1986-05-29

Hon. J. Robert Howie (York-Sunbury):: Mr. Speaker, as Chairman of the Legislative Committee on Bill C-109, an Act to amend the Income Tax Act, I have the honour to report the Bill to the House in both official languages. The Committee has considered Bill C-109 and has agreed to report it without amendment.


STRIKING-PRESENTATION OF 36TH AND 37TH REPORTS OF STANDING COMMITTEE
Mr. Scott Fennell (Ontario):: Mr. Speaker, I have the honour of tabling the Thirty-sixth and Thirty-seventh Reports of the Striking Committee.
If the House gives its consent, I intend to move concurrence in the Thirty-seventh Report later this day.
[Editor's Note: For above reports, see today's Votes and Proceedings.]


PETITIONS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, I have the honour and the pleasure to submit to you and to the House a number of petitions. These petitions come from several places including New Glasgow, Fredericton, Toronto, Kamloops and points in between in which the petitioners ask that this Parliament and the Government reconsider the ending of the Katimavik Program and that the decision be reconsidered in terms of renewing the program as of July 1 of this year.

Mr. Speaker, I also have petitions from residents of a number of communities in the province of Quebec, who humbly ask Parliament and the House of Commons that the decision to terminate Katimavik be reconsidered and the program renewed, starting in July.


QUESTIONS ON THE ORDER PAPER
Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I ask that all questions be allowed to stand.


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


Some Hon. Members:: Agreed.



STRIKING


Thomas Scott Fennell: Mr. Speaker, if the House gives its consent I would move, seconded by Mr. J. R. Gauthier, that the Thirty-seventh Report of the Striking Committee presented to the House earlier this day be concurred in.


Mr. Speaker:: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


Hon. Benoit Bouchard (for the Minister of Transport) moved: that Bill C-88, an Act to authorize the acquisition of Marine Atlantic Inc. and to provide for other matters in relation thereto, be read the second time and referred to a legislative committee.
[DOT] (mo)


Mr. J. M. Forrestall (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, the purpose of Bill C-88, the short title of which is the Marine Atlantic Inc. Acquisition Authorization Act, is to establish CN Marine as a separate Crown corporation under a new name, Marine Atlantic Inc. This

May 29, 1986
Marine Atlantic Inc.
move is the fulfilment of an original plan which goes back some eight or nine years. It is the culmination of a process which was envisaged when CN Marine was set up as a separate corporate entity in 1977.
At that time it was clearly understood that when CN Marine was in a position to stand on its own corporate feet action would be taken to make that possible. Action to this end started in December, 1984, when, under the provisions of Section 97(2) of the Financial Administration Act, the Governor in Council ordered the company to act as though it were a parent Crown corporation. This move presented a de facto separation of CN Marine from CN. Bill C-88 merely formalizes a situation which, as I have already indicated, already exists.
I would now like to deal with the two key elements of the Bill. The first one effects a name change and the other effects a change of ownership. The name is to be changed to Marine Atlantic Inc. so that the company will be more closely identified with the region which it serves. A transfer of shares will take place between Canadian National and the Crown, the final result being that the Crown will own all the shares of CN Marine, that is, Marine Atlantic Inc., thus making the company a Crown corporation. The changes in name and in status will not produce any material changes. The same group of people in the same corporate structure will continue to perform the same functions and deliver the same services under contract to the Government.
Improvement in the company's performance can be reasonably anticipated since it will no longer be conditioned by the corporate profitability desires of CN, but it will be free to develop as a marine entity unto itself with a potential for greater efficiency and cost effectiveness in the rendering of the services for which it contracts. The Bill will neither increase nor decrease the Government's control over the corporation's activities. The Government will continue to provide subsidies in support of Marine Atlantic ferry services under the terms of annual operating agreements already in place. Service level and tariff decisions will continue to be made by Government in consultation with all interested parties, and these will not be affected by the change of status.
In practical terms, the change has no impact on the provincial Governments directly concerned with Marine Atlantic activities. However, it should be noted that the company has already manifested its dedication to marine service goals by strengthening its presence in the two island provinces with vice-presidential offices in St. John's, Newfoundland and in Charlottetown, Prince Edward Island.
This outlines the general principles of the Bill. I know that a number of Hon. members will want to make comments with respect to it. We will be pleased to go into the details of the Bill in response to any questions which are deemed necessary as a result of the debate.
I commend the Bill to the House. In a sense it is a housekeeping matter. As I have said, it simply formalizes a
situation which has been in existence for an extended period of time. With the consent of Hon. Members I hope that later today we can deal with the Bill in all stages, if that meets with the approval of my colleagues.


Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, I am pleased to rise in my place today to participate in the debate on Bill C-88, an Act to authorize the acquisition of Marine Atlantic Inc. and to provide for other matters in relation thereto.
Anyone listening to the remarks of the Parliamentary Secretary to the Minister of Transport (Mr. Forrestall) will have the impression that nothing more is occurring today than simply a request for the authorization of Parliament to allow for the acquisition of Marine Atlantic Inc. I think the public should realize that Marine Atlantic Inc. is currently called CN Marine and that what we are talking about is more than a change in name. What we are talking about is taking the division of Canadian National called CN Marine, that division which operates ferry services on the east coast of Canada, and hive it off by wielding a long sword. With one clean and vicious stroke the Government proposes to sever CN Marine from Canadian National and give it a new name.
Members should ask themselves why the Government of Canada would want to sever CN Marine from Canadian National. It is a great and historic transporation company which personifies the concept of national unity being built with a national transportation policy. That is how the country was built, which is why Sir John A. Macdonald built a railway from one end of the country to the other. He did not build it because he wanted to see a train service running from the east coast of Canada to the west coast of Canada. He did not build it because it made a lot of economic sense in those days-it did not. He did not build it because he thought it would bring revenues to the Government of Canada. He built it because he wanted to have a sense of national identity running from sea to shining sea. He understood that if Canada were to develop as a nation and as a people who could share a common identity, a common sense of opportunity, there had to be a vehicle by which to tie the country together. Thus he created a national railway which ran from sea to sea.
Canadian National grew and became involved in many other divisions. It served the needs of the Prairies, as it served the needs of the hinterland and the North. It was a main engine which drove industrial development in Ontario and Quebec. It provided a ferry service to Atlantic Canada, those four provinces located on the great Atlantic coast, two of which are islands. The people in those four provinces realized that to fully participate in Confederation, to fully participate in the country and its economy, and because of our geographic location and our isolation, certainly in the early days, we needed to have a first-class transportation network. That was provided by CN Rail to all of Atlantic Canada as a result of CN's acquisition of the Newfoundland Railway at the time that Newfoundland joined Confederation in 1949.
May 29, 1986

Under the Terms of Union between Newfoundland and Canada, CN took over the operation of the Newfoundland Railway. A linkage was established through the development of CN Marine which guaranteed that the people of Atlantic Canada would not be penalized because of their location. It guaranteed that the people of Atlantic Canada would have access-because the country thought it was important to have access-to a first-class transportation service. The service was never perfect. There were always complaints; but there was a service and it was guaranteed. It was guaranteed to be a reasonable service in terms of cost and in terms of the quality of the service being provided. What has happened now? The Government of Canada has taken an action which, as I said earlier, with one fell swoop hived this off. It has severed CN Marine. Given the brief historical analysis of how CN Marine came into existence one would tend to ask oneself why the Government has hived it off. If it has played that kind of a nation-building role and has been that essential to the people who live in Atlantic Canada, why the name change and severance of CN Marine from the parent company?
You will note, Mr. Speaker, that Bill C-88 received first reading on December 5, 1985. Mark that date down, Mr. Speaker. You will also note that the Ministerial Task Force on Program Review headed by the Deputy Prime Minister (Mr. Nielsen), a very famous fellow around here, made its report to Cabinet in September 1985, two months before this Bill received first reading.
The Parliamentary Secretary would have us believe the reason for the Bill is to give the old company a new name. Let us see what the Deputy Prime Minister's task force on program review which came out two months before this Bill mysteriously appeared in the House had to say about the East Coast ferry service. Would that not make interesting reading?
Let us take a look at what the Deputy Prime Minister and his committee of slashers and hatchet men had to say about this great and historic East Coast ferry service. They said that there is a problem on the East Coast and that this commitment to national unity, surprise of all surprises, costs money. They said as well that compounding these cost pressures has been the typically very low rate of cost recovery for the subsidized service. They said that the way to reduce the level of subsidy is to reduce the level of service and to raise the rates that individuals and corporations pay to move themselves or freight on the East Coast ferry services.
In other words, the level of activity on the East Coast ferry services is relatively high and, given the level of subsidy, the total bill is substantial. The committee believes that fewer Canadians should use those services and the way to accomplish that is to reduce the frequency and quality of service and to raise the rates. The committee wants to discourage people from the East Coast of Canada from being involved in commerce or travel or from using an ingredient that is
Marine Atlantic Inc.
essential to the health of any economy, a good transportation system. If that happens, the subsidy can be lowered.
Sir John A. Macdonald would roll over in his grave to learn that a Government would treat Atlantic Canada like a chip on a Monopoly board. He would roll over in his grave to learn that a Government would tell the people of Atlantic Canada that they are simply a number on the bottom of a cost sheet and that a sense of national citizenship having one meaning in Canada is unimportant. The bottom number has to be changed.
The report was made to the Government of Canada in September and this Bill materialized in December, two months later. A plan of action was then undertaken. The Government of Canada knows that the ferry services that exist between PEI and the mainland and Newfoundland and the mainland are constitutionally guaranteed. Those ferry services were guaranteed in provisions of the Terms of Union signed between Newfoundland and Canada at the time of confederation in 1949 and in provisions of the Terms of Union signed between PEI and Canada when it entered into confederation.
What does the Deputy Prime Minister's task force say about the constitutional obligation of the Government of Canada to those two provinces? It calls them quasi-constitutional questions. Since when on one occasion is a constitutional matter a constitutional obligation cast in stone and on another occasion in another part of Canada a quasi-constitutional obligation? Are Atlantic Canadians quasi-Canadians? Are they entitled to or should they expect a different level of services from the Government? No, there is not one person between British Columbia and the great Province of Newfoundland who would say anything but that all of us are Canadians, that we all share the risk and share the reward, that we all carry the burden of cost and we all share the opportunities of being Canadians.
Can anyone imagine saying to wheat farmers in the West who have had a disastrous year with the lowest prices in decades and are on the verge of bankruptcy that the Government of Canada should not subsidize them? Can you imagine anyone saying that since they are producing wheat for less than cost they should be shut down? You are from western Canada, Mr. Speaker. Can you conceive of that being said? I would bet Hon. Members that the Speaker's heart rate has just gone up. He, being from the great Province of Alberta, would simply find it unbelievable that we would say to the people who till the soil and preserve the bread basket of Canada that they are not worth a buck today so we are not interested. No, I cannot imagine that.
What about the people who are involved in the dairy industry in Ontario and Quebec, an industry receiving an annual subsidy of $300 million. As Joey Smallwood used to say, that industry is receiving not $100 million, not $200 million, but three-count them-$300 million a year. Could anyone imagine saying to those dairy farmers: "Fellows, you are not making a buck right now. You are part of the Canadian mosaic, you are part of the Canadian family but at the

May 29, 1986
Marine Atlantic Inc.
moment you are costing a buck, so go slaughter your herds"? There is not a Canadian who would suggest any such thing to the dairy farmers of Quebec and Ontario.
Yet the Deputy Prime Minister's task force report tells us that the ferry services along the coast of Labrador and Newfoundland are costing the horrendous amount of $25 million. Having discovered that $25 million was being spent to provide services for half a million Canadians who live 90 miles away from their fellow citizens across a body of water, the Government had a collective cardiac arrest and promptly found the axe-men who wrote this piece of legislation that appeared in December following the recommendation which appeared in September. It makes one wonder.
The cost of the subsidy in Prince Edward Island is substantially less than the cost of the subsidy in Newfoundland, but again, the gun has been brought to the shoulder and the collective eye of the administration has looked down the barrel, the bead has been placed, the target has been identified and the trigger is now being pulled. This Bill is the bullet.
The Government is severing CN Marine from Canadian National because Canadian National appears on television telling Canadians that CN is in business for Canada. Every time I turn on the tube, I hear: "CN, in business for Canada". It is, Mr. Speaker, except in Newfoundland and PEI. That tie is being severed, and a new company is being set up. It will be easier that way to identify how much subsidy the parent company pays out to run those ferry operations. It will be easier that way to raise freight and passenger rates. It will be easier that way to reduce the level of service and the frequency of travel of those ferries. That is why this is being done.
What I am about to say may come as a shock to some of my colleagues in the House. However, Newfoundlanders do not regard the ferry service between that province and the rest of the country as a scenic route by the sea used for a pleasant excursion across to Nova Scotia on the way to Toronto, Edmonton, Montreal, or Vancouver. It is a pleasant route if the sun is shining and the seas are not rough, but it is not just a scenic route or one of 25 different modes of transportation available to Newfoundlanders. Unless one has a lot of dollars in one's pocket it is the only game in town. Not everyone can afford to fly. There is not a bus which floats across the water. We in Newfoundland do not have special shoes which allow us to walk across the water. We are a province with great swimmers, but 90 miles of salt water is a bit far.
The gulf ferry service is as intrinsic to the economic health of Newfoundland as the blood which beats through your heart, Mr. Speaker. I am sure your heart pressure has increased, as you reel with compassion, anger, and frustration. I know you are a man of principle, a man of integrity, and a man of compassion. If it were not for the position you occupy in the chair, requiring you to maintain a neutral position in the House, you would be on your feet with your fists balled up and
saying: "Enough. What kind of nonsense is this being perpetrated upon the people of that province?"
Atlantic Canadians are aware of the situation. As early as November, 1984 the Conservatives were barely in power long enough to leave their rear-end imprints on the front benches and they brought down an economic statement. The November 1984 economic statement was quite a statement. It resulted in a 15 per cent increase in fares on the East Coast ferry service. That was the thin edge of the wedge, and now the knife is being shoved in all the way.
The Parliamentary Secretary said that this Bill was merely a formality. He understood that there may be one or two Members who wanted to speak on it, but he indicated that they had already changed the name of the company to Marine Atlantic Inc., that they had already severed CN Marine from the CN parent company, and that everything was already in place. Is that not typical? Here we are today, on May 29, 1986 and the Government is seeking parliamentary approval and authorization for a certain series of measures contained in a Bill, and the Parliamentary Secretary rises and says that it is mere formality in that they have already proceeded. Not only does the Bill make a mockery of Parliament, because what is contained within it has already occurred without Parliament's authorization, but it is an example of the approach of the Government to the people of Atlantic Canada. No one has gone to Atlantic Canada and kept the commitment of consultation, which the Prime Minister (Mr. Mulroney) promised in the summer of 1984. No one has gone to Atlantic Canada and kept the commitment of co-operation promised by the Prime Minister in the summer of 1984.
Most citizens of Atlantic Canada will not fully appreciate the impact of the Bill until they discover that it will cost a lot more to ride a ferry and that many of the currently existing services, routes, and frequency of travel are gone. That is the kind of co-operation which Genghis Khan gave to the people he invaded. He left his calling card as he rode, hooves wild, across their lands, villages, and heads. We in Atlantic Canada do not need that kind of Genghis Khan consultation.
I remind the Government that Atlantic Canadians believe firmly in the old saying: "An eye for an eye and a tooth for a tooth". If one runs roughshod over their concerns, those things which are essential to a health Atlantic economy, and if one leaves a calling card in the carnage, then I warn that one shall reap what one sows. Atlantic Canadians will not forget this jackboot approach to the people of that region.
I should like to speak for a moment about another matter which is indirectly tied to Bill C-88 as part of the master plan of the task force report on ministerial review of the Deputy Prime Minister. There is a section of that report which is indirectly tied to this plan, gut the ferry service, raise the rates, and reduce the level of service. Logically one may say that if the Government does them in, in one area, perhaps it will give them better service in another area. However, what does this task force report say about another mode of transportation in Newfoundland? It actually says two things. First, it says that
May 29, 1986

under the terms of union, about which I spoke a few moments ago, Newfoundland was "guaranteed" a rail service between Port aux Basques and North Sydney and, second, that the Government of Canada assumed ownership of the Newfoundland railway. That service was not promised to Newfoundland, it was not held out as a carrot, it was guaranteed a railway service.
On the one hand Bill C-88 does a number on the gulf ferry service. However, what did the report say about the railway? Let me find the specific recommendation because I would not want to mislead the House. The first recommendation indicated that an agreement in principle would be reached with the Government of Newfoundland to phase out the Newfoundland railway in an orderly manner. In other words, close down, shut up, pull up the rails, burn up the ties, and consign the engines to the nearest museum. Gone was the Newfoundland railway; vanished in a moment.
Can one imagine 600 miles of track which the morning after looked like they took a direct hit from a nuclear weapon, vaporized? They not only plan a Chernobyl-type eradication of the gulf ferry service, they will slowly poison that service or choke the life out of it slowly. They are showing no mercy at all, but with the railway they are being merciful, kind, and considerate. They will not drop a neutron bomb because that destroys people and not property. They will drop another kind of bomb which will destroy property and people.
There were 800 jobs in a province with 30 per cent unemployment associated with that railway and the Nielsen Task Force report is saying: "Shut it down". How effective have these gentlemen of the Genghis Khan school been in convincing some people in Newfoundland that they ought to stand while the warhead zooms in from outer space on a direct loop from the Parliament Buildings in Ottawa? How successful have they been?
We had the spectacle a few weeks ago in the Newfoundland legislature of the Premier of Newfoundland, who can normally be counted upon to be as rational as an unguided missile, and he was again true to form, saying, "I do not think our constitutional case for the railway is all that good. I think we might get laughed out of court. I am for retaining the railway. I want to keep it. In fact, I want to see it upgraded and modernized, but with respect to our consitutional case, I think we might get laughed out of court". Here we had the Premier of Newfoundland telling Newfoundlanders that they do not have a constitutional right to their railway at the same time the Government of Canada, in the same document that recommends closing it down, acknowledges a Newfoundland constitutional right to the railway. It is not a matter of opinion, it is acknowledged, Mr. Speaker.
The Government of Ottawa has been saying to the Government of Newfoundland that it will either have some money for a reduced level of ferry service, or it will have some money for a railway service; it can have that, and money for nothing else.
Marine Atlantic Inc.
Or, if it wants some money for highway or money for other modes of transportation that every other province in Canada takes as their right of Canadians, it can but it is either/or. It is a situation that if it wants money for highways it has to give up the railway; it has to reduce the ferry service.


J. Michael Forrestall: That is ridiculous.


Brian Vincent Tobin: It is ridiculous. There is no other province in Canada that I know of that is being told: "Gentleman, it is either a highway or a railway. You cannot have both. It is either a Gulf ferry service or a railway. You cannot have both." Newfoundlanders are wondering what distinguishes us from other Canadians that we should receive this special select treatment by the Government of Canada. We pondered that question for months. I have not found an answer.
As a Canadian first, who comes from Newfoundland, I was never made aware at any time during my upbringing that somehow being a Canadian in one part of Canada distinguished you from being a Canadian in another part of Canada. Nobody ever said to me when I was learning about this country that we were anything but a nation where unity was found in diversity and where diversity was reconciled by national trends in services and rights that we all have in common, be we black or white, Protestant or Catholic, tall or short, from the centre, from the west or from the east. All of us as Canadians expect a number of services and rights that we hold common in this country.
We understand as well that when you have certain services and rights accorded to you as a Canadian, you have as well certain responsibilities. We in Newfoundland appreciate that. That is why the vast majority of Newfoundlanders have always believed in the whole debate about offshore oil and gas, now reflected in legislation, that if it is there in the multibillion barrel reservoirs to be developed, whenever the time is appropriate, it is a resource that belongs to all the country, not just to those who live in Newfoundland.
As we embrace the concept that a resource off the shores of Newfoundland belong to the whole country, so too, Mr. Speaker, do we embrace the concept that we as Canadians who live in Newfoundland, Nova Scotia or PEI, have a right to the same kind of consideration of our needs as people who live anywhere else in the country. We should have the same right as the dairy farmers in Quebec and Ontario, the same right as the wheat farmers in western Canada who find themselves confronted with recession, the same right as the cedar shingle and shake workers in the great province of British Columbia who have just been dealt a devastating blow and who properly expect the Government to assist them in their dilemma and in their time of need.
Bill C-88 is not a Bill that seeks to bind this country together. It is not a Bill that provides the glue that keeps this country together. It is a Bill that was designed with an axe. It is a Bill that severs CN Marine. To some that is a ferry ride, a boat in which you go bobbing around the ocean. This service is the way people move themselves, their goods, their produce

May 29, 1986
Marine Atlantic Inc.
around Atlantic Canada. It is not just one way for those who use it, it is the only way. This Bill not only severs the company from CN but it is a Bill that severs and tears at the fabric of Canada.
I recall the words of a gentleman named Gordon Bradley. He occupied the same position you occupy, Mr. Speaker, in 1948 in the Province of Newfoundland when we were debating whether we would send a delegation in 1947-48 to the United States to seek union with the U.S. or a delegation to Canada to seek union with Canada. Mr. Bradley was the Chairman of the Commission that had been established to determine what Newfoundland's future ought to be and where it lay. For many Newfoundlanders there was no question. Newfoundland's future was with Canada, it was completing the 10 provinces from sea to sea. But there were others for their own reasons and their own convictions who felt that our future should be with the United States.
I have never doubted, neither from Canada's point of view nor from Newfoundland's point of view a scant few decades ago-1949 was not all that long ago, 37 years, when Newfoundland made its choice-that we made the right choice. I do not doubt it now in the face of Bill C-88 and other insults that have been hurled at my province and, indeed, PEI as well, that we made the right decision.
During one particularly acrimonious evening of debate as Members fought back and forth across the way, Gordon Bradley suddenly stood up and bellowed "Order". He said to the Members assembled: "Gentleman, I remind you that the eyes of the people of Newfoundland are upon you now. They are watching you. They are weighing your every word and sometimes I fear you have tried their patience much too far".
Those words spoken in 1948 bear repeating today. The eyes of the people of Newfoundland are upon this place. They are watching us. They are weighing our words. More important, they are measuring our actions. Legislation, which may seem to the Government merely an act of expediency, merely a piece of legislation to try to cut costs, to reduce levels of government subsidies, legislation that would be perceived by a Cabinet purely in an economic number-counting way, in Newfoundland is seen as an insensitive piece of work. It is work that has been badly done. It ignores the geographic, economic and the social reality of my province. I say that in the hope that Members opposite will understand those words and will receive them and will think about them in the spirit in which they have been said.
One must understand the message that Newfoundlanders believe is coming from Ottawa when their ferry service is reduced and the cost increased, when a railway is closed and when a fisherman is told that the small craft harbours program has been wiped out. It costs potato farmers more to grow their crops than they get when they sell them and they have suddenly been slapped with a new series of inspection fees. The message that these people are receiving is that they are
expendable, are on the outer fringe, are not central to the country, and that the political power and influence in the country emanates from the centre and dies before it gets to the East Coast.
If that message continues to go out undiminished, it will create in my province, not for romantic or emotional reasons, but for economic and social reasons, a generation of people who will do as I do not, that is, question seriously the decision which was made in 1949.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I would like to add a few comments to the debate on Bill C-88, an Act to authorize the acquisition of Marine Atlantic Inc. and to provide for other matters in relation thereto. I will start with the process.
Like the previous administration, this administration likes to do things by Cabinet decree and then come to Parliament to tidy up the paperwork. When the Government of the day decided, for whatever reason, that it was appropriate to make what we now know as CN Marine into the new Crown corporation, Marine Atlantic Inc., it should have come to Parliament first. It should have presented us with the legislation which will come into effect in a year from now and given us the opportunity to have a broad discussion on the appropriateness of separating out one of CN's components. We should have had an opportunity to determine whether it made sense, with regard to the economics and the social value of transportation, to break up the various modes of CNR.
More recently there has been a decision to dispose of the CN trucking operation. We are seeing a fragmentation. We are in a very difficult position because the act has been done. All we are doing through the process of the legislation is to confirm what is already in place. It would be ludicrous for us in the House to cancel the decision. You cannot turn time back, even though some Hon. Members on the other side of the House would like to do that. We must go forward to give legal approval to the actions that CN and the Government of Canada have taken. This is so typical. We have seen other instances where the Government has presented a Bill which gives it certain powers and then negotiated instead of doing the negotiating first. It is clear that the Government's view of operating things has no regard for the people of Canada.
This is a very important Crown corporation. We who come from mid-Canada do not appreciate the value of CN Marine or Marine Atlantic Inc. to the people of Atlantic Canada. We do not appreciate it because we do not have anything similar which we must use to communicate with the rest of Canada. We hop in our cars and drive down the TransCanada Highway. If we want a little variety on the way to Toronto we will go through Tobermory and take a ferry across part of the Great Lakes. However, that is only an alternative for us.
On the two island provinces in Atlantic Canda they do not have a choice. If they want to travel by surface transport they have to use one of the vessels of Marine Atlantic Inc. They are captive to the rules of that Crown corporation. They are
May 29, 1986

captive to the cost-recovery mentality of the present Government, as they were to that of the previous administration. I do not deny that the previous Government was moving in that direction, but the present Government seems to be moving much faster.
Even with the subsidy that is in place to offset the costs, and even though the report published under the name of the Deputy Prime Minister (Mr. Nielsen) suggests very strongly that the amount of subsidy should be reduced and the cost for the user should be increased, the reality is that residents of the two island provinces in Atlantic Canada are treated very differently than the rest of us in Canada. We do not have to pay a user fee to use the TransCanada Highway. We pay through income tax and gasoline taxes for the maintenance and operation, but there is no toll booth in northern Ontario. There is no longer a toll booth in northern Quebec. We have had toll booths in Atlantic Canada for too long.
I know that the Parliamentary Secretary to the Minister of Transport (Mr. Forrestall), who comes from Atlantic Canada, has a very strong position on this particular issue. People from his area are being taxed at a third level for transportation. They must pay a fee to travel by ferry or to transport goods from one area to another.
When we reach clause-by-clause deliberation I will move an amendment to the appropriate clause which, if adopted, would call on Maine Atlantic Inc., and therefore the Government of Canada, to treat the ferry service in Atlantic Canada as an extension of the TransCanada Highway with the corresponding fee structure. Thereby all Canadian taxpayers who contribute to the cost of running the country through work and investment will say that we should give our Atlantic Canadian neighbours the same rights as they have, the right to free surface transport in the nation's transportation system. I think it would be very appropriate for Members on the other side of the House to give consideration to the acceptance of that motion, should it be deemed appropriate under our rules. If it is not, I would encourage the Parliamentary Secretary to take that suggestion to the Minister.
Each year 2.3 million passengers and nearly 1 million vehicles use the services of Marine Atlantic Inc. If one did a traffic count in my community of Thunder Bay one might find similar figures-and perhaps higher. However, the important thing is that they must have the same kind of unrestricted access. I think the Government should remove the fee entirely and pay for the services out of general revenues.
I want now to deal with a couple of other areas regarding this Bill. One is not directly related to the Bill but is tied to the fee structure. We had extensive hearings this winter on a Bill which would give the Minister of Transport (Mr. Mazankow-ski) the power to impose fees for certain Coast Guard services. We had representations from Atlantic Canada. One of the concerns they raised was that the Bill C-75 would give the Canadian Coast Guard the power to charge for ice-breaking
Marine Atlantic Inc.
services. We were told by people in Atlantic Canada that for a great part of the year the ferries owned by Marine Atlantic Inc. must use the ice-breaking services of the Canadian Coast Guard. Under that Bill the cost of those services, which could amount to as much as $30,000 a trip, could be passed on in whole or in part to Marine Atlantic Inc.
Their alternative, unless the Government was prepared to accept the concept that there should be no tolls or fees to get on the ferry, was that the users were going to have to pay. We were then going to have yet another increase in the cost of using the ferries. Fewer and fewer people will be able to afford to take those trips. For Prince Edward Island the cost of moving its produce, potatoes in particular, will be even more expensive than it is today. How many more potato producers are we going to put out of work? How many more potatoes will we end up bringing in from offshore?
Instead of putting all these road-blocks in the path of Canadians, we in this Parliament should be working to remove them. We should, if you like, be deregulating the financial aspect of cost recovery. We need efficiencies of scale. We need to ensure that we provide the service without penalizing the people concerned.
One of my concerns is that we set up Marine Atlantic Inc. by statute, and if at some point in time the Government felt it was appropriate to dispose of the assets of that company, in other words to privatize it, the Government would have to come back to this House to get permission to do so. There would be a full public debate on the disposition of Marine Atlantic, which is not the case with CN Trucking and some other Crown corporations, which this Conservative Government in its blind belief in the private sector has chosen to privatize.
Therefore I encourage the Parliamentary Secretary to the Minister of Transport to give us a clear statement in this House on this before we get into clause-by-clause study. He should indicate that under the terms of this legislation the Government of Canada must return to this House for permission to dispose of those assets.
I now want to talk about the employees of what was CN Marine and is now Marine Atlantic Inc. Over 2,500 people work for this Crown corporation. Obviously if you are going to carve a new Crown corporation out of an old Crown corporation, issues like pensions and pension credits and fringe benefit packages, some of which have been system-wide across CN, have to be dealt with. We must ensure that the employees are fully protected. The benefit of the doubt should be given to them, not automatically to the company. When we fragment organizations like CN there is a belief by some people that it becomes an excuse to do some labour bashing. Carve them into a smaller unit and we can get at them.
In another part of the marine sector over this past week we have seen a thousand workers forced to leave their jobs because of the way in which Treasury Board has been handling negotiations. Those negotiations went to conciliation. There

May 29, 1986
Marine Atlantic Inc.
was a majority report which the Government flatly rejected but which the union was reluctantly prepared to accept. That report would have begun to bridge the gap between east and west in the Department of Transport, the Department of Fisheries and Oceans and the Department of Public Works. Those workers were so frustrated with the way the federal Government handled the negotiations that they left their jobs. I do not want to see that happen with this new Crown corporation. I do not want to see Marine Atlantic use this as an excuse to reduce wages and benefits if they find it necessary to do some rationalization.
We all recognize that this modern environment of technological change, particularly in the marine sector, leads to change in labour allocation. However, we have to be sure we look after those people who become redundant. What an awful term. How would you like to be referred to as redundant? I do not think any of us would. We have to look for a new term which clearly indicates the status of those positions, not the employees but those positions, the need for which is no longer there. We have to provide early-out options at a decent level, and which are not then penalized by the Minister of Employment and Immigration. We have to make sure that our people are protected. I do not say "our people" in the sense that they are members of a union or because they are from Atlantic Canada, but because they are Canadians and deserve respect and fair treatment.
The final thing I want to deal with is, again, the question of rates and services. The Liberal Party spokesman raised the issue of the Nielsen task force report. He talked about the cutting of services. There are many ways to cut services. The post office is talking about alternate day delivery. That is one way. Another way was announced by Marine Atlantic last fall when it said it was going to start shutting down the ferry a little earlier. It is going to cut six and a half hours off the time when you cannot travel from point to point. Can you imagine if the Government of Alberta closed the highways at ten thirty at night and you were not allowed to travel, or if you were the owner of a trucking company? In northern Ontario we see it all the time, trucking companies that travel at night because they can make better time when there is less congestion. Quite frankly, this makes it safer for you and I in our little cars to have fewer of them on the road in the day time.
They do not have that opportunity in Atlantic Canada. They do not have 24-hour service. Marine Atlantic is proposing even less service. We have to be careful that, because we are allowing Marine Atlantic to be carved off from CN, they remain not only technically responsible and legally responsible, but morally responsible to this House and through this House to the people of Canada to ensure that they provide the same level of service that everybody else in the country enjoys, and to ensure that they do so at a cost to the individual that is not any more or less than the cost to any other Canadians, whether they be in Thunder Bay, Edmonton, Winnipeg or Toronto.
Those are the things that Marine Atlantic must adhere to, but they cannot do it by themselves. The Government of Canada sets the rules. If the Government of Canada says there has to be user-pay for the Coast Guard services, if they say there has to be user-pay for the users of the ferries in Atlantic Canada, then they have to accept the reality at election time that there is another form of user-pay, and that is the users of the service will pay that Government back by voting for somebody else. The Government should keep that in mind as they move to this kind of legislation.
I look forward with interest to the rest of the debate. I suspect it will continue until sometime this afternoon at least, and it should be very interesting.


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, the Bill before the House today will in effect really not change anything. Most people in mainland Canada-as we say in Newfoundland, the mainlanders-would know of the service that is talked about in this Bill if they have ever travelled to the islands of the East coast of Canada. If you have ever gone to Newfoundland by car you would know that you put your car on the ferry boat at North Sydney, and then you travel 100 miles across the Atlantic Ocean to Port-aux-Basques. It is a hundred-mile journey, and it is an incredible trip. If you are ever looking for a place to go to watch whales this is the place. If you have your family with you then you can actually see the whales during the summer months. This is nothing new to me. I cannot really comprehend why a lot of people like watching whales. I suppose it is because they have never seen wild whales before in the ocean, but being a Newfoundlander I have seen them all my life. I do not take any great pleasure in watching whales. A lot of people do, so it is a great trip to take. You go 100 miles across the Atlantic Ocean. If you take the alternate ferry route it will actually be more than 100 miles, in fact a couple of hundred miles across the Atlantic. Then you go down to the Argentia ferry station in Newfoundland. It is a great trip to take. I can think of no other place in Canada to go in the summer months with your family that would be more enjoyable than Newfoundland using this service we are talking about here today in this House.
There are some problems that I should perhaps tell the House just in case Members think about taking that trip this summer, and then relate to taking the ferry boat to Newfoundland. It takes about seven or eight hours. The new boat, which is being launched today in St. John's by the Minister of Transport (Mr. Mazankowski), is supposed to be a faster, reducing the time, I understand, to five or six hours. That is neither here nor there. The Minister of Transport will stand up in St. John's today and say it is going to reduce the time to five hours. It is five hours if you are talking about May, June, July, August, September, October. If you go at any time other that, then it is going to take anywhere from five to 20 hours, depending on the time of year. Sometimes you have ice that has to be bypassed, and in some cases it will take you anywhere from 15 to 20 hours.
May 29, 1986

I would not advise anybody to go on the night crossing because that presents a problem. If you like driving in the day time, and you are leaving Ottawa, Toronto or Montreal in the day time, it will take you about 22 hours. You would normally arrive at the ferry boat at night. There is a problem in that CN Marine, this new Crown Corporation and the federal Government, have always had the policy that the boat that crosses to Newfoundland is not designed as a hotel. In other words, there are never enough cabins available. It is a great pleasure when you get on the boat and you start out to sea, but in the middle of the night you obviously want to sleep. There are not enough cabins, so the people sleep-you guessed it-on the floor. When you walk down through the ferry boat you have to be careful that you do not step on somebody's feet or head, or something like that. I have always wondered why CN Marine and this new Crown Corporation, Marine Atlantic Inc. have this policy that the boat is not a hotel. How many times has somebody from CN Marine, or any Government, any Minister of Transport, including this one appeared before the committee and said that we are really not operating a hotel. This leads to all kinds of problems. You can imagine children and elderly people sleeping on the floor, but that is the way it has been throughout the years, that somehow by some rationale we have allowed these boats to operate without enough cabin space.
At one point in time they even used to supply pillows, but that was stopped, or they would give you a free blanket, but that was stopped. They sell you a chair for an extra $10 called a "Day-Nighter" which can actually be tilted back. The other chairs on the boats are designed in such a way that it is absolutely impossible to lie down. In other words, they were made so that they will not tilt back. They have fixed arm rests which do not move, so one's only choice is, of course, to sleep on the floor. There is lots of sitting space on the chairs on all of the boats, but one cannot sit on the chairs because one's feet would be on someone's head. That has been the policy of CN Marine or, as we call it today, Marine Atlantic Inc. Is it any wonder that tourists are discouraged from returning to Newfoundland, having gone there once on the night crossing? After coming across on that boat at night one has to take a motel room during the day to get over it. That is one problem I wanted to outline.
The problem, of course, is one of management and of the Government. Those are the fellows, the accountants who sit in head office who cause the problem. That is the problem with the way CN Marine has operated over the years, and that is going to be the problem with this new Crown corporation, Marine Atlantic Inc.
There is something else wrong with this new Crown corporation which was created in order to save the Government $20 million. Things seem to have been arranged so as not to accommodate most of the people. In other words, in Newfoundland one gets on a bus instead of a train and travels across Newfoundland. Then one gets on a boat-there is no helicopter service. One has to go by boat to cross the ocean,
Marine Atlantic Inc.
and then one gets on a train to cross Canada. There is a separate Crown corporation which controls the bus. We have another Crown corporation which controls the boat and another Crown corporation which controls the train, and never these three shall meet on scheduling. The bus will meet the boat if it is not inconvenient, but the train leaves at exactly ten minutes after nine o'clock in the morning from Sydney. When one looks at the schedule of CN Marine or, as we call it now, Marine Atlantic Inc., we find one would have to spend overnight in Sydney in order to meet the train.


An Hon. Member:: There is nothing wrong with that.


George Baker: Yes, it is good for the motel business in Sydney, Nova Scotia. I like Sydney. I think it is a wonderful place. Cape Breton is the closest thing you can find to Newfoundland for excellence. I have little confidence in an organization which cannot match three schedules to allow people to have a convenient trip across this country. A lot of people travel that way because they do not have the financial resources to take a plane. A man looking for a job in Alberta, perhaps in your riding, Mr. Speaker, in Edmonton, would take the bus, the ferry boat and the train. He cannot afford sleepers. He takes that service and goes across the country. Sometimes women with children take that route. Sometimes whole families. But here we have, under the umbrella of the federal Government, three separate transportation systems with no links. That is absolutely atrocious. That is enough to make one vote against every single Bill which comes to this Chamber having anything to do with Canadian National.
If you spoke to the people who travel on that system, as I have, Mr. Speaker, you would come to the conclusion that the whole set-up needs to be examined by a judge of the Supreme Court. I have seen people taking a bus and having to spend 24 hours waiting for the boat because the weather was bad and the bus was late. The boat went on without them and they had to wait for the next boat. They get on the other side and have to spend another 24 hours waiting for the train to leave. There are women and children, whole families, going through that procedure because they do not have the money to take a plane. That is not good enough. If that were happening anywhere else in Canada it would not be allowed. The Government would step in.
I have now covered two points. First, one does not cross in the night time if one does not have a prearranged, guaranteed, prepaid cabin. If one does not have in writing that one definitely has a cabin, I would not advise it, unless one wants to spend the next morning in a motel somewhere sleeping it off. Second, those poor people who cannot afford to take a plane are being discriminated against to an incredible degree because there is no matching of schedules.
Let me move on to what is going to happen to those employees who will be displaced because the federal Government wants to save $20 million by creating a Crown corporation. I will just deal with one aspect, pension transferability when these people are laid off. If one is from the Province of

May 29, 1986
Marine Atlantic Inc.
New Brunswick and is working with CN Marine one can transfer one's pension credits. In other words, if one were working with a provincial Government agency and one had worked with CN, then the pension could be matched up-that is if one is from New Brunswick. If one is from Nova Scotia, it does not work that way. There is no pension portability agreement. If one is from Newfoundland it does not work that way because there is no pension portability agreement. If one is from Manitoba it does work that way, because it has a pension portability agreement. What I am saying is that Transport Canada, with the creation of this new Crown corporation, should go after those provincial Governments and agencies and say: "For goodness sakes, sign a pension transferability agreement with CN Marine in order to take care of some of these people".
The Canadian Transport Commission and the Government of Canada have recently ruled that the guarantees under the terms of union on freight rates across the gulf do not apply. What that means is that what is in the terms of union in the Constitution of Canada in black and white really does not apply. We are told it is there in black and white in the Constitution and the Terms of union, but it is really not there. That has led to the CTC recently, within the last couple of months, and the Government of Canada, approving vast rate increases for freight across the gulf. If they get away with it, then we will have more increases, because under the Terms of Union one could not charge any more for a passage on that ferry for freight than you would charge for an equal distance by rail. So there was a subsidy built in to freight movement to and from Newfoundland as a result of the Terms of Union.
For the first time since Newfoundland joined Canada the Canadian Transport Commission is saying: "Although it is in the Terms of Union we do not think it really applies". That is quite a decision by the CTC. The Minister of Transport must approve or disapprove that interpretation of the Terms of Union.
When the CTC brought down its decision I checked with the Government of Newfoundland. I was told that it would appeal the decision. At the last moment there was an extension of the appeal period for one week. The matter is presently under appeal. Certainly what is in the Terms of Union is in the Terms of Union. If it were not, it would be something completely different. It is in the Terms of Union and the Government of Canada must realize that.
Those are my remarks as far as this Bill is concerned. I notice in the Bill that the figure $2,344,473,774 is used with respect to the value of the shares, as far as service is concerned. Someone might misread that and think that it is the actual value of the company. Someone might think it is the ultimate purchase price of the service. Of couse, that is not the case.
CN provides a necessary service between the provinces. I have never been able to understand why, back in 1949 when
the Terms of Unions were being negotiated, we did not put it in black and white that this service is nothing but an extension of the Trans-Canada Highway, that people should not have to pay and that the cost of transportation should not be added to the cost of goods and services. In fact, the entire argument with respect to whether the Newfoundland Railway will continue is based on the fact that in the accounts of the railway in Newfoundland the actual cost of transporting goods from North Sydney to Port aux Basques is added to the cost of the operation of the Newfoundland Railway. Therefore the books of CN, which are held at its head office in Montreal, show that the Newfoundland Railway will lose $40 million this year. I caution anyone who looks at those figures to phone CN and say: "Is it true that you have the absolute audacity to add the cost of transportation to the Newfoundland Railway for moving goods from the moment they are taken off a truck in North Sydney and put on the ground? Are all the costs for loading them, carrying them across the gulf and unloading them added to the cost of the Newfoundland Railway?"


The Acting Speaker (Mr. Paproski):: I regret to inform the Hon. Member that his time has expired. Are there questions or comments? The Hon. Member for Vancouver-Kingsway (Mr. Waddell).


Mr. Waddell:: Mr. Speaker, I have one comment and one question. With respect to making the ferry service an extension of the Trans-Canada Highway, in British Columbia we have been saying that for years. We have been saying that in fact it is part of the Trans-Canada Highway and it should be picked up as part of the costs. My question is this. I am not familiar with the ferry about which the Hon. Member speaks since I live on the opposite coast. We have a pretty efficient working ferry system in British Columbia. He said: "Don't take the night ferry unless you want to spend the next day in a motel sleeping it off'. I wish to ask him, sleeping what off?


George Baker: Mr. Speaker, I am pleased to say that the way it will read in Hansard is the way the hon. gentleman put it. What he said was that the people of British Columbia have always maintained that the Newfoundland ferry system should be considered part of the Trans-Canada Highway.


Ian Gardiner Waddell: No, no.


George Baker: That is exactly what the hon. gentleman said. That is what is in the official record. That is what has been taped and that is what these gentlemen have taken down in their notes. Perhaps the hon. gentleman will want to correct it. Why not leave it on the record? Why not say that that is what the Hon. Member supports, as do the people in his riding and the people in British Columbia?
The hon. gentleman also says that in British Columbia they do not have problems with their ferry service similar to the ones I outlined in my address. No, they do not. The Province of British Columbia is not 100 miles away from the rest of Canada at its closest point. We are talking here about 100 miles of Atlantic Ocean. I suppose it is a very difficult system
May 29, 1986

to operate. If someone were to place me in charge of the position today, in a part-time capacity-and I wish they would-with no pay, I would look at what would have to be done in order to actually supply the service. The needs of the people would have to be satisfied.
Do you know, Mr. Speaker, that for the last two months on this service the boats with cabins have been on the day run? The boats with no cabins have been on the night run. That is what has been going on for the last two months at CN Marine. A constituent of mine phoned me up and said: "George, you have to do something about this. I am taking my family across the gulf, but we can't get a cabin because there are no cabins on the night crossing ferry. They told us that if we wanted a cabin we would have to wait until the next morning". I phoned up CN Marine and I said: "Look, I just had a crank call from someone. They are telling bad stories about you. I have just been told that your policy with respect to getting a cabin in which to get some sleep is that you have to take the day ferry". The lady at the other end of the line said: "Mr. Baker, oh yes, that is right". I said: "Really?" She said: "Yes". I said: "When was this policy initiated?" She said: "Oh, a couple of months ago". I said: "There is obviously no problem getting a cabin to go to sleep in during the daytime". She replied: "No, sir, not at all. In fact, they are not being used up and I don't know why".
To answer the hon. gentleman's question with respect to what you have to sleep off-


Ian Gardiner Waddell: They're your words.


George Baker: The hon. gentleman was probably talking about the bar. The bar closes at, I believe, 12:30 or one o'clock. It is good that the bar does close because the best sleeping space is on the floor in the bar. The benches in the bar are more comfortable. In fact, everyone rushes to the bar when it closes.
I hope that with the creation of this Crown corporation some changes can be made. If some changes are not made, then I will have camera crews down there. That is what we should have done a long time ago. We cannot pretend that this is some riverboat in some part of China or Africa or some place like that, that it is just a pleasure jaunt and people are kind of tired after travelling all day and they wish to sleep on the floor. I hope that will be corrected. If it is not we will have to get some camera crews down there in order to have film clips to show on the national news just so the rest of the country will know what is going on.


Mr. Mantha:: We enjoyed the Hon. Member's lively speech, Mr. Speaker. I wish to ask the Hon. Member about the Pope coming here and the crazy schedule in terms of people getting to see the Pope. Was that the schedule of the previous Government, in all fairness, or was it this Government's? I do not want to put the Hon. Member on the spot.


George Baker: The what?
Marine Atlantic Inc.


Moe Mantha: The Pope. You said a little while ago that the people came to see the Pope.


George Baker: Mr. Speaker, sometimes I do have a Newfoundland accent. When I get a bit fired up or start talking about something that has to do with Newfoundland that is not right, my words kind of twist. Perhaps when I said "boat", it came out like "pope".
In any event, the Hon. Member asked if this was the case under the previous Government. That is a good question. In fact, I have been waiting for someone to ask that question. Yes, Mr. Speaker, it was.
As you know, Mr. Speaker, I have been here for years. It was frustrating, to no end, to try to convince the political powers to actually get their fingers into the operations of Crown corporations. It was never that Government's policy to do that.
What has changed is that before there were some cabins available and the rest of the people had to sleep on the floor, if they wanted to sleep. But since this Government took over, and in the last two months, all of the beds are on the day-boat and there are no beds on the night crossing. That is obviously a step backward, would you not agree, Mr. Speaker?


J. Michael Forrestall: Mr. Speaker, never in my 53 years of life have I ever met a Newfoundlander who could not entertain on such little evidence.


Ian Gardiner Waddell: Mr. Speaker, I would like to put another question to the Hon. Member. Pardon my ignorance, but I will put the question anyway. Why could the provinces not run these ferries? The province runs the ferry in British Columbia, and it is much closer to the people. Perhaps we should consider decentralizing ferry services. What about a co-operative running the ferry system? We could privatize it and let the people run it as opposed to the Ottawa bureaucrats.


George Baker: Mr. Speaker, that is a very good question. The only problem is that in British Columbia we are talking about intraprovincial ferry services, whereas on the East coast we are talking about interprovincial ferry services. One, of course, is controlled by the provincial Government and the other by the federal Government. However, there are still a couple of ferry services within provinces operated by the federal Government. The Government has been trying to get away from those services over the years, and certainly this Government will make sure it does so, and perhaps even in the case of the ferries in British Columbia, though the federal Government pays a certain portion of the costs of operating the ferry system.
Certainly the provinces are closer to the operation. The only problem for Newfoundland is that ferry boats are operated at a tremendous deficit. It is the constitutional responsibility of the federal Government to operate the ferry boats, but it is certainly not the constitutional responsibility of the federal Government to operate those services at a profit or a break-
13760

May 29, 1986
even margin. That was never the intent of the Terms of Union, but, as I understand it, that is the present policy of this new, ultra conservative Tory Government.


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


Some Hon. Members:: Question.


The Acting Speaker (Mr. Paproski):: Mr. Bouchard, for the Minister of Transport (Mr. Mazankowski), moved that Bill C-88, an Act to authorize the acquisition of Marine Atlantic Inc. and to provide for other matters in relation thereto, be read the second time and referred to a legislative committee.
It it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to a legislative committee.
Philip Derek Lewis: Mr. Speaker, I rise on a point of order. As a result of the co-operation of all three Parties in dealing with this Bill, and in an effort to move on to legislation on which critics from all three Parties are prepared to move, I suggest you would probably receive the unanimous consent of the House to call it one o'clock. At three o'clock, it is the Government's intention to call Bill C-86 for report stage and third reading.


Iain Francis Angus: Mr. Speaker, I rise on the same point of order. I think we are disposed to that suggestion. However, when you referred the Bill to a legislative committee, Sir, I assume that if discussions ensue, we can in fact refer the matter to a Committee of the Whole rather than a legislative committee.


The Acting Speaker (Mr. Paproski):: I would imagine that if House Leaders got together and discussed the way they wanted to proceed, the House would agree to that. I do not think I should tell Hon. Members how to proceed. I think the matter should be discussed with the House Leaders.
Is it agreed that we call it one o'clock?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Paproski):: It being one o'clock, I do now leave the chair until two o'clock this day.
At 12.47 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, last Monday the Montreal East Survival Committee met to establish how many jobs we were able to save. Unfortunately, the same day we heard that Versatile Vickers was laying off and had fired 175 workers. In December last year, the Minister of Supply and Services promised representatives of employees at Versatile Vickers that work on the first ship in the Trump program, the Algonquin, would be done at the shipyard in Montreal.
Unfortunately, Mr. Speaker, if the Government does not intervene, there will be 650 lay-offs at the Montreal yards. I earnestly hope that Progressive Conservative Members will urge the Prime Minister (Mr. Mulroney) to take action so that Quebec's three shipyards will have work and jobs, not shutdowns.



NUCLEAR ARMAMENTS


Mr. Derek Blackburn (Brant):: Mr. Speaker, Canada has a chance to make up for its abysmal silence on the NATO decision to support the production of new chemical weapons. NATO Foreign Ministers are meeting in Halifax, giving Canada the opportunity to underline our support for arms control. Let us applaud the American decision to scrap two missile carrying submarines to stay within the limits of SALT II.
Let us be just as vocal about our opposition to American threats to abandon SALT II later this year. It would be ironic if deployment of the air-launched Cruise missile, which Canada helped develop, broke SALT II. Canada should make clear that we would no longer allow Cruise missile testing in Canada if the U.S. broke SALT II.
Similarly, Canada should press the U.S. for strict adherence to the ABM Treaty. We should make it clear that we will not take part in SDA 2000 Phase II or allow Canadian territory to be used as a base for any ABM systems. Such strong statements within western councils would demonstrate that Canada expects her allies to match our commitment to arms control.
May 29, 1986



CANADIAN TEAM'S PARTICIPATION IN SOCCER'S WORLD CUP CHAMPIONSHIP

Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, Sunday marks a special day in the history of sports in Canada. For the first time Team Canada will begin its quest for soccer's World Cup in Mexico. Over the next month, 24 nations will compete for the right to be crowned world champion in Canada's fastest growing sport.
Just as this event is truly a world competition, the members of Team Canada truly reflect the multicultural flavour of Canada. On our starting squad we have Canadians of Italian, Scottish, Yugoslavian, German, and Czechoslovakian descent; players who hail from Victoria, Moncton, Nanaimo, Ottawa, and Edmonton. It is truly a Canadian team.
I am sure all Members of the House and all Canadians will join with me in expressing our best wishes to Team Canada.



FORESTRY


Mr. Maurice Tremblay (Lotbiniere):: Mr. Speaker, the Minister of State (Forestry) (Mr. Merrithew) announced recently that the Canadian Forestry Service has asked the Centre de foresterie des Laurentides to do a scientific study on the maple tree blight.
This study, another in a long series of efforts by the Service in this area, will be directed by Gilles Robitaille and Marcien Roberge, who have both been involved for many years in activities either directly or indirectly related to the phenomenon of maple tree blight in Quebec.
Research directly related to the problem of declining maple stands will be done mainly at the experimental maple farm at Nobertville, in the riding of Lotbiniere.
Mr. Speaker, I must congratulate the Minister on the kind of action he has taken, which again demonstrates his desire to deal with the problem once and for all and thus help a typically Canadian product and one of our major industries to continue to exist, especially considering the time and effort that goes into managing a maple stand, and preserve part of our heritage.



SMALL BUSINESS


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, when the Conservatives were in the Opposition, they went on about reducing the paper burden on small businesses. As soon as they formed the Government, they amended the Small Business Loans Act to make it less accessible. It seems that banks are advising business people against taking advantage of this legislation because of the very strict directives of the Minister of State (Small Business) (Mr. Bisson-nette) with respect to the administration of loans.
Mr. Speaker, since the new legislation came into effect, there has been a 25 per cent reduction in loans. When they were in the opposition, the Conservatives were against sin, but now they are in power they are all for it.



THE PROFESSIONS


Mr. Paul Gagnon (Calgary North):: Mr. Speaker, the engineers in the House of Commons take great pleasure in joining our fellow engineers in drawing the attention of Canadians to the outstanding contribution our profession has made to the development of Canada.
The art and science of the engineer forged the technological foundations of our Confederation. Our early engineers built the network of railways, canals, and bridges. This expertise has continued to expand in aviation, telecommunications, and space systems. The 125,000 men and women who constitute Canada's professional engineering fraternity continue to contribute to the exploration and commercial exploitation of leading edge technologies, bringing technological progress and economic prosperity to Canada and other countries.
We trust that National Engineers Week will encourage Canadians to reflect on the sometimes heroic but often insufficiently recognized contribution of engineers to Canada's past, present, and future.



LABOUR RELATIONS


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, the Canadian Airline Flight Attendant's Association is on strike against Air Ontario. Strikes are at best unpleasant events. They are the last resort very often of a collectivity of

May 29, 1986
the powerless, only made more powerful by their union, against the recalcitrance of insensitive management. Strikes are often at the cost of hardship and frustration to the strikers. Often too, they bring inconvenience to members of the public, challenge their commitment to social justice, or test their priorities.
In London and Sarnia, Members of this House have honoured Air Ontario picket lines, that is, except for one. That the Minister of Agriculture (Mr. Wise), the Member from Elgin, should fail to do so, many would say is his own business. But that he felt compelled on May 23 to insult two female pickets deliberately and give them the Trudeau finger of contempt can but bring contempt upon himself that his Party and Government will inevitably share.



EMPLOYMENT PROSPECTS

Mr. Andre Plourde (Kamouraska-Riviere-du-Loup):: Mr. Speaker, Challenge 86, a program for which the Minister of State (Youth) (Mrs. Champagne) is responsible, has been of great benefit to students in the riding of Kamouraska- Riviere-du-Loup. In fact, 374 young people will have jobs this summer thanks to wage subsidies totalling $472,578 which the federal Government is providing through Challenge 86. Two hundred and seventeen applications out of 297 have been approved in my riding. The private sector has created 154 jobs, non-profit organizations provided 169, while educational institutions and municipalities made 51 jobs available. Furthermore, on May 16, 1986, I attended the re-opening of two employment centres for students, one at Riviere-du-Loup and one at La Pocatiere. Last year, the centres exceeded their placement objectives, and I hope we will get a repeat performance this year.
This is good news, Mr. Speaker. This is how young people in the riding of Kamouraska-Riviere-du-Loup are taking up the challenge.



AIRPORTS


Mrs. Lise Bourgault (Argenteuil-Papineau):: Mr. Speaker, it seems if we want to hear any good news, we Government Members will have to announce it ourselves. In the last two weeks, the press, television and the Opposition have been hammering away about the working conditions of search officers at the airports in Montreal and Quebec, and the alleged lack of concern of my Government for the safety of
travellers. However, the day before yesterday, as a result of intervention by our Government, security officers of the former Burns Agency reached an agreement with the new company responsible for baggage search. From now on, these employees will receive $6.20 an hour, which means they will be working for the same salary and under the same working conditions as their colleagues in other Canadian airports. The people in my riding and even the metal workers' union are very pleased with this victory.
The Liberals and New Democrats specialize in controversy but do not mention the results when they are good. Mr. Speaker, this is one more achievement that will be hard to beat in the next election campaign!



ABORIGINAL PEOPLES


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, Mr. Jack Davis, an Australian aboriginal playwright, has written a play entitled No Sugar. The theme of this play deals with attempts by Australian Governments to rid their country of natives by policies of extermination, assimilation, and isolation.
The bold and disturbing theme is handled with compassion and even humour, but the stark message is never blunted. The play ran with rave reviews at Expo 86 and is now being staged here in Ottawa under the auspices of the National Arts Centre. It has considerable relevance for Canadian audiences since the history of our relationship with the native people of Canada is equally brutal.
Those who care about native issues and aboriginal rights in Canada, including all Hon. Members, should not miss seeing this presentation.



EMPLOYMENT PERSPECTIVES

Mr. Clement M. Cote (Lac-Saint-Jean):: Mr. Speaker, contrary to what the Liberal Opposition, particularly Quebec Members, would have us believe, the youth unemployment rate decreased fom 18.4 per cent at election time to 15 per cent now, the lowest rate ever since December 1981. To put it another way, 98,000 new jobs have been created since September 1984, against a net loss of 285,000 jobs under the Liberals.
May 29, 1986

Thanks to the private sector's $120 million financial contribution, Challege 86 has provided 74,833 jobs so far, whereas Summer Canada Employment 84, with $125 million, accounted for only 64,813 new jobs. In other words, in a single summer we have created 10,000 more jobs than our predecessors did. Mr. Speaker, it should be noted that private sector companies offer young people wages which are 50 per cent and sometimes 100 per cent better than those paid by other organizations. In addition, the private sector will give them jobs after they graduate. Thanks to their summer jobs they can get in touch with-


Mr. Speaker:: Order, please, The 60 seconds have expired.



CANADA HEALTH ACT


Iain Francis Angus: Mr. Speaker, in April, 1984, the Parliament of Canada unanimously passed the Canada Health Act which was designed to put an end to extra billing by doctors. Unfortunately the doctors of Ontario believe that they should be exempt from this national Act, that they should not have to accept the national consensus. They want the right to extra bill their patients, and today and tomorrow they are on strike over this issue.
They are not on strike because they could not reach an agreement with OHIP. No, Sir. They are on strike for the right of the individual doctor to charge more than his or her contract provides. No other labour organization in Canada has such a right. If the doctors are not happy with the negotiated rates of pay, they should get a new negotiating team rather than charging patients more.
In 1984 this House said that doctors should no longer be allowed to extra bill. What doctors are doing in Ontario this week is an affront to Parliament and the people of Ontario. The doctors of Ontario should be ashamed of themselves.



TEXTILES AND CLOTHING


Mr. Jean-Guy Guilbault (Drummond):: In my opinion, Mr. Speaker, the Canadian Government should end the GATT Multifibre Agreement when it expires at the end of July so as to draft a general policy and sign bilateral agreements with
other nations. It should also fully exercise its international rights with a view to restoring order and fairness on the Canadian textile and clothing market.
This is all the more imperative because, at the 20th international textile seminar held in Sherbrooke this week, the president of the Canadian federation deplored the fact that the 1970 policy is not in force.
One third of the textile industry production is clothing, industrial textiles make up the second third, and carpeting and geotextiles account for the other third.
As we all know clothing imports have increased by 43 per cent since 1982, yet clothing retail sales have gone up by only about 1 per cent a year. These industrial sectors are an integral part of our national economy because they provide direct and indirect jobs for over 400,000 Canadians and produce 6.6-


Mr. Speaker:: Order, please. The 60 seconds have expired.



LABOUR CONDITIONS


Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, unemployment in Metro Toronto has dropped from 8.5 per cent two years ago to 5.3 per cent in April, 1986. Since the election 110,000 jobs have been created in Metro Toronto alone. That region is approaching full employment. Youth is sharing in this too. Youth unemployment remains critical across Canada, but it has fallen over 3 percentage points since the Government took office. Unemployment among women has also dropped 2 percentage points.
I am sure that everyone in this House is greatly encouraged by the economic policies which have contributed to this drop in unemployment. Yet we also recognize that older workers still face great discouragement. The number of workers between 45 and 65 years of age has grown in the past year. Lay-offs of persons in this age group too often still mean anxiety, frustration, and hardship. Opportunities for the re-employment of this age group should have priority in shaping future policies.



ENVIRONMENTAL AFFAIRS


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, I would like to draw to your attention once again the damage to forests, agriculture, and human health caused by oxidants produced by the combustion of leaded gasoline. The situation is made worse by motorists who, because of a lower price, put leaded gasoline in cars designed for unleaded gasoline.

May 29, 1986
Oral Questions
The 3-cent per litre gap at the pump, the largest ever, between the price of leaded and unleaded gasoline, is a serious environmental problem to which the Government must address its attention. Leaded gas aggravates the acid rain problem and is also a health hazard. Canadians want the Government to adopt the examples set by Holland, Denmark, and Austria. We must equalize the price of leaded and unleaded gasoline at the pump, thus stopping misfueling and protecting the environment and human health.



ORAL QUESTION PERIOD


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, my question is directed to the Deputy Prime Minister. There was a report today that the Minister of Justice, senior Minister in our Cabinet, told an American audience, using a memorable political phrase, that the Government had no choice but to call for retaliation. At the same time Canadian officials are meeting with U.S. trade negotiator Peter Murphy in Washington to discuss compensation. Those two initiatives are totally incompatible with and opposite to one another. Therefore, have we abandoned the request for compensation? If so, what are we meeting with Mr. Murphy about? On the other hand, if we are now going to retaliate, what kind of retaliatory measures will we be introducing and when, or is the Minister of Justice once again engaging in a hothouse harangue?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, there are a large number of questions there so let me try to address them. The first was that officials of the Government of Canada met with representatives of the U.S. administration to discuss both the question of compensation as well as restoration of access to the U.S. market. These discussions are continuing. I have to say that the early indications are that the question of compensation is going to be difficult. It does not appear possible to provide that compensation under U.S. legislation. However, we are exploring further the possibility of restoration of access to that market.


CANADA-UNITED STATES NEGOTIATIONS-U.S. COUNTERVAIL ACTION
Lloyd Axworthy: Mr. Speaker, in those discussions have we raised the question of the Government of Canada intending to retaliate, as the Minister of Justice said? Was that put on the table? As well, did we ask Mr. Murphy if the American Government will agree to a standstill on countervail action, as requested by the Premier of B.C. and other people, during the course of these negotiations,
in order to proceed on a clean launch basis as announced several weeks ago?


Michael Holcombe Wilson: Mr. Speaker, we have indicated all along that in one form or another there must be a response by the Government to the action taken by the U.S. last week. That is clear. The question of a standstill is related to the problem of the shakes and shingles decision. It is something of lasting importance and it will be discussed by Mr. Reisman with Mr. Murphy as the trade negotiations proceed.


SOFTWOOD LUMBER EXPORTS
Lloyd Axworthy: Mr. Speaker, I thank the Minister for his answer. If Mr. Murphy and Mr. Reisman are now putting on the table as part of the negotiations the question of the shakes and shingles industry, will they also be putting on the table the question of the softwood lumber petition presently before the U.S. Government? In other words, has the Government once again changed its position and is it including a discussion of these irritants as part of the comprehensive negotiations even though it previously said it would not?


Michael Holcombe Wilson: Mr. Speaker, again the Hon. Member has made a leap, if I can put it in the nicest possible terms, by taking something I said and putting it into his own words. What I said was not what he just said, and he knows it. During the course of these negotiations we are going to have to deal with this question of disputes which come up during the course of negotiations. That matter will be discussed by Mr. Reisman and Mr. Murphy.


Lloyd Axworthy: Which is what I said.


Michael Holcombe Wilson: Let me just make it clear, Mr. Speaker. The question is of how to deal with these issues in a process sense, not the specific matters as the Hon. Member tried to imply.


REQUEST THAT UNITED STATES PRESIDENT BE CONTACTED
Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, I think I should go to the Deputy Prime Minister, if I may. As he knows, the U.S. Ambassador is quoted as advising Mr. Shultz in a cable that the Canadian Government, "as expected, is showing signs of panic". This is following the President's decision to impose a tariff on cedar shakes and shingles. We do not want panic. We do not want handwringing. We want action.
Having failed to act on Premier Bennett's warning of May 7, and the plea that he made, will the Deputy Prime Minister assure us that he or the Prime Minister will act on Mr. Bennett's further warning and plea of May 20? Will the Deputy Prime Minister or the Prime Minister contact


May 29, 1986

President Reagan immediately and ask him to stop the countervail proceedings on Canadian softwood exports?


Michael Holcombe Wilson: Mr. Speaker, let me make it quite clear to the Hon. Member that the countervail action on the question of softwood lumber is part of a legal process which has been initiated by the industry in the United States for which there are many steps, steps that can take a variety of directions as time goes by.
I should throw a question back to the Hon. Member. Since he said in a perjorative sense we were acting as expected, did the Hon. Member expect that we would sit down and take this action without making any response to the United States? Surely he understands that it is important to the economy of Canada and to British Columbia that this Government make a strong and steady response, a response that is understood clearly by the United States Government.


EXPORT OF WOOD PRODUCTS TO UNITED STATES- GOVERNMENT POSITION
Donald James Johnston: Mr. Speaker, I am not the one who said that, I was simply quoting the remarks of the ambassador in question.
It is obvious that panic will soon give way to apoplexy unless somebody stops the President.
So my question is this: What does he intend to do to put a stop to that process in the United States so as to protect Canadian softwood exports?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member has twice used the word panic. Let me refer him to an editorial in the Washington Post today which talks about trade panic in the White House. There can be many points of view expressed on this matter. What I think is quite clear is that the response of the Government of Canada has been a strong one, a firm one, and a response that is quite clearly understood by the Government of the United States that we are concerned about the directions of their policies on trade which they have taken in the last little while, and they are matters we want to discuss thoroughly during the weeks and months ahead.


COMPENSATION ISSUE-GOVERNMENT POSITION
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I would like to direct my question to the Minister of Finance who is dealing with this matter today. He has said to the House the Government wants to send a strong and clear Canadian response to Washington. The representatives of both industry and the trade union workers affected by the shakes and shingles tariff yesterday made it very clear to the Government that what they did not want was some compensatory action that was not going to have any direct effect on them. Why is the Government of Canada pursuing, in negotiations today in
Oral Questions
Washington, exactly what the people in Canada affected do not want it to pursue?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member did not listen to my first response. What I said in the first response was that officials of the Government of Canada are meeting with officials of the U.S. administration today to discuss two things, one, the question of compensation, and I said that probably was not on because they do not have the legal power to do that, and also to look at the question of how we can regain access to that market for the industry. That matter is still on the table.


POSSIBLE OUTCOME OF TALKS
John Edward Broadbent: Mr. Speaker, I want to ask the Minister more about the compensation package. For two or three days the Government has been talking about that as the desirable route to go, even though the workers and business people affected do not like it. Would the Minister of Finance not agree that if the Americans agree to compensatory action by reducing tariffs in other sectors what we will end up with is a package that may have benefits elsewhere, but will do absolutely nothing in terms of benefits for the workers who are going to lose their jobs in British Columbia? We will still have 4,000 men and women without work in British Columbia.


Michael Holcombe Wilson: Mr. Speaker, the Leader of the New Democratic Party is floating off into never-never land again. I said this matter was no longer under discussion.


John Edward Broadbent: No, you didn't say that.


Michael Holcombe Wilson: There was no legal power for the U.S. adminsitration to deal with it. I said that the matter of regaining access to the United States market for the shakes and shingles industry was still under consideration. These were two very clear and distinctive points that I made. The Hon. Member missed one I would ask him to listen carefully to the answers.


John Edward Broadbent: Mr. Speaker, I listen with care. If the Minister reads the "blues" afterwards he will see what he said in reply to the first question.


GOVERNMENT POLICY
John Edward Broadbent: Since they are now reverting back to a process which many on this side of the House said should have been pursued a long time ago, and that is talk about serious bilateral issues instead of pursuing a never-never land of hopeful benefits with free trade down the road, is the Minister saying that the Government of Canada is recommending setting up a special committee with American and Canadian representatives who would deal, for example, with the very important softwood decision which is to be made

May 29, 1986
Oral Questions
and which could effect thousands of more jobs being lost in Canada?


Michael Holcombe Wilson: Mr. Speaker, I responded in reply to the Hon. Member for Saint-Henri- Westmount that the question of the softwood lumber countervail action is part of a legal process which has already been started. That matter is under way. What I went on to say is that we recognize the importance of these bilateral issues and the effect they can have on the ongoing trade negotiations. So it is important that we try to find ways of managing these bilateral disputes.


ROLE OF PROVINCES
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, my question is directed to the Acting Prime Minister. It concerns free trade. In early February, Premier Getty, representing the provincial Premiers, sent to the Prime Minister an eight point proposal concerning the provinces' role in the free trade talks. As of last night, just three business days before the federal-provincial conference on free trade is to begin, the provinces have received no official reply.
Why has the Government not responded to the provinces? Even if the Government responds today, only 48 business hours before the conference, the provinces will not have time to respond appropriately. Is this an example of the Government's commitment to full participation of the provinces in the free trade talks.


Mr. Speaker:: Order, please. This is a little long.


Michael Holcombe Wilson: Mr. Speaker, let me set out the degree of discussion which has taken place between the Government and the provinces during this period of time. Since the Halifax meeting there have been five very, very productive meetings of the ongoing committee of officials chaired by Ambassador Reisman. In addition to that, in response to the letter Premier Getty sent to the Prime Minister on how the provinces might participate in the trade discussions, the Secretary of State for External Affairs has met or talked to most of the Premiers in order to continue the dialogue on a political basis.
Since then the Prime Minister has called the Premiers together, and the purpose of the meeting on Monday night is to discuss this matter further. That is considerable consultation with the provinces.


Raymond Garneau: Mr. Speaker, the fact remains that the provincial premiers still do not know the federal Government's position.


INQUIRY WHETHER PRIME MINISTER COMMUNICATED WITH UNITED STATES PRESIDENT TO STOP TAX ON LUMBER PRODUCTS
Raymond Garneau: My supplementary also concerns the meeting of First Ministers. We know that the U.S. Government is receiving a petition.
Did the Canadian Government, did the Prime Minister get in touch with the President of the United States to try and stop this levy of $57 per 1,000 board feet, which amounts to a 27 per cent tariff on our lumber exports to the United States? Did the Prime Minister discuss this with the President of the United States?


Mr. Speaker:: Order, please. I will allow the answer in this case, but I would ask Hon. Members when asking supplementary questions at least to help the Chair figure out how they are clearly supplementary. I will allow the answer in this case.


Michael Holcombe Wilson: Mr. Speaker, in response to the preamble to the Hon. Member's question, the whole purpose of the meeting on Monday is to discuss the participation of the provinces in the trade discussions. Surely the Hon. Member understands that it is necessary for the Prime Minister and the Premiers to get together to discuss that matter.
The second point of the Hon. Member's question was the same question which his seatmate asked a few minutes ago. Surely they can get together and get an answer.


Mr. Rossi:: You never gave an answer.


JOB LOSSES IN BRITISH COLUMBIA
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I have a question for the Minister of State for Forestry who may at least give us some facts with respect to this industry. Yesterday shake and shingle producers told us that almost 4,000 jobs will disappear in British Columbia, while the American Ambassador claimed that most of these jobs will survive. Whom does the Minister believe, Mr. Niles or our producers?


Hon. Gerald S. Merrithew (Minister of State (Forestry)):: Mr. Speaker, Ambassador Niles certainly has a right to his own opinion. He is expressing a view on behalf of his Government. He is trying to rationalize the decision taken by his own administration. Personally, I have some difficulty with it. The Government of Canada, and certainly the British Columbia Government as well as the people in British Columbia who are adversely affected by it, do not treat it very lightly.
May 29, 1986


REQUEST THAT GOVERNMENT COMMUNICATE URGENTLY WITH UNITED STATES PRESIDENT
Steven W. Langdon: I have a supplementary, Mr. Speaker. Considering the previous question, does the Government intend to call Mr. Reagan immediately and tell him that Mr. Niles is wrong about the facts he pointed out to the President?


Michael Holcombe Wilson: Mr. Speaker, perhaps I could respond to the Hon. Member's question. Ambassador Niles is very clear in his understanding as to what the understanding of the people of Canada is in terms of the effects of the decision taken by the U.S. administration on the shake and shingle industry. Obviously, there are differences in points of view between the understanding of the Americans and the understanding of Canadians. As I said yesterday, we will assess on an ongoing basis the impact of this decision on the people who work in the industry, and make our decisions accordingly.


EXCLUSION OF TERRITORIAL LEADERS FROM TALKS
B. Keith Penner: Mr. Speaker, my question is for the Acting Prime Minister. Is the Minister aware of official protests which have been received from the Leaders of the two territorial Governments, that is, Yukon and Northwest Territories, concerning their exclusion from Monday's talks on the free trade negotiations? Is he aware of this? If so, what has been the Government's response to these protests regarding their exclusion?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, I am not aware of any such protests. However, they certainly will be given every consideration, as one would naturally expect from me, should they be received.


MINISTER'S ENCOURAGEMENT OF NORTHERN PARTICIPATION
B. Keith Penner: Mr. Speaker, my supplementary question is for the Deputy Prime Minister. They have been received by the Prime Minister's Office. I would like to know how the Deputy Prime Minister can reconcile excluding the territorial leaders from these talks when the Minister of Indian Affairs and Northern Development goes out of his way to encourage active participation in all matters which concern the people in the northern part of Canada.


Erik Nielsen: Mr. Speaker, as far as I am aware they will be part of the consultation process. I certainly have not been shy in my representation in this place in years past in ensuring that that kind of process exists. I will certainly do that again in this instance.
Oral Questions


UNITED STATES AMBASSADOR'S LETTER
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is for the Minister of Finance. I am sure he is aware that over 1,000 shake and shingle workers are down at the Blaine border crossing right now making their views known on the action which has been taken against their industry. My question is in relation to Mr. Niles' letter which appeared in all the major Canadian newspapers today in which he states in part:
To put the President's decision in perspective, it is worth noting that the decision was taken almost at the same time that U.S. statistics on bilateral trade for the first quarter of 1986 were released. They show that Canadian exports of goods to the U.S. during the first three months alone of this year were worth- $17.3 billion.
Since Ambassador Niles has put that on the record, what is the view of the Minister of Finance regarding it being used as the reason for placing the 35 per cent duty on shakes and shingles? Does the Minister not think that will lead Secretary of Commerce Baldrige on Monday to move against softwood-


Mr. Speaker:: Order, please. It is long.


Michael Holcombe Wilson: Mr. Speaker, I have said on a number of occasions in the United States that it is wrong to isolate just the trade figures in the statistics of trade in goods and services between Canada and the United States. Offsetting that we have a major services deficit. The combination of the two puts the picture in a much better perspective, one slightly in favour of Canada but not sufficiently in favour of Canada that would justify any decision along the lines the Hon. Member has just enumerated.


Some Hon. Members:: Hear, hear!


REQUEST THAT UNITED STATES PRESIDENT BE CONTACTED
James Ross Fulton: Mr. Speaker, my supplementary question to the Minister of Finance is this. Since the shake and shingle workers and the industry have made it clear that they do not want compensation from either the Cabinet or through some squirrelly method through U.S. trade law, will the Minister now agree that the only thing for the Government of Canada to do is to get a hold of President Reagan and make sure that either negotiations are forthcoming or that the 35 per cent duty is removed?


Michael Holcombe Wilson: Mr. Speaker, if there is one thing which has been made clear to the United States Government it is that the Government of Canada is not at all happy with the decisions that were taken last week-


James Ross Fulton: You're not doing anything!


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member says that we are not prepared to do anything. Today, in Halifax, the Secretary of State for External Affairs is meeting with Secretary Shultz. Today, in Washington, officials of the Government of Canada are meeting with representatives of the U.S. administration. We are prepared-

May 29, 1986
Oral Questions


James Ross Fulton: You're not doing anything!


Michael Holcombe Wilson: The Hon. Member does not want to listen to the answer. However, I think that his constituents would like to hear it. We have these ongoing discussions with the United States to try to find a solution to this problem which will help the people about whom he is talking.


THE ADMINISTRATION
Mr. Don Boudria (Glengarry-Prescott-Russell):: My
question is directed to the Solicitor General and concerns the matter of alleged kickbacks demanded by the Conservative Party in exchange for contracts from the Department of Public Works. The day before yesterday, the Hon. Member for Broadview-Greenwood drew the attention of the House to allegations concerning Mr. Andre Bureau, and at the time the Minister of Justice said there would be an investigation. Why did they agree to an investigation in the case of Mr. Bureau, when the day before, they refused to order an investigation of the Public Works contracts? Is there one justice for Canadians and another justice for the Conservatives?


Hon. Perrin Beatty (Solicitor General of Canada):: Mr. Speaker, if the Hon. Member has any evidence of any criminal activity on the part of anyone, he has the obligation to bring it directly to the attention of the police. I hope he will do so.


Don Boudria: I hope, then, that the Minister has evidence in the other case which he has not shared with us.


REQUEST THAT INQUIRY BE INSTITUTED
Don Boudria: Mr. Speaker, in light of public comments in the media concerning these alleged kick-back schemes in Public Works is there, or is there not, going to be a criminal inquiry? There is in the other case. If not, are Canadians being led to believe that this is Tory justice and that is what they will get from now on?


Henry Perrin Beatty: Mr. Speaker, I guess what the public will be interested to know is whether this is simply Liberal histrionics or whether the Hon. Member has any evidence whatsoever to turn over to the police. If he has any evidence to turn over to the police-


Carlo Rossi: Look at the Gallup Polls, they will tell you!


Henry Perrin Beatty: -they will be pleased to receive it and they will investigate.


Don Boudria: If it's a Tory it requires more evidence than for someone else.


AIR CANADA
Mr. Les Benjamin (Regina West):: Mr. Speaker, my question is for the Deputy Prime Minister. It concerns a matter about which I know he and his colleagues are well aware. I have just received word that the Air Canada flight attendant who expressed her opinion when asked by a delegate to a Conservative convention has been assessed a 30-day suspension without pay.


Some Hon. Members:: Shame!


Leslie Gordon Benjamin: I would like to ask the Deputy Prime Minister if the Government will make representations to Air Canada to have this unjustified decision reconsidered and rescinded?


Erik Nielsen: Mr. Speaker, the Minister of Transport responded yesterday, and I believe the day before, that when received by him the matter was referred at once to the board of Air Canada. The decision, about which I am not aware, and which has been drawn to the attention of the House by the hon. gentleman, is a corporate decision.


Mr. Deans:: It wouldn't have happened if it had not been for Maz.


Erik Nielsen: His representations with respect to what should occur from now on will be brought to the attention of the Minister of Transport immediately upon his return. Should he see fit in his judgment to pass those on to the board, I am sure he will do so.


EXPRESSION OF OPINIONS
Leslie Gordon Benjamin: Mr. Speaker, since this all started out of the Minister of Transport's office and has now culminated in this, are all employees of the Government of Canada, Crown corporations and agencies, to consider that they suffer the consequences of having an opinion and expressing it when asked for it, whether they are on or off duty? Will this now be the criteria of the Conservative Government?


Erik Nielsen: Not at all, Mr. Speaker. The hon. gentleman does a disservice to the House when he leaves that sort of murky accusation or implication lying around. To set the facts straight, let us remind ourselves that the Minister of Transport
May 29, 1986

received a letter and referred it at once to the board of Air Canada. To say that it all started in the Minister's office is a distortion of the truth. It is a corporate decision that has been made. The Hon. Member's representations will be brought to the Minister's attention.


CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION CANCOM CORPORATION RATES
Mr. John Gormley (The Battlefords-Meadow Lake):: Mr. Speaker, in July, 1983, a Saskatchewan cable television company, Battlefords Community Cablevision, was concerned and wrote two letters to the CRTC about an apparent inconsistency in rates offered by Cancom. My question is directed to the Minister of Communications. At that time did the CRTC undertake an investigation of this matter? If so, precisely what was done?


Hon. Marcel Masse (Minister of Communications):: Mr. Speaker, I have taken the question as notice. I will check with the Department of Communications and the CRTC and send you the answer.


VISIBLE MINORITIES
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is for the Minister of State for Multiculturalism. Before taking office the Prime Minister committed himself to a process of Japanese-Canadian redress, including compensation. However, the Minister has again thrown cold water on the Government's written promise of December 15, 1984, to negotiate a settlement with the national association. Given that any agreement is only as good as the process, a process which has not been in existence, why is the Minister going against the spirit of his own leader and the commitment made by his predecessor in 1984? Is he telling the House that they were both wrong?


Hon. Otto Jelinek (Minister of State (Fitness and Amateur Sport) and Minister of State (Multiculturalism)):: Mr. Speaker, as is usually the case, the Hon. Member is a day late, since I answered a similar question put by an Hon. Member from the New Democratic Party yesterday. I would repeat for the Hon. Member's sake that, whatever commitment this Party and the Prime Minister made, is going to be kept, and that is a heck of a lot more than can be said for the Liberals.
Oral Questions


Sergio Marchi: Mr. Speaker, I am going to ignore his petty articulation on such an important issue. I would only say that his position has been shameful and irresponsible given his own Government's commitment-


Mr. Speaker:: Order, please. Does the Hon. Member just have a question?


REQUEST THAT MINISTER DIVEST HIMSELF OF RESPONSIBILITY FOR REDRESS
Sergio Marchi: Mr. Speaker, since the Minister is incapable of respecting his predecessor's commitment-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The Hon. Member is not asking a question. He can see what his preamble is causing. Would he just put a question now?


Sergio Marchi: Will the Minister remove himself from the dossier of Japanese-Canadian redress since he does not have sensitivity to it or the confidence of the community, and cannot respect the commitment of the Prime Minister and his own predecessor?


Otto John Jelinek: Mr. Speaker, I do not need any lessons on sensitivity from an Hon. Member who uses this issue to grandstand, because that is exactly what he is doing here today and has been doing all along.


Some Hon. Members:: Hear, hear!


Otto John Jelinek: The Hon. Member knows full well that I initiated a wide-ranging series of discussions with all interested parties-


Sergio Marchi: Take your running shoes out of your mouth.


Otto John Jelinek: Are you going to listen, or are you going to motor-mouth like you usually do?


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Order.


LABOUR RELATIONS
Iain Francis Angus: Mr. Speaker, my question is for the President of the Treasury Board. The Minister will know that this week more than a thousand Government employees who operate ships for four federal Departments right across the country were forced off the job because the Government refused to negotiate in good faith or

May 29, 1986
Oral Questions
to accept the principle that workers in different parts of the country doing the same jobs should be paid at the same rate. Will the Minister instruct his officials to accept the majority conciliation report which partially redresses this very important issue?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, 1 take strong objection to the preamble to the Hon. Member's question. In this case the Government has never refused to negotiate in good faith. The members of the union walked off their jobs illegally and we are now seeking an injunction to deal with the issue.


REQUEST FOR RESUMPTION OF BARGAINING
Iain Francis Angus: Mr. Speaker, if the Minister wants to avoid labour disputes in the four Departments, and if he is not prepared to accept the conciliator's report which was reluctantly accepted by the unions, would he at the very least go back to the bargaining table to present a new offer, something which he has not done in six months, to see if some settlement can be reached?


Robert René de Cotret: Mr. Speaker, the Hon. Member speaks of good labour relations. I would just like to tell him that in the last several months we have successfully signed 64 collective bargaining agreements with 159,307 employees in the Public Service, with no labour disruptions whatsoever, at an average rate of 3.53 per cent for three years.


Some Hon. Members:: Hear, hear!


Robert René de Cotret: That represents 82.29 per cent of unionized Public Service workers. We are doing everything in our power to reach good negotiated settlements that are fair for the public, for the Government and for the employees concerned, and we are succeeding.


TEXTILES AND CLOTHING
Jean-Guy Guilbault: Mr. Speaker, my question is directed to the Minister of State (Finance).
Some Quebec industries have told me that Romania is circumventing import quotas on specific items and saturating the Canadian market with winter and fall overcoats instead of pyjamas and raincoats, and so forth.
Does the Minister intend to make enquiries at Canada Customs in order to correct, if necessary, the way the tariffs on textile imports are enforced?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I believe this matter should be brought to the
attention of my colleague, the Minister for International Trade. In fact, I believe he is examining the matter at this time.
I may add that imports from Romania represent only 1 per cent of our clothing imports.


INDUSTRY
Jean-Claude Malépart: Mr. Speaker, I want to direct my question to the President of the Treasury Board and Minister responsible for the Montreal area Cabinet committee.
The survival committee got together last week and their unanimous view was that the federal Government did not do anything to avoid, or rather to save jobs in Montreal East, and Canadian Vickers Limited did lay off 175 employees.
Can the Minister tell us when he will announce concrete measures to avoid plant closures in Montreal East and create more jobs? Second, did he get a report from the advisory committee?


Robert René de Cotret: Mr. Speaker, I am pleased to reply to my colleague. The answer to his second question is yes, the advisory committee did submit a preliminary report in record time, in fact hardly a month after it was established. The advisory committee is planning to present a second report to the Cabinet committee on Friday of next week.
With respect to measures, I would point out to the Hon. Member that we have already unveiled a fair number of measures designed to boost Montreal's economic development. Indeed some of these measures had been recommended by the advisory committee.


REQUEST THAT GOVERNMENT PUBLISH REPORTS PRESENTED BY ADVISORY COMMITTEE
Jean-Claude Malépart: Mr. Speaker, the Minister did not give an answer concerning specific measures to improve deteriorating conditions in Montreal East.
Can the Minister tell us whether he will be releasing the advisory committee reports, and whether the advisory committee report contains recommendations to help Montreal East?


Robert René de Cotret: Mr. Speaker, since the purpose of this exercise is give back to Montreal the economic stamina it lost under the previous Government, unfortunately, it stands to reason that the appropriate recommendations made by the advisory committee
May 29, 1986

will be released to the public. They will be announced at the earliest opportunity, and Montreal will benefit from measures taken by a Government which is concerned about the economic development and the economic future of Montreal and its residents.
* *
*



SHIPYARDS


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Minister of State (Small Businesses).
Why did he mislead the people of Sorel last week by telling 2,000 demonstrators on Parliament Hill that the Government had never given the president of Versatile Vickers a mandate for rationalizing shipyards in Quebec? Why did he say that?


Hon. Andre Bissonnette (Minister of State (Small Businesses)):: Mr. Speaker, I repeat, we never gave Mr. Saunders a mandate for rationalizing or shutting down any business whatsoever, either in Sorel or anywhere else in Quebec.



ENQUIRY WHETHER GOVERNMENT CAN CONFIRM DISCUSSIONS WILL BE HELD TO ESTABLISH SHIPBUILDING POLICY

Lorne Edmund Nystrom: In that case, Mr. Speaker, I have a supplementary.
Will the Minister now confirm before the House that he intends to meet the commitment he made to those 2,000 people from Sorel, namely that there would be discussions with the shipyards and the unions in order to establish a Canadian shipbuilding policy?


André Bissonnette: Mr. Speaker, I could do without comments from the Liberal Member for shutting down businesses.
Oral Questions



DIESEL, HOME HEATING, AND AVIATION FUEL PRICES

Mr. J. R. Ellis (Prince Edward-Hastings):: Mr. Speaker, the Minister of Energy, Mines and Resources has done very well in getting the price of gasoline down.


Some Hon. Members:: Oh, oh!


John Raymond Ellis: When will the Minister or her Parliamentary Secretary be able to advise us of some success in terms of bringing down the price of diesel fuel, which fuels the trucks on our highways, the price of home heating oil for senior citizens, and more particularly the price of general aviation gas which is still particularly high?


Mr. John McDermid (Parliamentary Secretary to Minister of Energy, Mines and Resources):: In the fullness of time, Mr. Speaker.
* *
*



ENVIRONMENTAL AFFAIRS


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is directed to the Minister of the Environment. As the Minister knows, repeated scientific studies have reported the presence of toxic substances in crops and food. In view of mounting public preoccupation with health, will the Minister undertake to launch immediately a study on the presence of toxic chemicals in food, based upon a broad national sample?


Hon. Tom McMillan (Minister of the Environment):: Yes, Mr. Speaker. I think that is a reasonable representation. It is an idea with which my Department and I are wrestling. Some of the concern is based upon a major study done by Kate Davies through the auspices of the International Joint Commission, which the federal Government helped to fund. However, I think the study was fairly limited in the sense that it focused upon only seven toxic chemicals. It was certainly not on the broad range of toxic chemicals the Hon. Member has called to have studied. In light of those circumstances, the representation he has made has been well taken by me and by my Department.
Mr. Speaker, I can say that last week I was delighted to meet the people from Sorel and to reassure them about what was happening in Quebec and to put a stop to those negative rumours the Liberal Members have been spreading with their talk about shutdowns, shutdowns and more shutdowns. The only one who is talking about shutdowns here, Mr. Speaker, is the Hon. Member for Montreal-Sainte-Marie.



WITHDRAWAL OF STORM WARNINGS PUBLICATION

Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in the meantime, while the Minister is wrestling with this proposal- and I hope it will not be for too long-will he release the Storm Warnings report which he stopped, or at least undertake to reinstate the Guelph Toxicology Centre which the Minister of Finance wiped out in his November, 1984, Budget.

May 29, 1986
Oral Questions


Michael Holcombe Wilson: It was not a Budget.


Thomas Michael McMillan: Mr. Speaker, I suppose this is yet another example of the left hand of the Liberal Party not knowing what the right hand is doing, or indeed an example of one hand chopping off the other at the wrist. The Storm Warnings publication was withdrawn because there were some very marked differences of opinion in the scientific community about the facts in the study. As a result of strong representations made to me by my Department's scientists-


Mr. Gauthier:: Canadian scientists, not yours.


Thomas Michael McMillan: -by those in the Federal Department of National Health and Welfare, and by the Liberal Government of Ontario, the publication was withdrawn. We have no intention of re-releasing it until the scientific community can agree on the facts as reported.



HUMAN RIGHTS


Mr. Dan Heap (Spadina):: Mr. Speaker, I have a question for the Acting Prime Minister. Since Canada has resumed aid to El Salvador, will the Deputy Prime Minister tell us what Canada is doing to protect the five Salvadoran human rights workers who were recently kidnapped, tortured, or arrested by the Treasury Police, in particular Michele Salinas who, during the visit last year of the Minister of External Affairs, risked her life to present to that Minister, in front of President Duarte, a file on the human rights violations in El Salvador? Will the Minister explain why Canada has resumed aid to the Government of El Salvador, which is attacking its own independent Human Rights Commission?


Erik Nielsen: Mr. Speaker, I will make inquiries in respect of the details contained in the hon. gentleman's question and will ensure that the Minister responsible gives him a full reply either in the House or by correspondence.



REQUEST THAT GOVERNMENT MAKE INQUIRIES

Daniel James Macdonnell Heap: Mr. Speaker, will inquiries be made today and directly to the Government of El Salvador in San Salvador? Human lives are at risk, in the hands of police with a very brutal reputation for torture and murder.


Erik Nielsen: Mr. Speaker, I will ensure that the hon. gentleman's representations are brought to the attention of departmental officials today. Should there be a need to follow his suggested course, I am sure they will take the responsible course of action.
[ Translation]



CANADA POST CORPORATION


Alfonso Gagliano: Mr. Speaker, my question is for the Acting Minister responsible for Canada Post. Canadians from sea to sea are protesting the cutbacks in home delivery services. Yesterday, people from Montreal, who felt frustrated at not being able to speak to the Minister responsible for Canada Post, invaded the foyer of the House of Commons. How many protesters must come to Parliament before the Government provides home delivery service in new housing projects?


Mr. Bill Domm (Parliamentary Secretary to Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, I assure the Hon. Member that it is the intention of the Minister responsible for Canada Post to meet with those citizens at a satisfactory time to be arranged. I am sure he has found at times that he could not meet with his constituents, as we all have found from time to time. The second part of his question dealt with the improved service of Canada Post. I refer the Hon. Member to the Marchment Commission which had full consultation with all sectors in society today. It is on that report that we will base serious recommendations to improve Canada Post. On repeated occasions the Minister has assured the House that that will be brought before Parliament before the end of June.



GOVERNMENT RESPONSIBILITY

Alfonso Gagliano: Mr. Speaker, will the Government stop studying how to reduce the postal service and take its responsibilities by introducing daily home mail delivery to new residential districts?


William Henry (Bill) Domm: Mr. Speaker, I assure the Hon. Member that Canada Post operates on both the use of the private sector and of the public sector. We have continued to improve service. We have increased volumes of mail. We are continuing daily delivery to homes in urban areas, and we are extending services in rural areas in a different fashion to be more economically sound in administering Canada Post.



CORPORATE AFFAIRS


Ian Gardiner Waddell: Mr. Speaker, my question is directed to the Minister of Finance. The debts of Dome Petroleum are due tomorrow, and people are
May 29, 1986

wondering whether it will go out of business. Will the Minister confirm whether he, the Minister of Energy, or departmental officials have had discussions with Dome Petroleum? Is it his opinion that Dome will go out of business?


Michael Holcombe Wilson: Mr. Speaker, I think the Hon. Member is trying to excite some imagination, which is not very responsible of him. Yes, we have been in continuing discussions with the company and other parties interested in the matter. We will continue to be in touch with them. I am pleased with the progress of the discussions, and I do not think the expectations of the Hon. Member will come to pass.



INVOLVEMENT OF CHARTERED BANKS

Ian Gardiner Waddell: Mr. Speaker, I know the Minister of Finance is aware that if Dome Petroleum goes under, interest rates could go up. Would he ensure that the banks do not pass on their losses in terms of higher interest rates to ordinary Canadians?


Michael Holcombe Wilson: Mr. Speaker, that is a totally hypothetical question. Surely the Hon. Member understood my response to his first question.


Mr. Speaker:: One question, the Hon. Member for Hamilton East.



REPRESENTATION OF WOMEN AND FRANCOPHONES ON FREE TRADE NEGOTIATING TEAM

Ms. Sheila Copps (Hamilton East):: Mr. Speaker, since ambassador Reisman, Canada's negotiator, believes that it is enough to have drivers and secretaries representing Francophones and women in the free trade negotiations, can the Acting Prime Minister tell us what he has done to keep the promise of the Secretary of State for External Affairs to add Francophones and women to the negotiating team so that they will really be in a position to have a say in the free trade negotiations?


Erik Nielsen: Mr. Speaker, this question has been put before, and the lead Minister, the Secretary of State for External Affiars, answered it on March 21. He is recorded at page 13473 of Hansard saying:
-we agree that the Canadian team should more accurately reflect Canadian society.
Steps are being taken to see that that is done.
Business of the House


Some Hon. Members:: No answer.



BUSINESS OF THE HOUSE

Hon. Herb Gray (Windsor West):: Mr. Speaker, I would like to ask the Member on the government side who is carrying out the duties of Government House Leader whether he has anything further to report to the statement given yesterday by the House Leader. This is Thursday, the day we usually ask the House business question. Does the Acting House Leader have anything further to add to the statement of yesterday?


Philip Derek Lewis: No, Mr. Speaker. We intend to discuss this matter with the House Leaders. At this time I am not in a position to make any public declaration as to what we might be doing on Monday. I can assure you, Mr. Speaker, that we will be doing so as soon as possible.



POINT OF ORDER


Erik Nielsen: Mr. Speaker, I rise at the earliest opportunity to correct an impression that I may have left in my responses to the Hon. Member for Regina West (Mr. Benjamin). I believe I said the correspondence which was referred to by the Minister of Transport (Mr. Mazankowski) was referred to the board of Air Canada. I meant to say that it was referred to the management of Air Canada and not the board.


Leslie Gordon Benjamin: Mr. Speaker, I rise on the same point of order. The letter to the Minister of Transport (Mr. Mazankowski) was referred to the executive correspondence unit of the Department of Transport. I will be happy to give the Deputy Prime Minister (Mr. Nielsen) the file number.


Mr. Alan Redway (York East):: Mr. Speaker, I rise on a point of order. It concerns House business and my question will be addressed to the Parliamentary Secretary.


Mr. Speaker:: Given that the Hon. Parliamentary Secretary said he had nothing to announce today, it is a little difficult to allow further questions. The Hon. Member for York East (Mr. Redway) briefly.


Alan Redway: Mr. Speaker, Bill C-67 was reported back to this House at the end of January. It has not come back on the

May 29, 1986
Canada Deposit Insurance Corporation Act
Order Paper for third reading. Can the Parliamentary Secretary assure us that Bill C-67 will come back next week?


Philip Derek Lewis: Mr. Speaker, I can assure the Hon. Member that we are actively considering proceeding with that Bill. It has been a question of making sure that all the amendments from all Parties are on the Order Paper in order to be able to proceed and to be sure that we have the critics from the two Opposition Parties in position. I can assure the Hon. Member that Bill C-67 is under very active consideration.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-86, an Act to amend the Canada Deposit Insurance Corporation Act, as reported (with amendments) from the legislative committee.
Mr. Speaker:: I believe what I am about to say has been distributed to Hon. Members. I asked that it be distributed earlier so that Members would have the information in advance.
There are six report stage motions on today's Notice Paper in amendment to Bill C-86, an Act to amend the Canada Deposit Insurance Corporation Act.
As Motions Nos. 3 and 4 attempt to amend line 30 in Clause 1 of the Bill and are significantly similar, it would be my intention to select Motion No. 3 standing in the name of the Minister of State for Finance (Mrs. McDougall) as she is the sponsor of the Bill. Accordingly, Motion No. 4 will be dropped from the Notice Paper.
Motions Nos. 1, 2, 3, and 5 will be grouped for debate and voted on as follows: Motion No. 1 will be voted on separately; an affirmative vote on Motion No. 2 obviates the question being put on Motion No. 3. A negative vote on Motion No. 2 requires the question to be put on Motion No. 3; and Motion No. 5 will be voted on separately. Motion No. 6 will be debated and voted on separately.
Therefore, I propose to call Motion No. 1 standing in the name of the Hon. Member for Regina East (Mr. de Jong). Under the circumstances I think the House will give its consent that the motion be moved by Mr. Deans for Mr. de Jong. Is that agreed?


Some Hon. Members:: Agreed.


Ian Deans: Motion No. 1
That Bill C-86 be amended in Clause 1 by striking out lines 16 to 18 at page 1 and substituting the following therefor:
"intendent of Insurance, the Inspector General of Banks and the Deputy Minister of Consumer and Corporate Affairs; and
(c) not more than three other members"


Mr. Speaker:: The same situation arises with Motion No. 2 standing in the name of Mr. Riis. Is there unanimous consent for the Hon. Member for Hamilton Mountain (Mr. Deans) to move it for the Hon. Member for Kamloops-Shuswap (Mr. Riis).


Some Hon. Members:: Agreed.


Ian Deans: Motion No. 2
That Bill C-86 be amended in Clause 1 by striking out lines 25 to 30 at page 1 and substituting the following therefor:
''Board of Directors
(a)	if the person is employed in any capacity in the public service of Canada or holds any office or position of which any salary or other remuneration is payable out of public money; and
(b)	unless the person complies with the following:
(i)	that within sixty days of appointment and thereafter annually, the person reports in writing and in confidence to the chairman all direct and indirect interests the person holds in member institution;
(ii)	that as a director, the person is required to divest himself of any direct or indirect interests in any shareholding that is in excess of ten per cent of the outstanding shares of any class of share of a member institution or where the chairman is of the view that the shareholding constitutes a significant interest in the member institution; and
(iii)	subject to the chairman's request, that the person divests himself of shares that are pledged to a lending institution as collateral for loans made to the person, and such divestment shall be accomplished by selling the shares in an arm's length transaction or by placing the shares in a trust."


Barbara Jean McDougall: Motion No. 3
That Bill C-86 be amended in Clause 1 by striking out lines 26 to 30 at page 1 and substituting the following therefor:
"(a) employed in any capacity in the public service of Canada or holds any office or position for which any salary or other remuneration is payable out of public moneys;
(b)	a member of the Senate or House of Commons of Canada or a member of a provincial legislature; or
(c)	a director, officer or employee of a federal institution or provincial institution."


Mr. Speaker:: Is there unanimous consent that the Hon. Member for Hamilton Mountain (Mr. Deans) move Motion No. 5 for the Member for Regina West (Mr. de Jong)?


Some Hon. Members:: Agreed.


Ian Deans: Motion No. 5
That Bill C-86 be amended in Clause 1 by striking out lines 1 to 8 at page 2.


Mr. Speaker:: Motions 1, 2, 3 and 5 are grouped for debate. Debate. Under the circumstances, the Hon. Minister of State for Finance (Mrs. McDougall).


Barbara Jean McDougall: Mr. Speaker, I would like to offer some comments on the
May 29, 1986

amendments proposed to Bill C-86. It is important that as we commence this stage of the legislation Members are aware of the importance of the legislation.
As a result of the difficulties experienced by several financial institutions over the past several years, the deposit insurance system has experienced substantial losses. The extent of the losses were such that the CDIC's accumulated financial resources were depleted. In other words, CDIC is in need of the money. Moreover, these losses will continue to impede the rebuilding of the deposit insurance fund, which will require rebuilding to provide it with a sound financial base. Indeed, without an increase of premiums the deposite insurance fund's deficit will continue to increase even if CDIC does not incur additional losses in the future. Interest costs on funds borrowed to finance past deficits, and this is an important point, would exceed premium revenue at current rates. This is the reason for the urgency behind the legislation being discussed today.
Bill C-86 would raise the premiums paid by member institutions of the CDIC from the present level of one thirtieth of one per cent to one-tenth of one per cent of insured deposits effective February 1, 1986. This increase in premium levels is necessary to begin the lengthy process of reducing the size of CDIC's deficit.
The increase in premium rates expires at the end of March, 1987, and thus would be an interim measure, pending the completion of a full review of the deposit insurance system. The reports prepared by the House finance committee and the committee in the other place examined this issue and their reports are important elements in this process. I should indeed thank all Hon. Members for their participation in that discussion.
Some Members of Parliament have expressed concerns that the proposed premium increase is effective February 1, 1986. It has been suggested, for example, that the legislation enforces a retroactive increase in deposit insurance premiums. It is important to note that this legislation was first tabled and made public on November 29, 1985. CDIC members therefore had ample notice that the Government was planning to raise CDIC premium rates.
When it became apparent that the legislation would be delayed, it was decided that this increase in premiums be authorized in the Bill as of a specific date. In mid-January we announced that we would make the higher premiums effective February 1. A letter to this effect was sent to all CDIC member institutions. We were very concerned about providing them with warning.
Another provision is that Bill C-86 increases the size of the Board of Directors of CDIC to provide for the appointment of up to four board members from outside the federal public service. This amendment addresses the Wyman Committee's recommendation that there be broader private sector representation on the board of the CDIC. It was suggested that representatives from the private sector would complement the
Canada Deposit Insurance Corporation Act
existing membership, who are public service directors, by bringing a private sector market perspective to the decisionmaking process of the board. These directors will provide the CDIC with valuable insights on developments in the financial system. The legislation precludes individuals still active in financial institutions from serving on the board of directors.
It has been suggested that active members of the financial institution sector should be appointed to the board to ensure that the CDIC has access to timely market information. That point is well taken and that is why we propose private sector directors in the Bill. However, the appointment of active board members within financial institutions would raise serious conflict of interest concerns since CDIC board members receive sensitive information from member institutions which could frequently be competing institutions. Member institutions must, therefore, at all times be assured that the information they provide to the Deposit Insurance Corporation will not be used in a manner which is detrimental to their interests. Consequently, I believe it would not be appropriate to appoint individuals active in the financial institutions sector to serve on the CDIC board of directors.
The legislation does not preclude the possibility of having someone from the consumer sector serving on the board. Our intent is to ensure that four of the best people are selected to fill the new positions. Defining who those people should be would limit our capability to make future appointments based on that and our flexibility to pull in people from coast to coast with different kinds of expertise.
It was also proposed that there be conflict of interest provisions placed in the legislation. I share, as much as anyone, the Hon. Member's concern about the need to prevent conflict of interest with CDIC board members. However, if specific conflict of interest provisions were placed in the legislation, it could limit our flexibility in dealing with possible future conflicts of interest because these values change. If this proposal were adopted, changes to these guidelines would require legislative changes.
For this reason I feel it is advisable to have conflict of interest guidelines in corporate by-laws. This would allow the CDIC to react quickly to a possible conflict of interest situation which might arise. It is the intention of the Government to ensure that the conflict of interest guidelines which are formulated are effective. We regard this as a matter of the highest importance. Given the importance of the deposit insurance system, Mr. Speaker, I hope that all Members will join with me in supporting this legislation.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, we are going to support this legislation although we will move some amendments which we think are pretty important. We are going to support the legislation because there is no other way. We look upon it as essentially a stop-gap measure. We believe that the reason the CDIC has its present problems and has had to finance bank and trust bankruptcies in recent years is

May 29, 1986
Canada Deposit Insurance Corporation Act
because of the inadequacy of the legislation and the monitoring system. Due to this, when things went bad, as they so frequently have in recent years, both under the Liberal and Conservative administrations, the monitoring system which was supposed to protect the people of Canada from the disasters which took place were not in place.
During the hearings by the Standing Committee on Finance, Trade and Economic Affairs into Canada's financial institutions a number of witnesses supported the increase in the premium levels paid into the deposit insurance corporation. Considering the numerous failures of trust companies, loan companies, and most recently banks, and the fact that in 1983 the level of deposits covered by insurance was increased from $20,000 to $60,000, there has been a recognition that premium increases are required. We are not opposed to this increase but there are points worth touching on in this debate. We want to get them on the record.
First, the increases in premium contributions may, and I am certain will, be passed on by some if not all the institutions to the consumers through increased service charges. We have seen service charges increase in number and by very substantial amounts in both banks and trust companies. The days when banks provided services for free are long since gone. This has helped the profits of banks escalate.
Second, under the current legislation which is not affected by the amendments to Bill C-86, member institutions are entitled to reduced premiums when, in the opinion of the corporation, the deposit insurance fund is adequate having regard to all the circumstances. These reduced premiums are usually extended to member institutions in the form of a rebate.
We are not opposed in principle to the increased numbers of members on a corporation board. There is little doubt that the CDIC as well as the other regulating bodies are in desperate need of a fundamental reorganization. I would include in that group of organizations which need fundamental reorganization the office of the Superintendent of Insurance. I hope that when we get the new system in operation the Superintendent of Insurance, the Inspector General and the head of the Bank of Canada will talk to each other. Apparently when the Superintendent of Insurance realized that there were certain things wrong with the trust companies there was no communciation with the Inspector General who could have taken early action which would probably have avoided some of the major disasters which took place.
However, the concern with this specific provision is that the majority position will in future be held by private sector rather than public sector members. We find that very strange because, as the Minister knows, there is a very distinct possibility of a conflict of interest. While the latter may well have more hands on experience, as long as CDIC has access to the Consolidated Revenue Fund it cannot be construed as a private sector organization. It should not be seen as a glorified Canadian bankers' association. Therefore, we would have serious reservations about handing over majority control of the
CDIC to private sector oriented directors. The major proponent of this latter proposal was the Wyman committee which contended that: "in an environment of deregulation" it was essential that CDIC reflect that reality.
As I indicated earlier, we believe that Bill C-86 is a stopgap, short-term measure. Taken in the context of the recent bank and trust company failures, this legislation should only be interpreted as a minimal knee-jerk reaction rather than a substantial beginning to require reform of the regulatory and supervisory institutions. For example, from the direction of both Bill C-86 and the proposed legislation which will be presented more formally some time in the future, the Government appears somewhat reluctant to fully undertake to bring into existence the recommendation of the standing committee on finance for a national financial administrative agency which would consolidate all regulatory bodies into one organizational structure.
I have already indicated our concerns, that if we do not do this we will have a repeat of what happened previously when one of the important regulatory agencies did not communicate with the other. In the course of debate we want to emphasize the interim nature of the Government's response to the crisis in the financial sector. When I talk about a crisis, I do so advisedly. Just look at the billions of dollars the CDIC has had to pay out because of the failures of trust companies and banks.
We have some questions concerning Bill C-86 which need to be answered. First, what measures are there in the Bill to prevent members of the board of directors from the private sector being considered on the basis of political connections rather than on merit? Second, why would the Government consider it astute to permit the use of alternates on the board when the Government-appointed Wyman committee recommended against such a practice? Third, should CDIC, as a result of the increase in the number of private sector board of directors, be placed in a position of appearing to become a federal agency which in fact is little more than the equivalent of the Canadian Bankers' Association; a vehicle for the private sector to influence direction of Government policy and perhaps as a means by which to manipulate competition amongst member organizations?
The Canada Deposit Insurance Corporation was established in 1967. In its first year of operation the corporation insured 28 federally-incorporated financial institutions, 10 of which were banks, and 41 provincially-incorporated trust and loan companies. The level of deposit protection was set at $20,000 and the total amount of deposits insured was $17.1 billion. By the end of 1984 there were 140 federally-incorporated institutions affiliated with the CDIC, 72 of which were banks, and 46 provincial institutions. The insured deposits had increased from $20,000 to $60,000. Total deposits insured were $162 billion. Apart from that change in 1983, the corporation's authority to borrow from the Consolidated
May 29, 1986

Revenue Fund was also increased from $500 million to $1.5 billion. Both of these substantial increases were introduced in the wake of the Crown-Greymac-Seaway trust fiasco of that year.
Let me pause for a moment to say something about that. We understand that the CDIC, having paid out the money lost, wound up with 10,000 apartment units in Toronto valued at something in the neighbourhood of $1.5 billion. We are very concerned about that real estate. How is the CDIC going to dispose of it? If it does so quickly and at market value, and if the market is very active and they get a high price, and I suppose from the point of view of the CDIC it should get as high a price as it can in order to recoup as much as possible of the money it paid out, then the new owners will be required and entitled to ask for and maybe get very substantial rent increases on those apartments. They are entitled to make a reasonable profit. We are very concerned about how that kind of transaction will be dealt with by the CDIC.
Like the Office of the Inspector General of Banks, the CDIC, while having a vital role to play in the regulation of deposit-taking institutions, has never been considered until very recently as an essential service. Previous Governments, and to some degree the present Government, have not demonstrated an attitude which indicated those bodies were so regarded. In 1980, for example, when the recession was beginning to take hold, the CDIC had a total of five employees. In 1984, after eight trust companies had either collapsed or been taken over, the staff stood at 16. Even when allowing for the difference in size, we have to be struck by the fact that the U.S. Federal Deposit Insurance Corporation has a staff of 1,500 who deal only with the liquidation of failed institutions.
We believe very strongly that the CDIC and the Inspector General, or whatever agency is given the responsibility, should monitor and regulate these institutions so that the people who deposit their money will not lose it. Yet how can they do the necessary monitoring so that we will not have a repeat of the situation we had in the past?
Let me just say in closing that we believe we need people from the public sector on the board of the CDIC. We are, to say the least, unenthusiastic about a large number of private sector representatives on that board who may indeed have a conflict of interest, either obvious or not so obvious, but certainly there.


Ian Gardiner Waddell: Mr. Speaker, I want to follow up on some of the comments made by my colleague, the senior Member for Winnipeg North. I am particularly concerned about Motion No. 1 standing in the name of the Hon. Member for Regina East (Mr. de Jong). The motion calls for adding a number of people to the board.
Just to go back for a moment, as I understand it, this Bill deals with deposit insurance for banks and trust companies. The Bill does two things. It increases the premiums that the CDIC collects from the banks and trust companies. It had to
Canada Deposit Insurance Corporation Act
do that because it has paid out so much in claims recently. The Bill also increases the board of directors from five to nine people. I have no objection to increasing premiums. However, we have some problems with the number of the board of directors and we would like to make some changes.
Our concern is with the management of the corporation. That is why we have introduced a series of amendments which we think will make the management better in the public interest. I have to go to committee soon. You will notice that around this House you are going here and there. You have committees going at the same time the House is sitting and sometimes it can be very difficult. I am glad I am able to speak now and I thank my Liberal friends who have allowed me to do so at this time.
I think the first amendment is important. What it does is add to the board of directors the Deputy Minister of Consumer and Corporate Affairs. Why is that important? Well, it is important because each of the other board members represents government Departments which are close to the corporation. There is almost a conflict of interest in the sense that all the other Departments, Finance and so on, sometimes have reasons for wanting the Deposit Corporation to act, for example, in the bankruptcy of the Canadian Commercial Bank. That was a good example of a case where they would want the moneys to be paid out quickly.
What we want is to have a consumer voice on that board, and that consumer voice would be someone from the Government representing the Consumer Affairs Department who would bring a different point of view to the discussions of the board of directors. We feel it is essential to have a member of the board of directors whose role it will be to monitor the workings of the corporation on behalf of consumers. That was the first amendment by the Hon. Member for Regina East (Mr. de Jong).
We want to preserve the public sector majority on the board of directors, considering the access the corporation has to the Consolidated Revenue Fund.
In a third amendment we feel it is essential to ensure to as great a degree as possible that those who are to sit on the board of directors are not in a potential conflict of interest situation. Goodness knows, over the last few months in this House we have heard enough about conflicts of interest situations. It is an issue that is alive, and certainly the former Minister of Regional Economic Expansion is concerned about conflicts of interest.
What we are trying to do in this amendment is to make sure that those who sit on the board of directors are not in a potential conflict of interest situation. We want these provisions established in the Act. They will not preclude the corporation from having its own by-laws. The Hon. Member for Kamloops-Shuswap (Mr. Riis) proposed a very creative amendment which deals with the board of directors divulging

May 29, 1986
Canada Deposit Insurance Corporation Act
its assets and divesting itself of them. We also deal with relatives and others to whom assets may be transmitted. We think it is a good amendment and a necessary one because this board could, in fact, find itself in a conflict of interest situation because you are talking about paying off insurers of a financial institution that the Government may be involved in bailing out. If that happens, we do not want to have a conflict of interest situation.
We have also proposed an amendment which will have the disqualifications which presently apply to the private sector chairman apply to the private sector members of the board of directors. If you are going to have private sector members of the board, then we would like this provision included as well.
The last amendment we dealt with is to remove alternates from being able to attend meetings of the board of directors of the corporation. I am told that at the Legislative Committee studying Bill C-86 the Canadian Bankers Association, the Trust Company Association of Canada, and the Chairman of the Finance Committee, the Hon. Member for Mississauga South (Mr. Blenkarn), all supported the principle that alternates should not sit or attend meetings of the board of directors.
If those two groups and that fine gentleman-all probably Tories to the core-are prepared to support that amendment, let it not be us who hold it up. Indeed, we have gone further, we have proposed the very amendment that they were in favour of. That is the final amendment we propose.
Let me sum up by saying that from the NDP's point of view on this Bill we have no objection to the increased premiums part of the Bill. We do have some objection to the board of directors and how the corporation is managed through the board of directors, because it is they who will be doing the management. What we want to do is to make that board better, and that is the thrust of these amendments.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, I am pleased to participate in the debate on report stage of Bill C-86, but I have to say at the outset that we in the Official Opposition are very puzzled by the kind of timetable that the Government is using. The Minister today said that she regarded this Bill as very important and urgent.
When the Minister appeared before the House of Commons Finance Committee on September 9, 1985, she gave notice of the provisions of this Bill, and of draft legislation, which she described as items of high priority. Yet the Bill was not tabled in the House until November 29, 1985. Then the Bill sat on the Order Paper until it was finally called towards the end of January.
We in the Opposition responded to the Government's perfectly sensible statement that it was important to get this Bill dealt with, so we let the Bill go to committee after only one day of debate. In the legislative committee it was again dealt with expeditiously. It was reported out of committee on February 5. There it has sat. We remain very puzzled. We keep hearing that the Bill is urgent, but we do not see the
Government making any great moves to advance it in its legislative program.
We are concerned generally about the Government's leisurely approach to the question of the regulation and supervision of Canadian financial institutions. A review began during the last Government. The new Government decided not to accept the work of a very distinguished volunteer committee, which had worked on it for a year. That was all thrown out and a new set of consultations began, which eventually led us to a Green Paper. The Green Paper, having been out in the public sector, was then reviewed by the Standing Committee on Finance.
Bill C-103 has been tabled, but that does not go very far. This particular Bill C-86 is very much "a quick fix job" which proposes two temporary measures, and I say temporary because the Bill has a sunset clause that is valid for only one year. Bill C-86 proposes to do two things. First, it proposes an increase in the premium level paid by the member institutions of the Canadian Deposit Insurance Corporation. Currently they pay one-thirtieth of 1 per cent of their insured deposits. Bill C-86 proposes to change that to one-tenth of 1 per cent. As I said, the increase is to be in effect for one year only because this increase does not really address the problems of funding the CDIC adequately in view of the tremendous demands on the fund of recent years.
There is general agreement that the premiums should increase to reflect recent risk experienced, but the proposed increase certainly will not clear the deficit. There still remains the problem of finding a long-term solution. Different proposals have been put forward. The House of Commons Finance Committee recommended eliminating the deficit in ten to 25 years through surcharges on member institutions. The Senate Committee and the Wyman Committee both recommended eliminating the deficit in 10 years and separating deficit financing from operational financing. Those matters still remain to be addressed. In the meantime, as has been pointed out, the CDIC is able to function because it has access to a $1.5 billion line of credit from the Consolidated Revenue Fund.
One thing the Bill does is to increase the premiums in a limited way for one year, and then the whole problem has to be dealt with at that time. Second, the Bill proposes to increase the size of the CDIC's board of directors and include members from outside the Public Service. At the present time, the board of directors consists almost entirely of public servants, the Governor of the Bank of Canada, the regulator of banks, the Inspector General of Banks, the Superintendent of Insurance, and the Deputy Minister of Finance. The chairman is appointed from the private sector and is the only private sector representative.
The Bill before us proposes the addition of four outside directors. Contrary to the view of my NDP colleagues, I think that adding directors with experience in the financial field
May 29, 1986

should be an effective and useful balance. However, I am in favour of some of the amendments proposed by my NDP colleagues and I would like to address these now. In Motion No. 1 the proposal is to add the Deputy Minister of Consumer and Corporate Affairs to the board. That probably would be useful in that it emphasizes the concern for consumers. After all, the CDIC was originally intended to serve and protect the unsophisticated small depositor.
In Motion No. 2, the mover of the motion has taken some of the guidelines on conflict of interest which the CDIC has adopted voluntarily and he proposes including these in the statute. I think that is probably a good thing to do as well in that more things are in the statute rather than leaving conflict of interest guidelines up to the good will of people. This is not quite the position I took at second reading, but then a number of events have happened since that time which have lead me to have more awareness of the need to put things in the statute rather than leave it up to good faith and good judgment.
The Minister's Motion No. 3, which also sets some requirements for the public sector representatives on the board, I find quite acceptable.
I am sorry that Motion No. 4 has been struck, but since it has, I expect it is not in order for me to comment on it. However, I think the emphasis on Canadian citizenship is a useful thing that probably should have been retained.
I understand we will be debating Motion No. 6 separately and I will come back to discuss that motion later. I want to go back again to the background and the urgency of Bill C-86 and to stress that we will not be delaying it unduly either now at report stage or at third reading because it is a quick fix and there is not very much in it. However, I am deeply concerned that at this stage in the history of our country, with all that has happened in recent years, we are still only dealing with a "quick fix" Bill and have not yet addressed some of the serious problems which were illustrated when some Canadian financial institutions have got into difficulties. In 1982, deposit insurance coverage was increased from $20,000 to $60,000 after the Ontario Government seized three trust companies in the belief that public funds were at risk. In order to protect those funds, the federal Government moved to insure all depositors of the institutions at the new higher rate. In 1985, as part of the Canadian Commercial Bank bail-out, the CDIC committed $75 million and, according to its annual report, it did not make any provision for loss as it expected to be fully reimbursed. That expectation, unfortunately, was not met. Later the Government announced its intention to reimburse all depositors in both the Canadian Commercial Bank and the Northland Bank. As a result, CDIC paid out, as far as insured deposits were concerned, $250 million to CCB depositors and $170 million to Northland depositors, while uninsured deposits came to $430 million for Canadian Commercial Bank and $470 million for Northland. So at this point estimates have put the CDIC deficit at about $1.2 billion.
Canada Deposit Insurance Corporation Act
The Bill before us is a small step towards correcting the problems. Let us hope we see some substantial measures soon.


Iain Francis Angus: Mr. Speaker, I too would like to speak to the grouping of amendments in Bill C-86, an Act to amend the Canada Deposit Insurance Corporation.
Motion No. 1 put forward by one of my colleagues is a very crucial one. This amendment would place another individual, another position, on the board of CDIC. It would be a position which would be there for the purpose of keeping the consumer in mind when decisions about the policies and actions of the Canada Deposit Insurance Corporation are made. In theory, the CDIC is there to protect the consumer. The individual who places his or her trust in a financial institution, be it bank or credit union, whatever is applicable, should have his or her money protected. Should something happen to the financial stability of that particular institution, the individual consumer should not lose his or her life savings.
The current make-up of the board of directors includes a chairman from the private sector, the Governor of the Bank of Canada, the Deputy Minister of Finance, the Superintendent of Insurance and the Inspector General of Banks. With the exception of the chairman, the remaining four members are people who are directly involved on a day to day basis with the financial community. They tend, I would suspect, to get wrapped up in the dollars and cents aspect, in the regulations and in the paper flow and do not think about the average Canadian family, perhaps a couple reaching their retirement years, who have put money away not in a sock or under the pillow but in their bank account and then, all of a sudden, something happens to that institution and their money is no longer there. They will look to CDIC and say: "Well, I want my money back". If there is not a consumer advocate on the board of directors it is possible that the CDIC could make a decision which would prevent an average Canadian family headed into retirement from getting their money back. It is important to have someone there all the time to remind the senior bureaucrats that the reason the organization exists is for the protection of the little guy, the little girl-the average Canadian.
By amending this clause to add the Deputy Minister of Consumer and Corporate Affairs to the list we do two things. We provide an advocate for the consumer, while not tampering with the structure. We are not bringing in a consumer advocate per se; we are bringing in the most senior official next to the Minister in the Ministry of Consumer and Corporate Affairs. This is an official who is duty bound to look out for the consumers of the country. We wish to provide this linkage to ensure that there is some type of responsible review of any decisions that are made. Sometimes it is just a matter of a person saying: "But what about the consumer? How will this regulation affect a depositor in Vancouver or a person who has

May 29, 1986
Adjournment Motion
his or her life savings in Moncton?" I urge the Government to accept this modest but important change to the Bill.
The second motion with which I would like to deal is Motion No. 2 submitted by one of my colleagues in the New Democratic Party. This motion would establish some very specific rules for the members of the board, rules that relate to how they conduct themselves, and conflict of interest guidelines. This suggestion is not without support from the government side. When the Minister of State for Finance (Mrs. McDou-gall) appeared before the committee on September 9, 1985, she stated in part:
Conditions concerning the eligibility of prospective board members would be incorporated in the legislation to ensure that conflicts of interest do not arise.
It is clear from what we have seen in the House over the past month or so that conflict of interest guidelines have to be laid out very carefully. We believe that they must be placed into legislation rather than its being left to a Minister or the Prime Minister to draft effective and functional guidelines. The following is what is being proposed in the motion:
(a)	if the person is employed in any capacity in the public service of Canada or holds any office or position of which any salary or other remuneration is payable out of public moneys; and
(b)	unless the person complies with the following:
(i)	that within sixty days of appointment and thereafter annually, the person reports in writing and in confidence to the chairman all direct and indirect interests the person holds in member institution;
(ii)	that as a director, the person is required to divest himself of any direct or indirect interests in any shareholding that is in excess of ten percent of the outstanding shares of any class of share of a member institution or where the chairman is of the view that the shareholding constitutes a significant interest in the member institution; and
(iii)	subject to the chairman's request, that the person divests himself of shares that are pledged to a lending institution as collateral for loans made to the person, and such divestment shall be accomplished by selling the shares in an arm's length transaction or by placing the shares in a trust.
We are not talking about a small savings account which the member may have. Let us say that one of the members of the board happens to have a substantial involvement, one that would directly or indirectly, purposely or by accident, lead to a conflict of interest. I think the Government should look at this particular amendment very carefully. It should keep in mind the fact that the Minister of State for Finance specifically indicated that there was a need for such protection.
The final motion to which I wish to speak is Motion No. 5 which would prevent public sector members of the board of directors from appointing an alternate to attend any meeting of the board. The suggestion that alternates not be allowed was strongly supported in committee by the Canadian Bankers' Association, the Trust Companies Association of Canada and the Chairman of the Finance and Economic Affairs Committee, the Hon. Member for Mississauga South (Mr. Blenkarn), all of whom supported the suggestion that alternates for board members not be allowed.
I think the amendments which my colleagues have put forward make a great deal of sense. I believe they would
improve this piece of legislation. I am pleased to have had the opportunity to add my comments to the debate today.
[ Translation]


Alfonso Gagliano: As my
contribution to this debate, Mr. Speaker, I should like to say first of all that I do not object to the grouping of motions we are dealing with today, which appear to me to be quite normal and which should be included in the Bill as amended.
However, Mr. Speaker, I am very disappointed when I think that last spring, we had to adopt a special legislation to save the Commercial Bank of Canada on the brink of bankruptcy in Western Canada, that last fall, we had to adopt a legislation, following a long debate, and we know at what cost for Canadian taxpayers because the Government wanted to compensate with taxpayers' money paid both by the Canada Deposit Insurance Corporation and the Treasury of our country all investors with over $60,000 in deposits. Today, the Government has introduced a Bill which does not remedy the situation, which does not provide any way to avoid the repetition of the situation we experienced recently and which we could experience again.
In all areas, Mr. Speaker, the Government continues to come up with stop-gap measures which never solve the problems definitely; it continues to put forward half-measures and to adopt a kind of laissez faire attitude for which could prove very expensive in the long run. We should keep in mind the crisis which the liability insurance industry is experiencing today. As recently as yesterday, Mr. Speaker, I asked the honourable Minister of State (Finance) (Mrs. McDougall) when she would introduce a bill to control, because there again-
Those who had deposited their money in this bank in Western Canada were quite lucky, because they were covered to the tune of $60,000 in insured deposits and moreover, the Government decided to step in and compensate beyond $60,000 in deposits. But those who had an insurance policy with an insurance company which went bankrupt have lost everything, Mr. Speaker, and I hope that, as the Minister promised yesterday, we will have by the end of this month not a bill such as this which will remedy nothing, but a real bill which can solve this problem once and for all.



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 York East (Mr. Redway)-Environmental affairs-Toxic rain-Provisions of forthcoming legislation; the Hon. Member for Levis (Mr. Fontaine)-
May 29, 1986

Agriculture-Signing of sub-agreement with Quebec- Evolution of situation; the Hon. Member for Welland (Mr. Pietz)-Environmental	affairs-PCBS-Mobile	waste
disposal unit.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-86, an Act to amend the Canada Deposit Insurance Corporation Act, as reported (with amendments) from a legislative committee.
The Acting Speaker (Mr. Paproski):: Is the House ready for the question?


Ian Deans: Mr. Speaker, I notice government Members rushing into the Chamber. I would like to set their minds at ease. They do have a moment or two. The vote is not yet about to take place.


Mr. Wise:: We like to hear you speak.


Ian Deans: The Hon. Minister of Agriculture (Mr. Wise) says that he likes to hear me speak. Why, then, does he not attend more often?


Jean-Robert Gauthier: Way to go, Ian!


Ian Deans: I do not want to engage in this trivial banter when a matter as important as this is before the House of Commons.
I think it could be said that this particular Bill will provide for an improvement over the current situation. The amendments we have offered and, I suspect, even the amendment offered by the Minister, which is not at all unlike one we proposed, would make the Bill even better. However, this Bill does nothing to address the major problems with which we were faced as a result of the collapse of the Canadian Commercial and Northland Banks.


David Orlikow: And the trust companies.


Ian Deans: As my colleague has said, the trust company collapses that have also occurred.
If the banking industry had been going along as it had many years ago with little if any discernible problems, this Bill would have been seen as a way to try to broaden input and perhaps bring about a somewhat different perspective to the decisionmaking process. However, and I know you have been concerned about this as well, Mr. Speaker, the fact is that the banking structure of Canada lacks adequate supervision of operations. There is a lack of a guarantee that the operations
Canada Deposit Insurance Corporation Act
of the many banks that now make up the banking community, some large and some small, some traditional and others quite new to the scene, are consistent with the highest level of public interest.
I do not think it is unfair to say that banks, like most other private corporations, are in the business of protecting their own interests. They do what they do not because of any commitment to the public but because of a commitment to their shareholders and to themselves. I suppose I could be critical of that, but I live in a society in which that is well understood. It might be said by me and others that it would be desirable for the banks to be more concerned with the public interest and for them to make an effort to operate in a way that would protect not only the investors but also the depositors and not only the depositors but also the customers who deal with the banks in good faith.
My colleague, the Hon. Member for Winnipeg North (Mr. Orlikow), has already made mention of those who think that the "buyer beware" concept should apply to banking as it applies to most other commercial enterprises in Canada. How does the buyer beware? How does the average individual citizen, the buyer, who is doing business with a bank become aware of the bank's solvency or insolvency? Where do the buyers go to find out if the bank's practices at the management level are appropriate and prudent? How do they determine if the asset-to-loan ratio is indeed in keeping with what the Inspector of Banks believes appropriate? How would they know whom to ask and, more important, how would they know what to ask even if they did know whom to ask?
To attempt to leave the impression that, somehow or other, the same kind of general buyer-beware practices that are promoted for commercial transactions in non-financial institutions should be equally applicable to financial institutions is ludicrous. It is for that reason that many years ago we established the office of the Inspector of Banks. The purpose of that inspector was to make sure that banking practices as necessarily established by the Government and the Parliament of Canada were indeed followed to the letter by all institutions that fell within their purview.
We have argued, with total validity, I would submit, that the practices of the banks, were they to be followed and inspected properly, should be applied to the near-banks, the trust companies. We have reached a point at which trust companies are banks in all but name. It is time for the same provisions to apply to trust companies as apply to banks. I want to make it very clear, though, that if we do that, it will make very little difference if we do not have an enforcement mechanism and an adequate inspection process. It will make very little difference if we do not have a sufficient number of people to be able to undertake the close and continuous scrutiny that is necessary to require financial institutions to live up to their obligations. That is really what we should have before us.
What we do have before us, important though it is, is almost trivial compared to what we need. The Bill before us, no doubt, provides for a marginal improvement. Unfortunately, it

May 29, 1986
Canada Deposit Insurance Corporation Act
provides for improvement in an area in which, though improvement may well be necessary, it will serve no useful purpose in dealing with what we have seen occur in banks and near-bank trust company operations over the course of the last 10 or more years.
We offer these amendments in good faith and we do so because we believe that they will improve, in a perhaps marginal way, what the Minister has offered to the House as a change to the law governing the insurance corporation. However, when this Bill is passed and becomes law, we will still be faced with the same problems we have already faced. There is nothing now in place that was not in place at the time the Northland and Canadian Commercial Banks collapsed. There is nothing in place now that was not in place at the time of the collapse of the trust companies. I think it would be fair to say that there is not a Member in the House who was here at the time who would not have proposed that we needed some fairly drastic, dramatic changes to the system in place at that time.
When the commission has completed its work and reported, I hope it will be evident that the major problem which confronted the industry and consumers was that there was no adequate provision for guaranteeing that the law, even if it were correct, was being policed adequately. When we find in the banking system the kinds of unusual occurrences which were clearly taking place in the early and late parts of last year, when we find those unusual manipulations, if one can accept that term, of the assets of the banks over and against their liabilities, and still not have before Parliament provisions to guarantee that the banks, through whatever imaginative bookeeping mechanism, cannot undertake that again, then I say to my colleagues in the House that we are not dealing with the problem.
Two of the institutions about which I am talking are very close to your heart, Mr. Speaker, coming from western Canada as you do. Although I cannot recall actually hearing you say it, no doubt you were as perplexed and angered by what took place as were most of us. I would not be at all surprised if in discussing it with your constituents you raised the necessity for a stronger method of dealing with such situations before they arise again. I would be willing to bet, Mr. Speaker, that you even said at some point, as most of us did to our constituents, that we would take measures and bring forward changes which would result in a system that would be, if not foolproof, certainly less vulnerable than the system which then existed. 1 can see the disappointment in your face as you listen; I can see it.


Thomas Michael McMillan: I don't see it.


Ian Deans: I see the Acting Speaker sitting there, agonizing and wishing that he could rise in his place to put on record his own views, which I suggest, and I hope appropriately, would
parallel my own views. They would not be identical, I concede, but they would be similar to the views I have expressed.
Having said that, over the course of the day we must deal systematically with these amendments. In that process we must extract from the Government the promise that it will bring forward the changes which must be brought forward in order to clear up a system that does not work properly and to ensure that no depositor will have to rely upon the Canada Deposit Insurance Corporation because of inadequate banking and management practices being perpetrated upon them by people who do not follow the direction of Parliament.


Jean-Robert Gauthier: Mr. Speaker, I welcome this opportunity to take part in this debate on the report stage.
Earlier I heard the Minister say that according to the Government, this was an important Bill and it was urgent that we adopt the Bill and the measures it entails.
Mr. Speaker, we on this side of the House are wondering about this, because we know that the Bill before the House today was introduced for first reading on December 29, 1985, while the debate on second reading did not take very long, only one day, on January 27, 1986. After that it went to committee. The Bill came back to the House this year on February 5, if I am not mistaken, which is four months ago.
And now the Minister informs the House it is all very urgent. I think we should try to agree on the meaning of that word and be consistent, or at least have a good excuse, because quite frankly, even if the Bill is retroactive, something to which we object, there is some urgency involved. We agree with the purpose of the Bill, but we believe that the Government should not come before the House and make us believe it is urgent, when the Bill has been before the House for four months and we were just waiting for it to be called by the Government. After all, the Government calls the Bills here, not us. We dispose of the legislation but the Government has to propose it first.
In future, I think they better not pretend the matter is urgent when it has been nearly four months since the Bill was reported back from committee, in this case the Legislative Committee on Bill C-86, where it was considered.
Mr. Speaker, this Bill and the proposed amendments-the amendments before the House that are numbered, 1, 2, 3 and 5, which have been grouped according to a decision by the Chair and which are now being considered-these amendments are of course concerned with the membership of the Board and are also aimed at changing certain aspects of the Bill dealing with conflict of interest.
And since I only have a few minutes, I would like to have the following considerations put on the record with respect to these two points.
In 1982 and 1983, certain Canadian trust companies, such as Crown Trust, Greymac Trust, Seaway Mortgage, Greymac
May 29, 1986

Mortgage, The Fidelity Trust, Amic Mortgage Investment and District Trust, had some problems with the Canada Deposit Insurance Corporation which, as we know, insured the deposits of Canadians with these trust companies.
Our experience with the banks has not been easy either, Mr. Speaker. The Canada Deposit Insurance Corporation had to go through some acrobatics to meet the requirements of the Act so that all those who had deposits not exceeding $60,000 could be paid. Naturally, the Corporation spent nearly all its funds paying these depositors and Parliament had to take some action to make the Corporation more profitable and economically viable so that Canadians would have some assurance that their deposits would be well protected.

I say that the Bill is a quick fix because indeed it is just that. As we see from the legislation before us, the increases in the premiums will expire in February, 1987. I should like to refer to the notes for the Minister's speech before the committee wherein it is indicated that the proposed higher premiums would expire at the end of the 1986 premium year. We know, as a result of Clause 5 of the Bill, that that premium year starts on February 1, 1986 and therefore would end on February 1, 1987. She went on to indicate that this would ensure that other aspects of the deposit insurance system which are not addressed in Bill C-86 would be reviewed by Parliament.
I take it that this means the Minister and the Government will come forward with legislation in the near future which indeed looks after some of the loopholes, difficulties, and unfunded liabilities, if I may use that term, with which the Canada Deposit Insurance Corporation may find itself faced in the next year.

Mr. Speaker, it is obviously necessary to increase premiums. It is impossible to raise the total coverage of $60,000 per depositor within the present structures. I think that it is reasonable to suggest that the premiums of insured banks and trust companies, which now amount one-thirtieth of 1 per cent of deposits, be increased to one-tenth of 1 per cent. However, it is not enough. This was pointed out in a few reports, such as the Wyman Report, as I recall, and the Senate Report on this same issue. We were told that, while it was not an easy problem to solve, three specific remedies could be recommended.
First, we were told that the combined effects of a share issue in the amount of $1 billion to member institutions and an increase of premiums would eliminate the deficit of the insurance fund by 1990. This recommendation was contained in the Wyman Report.
The Senate Committee on Banking, Trade and Commerce also published a report in December 1985, as Hon. Members will recall. Among other things, this report recommended that the deficit of the Canada Deposit Insurance Corporation be financed separately from the renewed Canada Deposit
Canada Deposit Insurance Corporation Act
Insurance Corporation. The report recommended that the deficit not include the portion of current amounts of the retroactive raise in the ceiling from $20,000 to $60,000. The House will recall that the previous Government had increased coverage from $20,000 to $60,000.
I know the time is restricted. I would like to address one important amendment which is before us, the one dealing with conflict of interest. The provisions that were put to the committee, which were part of the self-imposed draft, if I may use those words, by the board itself read somewhat interestingly in terms of conflict of interest and, God knows, we have tried to come to grips with that problem. I would like to read some extracts of the draft because I think it is important that everyone understand that the board proposed these measures on its own. It reads:
Within sixty days of appointment-
That is as a member of the board, and we know that the board will be increased.
-and thereafter annually, directors should report in writing and in confidence to the chairman, all direct or indirect interests they hold in member institutions.
Directors are required to divest themselves of their direct and indirect interests in any shareholding that is in excess of ten per cent of the outstanding shares of any class of shares of a member institution.
A director owning directly or indirectly , a beneficial interest in less than ten per cent of the outstanding shares of any class of shares of a member institution may be subject to a divestment requirement where the chairman is of the view that shareholding constitutes a significant interest in the member institution.
I will read the last paragraph. This is a public document, but it has some importance. It reads:
Public confidence in the impartiality of the Corporation's decisions requires that directors' conduct be such as to avoid actual or perceived conflicts. To this end, directors are encouraged to seek the confidential advice of the Chairman or of the corporation's General Counsel.
The amendments before us deal with this issue of conflict of interest. The House would want to address this question with some seriousness. We should accept that if these guidelines are not sufficient, then we should improve them, but at least they are adequate for the purpose at hand, and, in my view, should be adopted. If I have a few minutes, I want to say this.

Mr. Speaker, I would like to conclude by dealing with the important matter of motion No. 6. However, I shall come back later to this amendment, which concerns retroactive application of the Act and its coming into force at a date to be fixed by proclamation. I may want to speak about this amendment later.


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


Some Hon. Members:: Question.

May 29, 1986
Canada Deposit Insurance Corporation Act


The Acting Speaker (Mr. Paproski):: The question is on Motion No. 1 standing in the name of the Hon. Member for Hamilton Mountain (Mr. Deans) for Mr. de Jong. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion, the nays have it.
And more than five Members having risen:


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 114(11), the recorded division of the proposed motion stands deferred.
The next question is on Motion No. 2 standing in the name of the Hon. Member for Hamilton Mountain (Mr. Deans) for Mr. Riis. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion, the nays have it.
And more than five Members having risen:


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 114(11), the recorded division on the proposed motion stands deferred.
According to Mr. Speaker's earlier ruling, an affirmative vote on Motion No. 2 obviates the question being put on Motion No. 3. A negative vote on Motion No. 2 requires the question to be put on Motion No. 3.
Therefore, the next question is on Motion No. 5 standing in the name of the Hon. Member for Hamilton Mountain (Mr. Deans) for Mr. de Jong. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion, the nays have it.
And more than five Members having risen:


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 114(11), the recorded division on the proposed motion stands deferred.
Miss Aideen Nicholson (Trinity) moves:
Motion No. 6.
That Bill C-86, be amended in Clause 5 by striking out lines 24 and 25 at page 5 and substituting the following therefor:
"5. Section 4 shall come into force on a day to be fixed by proclamation."


Mr. Vincent:: Mr. Speaker, I rise on a point of order. You said that a negative vote on Motion No. 2 requires the question to be put on Motion No. 3. You went directly to Motion No. 5, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: I said that an affirmative vote on Motion No. 2 obviates the question being put on Motion No. 3. A negative vote on Motion No. 2 requires the question to be put on Motion No. 3. Therefore, we cannot put the question at this time on Motion No. 3. If the Hon. Member would like more information, he can come to the table and we will explain it to him while we carry on with debate. I will recognize the Hon. Member for Trinity (Miss Nicholson).


Aideen Nicholson: Mr. Speaker, as a history to the amendment which I have placed before the House, Bill C-86, as originally tabled, would have come into force in the usual way on a date to be fixed by proclamation. At legislative committee it was amended to come into force retroactively as of February 1. I am having difficulty now, as I had then, with understanding the need for retroactivity.
The chronology is that in November, 1985, the Minister tabled draft legislation to which she said she attached a very high priority. Yet the Bill was not called for second reading until January 27. The Opposition responded to the request for fast passage, and it was dealt with in one day. The Bill went to committee where there were two hearings. It was reported out of committee on February 5. It was brought forward for report stage only today. I have great difficulty in understanding the
May 29, 1986

need for retroactive legislation. If it was considered important, there has been ample time to bring it foward in the normal way.
My second reason for opposing retroactive legislation in this case is that this Bill is so very much a stop-gap piece of legislation. It does two or three things. It increases the number of members on the board to allow for some private sector representation, it allows the board to draft conflict of interest guidelines, and it increases for one year the premiums which the member institutions pay to the CDIC.
This legislation does not address any of the underlying problems. The board members of the CDIC who appeared before the legislative committee were quite frank about their belief that increasing the premium structure from one-thirtieth of one per cent to one-tenth of one per cent for one year would not resolve the over-all funding requirements of the CDIC. The Bill will increase the premiums from $62 million to $186 million during 1986. However, it does not touch the underlying problems. It does not touch the issue of the need to reform the structure. For example, the suggestion has often been made that instead of all institutions dipping into one pool of capital there should be separate pools for different kinds of institutions. Suggestions have been made that premiums should be related to risk assessment. None of these issues is touched upon.
I mentioned earlier that the CDIC's last financial statement anticipated a deficit of $1.2 billion. That statement was issued before the numbers were in from the failures of the Canadian Commercial Bank, the Northland Bank and two other smaller institutions. The final number may very well be considerably larger. This issue has not been addressed. In the interest of getting a quick fix Bill which does not touch any of the essential factors, we are asked to treat it retroactively but have not been given sufficient reasons to justify this.
I should also point out that when the Canadian Banking Association appeared before the legislative committee, it made the following point:
The proposed tripling of the premium rate provided for in Bill C-86 is supposed to be temporary, extending from February 1, 1986, until April 30, 1987.
The banking industry would Find this temporary surcharge easier to accept if there were positive measures in place to reform the deposit insurance system altogether.
This particular brief also raised the question of a claims-based premium assessment system. It also suggested considering replacing the uniform premium rate for all CDIC member institutions with a system of rebates to reflect the claims experience of different classes of member institutions. These are all matters of extreme importance which should have been debated in previous months. The debate was foreclosed because when this Bill was introduced we were told that it must be rushed through. We co-operated and agreed to have a one-day debate. The Bill went to a legislative committee where we were again told that there was great urgency. However, it simply sat on the Order Paper until today.
Canada Deposit Insurance Corporation Act
The position of the Government is not logical. There are serious problems which need to be addressed that are not being addressed. The debate on those has been foreclosed by the existence of this quick fix Bill. We are also asked to give retroactive passage to this quick fix Bill which puts a bandaid on but does not address the underlying problems.
For those reasons, Mr. Speaker, we are opposed to the retroactivity and we sincerely hope that the Government will soon bring forward serious measures to address the serious problems and that it will allow adequate time for debate in this House and in committee.


David Orlikow: Mr. Speaker, I am puzzled by this amendment. I agree with the Member that the Government has acted in a dilatory manner. I agree with the Member for Trinity (Miss Nicholson) and other Members who have criticized this Bill as being a quick fix and a short-term solution which does not really come to grips with the fundamental problem. Having agreed with the Member that the Government should have brought this Bill forward much sooner than it did, I still do not understand why we should not make the Bill effective as of the day the Government brought it forward. All the faults which existed and still exist which require higher premiums are still present. If we passed this amendment, we would only relieve financial institutions of having to pay the higher premium, if I understand it correctly.
I am not disposed to vote for this amendment. However, despite the fact that I will vote against it, and despite the fact that we are allowing this Bill to go through, we do have some very serious and major reservations. The passage of this Bill will not mean that we have dealt with the failures of banks and trust companies which will cost the people of Canada hundreds of millions of dollars.
Robert Wyman headed up the committee set up by the Minister to look into the problems. He said that the CDIC has no clout. It cannot cancel the insurance of federally-incorporated institutions. It cannot do anything, yet it has the responsibility for paying out what is now billions of dollars. Astra Trust was liquidated in 1980. The CDIC paid out about $21.5 million and there is still $3.5 million to be recovered. The Northguard mortgage collapse in 1984 meant that the CDIC had to pay $27.8 million to insured depositors. There is still $27.8 million to be recovered. Pioneer Trust, Western Capital Trust and London Loan Company were liquidated in 1985, and the CDIC paid depositors $305 million. That entire amount is still outstanding.
In many respects the CDIC is not the master of its own fate. It depends on both the office of the Inspector General of Banks and the Superintendent of Insurance to monitor member institutions. It depends on the present board of directors, the Governor of the Bank of Canada, the Superintendent of Insurance, the Inspector General of Banks, the Deputy Minister of Finance, and the chairman from the private sector.

May 29, 1986
Canada Deposit Insurance Corporation Act
We know how inadequate they were in protecting the depositors when these institutions were forced into bankruptcy.


Ian Deans: Pitiful.


David Orlikow: Yes, it was. According to the current chairman of the corporation, Ronald McKinlay, the directors participated in the federal Government attempt to rescue the Canadian Commercial Bank. The CDIC was authorized by the directors to make available $75 million worth of effort. However, when the officials were asked whether a representative of the corporation was present for the decision-making, the reply was that there was no one there. What kind of regulatory agency is that? The Wyman committee was of the opinion that the CDIC should have a greater degree of independence than it currently enjoys. Decisions of the board of directors should be made with the interest of the corporation in the forefront, rather than the interest that the board members may have outside of the corporation. There should be no inference of any conflict of interest as one might find when examining the decision to involve the corporation in the March bail-out of the CCB. That decision was made by whom? By the Inspector General of Banks. It was approved by the head of the Bank of Canada, Mr. Bouey, although later he made it very clear that he really did not have the information he should have had before being involved. It was, to say the least, far from a realistic and careful decision.


Ian Deans: It was slipshod.


David Orlikow: It certainly was. Last September the Minister of State for Finance (Mrs. McDougall) assured members of the Standing Committee on Finance and Economic Affairs that the private sector members would not be permitted to be associated with a single member institution. The background document released by the Department of Finance on September 1, 1985, provided the same assurance. Yet there does not appear in this Bill to be any such restriction. The only stipulation in the Wyman Report was that the board members should not be "active in the industry". That is not satisfactory to us.
In conclusion let me deal with several other matters. The Wyman committee was of the view that the primary objective of the CDIC required a fundamental realignment. Not only should it insure small, unsophisticated depositors against loss, it should more prudently administer the deposit insurance fund. Increased private sector participation in the CDIC is perceived as the most appropriate means by which to accomplish that. I have to say on behalf of, I suppose, 98 per cent of my constituents who put their money into a trust company or bank that, despite the suggestions by some people in financial institutions or what one reads in the financial pages of The Globe and Mail or The Financial Post, they, my constituents, do not have the ability, background, education or sophistication to be able to choose among financial institutions.


Ian Deans: Most Members of Parliament, too.


David Orlikow: Yes, they are in the same boat. Speaking for myself, I am certainly not competent to do it. If I put my savings into a bank, I assume the bank is operating so efficiently that I am not going to lose my money. We are very much opposed to the suggestion that somehow the depositors should have to pick and choose which institutions are soundly managed. That is pushing the idea of the free enterprise system far beyond where it ought to go.


Ian Deans: Caveat emptor.


David Orlikow: Yes, caveat emptor. That would not work for most people in this country.
While this Bill seeks to increase the control the private sector has over this regulatory body, there is no corresponding increase in the specific obligations of the corporation. For example, there is no emphasis placed on the corporation's responsibility to inform its member institutions as to what is and what is not insured. Remember that Saskatchewan trust company which was liquidated. It was telling its customers that their deposits were guaranteed by the CDIC when they were not. Not only was that institution making more than a major mistake, it was making a fraudulent claim, but the CDIC was remiss in not ensuring that its name was not used in that way.


Ian Deans: It did nothing.


David Orlikow: It did nothing about it. The CDIC's legal counsel said that, whether or not there was a legal obligation on the part of the Crown corporation, he knew of none under the Act. If that is true, and I am sure it is, then there is something very seriously wrong with this Act, indeed with all the legislation. While we are going to let this Bill go through at this stage, I want to warn the Minister that when she brings forward the promised legislation to deal with the whole question of the responsibilities of financial institutions, we will be examining the proposals with a very, very careful eye.


Jean-Robert Gauthier: Mr. Speaker, I merely have a few very brief comments to make in order to explain our position on that vote. We do not feel the Government acted promptly on this matter. It is unusual in my view for a Government to legislate retroactively, and I would urge my Progressive Conservative colleagues opposite to look back at the history of their own party. They consistantly fought retroactive measures in this House for a long time. One has to be reasonable and try to understand the situation. In my view, the Government should realize that retroactive legislation is something wrong, as I think most Members in this House will agree.
If this was urgent on February 5, when the Committee reported to this House, at that point they should have asked the House to pass the legislation post haste, instead of presenting us with a measure which, unlike most pieces of legislation,
May 29, 1986

provides under Clause 5 that "Section 4 shall be deemed to have come into force on February 1, 1986".
Mr. Speaker, that is almost five months ago. The amendment introduced by my colleague for Trinity (Miss Nicholson) is merely aimed at amending the Act to read, like all other pieces of legislation, that this Bill will be deemed-that the effective date shall be: "5. Section 4 shall come into force on a day to be fixed by proclamation".
This by the way is being consistently done in this House, when the Government acts responsibly and normally.
For that reason, Mr. Speaker, we oppose such retroactivity and we feel the Government should provide explanations. This House has still to hear explanations; it has not been told why they waited for so long. We did not prevent the Bill from going through. We have had a very responsible approach to this debate. Second reading stage lasted one day; committee proceedings took hardly one day for preparation and another day for debate. But since that time, nothing was heard from the Government. However, the Minister comes in this House and suggests this is urgent. Well, this will be all, but the Government should understand that retroactivity should not become a habit.
[DOT]	(1650)


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


Some Hon. Members:: Question.


The Acting Speaker (Mr. Paproski):: The question is on the motion standing in the name of Miss Nicholson.
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: In my opinion the nays have it.
And more than five Members having risen:


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 114(11), the recorded division on the proposed motion stands deferred.
The House will now proceed to the taking of the deferred divisions at the report stage of the Bill now before the House. Call in the Members.
[DOT]	(1720)
And the division bells having rung:


The Acting Speaker (Mr. Paproski):: The first question is on Motion No. 1.


Ian Deans: Canada Deposit Insurance Corporation Act
Motion No. 1
That Bill C-86, be amended in Clause 1 by striking out lines 16 to 18 at page 1 and substituting the following therefor:
"intendent of Insurance, the Inspector General of Banks and the Deputy Minister of Consumer and Corporate Affairs; and
(c) not more than three other members44.


The Acting Speaker (Mr. Paproski):: I declare the motion lost.


Ian Deans: Mr. Speaker, I rise on a point of order. I believe it might be possible, if you were to seek the consent of the House, to have the vote just taken applied to Motions Nos. 2, 3, and 5.

May 29, 1986
Canada Deposit Insurance Corporation Act


Some Hon. Members:: No.


Jean-Robert Gauthier: Not to Motion No. 3.


The Acting Speaker (Mr. Paproski):: Motion No. 3 must be put separately to the House, but the vote just taken can apply to Motions Nos. 2 and 5, if that is agreed, with the addition of the Hon. Member for Saint-Henri-Westmount (Mr. Johnston).


Donald James Johnston: Mr. Speaker, as you may have noted, I missed the first vote, but I should like my name to be added to the other votes.


The Acting Speaker (Mr. Paproski):: I just did it. The next question is on Motion No. 2. Mr. Riis moved:
Motion No. 2
That Bill C-86, be amended in Clause 1 by striking out line 25 to 30 at page 1 and substituting the following therefor:
"Board of Directors
(a)	if the person is employed in any capacity in the Public Service of Canada or holds any office or position of which any salary or other remuneration is payable out of public moneys; and
(b)	unless the person complies with the following:
(i)	that within sixty days of appointment and thereafter annually, the person reports in writing and in confidence to the chairman all direct and indirect interests the person holds in member institutions;
(ii)	that as a director, the person is required to divest himself of any direct or indirect interests in any shareholding that is in excess of 10 per cent of the outstanding shares of any class of share of a member institution or where the chairman is of the view that the shareholding constitutes a significant interest in the member institution; and
(iii)	subject to the chairman's request, that the person divests himself of shares that are pledged to a lending institution as collateral for loans made to the person, and such divestment shall be accomplished by selling the shares in an arms length transaction or by placing the shares in a trust."


The Acting Speaker (Mr. Paproski):: I declare the motion lost.
The next question is on Motion No. 3. Mrs. McDougall moved:
Motion No. 3
That Bill C-86, be amended in Clause 1 by striking out lines 26 to 30 at page 1 and substituting the following therefor:
"(a) employed in any capacity in the Public Service of Canada or holds any office or position for which any salary or other remuneration is payable out of public moneys;
(b)	a member of the Senate or House of Commons of Canada or a member of a provincial legislature; or
(c)	a director, officer or employee of a federal institution or provincial institution".
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.
(Division No. 261)
++YEAS
Members
Althouse	Gray	McDonaldAngus	(Windsor West)	(Broadview-Axworthy	Guilbault	GreenwooBenjamin	(Saint-Jacques)	NicholsonBlaikie	Jewett	(Trinity)Boudria	Johnston	Ny stromBroadbent	(Saint-Henri-West-	OrlikowCopps	mount)	OuelletDeans	Langdon	PennerFulton	Malepart	WaddellGagliano	McCurdy	Young-27.Gauthier Blackburn	NAYS Members Brightwell	Chartrand(Jonquiere)	Browes	Cornea uBourgault	Cadieux	Cook


The Acting Speaker (Mr. Paproski):: All those in favour of the motion will please say yea.


Some Hon. Members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some Hon. Members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion, the yeas have it. Shall I dispense with the ringing of the bells?


Some Hon. Members:: Agreed.


The Acting Speaker (Mr. Paproski):: I declare the motion carried.
The next question is on Motion No. 5. Mr. de Jong moved:
Motion No. 5
That Bill C-86, be amended in Clause 1 by striking out lines 1 to 8 at page 2.
May 29, 1986


The Acting Speaker (Mr. Paproski):: I declare the motion lost.
The next question is on Motion No. 6. Miss Nicholson (Trinity) moved:
Motion No. 6
That Bill C-86, be amended in Clause 5 by striking out lines 24 and 25 at page 5 and substituting the following therefor:
"5. Section 4 shall come into force on a day to be fixed by proclamation."
Shall the same division apply?


Some Hon. Members:: Agreed.
Canada Deposit Insurance Corporation Act Mr. Deans: No.


The Acting Speaker (Mr. Paproski):: I declare Motion No. 6 lost.


Mr. Hnatyshyn (for Minister of State for Finance) moved: that the Bill be concurred in.


[Stage Direction]
Motion agreed to.
[Stage Direction]
May 29, 1986
Canada Shipping Act

The Acting Speaker (Mr. Paproski):: Mr. Hnatyshyn moved that Bill C-75, an Act to amend the Canada Shipping Act and to amend the Arctic Waters Pollution Prevention Act, the Maritime Code Act and the Oil and Gas Production and Conservation Act in consequence thereof, be read the third time and passed.


Iain Francis Angus: I rise on a point of order. Looking at the clock, Mr. Speaker, would you allow us to call it six o'clock? It is a very important Bill and it would be inappropriate for the Opposition to have to split the time between two days. I would ask you to give consideration to this request, Sir.


Mr. Ouellet:: I would like to address this point of order, Mr. Speaker.

I understand that the Minister, at the explicit request of the Quebec Premier, will be meeting next Monday with the Quebec Minister of Transport who has precise objections to make to Bill C-75. I find it rather surprising that without any notice the Government has suddenly introduced a bill and, certainly, Mr. Speaker, I would like you to look at the clock and say it is 6 o'clock.


Ramon John Hnatyshyn: Mr. Speaker, I know that the Hon. Member for Papineau (Mr. Ouellet) who is a respected parliamentarian would not want to inject an unfortunate partisan note in this matter. As the Hon. Member will know and as Members will know, at the request of the Opposition I was quite prepared to put third reading debate over for two weeks in order to make sure that the committee was back and Members were available.


André Ouellet: We would have liked two years.


Ramon John Hnatyshyn: There is a quid pro quo for my putting it over. I thought we would have an expeditious debate at third reading stage. On the other hand, it being almost six o'clock, on the basis that this in no way interferes with the adjournment proceedings, I think we can accommodate that request to call it 6 o'clock. I am quite prepared to put third reading debate over until next week when I know the matter will receive expeditious treatment.


The Acting Speaker (Mr. Paproski):: Is there unaimous consent to call it six o'clock?


Some Hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Alan Redway: Mr. Speaker, I keep moving around at the behest of the House Leader, I believe. On April 28 I put a question to the Parliamentary Secretary to the Minister of the Environment (Mr. Gurbin). In part it reads:
Would the Parliamentary Secretary advise the House whether the new proposed Environmental Contaminants Act will deal with this problem and effectively eliminate the health threat posed to Canadians by this toxic rain?
That question on April 28 was prompted by a report that had been published shortly before that time, a report of a study that had been made by the Canadian Environmental Law Research Foundation and by the United States Environmental Law Institute. That study contained a number of very significant and interesting facts and figures.
First, it indicated that both Canada and the United States are threatened by toxic rain or, if you will, by toxic rain fallout. Toxic rain was identified as the worst type of pollution, worse than acid rain. Acid rain has been considered all across North America and Europe as an extremely potent form of pollution. It was identified as well that toxic rain contains some 1,000 different chemicals produced industrially, including chemicals such as dioxin and PCBs. In addition to that, the report identified that these industrial emissions mixed with water vapour form polluted clouds which then condense in the form of rain or snow. They fall to earth, into lakes, rivers and streams as well as into the fields and communities around us. In fact, some 46,000 tonnes a year of this toxic rain and the pollutants in toxic rain come down on Lake Ontario alone.
This toxic rain is what we were talking about when we dealt with the great industrial emission disaster in India a short time ago, the Bhopal disaster in which industrial emissions condensed and caused such devastation in India. There was loss of life and injuries not only to the present generation, but to future generations as well. It was indicated in the study that toxic rain threatened not only our drinking water, but also our food. It accumulates in human tissue and is one of the great causes of respiratory problems in human beings.
This is not the first time that we have heard about toxic rain, Mr. Speaker. We are not as familiar with toxic rain as we are with acid rain. We are very familiar with the problem of acid rain. It is caused by two types of industrial pollutants: sulphuric dioxide and various nitrogen oxides. Those particular forms of pollutants that we have been able to identify come from specific sources. They come from smelters such as those in northern Ontario at Inco and Falconbridge, northern
May 29, 1986

Quebec, from coal-fired power plants and also from automobile emissions. Those have been identified over a period of time as the sources of acid rain, which is one form of toxic rain.
The Government has taken some action on acid rain. It took action a few months ago by indicating that there was money put aside to clean up the smelters in the country, particularly the Inco Falconbridge smelters and the Noranda smelters. The Government indicated that approximately $150 million had been put aside for that and that there would be action taken. Unfortunately, we have seen no action to date.
The Prime Minister (Mr. Mulroney) met with President Reagan on two occasions and discussed the issue of acid rain in the United States. Again there were promises of action. We have not seen very much so far, but there is some indication of movement in the United States Congress. There have also been promises of car emission standards to go into effect on the 1987 car models. That has not occurred as yet and we are still waiting for 1987.
Acid rain has been a problem to deal with. If acid rain has been a problem to deal with, surely toxic rain will be much more difficult because it will be difficult to identify the sources of toxic rain and that much more difficult to find solutions for them.
In his answer on April 28, the Parliamentary Secretary indicated that legislation which was coming forward from the Government would deal with this problem. He identified two particular pieces of legislation, the Environmental Contaminants Act and the Environmental Protection Act. I know that the Parliamentary Secretary is a very sincere and dedicated man who is truly concerned about the health of Canadians and the problems of acid rain, toxic rain, and all weather pollutants which we face. I would like to hear from the Parliamentary Secretary tonight specifically how those two pieces of legislation will deal with this problem. I hope that he will set out for us very succinctly and in very specific terms how the Government proposes to solve the problem of toxic rain. It is no longer a matter to be taken lightly. It is an extremely serious matter which must be addressed as quickly as possible. I hope that, in addition to indicating specifically how that legislation will deal with the subject, he will tell us specifically when we can expect first reading of the Bills involving these changes.


Mr. Mel Gass (Parliamentary Secretary to Minister of Fisheries and Oceans):: Mr. Speaker, I am pleased to respond to the Hon. Member's question as to whether the new proposed Environmental Contaminants Act will deal with the problem of toxic rain and effectively eliminate the health threat posed by it to Canadians.
The report of the Canadian Environmental Law Research Foundation echoes the concerns of the Government on the issue of toxic rain. I am sure the Hon. Member is aware of the high priority that the Government has attached to the problem of acid rain and that we have been actively addressing the
Adjournment Debate
issue for some time. I am also sure that the Hon. Member is aware of the very significant progress that we have made in the past two years toward coming to grips with this problem in concert with provincial governments and the Government of the United States. The Government will continue to pursue this issue vigorously until the problem is resolved.
Toxic rain is but one warning symptom of the broader problem of toxic chemicals that Canadians face as society learns to deal with both the benefits and risks of living with chemicals. In the past we have approached toxic chemical problems by crisis management. We have dealt with problems after they have become evident. This has led to difficult and very costly remedial measures and clean-ups.
The Government believes it is no longer adequate in this country to deal with toxic chemicals after the problems are detected. Environment Canada has been actively pursuing a new comprehensive management approach for toxic chemicals, an approach which manages chemicals throughout their life cycle in a manner that prevents chemical leakage into the environment in the first place. This approach will mean that at any point in the life of a chemical, from cradle to grave-that is from its introduction into trade and commerce, its manufacturing, its transportation, its use and ultimately its disposal- all those who deal with the chemical must act in a responsible manner to protect the environment and the health of Canadians.
The new legislation, whether it be in the form of a revised and enhanced Environmental Contaminants Act or a new Environmental Protection Act, will be a key element of this new approach. The proposed Act will, through a broadly defined prohibition and regulation-making section, allow interventions to regulate the crucial phases of a toxic chemical's life cycle. It will make significant improvements to our ability to manage chemicals to prevent problems such as toxic rain, as well as to clean up the problems which we face today.
However, while the new legislation will be a valuable tool to address made-in-Canada problems, it will not solve those that come to us from outside our borders. Solutions to those problems will only arise out of ongoing consultations and actions with other governments.
In conclusion, let me assure the Hon. Member that the Government is fully committed to protecting the environment and Canadians from the threat of toxic chemicals, whatever their source.


AGRICULTURE-SIGNING OF SUB-AGREEMENT WITH QUEBEC- EVOLUTION OF SITUATION
Mr. Gabriel Fontaine (Levis):: Mr. Speaker, on April 29, 1984, I called on the Minister of Agriculture (Mr. Wise) to report on the status of the matter concerning the sub-agreement with Quebec on agriculture. I am quite pleased to see this evening that the Minister of Agriculture has taken this opportunity to provide me with details concerning his answer
13792

May 29, 1986
Adjournment Debate
given on April 29. I conclude that the Minister of Agriculture is quite aware of our national problems and is trying to solve the problems that arise in our respective constituencies.
I know that the Minister of Agriculture did not wait for the signature of that agreement involving $36 million to implement measures to promote agriculture in Quebec and in my own constituency.
Quite a number of events have taken place in parallel with the negotiations that led to the agreement on agriculture. For instance, since September 1984, our farmers have been enjoying a 5 1/2 cents reduction on their farm fuel, and that amount will be added to the 1 1/2 cent that all commercial undertakings can claim from the Government for the fuel which they have used.
Moreover, the Government has announced substantial and significant reductions in the interest rates charged by the Farm Credit Corporation and those rates are the lowest since 1979.
We also recall that the Minister negotiated a very positive conclusion to a specific problem with the United States when it was time to convince them not to apply an import tax on Canadian pork carcasses. In so doing, the Minister convinced a large number of pork producers in my constituency about the viability and long-term profitability of their operations.
It should also be mentioned that this same Minister has announced to farmers, to the dairy producers of Canada a dairy policy for the next five years. As we know, the Province of Quebec accounts for 50 per cent of Canadian dairy production. I therefore want to tell the Minister that not only was that action very well perceived in my constituency, but it was commended by Mr. Jacques Boucher, Chairman of the Union des producteurs agricoles, in an editorial in La terre de chez-nous, and I quote: "We welcome a policy that ensures stability in our industry for another five years".
It should also be emphasized that we did not wait for the signing of the agreement to study the problem faced by our producers of maple syrup and maple products. Indeed, a major survey will be made, more specifically with the constituency of Lotbiniere as a simpling base, over the coming months. This also speaks well for this Government and our Minister of Agriculture.
Finally we know that a good many farmers are experiencing serious financial problems, so our Government set up a mortgage loan program under which repayments and costs are based on commodity prices. Thus our farmers have the option of making larger payments in good crop years and when commodity prices are higher, and they can gear their interest rates to the quality and sale prices of their crops.
Finally we did not wait until the agreement was signed to allow farmers to sell their farm or business when they reach a given age, without being penalized through levies on capital gains. The result of this was that we immediately repealed the capital gains tax on the sale of a farm so that the business could be kept operating profitably and that people who spent
their lives doing farm work might look forward to a decent retirement.
I thank the Minister of Agriculture and I hope to have more explanations concerning the signature of the Canada-Quebec sub-agreement.


John Wise: Mr. Speaker, I want to express my appreciation for the kind remarks by the Hon. Member for Levis (Mr. Fontaine). Obviously the Hon. Member is a very intelligent, hard-working, industrious Member of Parliament and represents his constituents well. Indeed, he carries a very strong and continuing interest in the welfare of the agricultural community, not only in his province but in the country as a whole. He regularly attends rural caucus meetings and communicates problems on behalf of his constituents to me on a frequent and regular basis. It is a pleasure to be associated with him.
The Hon. Member has utilized what little time is available to him tonight to point to some of the major initiatives and programs we brought forward for the benefit not only of Quebec agriculture, but of Canadian agriculture. I am sure that he, if time permitted, would have made the observation that since we assumed office, we have taken somewhere in the vicinity of 235 initiatives, directing well over $5 billion to our agricultural industry. At the same time we should take note of the Prime Minister's observation as of April 30, when we delivered the last farm finance package, that indeed more had to be done.
Coming specifically to the question the Hon. Member raised, let me tell him that in March of this year I wrote to my colleague, the Minister of Agriculture of the Province of Quebec, requesting that he, on behalf of his Government, make a decision with respect to signing an agricultural subagreement. We had made representations on this subject to the previous Government. However, they could not make up their minds as to whether they wanted to sign an agreement both in agriculture and fisheries or on how to divide the federal allocation.
With the election of a new Government, the new Minister responded to my letter on April 23, I believe, indicating they had taken the decision and he was prepared to enter into an agricultural sub-agreement to the extent of some $36 million. Most of that money will be spent in research and development, and again we are happy to sign an agreement of that kind because of the priority we place on research and development.
I have replied to the Minister, indicating that we should instruct the appropriate officials in both our Departments to get together and work out the details. It is my understanding, from information I received earlier today, that the meeting will indeed take place next week.
May 29, 1986


ENVIRONMENTAL AFFAIRS-PCBS-MOBILE WASTE DISPOSAL UNIT
Mr. Allan Pietz (Welland):: Mr. Speaker, the question I wish to address this evening is one I raised with the Minister of the Environment (Mr. McMillan) during Question Period on May 2. It has to do with authorizing a revolutionary waste disposal unit for use in Canada. There are a number of industrial waste dump sites, particularly in southern Ontario, which allow the seepage of harmful chemicals into waterways like the Niagara River and, from there, into our drinking water. It is a source of concern to all who live in the densely populated regions of southern Ontario. As you and I both know, the federal Government is very concerned about this matter.
Recently the Environment Minister and the Minister responsible for emergency planning announced steps to respond to major chemical accidents in Canada. This is an important and timely development. My concern, however, is with the every-day dumping of chemical waste products from Canadian and American sources. We know that putting it into containers will not help. Over time containers deteriorate and we are right back where we started.
As I mentioned earlier in this House, the E. S. Fox Company, located in my riding of Welland, has developed a mobile waste disposal unit called the pyroplasma, which has been proven effective in the destruction of PCBs. This unit is unique. Its competition is essentially incinerators which have approximately a 99.99 per cent destruction efficiency rate. The pyroplasma unit has an unofficial destruction efficiency rate of 99.9999999 per cent. This is a consistent percentage when one is talking of a million pounds of waste material. Those extra nines make a lot of difference.
The provincial and federal Governments have actively participated in developing test procedures which will set permit application guidelines for waste disposal units. The commitment is there, but it is taking a long time.
The Province of Ontario has asked for proposals to clean up the Smithville site. These are to be submitted within the next few days. The local public know what the pyroplasma can do and want it to be used. They know what those extra nines mean. Other Canadians living close to industrial dumping sites are crying out for this kind of efficient answer to the problem.
The federal and provincial Governments have already invested half a million dollars into this project. The United States awarded the E. S. Fox Company a $2 million demonstration contract to finance the actual building of the unit, which could then be used to clean up the Love Canal area in New York State. Earlier this month the pyroplasma was set up at that site.
After four or five months of test procedures on dioxin and more than 100 other chemicals located there, it will be put into full use in clean-up operations.
Adjournment Debate
Over the past 10 years 17,000 gallons of waste products have been pumped out of the ground and stored at the Love Canal site. When the pyroplasma is put into full operation, it will take only 30 days to destroy that material. The company will go back once a year to destroy the waste which has been pumped out over that year.
We can all be very proud of the fact that this technology has been developed entirely in Canada. Despite considerable investment of American funds, it is still wholly owned by a Canadian company, a company which is continually looking at new ways to combat environmental problems.
At present the pyroplasma is being used to destroy liquid industrial waste. The same technology can be used on solid waste products. It is merely a matter of developing different material handling technology. There have been offers to fund the research necessary to develop such technology, provided free access to the technology is given in return. The company does not want to relinquish control to only one interested party. Too much has been invested. The pyroplasma has been extensively tested in Kingston under the supervision and with the financial backing of both federal and provincial Governments. The unit is completely mobile and can be set up in just a few days. What this will mean in future emergency clean-up situations is incredible.
The American Environmental Protection Agency ranks the pyroplasma in the top five technologies for waste disposal in the world. The word in the hallways at the EPA meeting last month was that this was the "-hottest piece of chemistry to come down the road in years".
My question was specifically when we could start putting this amazing technology to work in Canada. The question is a difficult one given the divided jurisdiction in the matter, but I firmly believe the clean-up of the environment is a national concern and one which must be addressed here in the House of Commons.


Melbourne Alexander Gass: Mr. Speaker, although the disposal and destruction of hazardous wastes in Canada are the responsibility of the provinces, the federal Government is actively involved in the search for solutions. Not one government can confront this issue on its own. It is for this reason that the federal-provincial Canadian Council of Resource and Environment Ministers has initiated work on the development of a national action plan for the management of hazardous wastes in Canada. Along with this initiative, CCREM has already developed and implemented a national action plan aimed at eliminating PCBs from the Canadian environment. The plan has four basic objectives; first, the establishment of destruction facilities; second, the creation of national standards for the transportation and destruction of PCBs; third, the creation of national environmental quality objectives for PCBs; fourth, the dissemination of factual information on PCBs.

May 29, 1986
Adjournment Debate
Ever since the Kenora spill, PCBs have been of particular concern to the Canadian public. Hardly a day seems to pass when there is not a new revelation of PCBs found at yet another location. This is a concern which I believe will be alleviated by the initiatives now under way by the Canadian Council of Resource and Environment Ministers. It is a concern which will be further alleviated by the fact that technologies do exist to destroy PCBs.
On May 2, the Hon. Member for Welland (Mr. Pietz) questioned the Minister of the Environment (Mr. McMillan) about a hazardous waste disposal unit which will be tested at the Love Canal site this summer. I am happy to report that the unit in question was designed and built in Canada and was successfully tested for PCB destruction. This plasma arc destruction unit is mounted on a 45-foot trailer and can be readily moved to PCB disposal sites. The unit is but one of a number of fixed and transportable mobile PCB destruction technologies which are coming on line for commercial application in Canada.
On April 5 of this year, the Ontario Government gazetted a new regulation under its Environmental Protection Act for transportable mobile PCB destruction facilities. This effort to regulate these facilities is a major step forward in eliminating PCBs from the Canadian environment. With this new regulation, companies can now begin applying to the province for approval to operate their PCB destruction facilities.
Initiatives are now under way in other provinces in Canada to rid ourselves of PCB wastes. British Columbia has taken an active role in determining suitable transportable mobile technologies for destroying PCBs in western Canada. Alberta has selected a site for its hazardous waste facility and expects it to be fully operational by 1988. Saskatchewan has established a permanent indoor facility in Regina for a mobile low concentration PCB treatment process which has been in use in the province since 1983. Quebec has initiated a search for a suitable location for destruction facilities. These are just some of the initiatives now taking place across Canada.
As our world becomes more complex, so do the environmental problems we must confront. Special efforts to reach a consensus on the best solutions for different problems are required if solutions are to be found and acted upon. PCBs provide a model of federal-provincial co-operation in confronting a problem and finding solutions to that problem. The lessons learned on this issue will no doubt be of immense use to us in solving other issues which threaten our environment.


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 6.14 p.m.
[Stage Direction]

Friday, May 30, 1986