1986-04-07

ROUTINE PROCEEDINGS

[Stage Direction]
Saskatoon, Winnipeg, Summerland, Kelowna and Vancouver. All of them are protesting the cancellation of Katimavik and seek to have it restored.

Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to Petitions Nos. 331-1, 331-4, 331-5, 331-6, 331-8, 331-10, 331-21, 331-22, 331-25, 331-26, 331-31, 331-32, 331-35, 331-36, 331-38, 331-39 and 331-41.
For the information of the House, these deal with the Morgentaler Clinic petitions.


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, it is my honour to present a petition signed by 34 residents of the national capital region as well as some from Montreal who are opposed to the National Capital Commission's proposal to convert the Mile Circle into embassies.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, it is my honour and duty to present four petitions from the Prince Albert region and other regions in Saskatchewan. All of them refer to the Government's inability to deal with the problem of youth skills and employment options for youth in Canada. They recommend that the Katimavik program be reinstated fully.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, I have the honour to table petitions bearing over 1,000 names. The petitioners seek amendments to the Criminal Code, the Canada Evidence Act and the Young Offenders Act to allow children's testimony in cases of sexual abuse.


Howard Douglas McCurdy: Mr. Speaker, I also have petitions from Windsor, St. John's, Corner Brook, Gander, Toronto, Sydney and Glace Bay,


Hon. Barbara McDougall (Minister of State (Finance)) moved: for leave to introduce Bill C-103, An Act to amend the Loan Companies Act, Trust Companies Act, the Bank Act and the Quebec Savings Banks Act in respect of certain regulatory matters.


Mr. Speaker:: Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Philip Derek Lewis: Mr. Speaker, if Question No. 413 could be made an Order for Return, the return would be tabled immediately.


Mr. Speaker:: Is it the pleasure of the House that Question No. 413 be deemed to have been made an Order for Return?


Some Hon. Members:: Agreed.


Mr. Robichaud: 1.	Does Tourism Canada have a research program on tourism and, if so (a) what amounts were allocated in (i) 1984 (ii) 1985 (b) following the November 1984 economic statement, how many persons were laid off in the (i) research bureau (ii) library?
11926

April 7, 1986
Competition Tribunal Act
2.	Are private firms hired under contract to do research and, if so, in (a) 1984, how many firms were hired and what were the names of the firms and, in each case, the amount of the contracts (b) 1985 (i) how many firms will be hired and what are their names if known (ii) what type of research will they undertake (iii) was the reseach bureau of Tourism Canada considered for the complete research and, if not, for what reason?
3.	Were Camp Advertising, Foster Advertising and Hayhurst Advertising invited to submit to the Cabinet Committee on Communications a tender for advertising contracts from Tourism Canada and, if so, were other firms also invited?
4.	Did the Cabinet Committee select Camp Advertising and, if so, on what basis and for what reasons were the other firms not selected?
Return tabled.
[ Translation]


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


Mr. Speaker:: Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


Hon. Michel Cote (Minister of Consumer and Corporate Affairs and Canada Post) moved: that Bill C-91, an Act to establish the Competition Tribunal and to amend the Combines Investigation Act and the Bank Act and other Acts in consequence thereof, be read the second time and referred to a legislative committee.
He said: Mr. Speaker, I am quite pleased to rise in the House today to acquaint Hon. Members with a very important piece of legislation in the eyes of this Government, which I would even describe as a major economic policy measure.
Bill C-91 to amend the Combines Investigation Act will also give Canada a market charter, a new charter better suited to current conditions. Mr. Speaker, the view of the Government is that the private sector or the market place must be the real driving force behind the most equitable sharing of resources, economic growth and job creation. We do know that the market system within a competitive framework paves the way for a dynamic and flourishing economy. We also know that a sound economy is absolutely essential if we are to maintain and improve the social programs which are the hallmark of Canadian society. To sustain and spur our economy, we have to revamp our major economic statutes and gear them to the requirements of a modern market place. They must also reflect an economy which is and will be ever more closely linked to international trade of goods and services.
When legislation on competition was first drafted in 1889, Mr. Speaker, Canada was barely entering the industrial age.
With the passage of time, however, we became leading players on the international scene in such sectors as raw materials, energy, aluminum, newsprint and telecommunications. Our exports now account for about 30 per cent of our Gross National Product.
The report of the Commission on the Economic Union and Development Prospects for Canada underlined the importance of international trade for the Canadian economy by saying that, as much as possible, Canada should use international trade to ensure a continued and aggressive competition on the domestic market.
Mr. Speaker, economically oriented major statutes, such as the laws on competition, bankruptcy, corporations, copyright and trademarks provide the essential tools for orderly trade as they establish the basic rules for a competitive and fair market-based economy. However, most of these instruments are old, inoperative and out of date. Our rules are obsolete, inadequate, and in some cases, more an obstacle than an incentive to productivity. Canadian businesses will have difficulty in taking up the challenge to claim their fair share of international markets and facing the impact of international competition on the domestic market if they are paralyzed by inadequate legislation. Moreover, if our businesses are disadvantaged, all Canadians will suffer.
I therefore believe, Mr. Speaker, that the Members of this House have a clear and pressing responsibility. They must update these statutes, eliminate such obstacles to growth and economic prosperity and see to it that businesses and consumers are treated fairly on the market.
Hon. Members of this House are well aware that Parliament has tried several times before to enact amendments to the Combines Investigation Act. Each attempt has ended in failure. This time the proposed Competition Act enjoys an unprecedented degree of support throughout the business community, especially with small businesses, consumers and labour interests. The Financial Post, for one, in its editorial of February 1, 1986, stated, and I quote:
This is, after all, the best opportunity yet after 16 years of seemingly endless debate to bring in much needed reform. The chief virtue of Bill C-91 is that it's a sensible, pragmatic document that will do the job without going overboard ... like highway speed limits, it simply sets a reasonably clear and enforceable standard of conduct that reflects a broad social consensus.

As for the publication Les Affaires, Mr. Speaker, it concluded that Bill C-91 maintains a fair balance between free competition and the need for businesses to re-organize to become competitive on international markets.
Some interested parties will probably want to express specific concerns to the committee responsible for considering this bill. Nevertheless, they accept both the need for change and the main thrust of the bill. What is important, Mr. April 7, 1986

Speaker, is that they recognize the need to take this opportunity, to roll up their sleeves, to amend the Act and to put an end to the uncertainty and the frustration this Act has caused them during the last 18 years.

As the Consumers' Association of Canada stated after 1 tabled this Bill in December: "The new Competition Act promises real progress for consumers and is a major improvement over current legislation".
The purpose of Bill C-91, as stated in the purpose clause in the Bill, is to maintain and encourage competition in Canada. However, the clause makes it abundantly clear that competition is not to be considered an end in itself. Rather, competition is sought for its effects on the Canadian economy.
There are four main objectives set out in the Bill. The first objective is to promote the efficiency and adaptability of the Canadian economy. This law will help the expansion of the economy and ensure that it can adapt to changing market conditions and create new jobs.
The second objective is to give us a law which allows Canadian companies to compete effectively in world markets and better meet foreign competition in the Canadian market. The Government is committed to making the Canadian economy world competitive.
The third objective in maintaining and promoting competition is to ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy, and there is an urgent need for this, Mr. Speaker.
The fourth but not the least objective is to provide consumers with competitive prices and product choices. As such, this objective becomes the common denominator in what we are trying to achieve. This is the ultimate objective of the Bill.
It is a law which will benefit all Canadians. A competition law which measures up in these respects will benefit every sector of our economy. It will benefit small business by promoting fairness in the marketplace. It will benefit larger businesses by placing greater emphasis on efficiency and international competition. It will also benefit consumers by giving them a marketplace where there is a choice, which will result in better service, products and prices.
We do not have this kind of competition law now and there has been no such law for a long time. As I said when I tabled this Bill we now have before us, the existing law belongs in a museum, certainly not in the marketplace. Canada has changed tremendously since 1910, but not the Combines Investigation Act. Except for a few alterations, it is the same Act our predecessors passed in this House 76 years ago.
[ Translation]
As for being different, Mr. Speaker, the world certainly was at that time, at least from an economic standpoint, as well as from all others, when the present legislation was originally developed. For instance, the population of Canada was only
Competition Tribunal Act
seven million, that of Montreal, 470,000, that of Vancouver, 124,000, and Canadian exports totalled only $274 million compared with $91 billion today.
However, Mr. Speaker, the economic context is not the only thing to have changed. There is also the legal environment. There was no Canadian Charter of Rights and Freedoms at the time.
In short, Mr. Speaker, that Act is now obsolete with respect to a number of important aspects, and this has become a very serious problem. Our prosperity as a nation depends on the quality of our economic participation in both domestic and external markets. We cannot afford the handicap of an "out of sync", inadequate Competition Act.
Those are the reasons why, Mr. Speaker, this Government has decided to revise the Competition Act, as indicated in the Throne Speech, in the budgets brought down by my colleague the Minister of Finance (Mr. Wilson), and in the statement made by the House Leader on regulatory reform. This legislation is the cornerstone of the Government initiatives designed to make Canada competitive internationally. For the first time, we will have a Competition Act that will reflect the special importance of international trade to the Canadian economy.
Canada is first and foremost a trading nation, and we must make sure that the Act accurately reflects that fact. This is why, Mr. Speaker, the preamble to Bill C-91 clearly states that the purpose of the Act is to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada. The importance of international competition is also emphasized in the proposals concerning mergers and specialization agreements. Moreover, unnecessary constraints resulting from the provisions relating to conspiracy would be abolished to encourage rather than hinder the establishment of export consortiums. Big is not necesseraly bad. In fact, when debating international markets and related goals, the bigger the stronger, the bigger the better.
Although they are strong in relation to the size of our economy, many Canadian businesses when involved on the global stage do not have the clout to compete efficiently with their foreign counterparts. The new provisions would indeed help Canadian businesses face up to their foreign competitors, both domestically and internationally. I would now like, Mr. Speaker, to turn to the major amendments put forward in this legislation-
In an area of law that relies so heavily on economics and business judgment it is very important to have a decisionmaking body that has the expertise to deal with complex competition cases while still providing the necessary legal protections. We propose to create an entirely new adjudicatory

April 7, 1986
Competition Tribunal Act
body, the competition tribunal. The purpose of this tribunal will be to adjudicate non-criminal competition matters. Its membership will comprise judges and lay experts in the areas of business, economics and public affairs.
This proposal addresses one of the problems that we have recognized and have had to live with for many years, the complexity of competition cases. Typically, the questions concern probable effects-future effects-and implications of various business activities, questions which have to be considered in their full commercial and economic context. For example: Is a given practice likely to reduce competition in the years ahead? Is this a situation where small market size makes it desirable to permit companies to specialize or to rationalize their production? Would a particular merger result in efficiency gains which would offset any negative effects on competition? Answers to questions of this type usually require the application not only of legal expertise but expertise in how the market-place functions.
I should add that these difficulties have been recognized and commented upon publicly by distinguished members of the judiciary itself. For instance, some 25 years ago Mr. Justice Spence expressed his view that: "A court is not trained to act as an arbitrator of economics." This problem has been addressed in other countries as well. Similar tribunals exist in both Sweden and in the United Kingdom.
Our proposal is based on a recognition that two needs have to be addressed. One is to draw on relevant expertise. The other is to do so in a process that is, and is seen to be, fair, open and independent. I believe the tribunal meets both requirements. Its membership will be balanced. It will include judges appointed from the Federal Court. It will also include people appointed from the world of business and economics.
To ensure fairness and consistency the tribunal will be chaired by a judge. All law appointments will be vetted by an advisory council appointed by Order in Council and made up of representatives of big and small business, consumer groups, the legal community and labour. This body will ensure that all lay members have the necessary expertise to carry out their statutory duties.
The tribunal will adjudicate. It will not have the powers now held by the Restrictive Trade Practises Commission to authorize searches and subpoenas or to conduct inquiries of its own. On matters of law there will be a full right of appeal from the tribunal to the Federal Court of Appeal.

Mr. Speaker, this Bill also provides for a comprehensive change of approach in the area of mergers and their impact on competition. In the first place, those moves would be considered as coming under civil law rather than criminal law, as is now the case under the present statute.
For years we have had the opportunity to realize that the criminal law is quite inappropriate where that kind of operations are concerned. Its inherent principles, procedures and penalties are simply out of place. Mergers and other relevant
practices are trade practices in the normal course of business activities which, under examination, may or may not affect competition. Our objective is not to mete prison terms nor to levy fines but to protect public interest by setting out specific game rules based on realities and enforce them strictly thereafter.
Criminal law is not only an inadequate tool for analyzing the consquences of amalgamations but again such a procedure, Mr. Speaker, has been shown to be entirely ineffective.
As the Hon. Members know, in criminal law, it has to be proven beyond any reasonable doubt that there has been a violation. It is really asking too much, Mr. Speaker,to assess the prospective consequences of an amalgamation. In other words, how can it be stated beyond any reasonable doubt that a takeover will have effects detrimental to public interest?
It has often been said, that economics is not an accurate science. In spite of this, under the present legislation, a violation has to be proven beyond any reasonable doubt. This is truly inconsistent. Therefore, we should not be surprised that, in the past 75 years, there has never been any conviction on the grounds of amalgamation challenged under the present legislation.
The new legislation surely provides a better procedure for solving our problems. It empowers the Competition Tribunal to prohibit amalgamations or to set specific conditions whenever they are deemed to restrict competition without increasing efficiency.
For the first time, still with respect to amalgamations, the rule of international competition in the Canadian economy will be specifically recognized in the legislation. In 1910, the year when the present legislation was passed, Canada was protected in different ways against international competition either through customs tariff or tariff barriers. Today, many of our industries are directly exposed to international competition both on our domestic and foreign markets.
Thanks to these amendments, Mr. Speaker, when the time comes to rule on the legality of a merger or take-over, the Tribunal will be bound to take into account the extent of foreign involvement in our domestic market.
The new legislation provides also for an exemption in the case of joint ventures which do not limit competition in any way, including research and development projects and natural resources development. Agreements of this kind are especially important for this industry. Most joint ventures do not lessen competition in any way. On the contrary, they bring about gains in efficiency by allowing temporarily joined corporations to share the high risks involved in projects requiring major investments. Joint ventures likely to generate benefits of this kind will be expressly exempted from the provisions of this Act. On the other hand, joint ventures suspected of limiting competition will be subjected to a review by the Competition Tribunal which can then order any remedial action deemed necessary.
April 7, 1986

Finally, we propose to amend the legislation to make it necessary for merging corporations to submit a prior notice when their assets or gross revenues exceed $500 million. We would then be in a position to examine the pros and cons of major mergers which are most likely to limit competition substantially, before they become a reality. Such a prior notice is provided for in competition legislation in many other countries including Japan, West Germany, Australia and the United States. The omission of such a clause in our own legislation would constitute in my view a major flaw.
In short, Mr. Speaker, these proposals will provide Canada with a legislation which will adequately govern mergers, a workable instrument which will encourage competition while not unduly affecting the activities of Canadian corporations abroad.
We also propose to repeal the existing criminal law provisions that deal with monopolies and replace them with civil law provisions dealing with the abuse of market power. The reasons for this change are in large part the same ones that apply to our proposals on mergers.
As written, the Act can now deal only with the most blatant and absolutely serious abuses of market power. Even within such stiff parameters, it does not work well. This is an area in which competition law must be effective if there ever was such an area.
Nevertheless, the law must explicitly recognize that in a small, open economy such as ours, some firms may well achieve a market dominance. The law must allow those who are doing a better job to continue to succeed. The problem arises when a dominant firm abuses its power and takes action to prevent or lessen fair and healthy competition. Small businesses which provide so many Canadian jobs are especially vulnerable to this type of behaviour.
The new Act will serve as an effective deterrent to these practices and will give small businesses protection and the fair chance they deserve. First, the law must be clear. As Hon. Members will see, the sectors regarding abuse of dominant position will clearly spell out what constitutes anti-competitive behaviour and will provide examples. At the same time, we will have a law that can be applied more precisely.
We must be able to distinguish between market success based on superior performance and success built on unfair market muscle. No public interest is served, for instance, by preventing businesses from reducing prices and gaining a larger market share because they have found ways to keep their costs down. However, we do have an interest in acting against dominant firms that use predatory practices to wipe out an inconvenient competitor. To make this distinction and others like it, the new law provides for a defence based on superior competitive performance.
Competition Tribunal Act

Under the new provisions, Mr. Speaker, any conspiracy to limit competition will remain a major crime. Unfortunately, the current legislation is again quite inadequate. First of all, it is of doubtful effectiveness, because it does not always discourage real conspirators. Also, its wording is so vague that it could stop agreements, especially in the export industry, which, in the final analysis, would prove beneficial to our economy. Obviously, Mr. Speaker, we need legislation to block these two loopholes. Any price fixing or competition limiting agreement would weaken the economy. It is therefore necessary to provide for sufficiently severe penalties to discourage people from concluding competition limiting agreements. On the other hand, we also need legislation which does not stop Canadian corporations from concluding agreements that are desirable to tackle international markets.
As a solution to the first problem, we propose to increase the severity of the law by increasing the maximum penalty in the case of a conspiracy from $1 million to $5 million. We will also make it clear both to businessmen and the courts that any conspiracy to restrict trade is intolerable.
We also propose to amend the legislation with a view to eliminating the uncertainty surrounding the mens rea, the intention to commit a crime that must be proven and the agreements the existence of which is inferred, that is, the weight the Courts should give for instance to circumstantial evidence in such cases.
To deal with the second problem, we propose to amend the legislation in such a way that it could adapt to particular circumstances. We do not want to interfere with corporations which are anxious to sign agreements that are clearly in the public interest. Several examples come to mind: agreements between corporations operating within a tight market for the purpose of specializing in different lines of products, or agreements for the purpose of exporting goods to foreign countries. The new legislation provides that the Competition Tribunal may allow specilization agreements for the purpose of increasing efficiency. These exemptions would apply both to services and manufactured goods.
Mr. Speaker, another amendment deals with the status of banking institutions and Crown corporations with respect to competition legislation. At the present time, agreements and interbanking mergers are governed only by the Bank Act. As far as Crown corporations are concerned, they are not, as a rule, submitted to the provisions of the legislation governing competition. A question is constantly raised: Why should banking institutions and Crown corporations enjoy a status different from that of other industries? So far, I have not heard any satisfactory explanation.
Under our proposed amendments, all agreements and interbanking mergers would come under the Act governing competition. Crown corporations which are competing with the private sector would also be subject to this new legislation. Because of these new amendments, Crown corporations would

April 7, 1986
Competition Tribunal Act
have to abide by the same regulations as the private corporations with which they compete. Of course, regulated activities would not be affected by these changes.
Another one of the main thrusts of the reform proposed in this Bill is the transformation of the enforcement mechanisms. If we want the Act to meet its objectives, it must be possible to enforce it, and to enforce it efficiently, powers of investigation are essential. Many Members will recall the famous Southam affair which established a precedent a few years ago. At the time, the Supreme Court declared inoperative the powers of search and seizure conferred by the present statute. The Court came to this conclusion partly because the fact of conferring to a single organization, namely the Restrictive Trade Practices Commission of Canada, the power both to make decisions and to authorize searches and investigations meant that the organization did not fulfill the requirement for impartiality prescribed in the Act.
As 1 have already said, the tribunal proposed in the Bill will have only decision-making powers. The regular courts will be empowered to issue search warrants and summonses. We believe that these changes will protect the individual rights enshrined in the Canadian Charter of Rights and Freedoms while providing the tools required to enforce the law properly.
In conclusion, I am not the first Minister in this portfolio to come before the House with a Bill to amend this Act. 1 am not even the second or the third, but I hope I will be the last to do so for quite a while. Indeed, I am optimistic that Parliament will make these proposals law. I am optimistic for several reasons. One reason is the consensus which exists over the need to put an end to the long process of reform. I am optimistic because we are not starting from scratch. All the time and work spent in attempting to change the legislation over the years has not been wasted. The problems and options have been studied in depth and in detail by this Government and by previous Governments.
While there was a good foundation, there were some pieces of the puzzle which still had to be put in place. I believe they are in place now. There is much in the Bill that is new. It is a Bill which bears the imprint of the Government's belief in the free market economy. However, in formulating these proposals, we do not intend to reinvent the wheel. Where the previous work was sound, we have built upon it.
[ Translation]
Finally, Mr. Speaker, we did not prepare the provisions of this Bill with undue haste. The amendments tabled before the House were discussed, prepared and finalized through a series of consultations which began as soon as this Government came to power in September 1984. Those concerned know about these amendments. Organizations representing Canadians from all spheres of society, including business, consumer groups, unions, universities and jurists have been informed of
all planned changes. We ensured that this would be done. In response to the working paper distributed in March 1985, we received over 100 submissions from groups and individuals throughout the country. We also requested and received the input of an advisory committee including representatives from business, economic and legal circles created for this purpose in the spring of 1985. Mr. Speaker, the work carried out by this group was very useful in enabling us not to lose sight of our objective during this entire process.
I would like to take this opportunity to thank sincerely the members of this Committee for volunteering their time and for their major contribution to this Bill on competition. I would like to give the names of the members of this Committee. First, Mr. Thomas Kendell, corporate lawyer in Newfoundland, Mr. Marcel Cote, President of Secor Inc., analysis consultant, Mrs. Diane Cohen, well-known journalist, Mr. William McKeown, partner of the Stephens, French & McKeown firm, Mr. Brian Finlay, partner of Weir & Foulds, Mr. Ron Atkey, partner of Osier, Hoskin & Harcourt, Mr. Grant Murray, Vice-President of IBM Canada Ltd., Mr. Alan Cooke, senior partner of Cook & Shandling, and Mr. Eric J. Rice, partner of Campbell, Froh, May & Rich.
Mr. Speaker, one of the aims of that consultation was to locate disagreements. We succeeded. Another aim was to try and settle those disputes and there again we were successful. Unanimity can seldom be reached but in my opinion, we have come as close as possible to a consensus. This has been achieved because many people have worked to develop it. It was attained through various reasonable and well-balanced proposals. The Bill protects the interests of all parties concerned in Canada, that is business people, unions and consumers.
Mr. Speaker, we are celebrating a dubious anniversary in 1986. Twenty years have already elapsed since the Economic Council of Canada examined the Combines Investigation Act.
The need is urgent and time is running out. We know what should be done. More than ever before, we agree on the steps to be taken. It is now time to act. This is, Mr. Speaker, what I am now proposing to this House today.


Hon. Andre Ouellet (Papineau):: Mr. Speaker, I am very pleased to rise in the House today to talk about a matter which is of great interest to me, the competition policy. Of course, I am doing so on behalf of my colleague from Saint-Michel- Ahuntsic (Mrs. Killens) who is still convalescing and who would certainly have a lot to say in response to the remarks of the Minister.
As everybody knows, many Members of the Liberal Party who now sit on this side of the House have worked hard over the past 10 or 15 years to bring about a reform of the competition legislation.
Indeed, my desk mate, the Hon. Member for Windsor West (Mr. Gray), my colleague the Hon. Member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand) and I have all had our say in these concerted efforts to improve Canada's
April 7, 1986

competition legislation. All three of us have tabled bills which came up for debate, and in one case in the mid seventies an affirmative vote enabled us to take a giant step towards improving the competition legislation.
Two more of our colleagues, first the Leader of the Official Opposition and Member for Vancouver Quadra (Mr. Turner), and my colleague from Grand Falls-White Bay-Labrador (Mr. Rompkey), were also Ministers of Consumer and Corporate Affairs at one time or another. In fact, the Leader of the Opposition was Canada's first Minister of Consumer and Corporate Affairs.
The Official Opposition has no fewer than five Members who have held that portfolio, so we are quite prepared and qualified to analyse this admittedly very complex measure introduced by the Minister, Bill C-91.
And I want to say that we intend to analyse this Bill because, unfortunately, there have been too few successful attempts to reform this legislation, and it has always been a rather laborious process.
That is why I share the Minister's view that, for a number of reasons, this reform is long overdue and we must act without further delay. The Minister said earlier that he would like this Bill to be adopted quickly. Why did he wait 16 months before introducing the legislation? The consultation process surely was important. We recognize that the Minister as soon as he took office had to do some sort of consultation. But consultation is no excuse for inaction. And now, 16 months later, we are faced with a Bill that has its origin in the legislation that was carefully prepared by myself early in 1981-82 and introduced in this House by my colleague, the then Minister Judy Erola, as Bill C-29.

Let me say very clearly and unequivocally that Bill C-91 is a welcome Bill. However, we must look at it and ask ourselves whether it is better than the present legislation dealing with competition. In many respects, I believe it is. In many other respects it is not adequate. We need to do the job in order to deal effectively with true competition in the market-place This legislation is far from being adequate to deal and to cope effectively with the current situation.

I find it unfortunate that Mrs. Erola's Bill has been "toryfied", if I may use the term. It is my feeling the Minister bowed before big business pressures and recommendations. The Bill he is introducing today does not really meet the needs of consumers and the multitude of small Canadian businesses that are constantly being bullied and crushed by big Canadian businesses.
[DOT] (iISO)

Considering that Bill C-91 is better than nothing, but not enough to do the job effectively, we, the Liberal Party of
Competition Tribunal Act
Canada, will seek to improve and to strengthen the Bill by amendments based on proper analysis within the framework of the legislative committee. We are committed to the improvement of Bill C-91 and we will react negatively to all amendments that could weaken the Bill even further. Our objective will be to strengthen this legislation substantially.
Why is there a need for such a piece of legislation, Mr. Speaker? Competition is the basis of the private enterprise system. Economic theory states that the more competition there is in the market-place, the better it is for everyone: prices are lower due to the wide choice of firms producing the same products and small business, provided it can face the competition, can assume its part of the market and improve its products and services. Consumers will then benefit from low prices and a wide variety of products from which to choose.

The healthier the competition, the better it is for everybody. For instance, in the '60s we started to relate competition and efficiency. Logic would have it that the competition legislation should help and encourage maintaining conditions conducive to efficient competition. As a consequence, competitive and therefore efficient markets were considered to be those that could allocate those resources that are the most urgently needed by Canadian society with the utmost efficiency. From there flowed the principle that efficient allocation of resources results in the highest possible level of material life. Of course the highest possible level of material life for all Canadians was the goal in the '60s, and as far as this party is concerned it still has to be, more than ever, our first and foremost goal. This points to the significance of efficient legislation in the area of economic competition.

On the other hand, when there is little competition product choice is poor and, in general, prices are high, sometimes excessively high. Consumers and small businesses are hit the hardest. I know the Government has what we call-

-favourable preconceived opinion for Canada's oil industry. [English]
But whatever this Government thinks, for the majority of the people the prime example of an non-competitive sector in the economy is the oil industry. There is little competition, choice is poor and prices are absurdly high. In a country such as Canada, where many of us depend on gas to travel the great distances that separate different communities, the high price of gas is a true scandal. Consumers and the Canadian economy as a whole are hurt by the oil industry.

Mr. Speaker, when world oil prices go up, that increase is reflected at the pumps the same day or the day after. But when oil prices decline, as it is now the case, we have to wait for weeks or months before prices go down at service stations.

April 7, 1986
Competition Tribunal Act
Mr. Speaker, the situation now prevailing in Quebec's oil industry is sheer madness. How can it be explained that a refinery is taken over in order that it will not be operated afterwards by its buyers? That flies in the face of logic. It is clear that the purchase of such a plant is normally aimed at operating it. But we know the Ultramar Corporation bought the Gulf refinery in Eastend Montreal, not to operate it, but to shut it down. Well, the Gulf-Ultramar deal is a downright political scandal which weighs heavily on the back of the present Conservative Government.
Why the present Minister of Consumer and Corporate Affairs (Mr. Cote) did not back his Director of Investigations to prevent that deal is incomprehensible. I maintain that the Minister did not do his duty. He has lost the confidence of Canadian consumers. And the Bill he is introducing today is another example of his subservience to the large Canadian companies. What reason did he have to defend Ultramar instead of the consumers of the Montreal area?
The concentration in that industry is so real and important that the Canadian Oil Products Marketing Association claims that Canadian consumers paid S302 million more than they should have for gasoline just for the month of January 1986. Yet, independent companies in that field are not afraid of competition and have indeed long been calling for a better competition policy to protect them from oil multinationals. Why is it the opposite in the case of multinationals and other large producers which do not want good competition legislation in Canada? And why is the Minister of Consumer and Corporate Affairs protecting oil multinationals?
When the former Combines Investigations Director, Mr. Bertrand, tabled his report incriminating oil companies, I was Minister of Consumer and Corporate Affairs, and I publicly backed the Investigations Director, Mr. Bertrand. I was in attendance when he gave his press conference and charged the large oil companies of Canada on the basis of vast and bulky information. 1 never failed in my duty to back the Director of Investigations. But what about the present Minister who went in hiding for weeks, who refused to make public the O'Farrell report, written by the present Director of Combines Investigations? When this civil servant, Mr. O'Farrell, published his report, the Minister simply said that it contained personal views and that he himself did not want to get involved. Now, it is an absolute shame for a Minister of Consumer and Corporate Affairs to refuse to back and defend the Director of Combines Investigations. If the Director is no good, let him go, let him be given the sack, let him be replaced. But if the Director is doing his job in a decent and conscientious way, then the Minister must back him publicly in his action. And I insist, Mr. Speaker, that the Minister did not do his duty and chose to protect multinational companies rather than backing his Director of Investigations and protecting Canadian consumers.
As it stands, our competition law is excessively weak compared to those of other coutries. Let us take the American situation as an example. The Americans have one of the best
competition laws in the world, which the oil companies in the United States must obey, a far cry from what exists here in Canada. We should therefore not be surprised, Mr. Speaker, to see that gas prices are much lower in the United States than they are here and that any reduction in the world prices is immediately passed on to American consumers. We hope that situation will finally prevail in Canada. A thorough study of Bill C-91 makes one realize, unfortunately, that this legislation is toothless and will not fill the bill and protect Canadian consumers.
I would also ask the Minister if he believes that the lack of competition in our country has been beneficial to the Canadian economy. For example, in 1978 Canada's top one hundred non-financial enterprises owned 48.6 per cent of all the corporate assets in the country, compared to 30.6 per cent owned by the top one hundred firms in the United States. Canada has gone through a major recession and, consequently, the 100 largest corporations control more than half of the business assets of our country. Furthermore, there is no proof that these very large companies are now better or more efficient because of their size. In fact, they can be either better or worse, but, unfortunaely, there is no documented proof of their efficiency. However, it is certain that their size gives them a tremendous degree of power.
If you define power as the ability to say no, then these very large companies have a definite power, for they have been saying no to competition policy for over 15 years.

The attitude of the Canadian Chamber of Commerce in the '70s, in particular, was almost ludicrous. The paranoiac reaction of its leaders to any amendement to the competition legislation completely discredited that body at the time. That is why other groups emerged as adequate and rational representatives of the interests of all business people in Canada. And I seize this opportunity of a debate on Bill C-91 to pay a tribute today to the Business Council on National Issues, particularly to Mr. Tom D'Aquino whose more realistic approach allowed a freer, more serene and serious debate on that matter. I do not hesitate to say that the BCNI has made considerable efforts to better understand the objectives of the Government and those of the Department of Consumer and Corporate Affairs and to explain to various representatives of the business community that once and for all they had to reach an agreement with the Government with respect to competition legislation. I know quite well that the Minister has resumed the dialogue and carried on consultations with the business community.

I understand that Bill C-91 was drafted in collaboration with the Gang of five: the Business Council on National Issues, the Canadian Manufacturers' Association, the Canadian Chamber of Commerce, the Grocery Products Manufacturers
April 7, 1986

of Canada, and the Canadian Bar Association. I have no objection to these associations being consulted. I think it was natural and that they should have been consulted.


Mr. Orlikow:: Consulted? They wrote the Bill. They weren't consulted.


André Ouellet: I share my colleague's fear in this regard. 1 would like to be assured by the Minister that the present amendments reflect not only their concerns and interests, but also those of the Canadian economy as a whole, of the small businesses of Canada and, more particularly, of the consumers of Canada. If the Minister is telling us that the business community is ready to accept the Bill because it is of their own making, I will be very uncomfortable, because if their participation has been, in large part, overwhelming, I would be afraid that Bill C-91 is strongly biased in favour of big businesses.
I am not the first one to acknowledge that a bias exists in favour of business communities in any country of the world. I am not saying that is always necessarily bad. However, we must be aware of the limitations this imposes upon us and acknowledge them. I want the Minister to be open, frank, and honest in this regard and to tell us who drafted the Bill.
As far back as the 18th century Adam Smith wrote in The Wealth of Nations:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings by any law which either could be executed, or would be consistent with liberty and justice.
More recently Mr. Justice Wyzanski of the United States Federal Court stated:
Concentration of power, no matter how beneficially they appear to have acted, nor what advantages they seem to possess, are inherently dangerous.
Their good behaviour in the past may not be continued; and if their strength were hereafter grasped by presumptuous hands, there would be no automatic check and balance from equal forces in the industrial market.... Dispersal of private economic power is thus one of the ways to preserve the system of private enterprise.
In view of the circumstances, Mr. Speaker, the manner in which the Bill was drafted, and the historical perspective of Canadian competition policy, a serious examination of Bill C-91 in committee is of the utmost importance. The effects of concentration on the Canadian economy are already very serious. The economic sectors of the oil, publishing, newspaper, food, and retail industries have all seen less and less competition and increased, although subtle in some cases, control of markets. This is practically always to the detriment of the consumer. This is obvious. One need only look at what happened in some cases to conclude that it is abundantly clear that consumers have not benefited from this era of concentration in Canada.
It is also to the detriment of our Canadian economy. For example, mergers do not necessarily create more jobs, they often decrease the prices of shares. Neither is a merger guaranteed to bring about more productivity or efficiency. The simple truth is that in some cases it does, but in many other
Competition Tribunal Act
cases, unfortunately, it does not. Our approach and vision of the problem is greatly enhanced when we consider the real motor of the economy, that is small and medium businesses, and also the spending power of the consumers.
Small businesses create the bulk of jobs that exist in Canada. Therefore, we have an obligation to encourage and protect competition and fair trade practices in order to ensure the best conditions for an active and healthy market-place. The reality is that it is not consumers or individual consumers who complain to the Department of Consumer and Corporate Affairs about unethical competition. The vast majority of requests that come daily to the Department come from small businesses, entrepreneurs that are squeezed out by the big ones, that are badly treated by the large dominant firms in Canada.
Therefore, once again Adam Smith's perspective can help us in our endeavour. He states as follows:
Monopoly-is a great enemy to good management which can never be universally established but in consequence of that free and universal competition which forces everybody to have recourse to it for the sake of self-defence.
The Liberal Party will be looking for indications that small businesses are protected from unfair competition by Bill C-91. We will not take only the word of the Minister, we will ask small business representatives to come before the committee and test this legislation as to whether it is efficient. If it is not we will have to amend it, because I believe it must be the essence of fair competition in the market-place; legislation that allows small businesses to prosper in Canada and multiply themselves, not to be squeezed out of business by the big ones.
I would now like to address briefly some of the aspects of the legislation, and the first has to do with the tribunal. Certainly the establishment of a tribunal can be said to be a positive step, since its members will be able to develop a certain expertise, but the issue of composition needs readdressing.
The judge on the tribunal will have great power in the decision-making process since he alone would be deciding on questions of law, and with lay members on questions of law and of fact. These lay members will be sitting on a part-time basis, opening the door to uncertainty as to their constant interest and commitment to the job, not saying anything of their total integrity. I do not think this system has been carefully considered and analysed.

I know that in Quebec, the tradition is that a judge is appointed to sit on some administrative courts. For instance, the chairman of the Workmen's Compensation Board is a judge sitting full-time on that administrative court for a five-, six- or seven-year term. And once he has completed his term, he returns to the bench, his independence as well as the security of his professional life being assured but we do not have this rather paradoxical mixture of the judiciary and the non-judiciary.

April 7, 1986
Competition Tribunal Act
I just cannot believe that Canadian judges of the Federal Court are prepared to sit on such a hybrid body. Asking a justice of a Canadian Superior Court, a Federal Court or a provincial Supreme Court to sit on the Competition Tribunal for four, five, six or seven years would be an excellent idea, but I cannot accept that this justice should continue to exercise his responsibility in his own court, to which he has been appointed and with which he is expected to work. I find it absolutely inconceivable that those justices should be asked to do double duty as justices of both the Federal Court and the Competition Tribunal. And also that they should be asked to lead a panel, not of other judges but of business experts. It is my view that the Minister made an excellent move when he decided on setting up a tribunal, but also that he erred when he turned that tribunal into some half-judiciary, half non-judiciary body.
I also wonder whether that would not be unconstitutional, and it is my view that we should have legal opinions on that before proceeding with legislation that could lead to tremendous difficulties with the Supreme Court of Canada a few years down the road.
But what is more important still for us is who will be appointed to that tribunal. We feel it is essential that people of absolute independence and integrity be appointed to that tribunal, because they will have to pass judgment on economic matters involving millions, if not billions of dollars. And if people are asked on occasion to sit temporarily on a tribunal that will have to decide whether the takeover of two big Canadian corporations should proceed or not, I feel that we will thus be exposing those people who in due course will be going back to their own fields of activity to earn an honourable living. It is my view that failing to provide for a fixed term of office and some employment stability in the case of those men and women who will be called upon to sit on that tribunal is a very serious blunder on the part of the Minister, one which I hope he will straighten out.

In addition, the appeal procedures are very broad and could go on for a very lengthy time. In economic matters, where time is of the essence, we must examine ways of speeding up, or limiting the time spent before our judicial institutions. Otherwise, opportunities may be missed both for companies and consumers.

Moreover, our party, the Liberal Party, is concerned that Bill C-91 will not allow third parties to appear directly before the Competition Tribunal. In my opinion, this represents an obvious lack of access to the tribunal in the context of a growing bureaucratization of the whole process.
I think that it is important for the Minister to accept an amendment which would allow third parties with a competitive interest to appear before the tribunal to express their views and present their arguments before this tribunal makes any decision which could impact on these third parties, who are not
directly involved, but who, indirectly, could be very much affected by a transaction sanctioned by the tribunal.
The legislative committee would also want to look into class action as introduced in both Bills C-42 and C-13, to see once again if this would be a good way for third parties to seek redress, or if procedural rules cover this kind of action sufficiently.

Mr. Speaker, I would like to say in closing that it is important in my opinion that the part of the Act dealing with mergers be as strong as possible because it is obvious that it is the weak point of the existing statute. The proof is obvious. Since 1910, there has only been one conviction under this section of the Act.
I believe that we are right to transfer jurisdiction for mergers from criminal law to civil law. However, Bill C-91 has been weakened if we consider that its predecessor, Bill C-29, listed twelve factors to determine whether there had been a contravention of the Act.
I do not understand why the Minister has made these changes. The bill introduced by Mrs. Erola was much more important, serious and useful to prevent mergers which would be detrimental to Canadian economic interests.
Bill C-91 omits several considerations, as I have just mentioned. For instance, the difference in size between the business planning a merger and its competitors. There is also the past behaviour of a company to prevent competition, for instance, as well as the potential elimination of a solid competitor, any evidence of the intention to prevent or reduce competition, the possibility that the merger will result in a substantial decrease in supply or distribution sources, as well as the nature and the degree of change and innovation in the specific market, and finally, any possibility that the merger will promote competition. Why have these factors been eliminated from the legislation which Mrs. Erola had introduced? It seems to me that the legislator should provide a text which is as precise as possible to better inform the judges of his intentions. Is it that the Minister does not feel these factors are important? Is it that the Minister wants to instruct the Competition Tribunal not to take these factors into account? If such is the case, it would be quite unfortunate, because we would have run the complete circle. While trying to tell us that the legislation would prevent unfortunate mergers in Canada, the Minister has come forward with a toothless legislation which will not prevent mergers which are detrimental to the Canadian economy.
In my opinion, there are too many loopholes in this legislation. Especially because of this defence of economic efficiency and the obligation to demonstrate a lack of competition, the legislation introduced by the Minister has so many loopholes that major corporations will be able again to get away with it.
April 7, 1986

Mr. Speaker, 1 am extremely disappointed that the Minister had to give major companies these concessions to gain their support for his Bill.
Finally, I hope the Minister will understand his mistake and realize that this is a toothless legislation, that it is no good as drafted, and that he will accept the amendments which committee members may suggest to him to strenghten his legislation so that it truly ensures free competition in Canada, in the interest not only of Canadian corporations, but also of Canadian consumers and, on top of that, of the Canadian economy as a whole.


David Orlikow: Mr. Speaker, when the Minister of Consumer and Corporate Affairs (Mr. Cote) introduced this Bill a short time ago he said it had the support of the business and financial community. A little later he gave us the names of the advisory committee that worked on this Bill. It then became very obvious to anyone who has an interest in this why the Bill had the support of the business and financial community. All the members of the advisory committee came from the business community or from law firms which represent the business community. The advisory committee had no representatives from farm organizations, labour organizations, consumer organizations or the academic community.
If we are going to be fair, we must say that this Bill is better than its predecessor. I say that only because the legislation we have had until now has proven completely useless. Previous Bills have failed to do anything to control mergers or see that we have real competition.
This Bill is light-years short of what we really need and 1 want to tell the Minister that the New Democratic Party intends to oppose it as much as we can, for as long as we can. If and when this Bill passes second reading we will insist that there be the most detailed discussion in the committee and that the fullest opportunity be given for input and testimony from witnesses who come from all those areas of the community to which the Minister has not listened.
There has been no sadder page in Canadian history than the failure of governments, Liberal and Conservative, to deal with the whole question of competition reform. That is not just the judgment of the New Democratic Party, it is the written assessment of one of the leading competition economists in Canada, Professor Irving Brecher of McGill University, who wrote a study in 1981 entitled "Canada's Competition Policy Revisted". Professor Brecher knew where to place the blame when he added in that article:
This judgment is made all the more painful by the realization that, contrary to often-expressed belief, the outcome was not inevitable or beyond the control of Governments determined that it be otherwise.
He was talking about Liberal Governments which failed to deal with the question and he could well say that about the present Conservative Government which is not now dealing with the real issue.
Competition Tribunal Act
This is a story of continuing failure over a long period of time. The Economic Council began their deliberations about what we need in a modern competition policy in 1966. Their interim report was completed in 1969 and the then Government brought forward its conclusions, drawn from that study, in Bill C-256 which was tabled in 1971. As of today, none of the studies, the commitments, Bills or speeches have produced a law which would reform our simplistic, judicially hamstrung and grossly ineffective competition law. Only one modest Bill was passed.
Today we are being asked to accept Bill C-91 as the ultimate development in competition policy. This Bill is hardly that at all. It is a fifth (and poor) generation descendant of a Bill that has been before the House, but not passed, since 1971. There were in earlier years Bill C-256, Bill C-42, Bill C-13 and Bill C-29. All of these Bills were attempts to reform the Competition laws and all of them failed.
Anyone who believes that competition law reform was or is a priority for this country should approach Bill C-91 with a good deal of suspicion. The question is not what is in the Bill, it is what is not in the Bill. Why did those earlier Bills not pass Parliament? It was not because they were blockaded by Opposition Members of Parliament. It was essentially because they only gave the business community 90 per cent of what it wanted.
In order to introduce this legislation today, the Minister of Consumer and Corporate Affairs (Mr. Cote) had to pay a price. He had to give them 99 per cent of what they wanted. It is a bit like Faust having to make a deal with the devil. In the name of promoting competition, the Minister had to reach prior agreement with the same people who had prevented the passage of all four of the previous Bills, namely, the representatives of big business.
We can be more specific. We can say categorically that five groups argued with the Department of Consumer and Corporate Affairs over every clause of this Bill until they got what they wanted. It was not labour and consumer groups, representatives of farm organizations, or academics, who spent years studying this question, who sat in on the drafting of this Bill. The groups which sat in with the Department and vetted every single clause in this Bill were the Business Council on National Issues, the Canadian Chamber of Commerce, the Canadian Manufacturers' Association, the Grocery Products Manufacturers of Canada Association and the Canadian Bar Association. These five groups are naturally satisfied with the Bill. We have not had a barrage of objections from them of the kind which downed the previous Bills. We should be very worried indeed. We have to ask ourselves if a committee of foxes did not design this particular chicken coop. We suggest that although they did not do the actual drawing up of the Bill itself, they certainly sat at the table to ensure that any detail did not affect them adversely.

April 7, 1986
Competition Tribunal Act
What about the other groups? What about the wide circle of consultation bragged about by the Minister in his press statement of December 17? He said he was listening not only to business interests both small and large, but to the provinces, consumers and organized labour.
We know something about those consultations. Organized labour was given a very perfunctory hearing with no follow-up as to what the Government was actually planning to do. We know that the Consumers' Association was warned to go along or there would be very serious consequences. We had our own experience with this consultation process. Because we believe in being constructive, we sent the Minister a letter on March 27 of last year requesting he meet with seven competition experts from the academic community in order to receive the benefit of their experience and scholarship in this field. My understanding is that none of those persons received any more than a perfunctory consultation. Departmental advisers will call them when they have problems but the Minister was not very interested in hearing their policy views and then acting on their expert advice.
Sunday morning on CBC Radio, Professor Stanbury, an outstanding expert at the University of British Columbia, spoke in considerable detail about what is wrong with this Bill and what should be in this Bill but which is not. Professor Stanbury was one of the persons we recommended the Minister consult, but all the Minister did was write to him, receive a reply, and that was the end of Professor Stanbury's participation.
Our conclusions about this kind of policy making are; first, it is one-sided, calculated to appease the most powerful special interest group, large business. There was no real consultation. Second, other interested parties, particularly the general public which would stand to gain substantially through an effective competition law, were involved tangentially or not at all. Third, expert outside advice was neither sought nor encouraged.
Why this has come to pass is part of the pathetic story told by Professor Brecher in his study. It is a diminishing effort by Cabinet, the Civil Service and political Parties, both Liberals and Conservatives, as the difficulties of passing a useful competition Bill became apparent. Competition reform as a priority gave way to the buzz words of "incrementalism" and "stage one" and "stage two" when the Government realized it would have to fight very powerful interest groups in order to implement a worthwhile policy. It was not prepared to fight. It is not as if the Government was resigned after fighting the good fight to getting half a loaf in Bill C-91. It has brought about this outcome by deliberately lowering its sights and being afraid to fight for a better economic deal for average Canadians in most of their every-day purchases. Just how much average Canadians are paying for this continuing policy failure will no doubt surprise Hon. Members.
We should take inventory of what this policy failure has cost the country and ordinary Canadian consumers. We know that the Canadian economy is highly concentrated. It is susceptible
to price increases associated with high tariffs, and the domination of markets keeps prices high throughout a business cycle. The cost to Canada of this kind of anti-competitive system has been estimated at 7.5 per cent of the Gross National Product. In 1984 the Gross National Product was $416.6 billion. The cost of economic wastes attributable to the absence of price competition in Canada is in the neighbourhood of $31 billion and rising yearly. This estimate is from a noted competition economist, A. M. Moore. The Nielsen Task Force should have also looked at private sector waste.
There are further costs to the economy, as Professor Brecher noted. We have highly sheltered markets, which means a sluggish economy, slow to adapt. These non-competitive markets also breed persistent powerful private attempts at manipulation of the policitical process in order to sustain the economic status quo. Thus we can see a New Brunswick dominated by the Irving family interests, a Newfoundland dominated by the Water Street merchants or the western provinces which were formerly dominated by the CPR now dominated in many food industries now dominated by the Weston group and by Safeway.
We now begin to see the double bind on competition reformers in Canada. On the one hand, we have a powerful business constituency wanting nothing to do with a policy it perceives, incorrectly, as being harmful to its interests. On the other hand we have a Government which is loathe to offend those who can cause it the most difficulty at both the political and Civil Service levels. Obviously, the substantial costs of not having a real competition policy have been borne by the ordinary Canadians who could not be effectively mobilized to argue for consistently better economic performance by this country's business firms.
There will be claims by both Liberals and Conservatives that they are the true parents of effective competition law in Canada. Those who study the field in detail know better than that. Professor Brecher said about both Parties:
The fact is, however, that neither the Liberals nor the Conservatives have ever articulated a clear philosophy of competition or a real commitment to its vigorous enforcement.
We have seen the abject Liberal record on this issue. That Party never did put through an effective Bill in all the years it was in office. This assessment ought to make us even more wary about what the Conservatives are promising. When the Minister of Consumer and Corporate Affairs unveiled this legislation last December we called it "more water than wine" in delivering a competition policy to Canadians. There is much more to be said on this.
Before going further I should point out where the Conservatives stood while the Liberals were at least trying to pass a Bill. The Conservatives were opposed to it and only too happy to be the advocates of big business once more. One of the biggest critics of Bill C-42, which was brought forward by the Liberals, was the present Minister of Regional Industrial
April 7, 1986

Expansion (Mr. Stevens). We have to ask whether there been a change of heart on the road to Damascus so that the Minister can now endorse the Bill of his colleague, the Minister of Consumer and Corporate Affairs. Of course not.
We have seen many changes to the earlier Bill C-42 as originally proposed. It has deteriorated and has been watered down into the present Bill C-91. Undoubtedly, we know that the Government has no great enthusiasm for this Bill. "We can live with it" is possibly how members of the Government explain it. But given Conservative ideology, a strong competition Bill is a must.
The Government repeatedly calls for maximizing the role of the private sector. It believes in a closer trade relationship with the U.S. and lower international tariffs. But lower tariffs are not a substitute for effective competition in the domestic market. We know that certain cabinet Ministers who often profess belief in the market frequently run into difficulties. For example, the Minister of Finance (Mr. Wilson) believes in letting markets set the value of the Canadian dollar. He believes that until the value drops too low and then he talks about burning the speculators. Let us consider the Minister of Energy, Mines and Resources (Miss Carney). She believes in letting the markets set the value of petroleum products. She says she believes that, even while gasoline prices have declined by only three cents a litre while crude oil prices have dropped by one-half or more. She continues to say she will be patient with the companies, while Canadians motorists want to see some real action from her, action that would cut gasoline prices by 12 cents a litre.
I wish to take a few moments to deal with a tremendously important decision being made right now out there in the real world about the future of this country, with which this Bill does not even deal. I am talking about the proposal by Imasco to take over Genstar. Before I point out what is wrong with that proposal let me put on the record the fact that it is not just New Democrats who are opposed to the takeover of Genstar by Imasco. I would like to quote from a news report which appeared in The Globe and Mail a couple of days ago. It is headlined: "Debate sought on Genstar takeover, Tory MPS oppose Imasco deal". I would like to read into the record a couple of paragraphs from the story.
A group of Conservative back-benchers are preparing to stage a special debate to oppose the takeover of Genstar Corp. by Imasco Ltd.-
The $2-billion deal, accepted by Genstar yesterday, would give Imasco, a Montreal-based cigarette, drug store and fast-food conglomerate, control over Canada Trustco Mortgage Co., a Genstar subsidiary. Canada Trust, with assets of more than $20-billion, is the seventh largest financial institution in Canada.
The protest is led by Paul McCrossan, Tory Member of Parliament for York-Scarborough, who opposes any particular takeover of a mjaor financial institution by a company not already in the financial services industry.
He argues that such a purchase creates a situation whereby a trust company can become the captive of its new parent-a compliant source of financing for deals that might not be in the best interests of the financial institution's depositors.
The article goes on to quote the Hon. Member for Don Valley East (Mr. Attewell).
Competition Tribunal Act
Mr. Attewell, Conservative MP for the Toronto riding of Don Valley East and a former vice-president for corporate planning with the Guaranty Trust Co., added that in the wake of recent takeovers, there is widespread support within the Conservative caucus for Government action, both on the Imasco-Genstar deal and on the broader question of corporate concentration.
This is what the Hon. Member for Don Valley East said, and I again quote from the article:
"My interests are a little broader-the whole subject of corporate concentration," Mr. Attewell said. "We need to put the brakes on. Takeovers don't create jobs. Often it's just the opposite, with rationalization that occurs after a takeover."
Members of the New Democratic Party have been saying that for years. We have been laughed at, scoffed at and told that we do not understand anything about business. Yet here we have the Hon. Member for York-Scarborough (Mr. McCrossan) and the Hon. Member for Don Valley East opposed to such a move. On As It Happens a few nights ago I heard the Chairman of the Finance Committee, the Hon. Member for Mississauga South (Mr. Blenkarn), make the same point.
I ask the Minister where he is living. Is he living in dream land while bringing forth this Bill and telling us that it will deal with the major problems in Canada? Before us is one of the biggest financial deals that we have ever seen in Canada. It is one which will cause tremendous hardship and trouble for most Canadians. Yet, the Minister does not say a word about it. His Bill does not deal with the situation at all. That is the real world which the Minister so conveniently, either by design or ignorance, avoids.
The fact is that conglomerate mergers are beyond the scope of Bill C-91. Neither Imasco nor Gulf has a horizontal or vertical relationship with the companies they want to take over since they are unrelated companies. Thus the Bill does not deal at all with conglomerates under its merger provisions. However, there is a linkage between the real economy, which makes goods and provides services, and the financial economy of intermediaries which provide capital.
This relationship has been the subject of the Green Paper on the regulation of Canadian financial institutions and hearings by the House Standing Committee on Finance, Trade and Economic Affairs. The Green Paper was confronted with the problems of financial conglomerates controlled by diversified companies. It decided to embrace them by calling them financial holding corporations and sought to regulate them through rules which would ban certain practices and restrict access in other areas. But now the nature of the problem has become more clear. The largest industrial companies have integrated financial holding companies. Brascan has Trilon, which has assets of $65 billion. Power Corporation has Power Financial Corporation, which has assets of $29.6 billion. Imasco now has Canada Trust, which has assets of more than $20 billion.
The problems with this type of relationship have become well known in recent years. There is the potential for selfdealing, to which the Conservative Members I have quoted have faced up. In such a situation the financial institution loses

April 7, 1986
Competition Tribunal Act
its arm's length relationship with its customers and is bent toward furthering the finances or the corporate goals of the parent company rather than those of the ordinary people who have put their money into these companies because they believe in the free enterprise system.
I remind the Minister of the activities of that well known Conservative Peter Pocklington. He used the trust company which he controlled to help in his real estate speculation. Then there was the case of Leonard Rosenberg and his trust companies, Seaway, Grey mac and Crown Trust, and even his involvement in the Canadian Commercial Bank. Those activities which were permitted by Canadian laws, and will continue to be permitted even after we pass Bill C-91, have cost the Canadian people hundreds of millions of dollars if not, indeed, billions of dollars.
This is only the most blatant of conflict of interests which would include any commercial activity that would compromise the normal relationship between the lender and the borrower. Already we are seeing incentives being offered to staff members of Trilon subsidiaries so that they would recommend other Trilon companies to their customers. It could very well be that a non-Trilon company would be better for a customer, both for financial and non-financial services, but will Trilon company employees be professionally restrained from offering anything but disinterested advice? Of course not. That is the problem that was not addressed, and it is only one tiny example of the conflicts that will be facing these companies and their employees every day. This Bill does not deal with that problem.
The answer to this problem, real economic financial conflicts, can be resolved in one clear way: adopt the 10 per cent maximum share limit which now applies to chartered banks. I have been in politics a long time and I did not think that there would ever come a time when I would agree with Canadian bankers on an important issue. However, the 10 per cent maximum share limit is what we proposed in the Finance Committee. We could not get the other members of the committee to agree to it so we proposed it in a minority report. That position is endorsed by groups as disparate as the Consumers' Association of Canada and the Canadian Bankers' Association. However, the Government continues to dance around this obvious solution by pretending it has other solutions.
The Minister of State for Finance (Mrs. McDougall) continues to maintain that by having published a draft Bill on amendments to the Trust Companies Act she can restrain Imasco. She already knows that her review is flawed. It is not a public process. Public criteria for the decision and public participation in the review do not exist and are not required in this Bill or in the Bill of the Minister of State for Finance. As a matter of fact, that is one of the very important criticisms of this Bill which Professor Stanbury of the University of British Columbia has made.
The Minister of State for Finance could decide against a Imasco only to have a successor Minister, reverse the decision. Policy will therefore be made on the whim of a Minister or the personal views held by that Minister and there will be no public discussion and no public input into the decision. That is hardly the basis for a competition policy. It is hardly what we were promised by the Minister of Consumer and Corporate Affairs who said that he would bring forth a Bill only after there had been the widest consultations and input from the widest group of interested people possible. It is ad hockery at its worst.
We asked the Minister of Consumer and Corporate Affairs to reconsider the problems of conglomerate mergers and to put provisions for the review into the new competition Act. Certainly the Minister of Finance and the Minister of State for Finance must come to grips with their own problems of financial and non-financial corporations and conglomerate takeovers, but the problem goes far beyond the financial sector. We should take a look at what takeovers do and what they do not do.
We can talk about greater efficiencies and economies of scale, but those do not always apply to particular conglomerate takeovers. We know that corporation takeovers are a good deal for those making the takeovers and for those being bought out. A lot of paper is passed around and fortunes are made. In the last couple of weeks the Belzbergs moved to take over Ashland Oil in the United States and they were bought off by what is called green mail. They made millions of dollars because they were persuaded by the profit they received from the present owners and management of Ashland not to continue their takeover bid. They made millions, but what did that add to the economies of Canada and the United States? Did it add one single job? No, it made money for the Belzbergs. That is quite permissible under our laws. I am not critical of the Belzbergs or of any other groups that do this. What I am critical of is the fact that we have failed to pass laws which would make sense and bring benefits to the people of Canada rather than to the few who have been able to make hundreds of millions of dollars.
As legislators, we should ask ourselves several questions. Do these takeovers create employment? The answer in most cases is no. Do they stimulate investment in new technologies, in the industries of the future, in electronics, computers and ceramics? No. Do they bring new companies and skills to Canada? In most cases, the answers are quite negative.
Do the staff members of Canada Permanent who no longer have jobs think much of the Genstar takeover? Do the staff members of Dominion Stores think much of Conrad Black for raiding their pension fund-I would say even stealing from their pension fund-and turning their jobs into $7-per-hour non-unionized jobs at Mr. Grocer from $14-per-hour unionized jobs?
Is there much in the way of investment in start-up enterprises in Canada? No, we support this kind of business at the rate of 50 cents per capita in Canada while in the U.S. it is
April 7, 1986

supported at the rate of $10 per capita. Pension funds have invested only $100 million of $8 billion in venture capital.
I would like to conclude my remarks about the takeover by Imasco of Genstar by quoting from that great radical newspaper, the Montreal Gazette. An editorial entitled "The macabre feast" which appeared on April 2, 1986, had this to say:
What is going on in Canada's industrial circles would surely alarm even a self-respecting cannibal. Certainly it should alarm the governments that are supposed to act as guardians of the public interest.
In a wave of ever-larger takeovers, giant corporations are gobbling each other up in a macabre feast, generating little except profits for the firms involved and their legions of lawyers and accountants.
Certainly there is no discernible benefit to the economy at large, let alone to consumer interest, in most of these billion-dollar deals. A good many of them, in fact, look potentially harmful.
Regarding the Imasco-Genstar deal, the editorial reads:
It is simply not healthy for financial institutions to be in a position where they may be pressured to give favored treatment to some borrowers (their corporate brethren). It is important for the health of the financial system in which all Canadians' savings are invested that such pressures be strictly avoided. Events of the past year have taught that the financial industry can and does run into trouble; this kind of relationship makes trouble that much easier to find.
The editorial concludes by saying:
There are reasonable arguments in favor of letting Canadian firms attain a respectable size, sufficient to compete in world markets. But those arguments assume the big firms will be innovative and will invest in new technologies and jobs.
Having one corporate giant swallow another corporate giant does not of itself create jobs (indeed, as Quebecers have reason to recall, the Gulf takeover last year resulted in the loss of jobs here). When huge firms use their financial muscle to buy other huge firms, they become richer but the economy does not.
If the Minister will not listen to us, I wish he would at least pay some attention to the Montreal Gazette.


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member. He has five minutes left to speak the next time this matter will be debated. It being one o'clock, I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2. p.m.


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: In
its Saturday edition, the La Presse newspaper published an article entitled "Matane paper mill: Ciaccia asks Ottawa to respect its promise".
Mr. Speaker, this Conservative Government, and especially the Prime Minister and the Minister of Regional Industrial Expansion (Mr. Stevens), have failed on three occasions to keep their promises to Quebecers. I need only mention the Gulf-Ultramar dossier where Quebecers were taken for a ride, and also the Domtar dossier.
Mr. Speaker, the Quebec Minister is asking and begging Conservative Members representing Quebec to wake up and pressure the Minister of Regional Industrial Expansion into signing the documents and keeping his word to save the Matane paper mill.



CANADIAN WHEAT BOARD


Stanley J. Hovdebo: Mr. Speaker, each year toward the end of March the Minister of State for the Canadian Wheat Board (Mr. Mayer) announces the initial prices to be paid for western grain. Producers use these prices as a basis for their seeding plans for the coming season. This year the Minister is dragging his feet. For what is the Minister waiting? We know that the Western Grain Stabilization Program is likely to generate a $500 million interim payment. Is the Minister waiting to announce stabilization payments so that he can soften the blow of low initial prices? Is he hoping that such an announcement will cover his Government's inability to deal with the disastrous effect of the U.S. Farm Bill?
The Minister should announce the initial prices immediately and then give some assurance to producers that they will not be ruined by decisions made in Washington. The Minister should give careful consideration to the advice of the Canadian Wheat Board advisory committee, or he should guarantee a basic price of $12 per bushel for wheat for domestic use and stabilize the income of farmers now, rather than wait until it is too late-


Mr. Speaker:: Order, please. Sixty seconds.



AGRICULTURE


Mr. A. H. Harry Brightwell (Perth):: Mr. Speaker, dairy farmers and agricultural research scientists in Canada are incensed that an American company called Dream Street Holsteins plans to use $10 million in research tax credits to fund a research project comparing red and white holsteins with

April 7, 1986
black and white holsteins. This project can be described as superficial or totally useless.
This waste is occurring while Canadian farmers are in financial difficulty and traditional Canadian scientists are looking for more funds. These tax credits will be used to compete directly with dairy farmers on quota prices, land prices, and the purchase of cattle. This will give this major American company a large foothold in the Canadian dairy industry. Already farmers note the unusually high prices being paid for red and white holsteins of poor quality.
I call upon the Minister of National Revenue (Mr. Mac-Kay) to take whatever steps he can to ensure that this outrageous waste is stopped.



CALGARY RINK WINS MEN'S WORLD CURLING CHAMPIONSHIP

Mr. Bob Hicks (Scarborough East):: Mr. Speaker, "Cool Hand Luke" has prevailed again. No, this is not a western movie to which I refer. It is Calgary's Ed Lukewich and his men's rink who, yesterday in Toronto, retained the men's World Curling Championship for Canada.
The Lukewich rink edged an outstanding team from Scotland four to three with the final rock on the final end, to join the women's World Championship rink of Marilyn Darte from St. Catharines. All Canadians should be justly proud of these two teams that have represented their country with such dignity and with such skill.



AIRPORTS


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, I wish to object to the sneaky and cowardly manner in which the Government of Canada announced the movement of Air Canada's international flights from St. John's to Gander, sneaky and cowardly because it made the announcement in the afternoon of the final day of sitting before the Easter break. The decision was made because of a threat issued by the Minister of Justice (Mr. Crosbie) that the flights must be moved to St. John's. In making the decision, the Minister of Transport (Mr. Mazankowski) has violated the security and sterility standards of several government Departments.
I have the questions for the Minister of Transport when he shows up in the House. I just wonder if he has answers.



ENVIRONMENTAL AFFAIRS


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, flooding of huge forest areas by Hydro Quebec has resulted in a frightening increase in mercury levels among the Cree Indians of James Bay.
1977 tests showed that 30 per cent of the people had mercury levels above international safety standards. By 1984 this had increased to 64 per cent. Some mercury levels are as high as the highest among the devastated Indians of Grassy Narrows and White Dog Reserves in northern Ontario. Mercury poisoning leads to neurological problems that can end in convulsions, paralysis, and death.
The James Bay Agreement calls for a federal environmental regime to monitor the impact of the huge hydro project. The previous Liberal Government never implemented it, and now the Conservatives are cutting back on environmental expertise.
The basic health of the Cree Indians depends upon the environment, and I call upon the Minister of the Environment (Mr. McMillan) to implement immediately the federal environmental regime as the Cree have requested.



BILINGUALISM


John Barry Turner: Mr. Speaker, the Canadian Parents for French Organization began 10 years ago when 35 parents decided that their children should have a better chance to learn French. The CPF is now a 15,000 member national voluntary organization, active in 140 local chapters.
This year it has mounted a national public awareness campaign designed to help parents seeking information on French second language education. The campaign is called "Making Choices" and the CPF is proud of its successes to date, and will gladly share its objectives with interested persons.
The CPF's recent book More French S'il Vous Platt is a valuable aid in helping Canadian parents to make language choices for their children. Canadians have a unique opportunity to speak two universal languages. Let us strengthen our collective efforts.
April 7, 1986



TRIBUTE TO QUEBEC NORDIQUES

Mr. Marcel R. Tremblay (Quebec East):: Mr. Speaker, 1 wish to point out to the House the tremendous success of a group of determined young men, I mean the Quebec Nordiques, an outstanding team!
Thanks to their dedication, determination, tenacity and team spirit, the Quebec Nordiques have managed for the first time in their short history-seven years-to finish first in their own division.
Mr. Speaker, I suggest that it would be appropriate to congragulate them for their brillant performance and to draw from their success a lesson in courage and determination.
Although a number of players are stars in their own right, I think it is essential to emphasize their true team spirit and motivation inspired by their coach.
Because I am convinced that success comes to those who work the hardest-


Mr. Speaker:: Order, please. The Hon. Member for Etobicoke North.



DROP IN UNEMPLOYMENT RATE

Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, youth unemployment, is a serious problem in Canada. No one will deny this fact. Certainly more needs to be done to address this serious problem. However, in responding to critics of our Government's policy, one only needs to refer to the facts.
In the late 1970s and early 1980s the previous Government allowed the situation of our youth to deteriorate to the point where, in 1983, youth unemployment hovered at the 20 per cent mark. As La Presse stated:
It was an era during which symbolic programs were given preference over solid realities such as job creation.
In only 18 months we have provided a positive economic environment which has resulted in a 2.5 per cent drop in youth unemployment. Today the unemployment gap between youth and adults is narrower than it was 10 years ago. Those are the facts, Mr. Speaker.
The most beneficial thing our Government can do for Canada's youth is to maintain our present economic course, which is producing positive results, to ensure that much needed jobs in the private sector continue to be created.



S'. O. 21 THE SENATE FILLING OF VACANCIES

Mr. John Nunziata (York South-Weston):: Mr. Speaker, the Prime Minister (Mr. Mulroney) is about to make two Senate appointments. Who will the lucky appointees be? The rumour mill says Norm Atkins and Michel Cogger, two of the Prime Minister's closest cronies, will get the nod.
Over the course of the next 25 years or so these appointments will be worth over $2 million each to these two gentlemen. That is just like winning Loto 6/49. Last week's Loto 6/49 winners must be green with envy. After all, they will get only $1.2 million after their winnings are split six ways.
I think the press should give these appointments as much publicity as it gives the Loto 6/49 winners. Perhaps we could get a picture of Michel Cogger and Norm Atkins kissing each other on the front page of The Globe and Mail, and perhaps a guest appearance on Front Page Challenge, if it is still in production. Who cares if the Prime Minister broke every campaign promise he has made on patronage? At least he will have made two friends, very, very happy and a little richer.



PETRO-CANADA PRICE OF GASOLINE IN NIAGARA PENINSULA

Mr. Joe Reid (St. Catharines):: Mr. Speaker, while consumers in other parts of the country were benefiting from plummeting gasoline prices, consumers in the Niagara Peninsula were plagued with halts and slow starts. First, officials of PetroCan said the 2-cent tax cut announced in the House was not an across-the-board reduction, but only where market conditions demanded.
Later, as Niagara residents continued to complain, Petro-Can's position was that it takes a while for the word to get through the system. Only when enterprising dealers defied the orders of regional offices did prices drop, but not to the levels of elsewhere. Prices hit 44 and 43 cents for a full week before Niagara benefited.
With less concentration of control at the top we would have more entrepreneurial dealers giving consumers the advantage of competitive prices. We should not have Crown corporations setting regional market prices.

April 7, 1986



CANADA LABOUR CODE


Mr. Rod Murphy (Churchill):: 

EQUALITY RIGHTS


Mrs. Mary Collins (Capilano):: Mr. Speaker, the Government has demonstrated time and time again its commitment to ensuring equality for women in Canadian society. Ensuring equality requires more than words, it requires action. One area where the results of the Government's undertakings with respect to equality of opportunity is most apparent is employment. Figures released by Statistics Canada on Friday reveal that unemployment among women is down significantly.
To illustrate, 293,000 more women are working today than there were in September of 1984. The unemployment rate for women has fallen by 1.9 percentage points since the election. In comparison, the unemployment rate increased by 3.4 per cent during the term of the last Liberal Government. The number of unemployed women has decreased by 82,000, compared to an increase of 243,000 under the Liberals.
This is real progress, Mr. Speaker, and it will continue so that Canadian women will achieve social and economic equality under a Progressive Conservative Government.



THE ECONOMY


Mr. Bill Attewell (Don Valley East):: Mr. Speaker, there is more good news. The central bank rate dropped last week to 10.14 per cent and banks are lowering their mortgage and loan rates. Lower interest rates help create jobs and, sure enough, the unemployment rate dropped to 9.6 per cent, the lowest rate since 1982. Since September, 1984, 574,000 jobs have been created. Youth employment has risen by 47,000 since the election, compared to a net loss of 285,000 under the Liberals.
I met last Saturday with members of our local advisory council on employment, which is chaired by Mrs. Shirley Scaife of Willowdale. Some of the other local members present were Jack Hauseman, Asta Dvorak, Frank Wilson, and Brian Patterson.
It is clear that the Canadian Jobs Strategy is working. The Job Entry Program, which concentrates on women who have been out of the workforce for three or four years, and on youth, has been a sparkling success thanks to the strong support of business people.



FINANCE


Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, the Minister of Finance (Mr. Wilson) has made public the final regulations stemming from his May 23, 1985 Budget measures aimed at encouraging investments from pension plans and other retirement plans in small- and medium-sized businesses.
According to the first part of these regulations, Mr. Speaker, RRSPs and RRIFs may invest in Canadian corporations with which they deal at arm's length.
Mr. Speaker, how can those regulations help small business when the Minister of Finance undoubtedly uses them as a smokescreen behind which major corporations hide to diversify their holdings?
Mr. Speaker, we know very well that the only people who can invest in small businesses are the owners themselves, their relatives and their associates.
April 7, 1986



ORAL QUESTION PERIOD


[Stage Direction]
1MASCO BID TO TAKE OVER GENSTAR
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is directed to the Minister of State for Finance. Last November the Finance committee unanimously expressed concern about concentration of ownership in the Financial services industry and about the implications of Financial institutions being owned by non-Financial interests.
The Government has not responded to that report but we now have the fast food and tobacco giant, Imasco, set to take over Genstar Corporation, which owns Canada's largest trust company. The Minister of State said on March 24 she was reviewing the situation. Can she now tell us her action plan and a timetable?


Barbara Jean McDougall: Mr. Speaker, this is an issue which does fall under the provisions of the Bill which we introduced in the House this morning. We will be reviewing all aspects of it under the criteria that we outlined last fall. That review is continuing, and I will be announcing a decision as soon as we have considered every factor.


REVIEW OF TAKEOVER BID
Aideen Nicholson: Mr. Speaker, will the Minister conFirm that Imasco offered her and her ofFicials all the documents to participate in a review as though the legislation had been passed some time ago before the takeover bid was made public, and that she failed to do so?


Barbara Jean McDougall: Mr. Speaker, my officials have been in constant touch with Imasco as a result of this and we have reviewed the criteria. They were not quite in the Final form but they have been made available to Imasco.


MINISTER'S POSITION
Aideen Nicholson: Mr. Speaker, the Minister has had information and was in a position to act before now. Why does the Minister wait until she is under public pressure before deciding to move?


Barbara Jean McDougall: Mr. Speaker, we are not taking any action on the Bill which was introduced this morning under public pressure. That Bill was introduced in draft form last fall. As a result of public discussion there have been some changes in it. It was produced as soon as it was ready. We are proceeding on track, as we always have. It is not a case of there being a response to pressure.
Oral Questions


EFFECT OF LEGISLATION
André Ouellet: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. Does he realize that his own legislation, not the one mentioned by his colleague, could not prevent a merger such as that given as an example by my colleague from Trinity? What does he intend to do about that?


Michel Côté: Last December, Mr. Speaker, we did introduce amendments to the combines legislation. One of the provisions of that legislation is aimed at establishing a competition tribunal responsible for screening proposed mergers and indeed for ruling on such deals.


MINISTER'S POSITION
André Ouellet: Mr. Speaker, does the Minister realize that he is trying to weaken the combines legislation section dealing with mergers with respect to Bill C-29? Can the Minister tell us why he thinks that the noncompetitive history of a corporation should no longer be viewed as a criterion for assessment in the case of a merger? Where is the logic in that?


Michel Côté: As it happens, Mr. Speaker, the ultimate objective of Bill C-91 is to increase competition on the domestic market and enable companies to be more competitive on world markets, create jobs, and boost economic growth. That is precisely the kind of Bill which the House is now considering.


COMMITTEE'S OWNERSHIP RECOMMENDATION
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, 1 have a question directed to the Minister of State for Finance. Since it was the unanimous recommendation of all members on the committee of this House that non-Financial institutions should not be able to own financial institutions in order to avoid selfdealing or a conflict of interest, why does she not announce now that she is not going to permit the takeover of Genstar by Imasco?


Barbara Jean McDougall: Mr. Speaker, we have a Bill before the House which suggests that transmissible ownerships are subject to ministerial approval. Among those matters that will be considered are the very excellent recommendations of the parliamentary committee.
However, as I understand the parliamentary committee recommendation, this trust company could be owned 50 per cent rather than 100 per cent. We are looking at all those questions as we reach our decision.

April 7, 1986
Oral Questions


INTRODUCTION OF LEGISLATION
John Edward Broadbent: Mr. Speaker, as the Minister in Cabinet responsible for this important area of policy, is she in agreement with the unanimous recommendation of the committee that financial institutions ought not to be owned by non-financial institutions for the obvious reason that a situation could arise where companies will be gambling with pensioners' funds in the future? Does she agree with that principle and, if so, why did she not bring in legislation that was consistent with it?


Barbara Jean McDougall: Mr. Speaker, there is more than one way to deal with this issue. We are looking at the recommendations of the parliamentary committee along with some other ways of dealing with matters concerning the ownership of financial institutions and the powers and obligations under the law. There is more than one way to deal with this, and we are looking at all of them.


John Edward Broadbent: The members of the committee from the Minister's Party, as well as members from other Parties in the House, looked at it carefully and reached a decision that makes sense.


ANNOUNCEMENT OF GOVERNMENT DECISION
John Edward Broadbent: Mr. Speaker, since the Minister is going to review this take-over bid that is not yet complete, will she at least tell the House when she will be ready with the Government's decision?


Barbara Jean McDougall: Mr. Speaker, I will inform the House when I am ready with the decision.


CORPORATE AFFAIRS
Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. The Minister of State for Finance has just confirmed that the Imasco-Genstar deal will be reviewed under the new financial institutions legislation which just received first reading today. Will he apply the same approach to the Gulf takeover of Hiram Walker by applying the criteria of the competition legislation now before the House to ensure the public interest is protected, including the 1,000 jobs at the Hiram Walker Distillery in Windsor?


Michel Côté: Mr. Speaker, I should like to reassure my colleague by saying quite simply that all deals in this country are examined by the director under the Combines
Investigation Act and that, in this regard, he examines each transaction on its own merits and takes appropriate action.


APPLICATION OF COMBINES LEGISLATION
Herbert Eser (Herb) Gray: Mr. Speaker, why is the Government applying two standards? With respect to the Imasco-Genstar transaction the Government is retroactively applying legislation that it just tabled today. Why is the Government not willing to do the same thing with the combines legislation before the House when it comes to the takeover of Hiram Walker by Gulf? The public interest is involved there just as much. Why the two standards?

Why this double standard?


Michel Côté: Mr. Speaker, the Government happens to believe that the private sector is the real driving force behind the most equitable distribution of resources so as to promote economic growth and create jobs. The competition legislation now before Parliament will meet such requirements and create a market place in which our economic needs can be met.


FINANCE
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is directed to the Minister of Finance. Will he confirm that as a result of our existing tax laws the Imasco takeover will cost Canadian taxpayers something in the neighbourhood of $200 million a year in tax write-offs of which the company will be able to take advantage as a result of the cost of this takeover?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, 1 think the Hon. Member is jumping to some conclusions. If he has specific information that he would like to discuss with me, I would be happy to sit down with him.


John Edward Broadbent: He just asked you.


Mr. Blaikie:: You haven't looked at it yourself?


COST TO TAXPAYERS
Nelson Andrew Riis: Mr. Speaker, will the Minister simply confirm that if Imasco borrows money for this take over bid, the cost of the take over will be deducted as part of its taxes, and consequently the taxpayers of Canada will be picking up the tab for this merger?
April 7, 1986


Michael Holcombe Wilson: Mr. Speaker, the conclusion drawn by the Hon. Member is that it is going to use totally borrowed funds-


Nelson Andrew Riis: Why won't they?


Michael Holcombe Wilson: The Hon. Member asks why they wouldn't. There are other ways of financing acquisitions than through borrowed funds. 1 would also say to the Hon. Member that the tax law we have is identical to the tax laws of other countries, and if we did not have that provision in our tax law it would be far easier for other companies-


John Edward Broadbent: To stop it in this case. Stop this case.


Michael Holcombe Wilson: -from outside the country to take over companies in Canada, and I do not think that is very good policy.


SITUATION IN OIL INDUSTRY
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Deputy Prime Minister. Tomorrow representatives of the oil-producing provinces will be in Ottawa to ask the federal Government to drop its wait-and-see attitude and do something to save the Canadian oil industry. Is the Government prepared to act now?


Mr. John McDermid (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, I think it is very plain that the Government, in co-operation with the producing provinces, is willing to sit down and talk. That is what the meetings tomorrow are about. The appropriate announcement will be made after those meetings which will be held with provincial Premiers and provincial Ministers of Energy. They are very important meetings and I think show most demonstrably that we are concerned about the energy situation in the West.


PROTECTION OF JOBS
Russell Gregoire MacLellan: Mr. Speaker, the provinces are asking for more than talk. Thousands of jobs have already been lost. Projections show that at least another 18,000 jobs will be lost. What is the Government going to do to save these jobs?


John Horton McDermid: Mr. Speaker, unlike the Liberals, we do not go off on a tangent all by ourselves making decisions without consulting our provincial counterparts.


Mr. Foster:: You don't do anything.


John Horton McDermid: That is what is going on tomorrow. Appropriate announcements will be made after the meetings.
Oral Questions CORPORATE AFFAIRS


IMASCO BID TO TAKE OVER GENSTAR
David Orlikow: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. He will know that Members of Parliament for York Scarborough, Don Valley East, and Mississauga South have expressed their opposition to the takeover of Genstar by Imasco. Does the Minster not believe that such a takeover should be reviewed for its effects on Canadian competitiveness, investment, and job creation? If he does, what action does he propose to take on competition law amendments so that such an inquiry will be thorough, public, and in the best interests of all Canadians?


Michel Côté: Once more, Mr. Speaker, I think that I shall repeat what I said earlier. We have now before this House a bill aimed at promoting more competition on domestic and international markets. This bill includes various provisions concerning, for instance, the creation of a competition tribunal, new powers of inquiry for the Director, as well as the requirement to notify the Director of Investigations before certain transactions occur. All these provisions are included in the amendments now before the House to make our legislation more effective.


CONGLOMERATE MERGERS
David Orlikow: Mr. Speaker, I am sure the Minister knows that the legislation as proposed gives the Government power to examine takeovers which extend vertical and horizontal concentration. If that is necessary, why are conglomerate mergers not subject to Canadian competition law because that is not in the Bill brought forward by the Minister?


Mr. Hnatyshyn:: This is the subject of the debate in the House today.


Michel Côté: Mr. Speaker, what I have said is that, while the existing statute does not allow any intervention, the new bill will give the Director of Investigations and the members of the Competition Tribunal the possibility of examining such transactions first and of taking action if need be. A major requirement will be to ensure that competition is protected at all times.


IMPERIAL OIL-REPORTED DUMPING OF OIL ON UNITED STATES MARKET
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I would like to ask the Minister of Consumer and Corporate Affairs if the Government will investigate a report

April 7, 1986
Oral Questions
contained in the Winnipeg Free Press last Friday that Imperial Oil is dumping hundreds of thousands of litres of diesel oil in North Dakota at prices below the U.S. wholesale price, and over 50 per cent less than what is being charged in the Winnipeg market? Is this an example of how a private sector firm is serving the proper market in Canada? Will the Minister investigate?


Michel Côté: Mr. Speaker, I can assure my colleague that such activities are now subject to review by the Director of Combines Investigations and that, if he knows of any facts which could enlighten us and make the work of the Director easier, I shall be happy to receive them and I shall take prompt action.


REQUEST FOR INVESTIGATION
Lloyd Axworthy: Mr. Speaker, the Minister has not answered my question. I am specifically asking whether or not the Government will investigate the case of Imperial Oil dumping diesel oil across the border. The fall in diesel oil prices has not kept pace with that of gasoline prices, a fall of 2 cents versus one of 9 cents. Is it not time the Government became interested in the downstream pricing policies of our oil wholesalers so that there will not be this type of consumer rip-off?


Michel Côté: Mr. Speaker, as I have already said, it is up to the Director of Combines Investigations to determine whether there are grounds for investigation or not. To my knowledge, the Director has always completed his reviews very promptly.


FINANCIAL INSTITUTIONS
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is for the Minister of State for Finance. Does the Minister remember the recent circumstances surrounding Greymac and those concerning Seaway some years ago, where conflict of interest situations resulted in tremendous losses suffered by depositors in both of those trust companies? Does she not see the same potential trouble looming with respect to the takeover of Canada Trust?


Barbara Jean McDougall: Mr. Speaker, I think the allegation of the Hon. Member is a little unfair. We have indicated that we are reviewing this proposal. We have brought in legislation which gives us the power to make a cease and desist order, a power which would have effectively changed the situation with respect to those trust companies. We have moved with our legislative program to deal with the problems which have come up in the past and problems which could come down the road in the future. 1 will not relate Imasco to something which has gone before in connection with those trust companies.


CONFLICT OF INTEREST INQUIRY
Ian Deans: Mr. Speaker, does the Minister not recognize that the power with respect to cease and desist is after the fact, and that what is potentially before us is the possibility of internal lending of people's money deposited in Canada Trust in good faith? Why does the Minister allow this potential conflict of interest to be included in this deal?


Barbara Jean McDougall: Mr. Speaker, we have moved on this legislative package to prevent the type of abuses suggested by the Hon. Member. The problems of the past are just that. We have learned many lessons from them, which is one of the reasons we have moved quickly with legislation.


REGIONAL INDUSTRIAL EXPANSION
Jean-Claude Malépart: Mr. Speaker, I have a question for the Minister of Regional Industrial Expansion.
Mr. Minister, last Friday the Quebec Minister of Natural Resources, Mr. Ciaccia, had to hold a press conference to implore you to honour the promise you made to him on January 14, 1985, to fund the Matane paper mill.
Can the Minister tell this House whether he signed today, morning, or whether he intends to sign later today the agreement that would allow the Matane paper mill to proceed?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, in connection with the proposed paper-mill in Matane I am sure that the Hon. Member will want to know that the company in Norway has advised us that it will not be in the position to say yes or no to the deal until sometime in May since it is the object of a takeover bid. The company has asked us to bear this in mind with respect to any negotiations concerning the paper-mill at Matane.
April 7, 1986


AGREEMENT PERMITTING ESTABLISHMENT OF MATANE PAPER MILL-GOVERNMENT POSITION
Jean-Claude Malépart: Mr. Speaker, I had a chance to speak to the Quebec Minister of Natural Resources, and I get the feeling that the two of them are not on the same wavelength.
I would like to know from the Minister, and I am asking the same question to the Quebec Minister, whether the Minister will have signed the agreement by Wednesday in order that the Matane paper mill can proceed? Yes or no?


Sinclair McKnight Stevens: Mr. Speaker, I will reiterate what 1 have said already. It takes two to sign an agreement. The Norwegian company has indicated that it will not be in a position to sign any agreement or negotiate seriously with respect to this project until sometime in May. As far as the Minister from Quebec is concerned, I have had repeated conversations with him, both in person and by telephone. Negotiations are ongoing as to what might be the federal position and as to what might be the Quebec position in the event that the Norwegian company wants to go ahead with this project sometime in May.


THE ADMINISTRATION
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, it has been reported, and not denied, that a company controlled by the Minister of Regional Industrial Expansion received large loans in 1983 from a Korean bank partly owned by Hyundai. First, will the Government recognize the concerns of many Canadians with respect to the grants and quota privileges given Hyundai? Second, will the Government recommend a judicial inquiry be conducted to probe such links between the Korean business lobby and the Government?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, this is a matter which carries at least the inference of a conflict of interest. On behalf of the Government I can inform the Hon. Member that, having discussed the matter with the Minister, I am absolutely satisfied that he has met the very exacting demands imposed by the previous conflict of interest guidelines and by the existing conflict of interest guidelines.


Some Hon. Members:: Hear, hear!
Oral Questions INQUIRY OF MINISTER


Steven W. Langdon: Mr. Speaker, I would like to put my question once more to the Minister.


Some Hon. Members:: Oh, oh!


Steven W. Langdon: Will the Minister confirm himself that the Hanil Bank, partly owned by Hyundai, loaned his company, York Centre, large sums of money in the past-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I think the Hon. Member knows the rules with respect to questions to Ministers with regard to their ministerial responsibilities. Therefore, the Hon. Member for Oxford (Mr. Halliday).


WORLD HEALTH DAY
Mr. Bruce Halliday (Oxford):: Mr. Speaker, my question is for the Minister of National Health and Welfare. Today, April 7, is World Health Day 1986 as proclaimed by the World Health Organization. Do the Minister and the Government have any new ideas or thrusts in the general area of health care in recognition of this special day?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, the Hon. Member has shown an interest regarding health and disease prevention and health promotion not only in Canada but internationally. I think Hon. Members in the House recognize that. I would like to inform the Hon. Member that the goal "Health for All by the Year 2000" remains. However, this year the goal is "Healthy Living: Everyone a Winner". We will emphasize exercise, nutrition and lifestyle. I thank the Hon. Member for also endorsing a program which we propose to all Members of the House.


AGRICULTURE
Maurice Brydon Foster: Mr. Speaker, my question is for the Minister of Agriculture. There is very great concern in the agricultural community with respect to the Government providing about $10 million to rich American investors called Dreamstreet Limited to do some very phoney research comparing the colours of dairy cattle. Did the Minister support this project which was approved last December? Why would the Government approve such an obvious scam?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I am aware of the project to which the Hon. Member refers. He

April 7, 1986
Oral Questions
should also acknowledge that this is a group which has chosen to utilize a provision put in place by the previous Government. Indeed, I have received a number of supportive representations with respect to the project. I have also received a number of representations which are asking some questions. In this respect I have communicated with the executive director of the Holstein-Friesian Association of Canada. I am awaiting his final recommendation.


APPROVAL OF PROJECT
Maurice Brydon Foster: Mr. Speaker, can the Minister explain why he overruled his departmental officials and approved this project when Doctor Rejean Bouchard, the Co-ordinator of Animal Research, said: "Everyone who was consulted on the project walked away from it"? Is the Minister really trying to put these Dreamstreet people on easy street with $10 million of Canadian taxpayers' money?


John Wise: Mr. Speaker, I am not so sure exactly where the Hon. Member is getting his information. The Hon. Member knows that this project, of course, is not approved by Agriculture Canada.


ANNOUNCEMENT OF PROGRAM-GOVERNMENT POSITION
Howard Douglas McCurdy: Mr. Speaker, Bill Fox said the Prime Minister did not know what he was doing when he promised a youth program before the end of the fiscal year, and the two ministers who are trying to outplay one another were saying they were setting up an advisory council that would advise them on the youth program.
Can someone, perhaps the Minister of State for Youth, explain to our young people how they can take the Government seriously when the Chairman of that famed advisory council admits he does not have much time to devote to it?


Ramon John Hnatyshyn: You've been practising all weekend on that one.


Hon. Andree Champagne (Minister of State (Youth)):: Mr. Speaker, let me first congratulate wholeheartedly the Hon. Member for Windsor-Walkerville for his extraordinary effort in the French language.


Some Hon. Members:: Hear, hear!


Andrée  Champagne: If I understood him correctly, Mr. Speaker-


Some Hon. Members:: Oh, oh!


Andrée  Champagne: -what the hon. gentleman wants me to repeat to him is that the youth unemployment rate is down by 2.5 per cent since the Government has come into power. We will continue toward-


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. A short supplementary question.


Howard Douglas McCurdy: Mr. Speaker, is it the intention of representatives of the Government either to repeat this silliness, or to lie to the youth of the country, or distort the truth to the youth of the country-


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The Hon. Member knows that he cannot-


Howard Douglas McCurdy: I retract that, Mr. Speaker. In order to get to the question-


Mr. Speaker:: Order, please. Order. Next.


Howard Douglas McCurdy: Is it not possible-


Mr. Speaker:: Order, please.


Howard Douglas McCurdy: Is it not possible for the Government to give a straight answer-


Mr. Speaker:: Order, please. Next, please. I recognize the Hon. Member for Notre-Dame-de-Grace-Lachine East.


Mr. Allmand:: Mr. Speaker, my question is directed to the President of the Treasury Board.


Howard Douglas McCurdy: Is it not possible to get a straight answer from this Government on any question posed to it? I ask-


An Hon. Member:: He's either deaf, or silly, or both.


Mr. Speaker:: Order, please.
* *
*


PUBLIC SERVICE
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the President of the Treasury Board. Is the Minister aware that the post office is now offering up to $14,000 to about 100 executives to take early retirement as a replacement for the unemployment insurance benefits cut by the Minister of Employment? Does the Minister think that this is justified, and how is it that it is
April 7, 1986
[Stage Direction]
only applicable to one group of civil servants and not all, including Armed Service retirees?
Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, we have offered early retirement incentives to various groups in the Public Service depending on the particular circumstances of a group, in keeping with our workplace adjustment policy which will be ongoing throughout our workplace reduction exercise from now until 1990-91.


GOVERNMENT POSITION
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, is this particularly geared to replace the cut unemployment insurance benefits, and does the Minister think it is fair to offer this program only to executives and not to all employees, including Armed Service retirees?
Robert René de Cotret: Mr. Speaker, each case is judged on its own merits. There has been a program like that for senior civil servants and also one for cleaners in the Department of Public Works. Each case will be reviewed on its own merits. What we are looking for are equity and justice for all.


SUGGESTED DISCOUNTS FOR MOTORISTS PAYING CASH FOR GASOLINE
Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, in the absence of the Minister of Energy, Mines and Resources, my question is directed to her Parliamentary Secretary. In various parts of the United States certain oil companies are giving discount prices to motorists who pay cash rather than use credit cards. In view of the Minister's advocacy on behalf of motorists, will she ask Canadian oil companies to consider adopting this policy to help motorists who are already paying excessive prices?


John Horton McDermid: Mr. Speaker, the Minister has said many times, and has made it very clear, that she does not interfere directly in the market-place. No more would she suggest that a company do that than she would suggest that a haberdasher charge less for a suit when customers pay cash rather than use credit cards.


FINANCE
Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, my question is directed to the Minister of Finance who, on March
Oral Questions
25, defended his decision to deny tax relief to laid off workers of Griffith Mine on the grounds that substantial employment opportunities exist with major employers in the area, citing Campbell Mines. Since the government-commissioned Anderson report on the impact of the lay-off and a survey of the major employers indicate no significant hiring plans, would the Minister now reconsider his decision and grant that tax relief or, failing that, will he make public the criteria under which he plans to deny it?


Michael Holcombe Wilson: Mr. Speaker, the information I have received is that 117 of the 300 who were laid off from Griffith Mine have already found alternative employment. The criterion under which these decisions are made is if the sole industry in the town is closed down. That was the case in Gagnon but it is not the case in Ear Falls.


GOVERNMENT POSITION
John Edmund Parry: Mr. Speaker, the Minister must surely be aware that the vast majority of those people moved to get work. Will he explain to the House of Commons, the people of Ear Falls, and the Griffith workers, why there was no consultation such as he promised in his November 1984 economic statement?


Michael Holcombe Wilson: Mr. Speaker, the Hon. Member asked a question about some of the provisions that are available. I should point out to him that the Income Tax Act already provides a number of provisions for assisting displaced workers and I will list these for him: the sheltering of severance payments in RRSPs, the application of pension income deduction against supplementary pension benefits, the deduction of moving expenses, and the tax exemption for a certain type of-


Mr. Speaker:: Order, please.


PUBLIC SERVICE
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker my question to the Deputy Prime Minister deals with the recently acquired habit of Progressive Conservative Party representatives to solicit funds from civil servants. Why does the Government, which has failed to keep its promise to grant political right to Federal Civil Servants, allow this appeal for funds to be made in the Government's own offices? Could the Deputy Prime Minister explain to us why this double standard, why he has failed to intervene to forbid this appeal which is probably made in violation of Public Service regulations?

April 7, 1986
Oral Questions


Erik Nielsen: Mr. Speaker, as Deputy Leader of the Progressive Conservative Party of Canada I can inform the hon. gentleman that we adopt a perfectly honest but very productive and aggressive fund-raising effort in all parts of the country.


REQUEST FOR INTRODUCTION OF LEGISLATION
Don Boudria: Mr. Speaker, given that the Government seems to be willing now to bend the rules slightly when it comes to Tory fund raising, and given this new-found interest in political freedom for public servants, can the Deputy Prime Minister-


Mr. Speaker:: I will hear the question but it should be about government policy.


Don Boudria: Can the Deputy Prime Minister tell public servants that he will forthwith introduce legislation to permit full political participation in the political process of the same public servants from whom he is soliciting funds?


Erik Nielsen: Mr. Speaker, I believe that that matter is sub judice, but in any event I would remind the hon. gentleman that I and many others throughout the country and in the House of Commons have received letters from his Leader, as they have from the Leader of the New Democratic Party, doing the same kind of thing, a little belatedly, I will admit, as our own Party is doing.


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: I get copies of Ed Broadbent's letters from all my constituents.


Ian Deans: Did you send us any money?


Mr. Benjamin:: Send money and we will quit writing.


PETROLEUM AND GAS REVENUE TAX
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, I would like to put a question to the Minister of Finance because the 21 Alberta Tory MPs in the House are too chicken to defend the interests of the Province of Alberta.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order.


Leslie Gordon Benjamin: That's parliamentary.


Mr. Speaker:: I will permit the question, but I will remind the Member that comments about other Members are not allowed.


Ian Gardiner Waddell: Does the Minister of Finance object to the Minister of Energy agreeing tomorrow, at her meeting with Energy Minister Zaozirny of Alberta and Premier Devine of Saskatchewan, to the immediate elimination of the Petroleum and Gas Revenue Tax on the oil industry?


Michael Holcombe Wilson: Mr. Speaker, 1 should draw to the attention of the Hon. Member that the most vigorous support of the Alberta economy, and the oil and gas industry in particular, I have experienced in the House was from Alberta Members of Parliament when they were on that side of the House and also when they are on this side of the House.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: The only thing 1 have heard from the Hon. Member in this regard is a lot of whining, with no positive suggestion being put forward from the other side.


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


HEAVY OIL UPGRADER PROJECT
Ian Gardiner Waddell: Mr. Speaker, is the present Government still committed to federal Government loan guarantees to the heavy oil upgrader project in Lloydmin-ster? There is a positive suggestion for you, Michael.


Michael Holcombe Wilson: Mr. Speaker, I appreciate very much the positive suggestion of the Hon. Member which was made a number of years ago by someone else. The purpose of the meeting tomorrow is to discuss a wide range of matters relating to the very serious situation which is being experienced in western Canada, particularly in the Province of Alberta. Things related to the oil upgrader will be discussed. However, in response to the Hon. Member's previous comment, I should point out that the major beneficiaries of his first suggestion would be the large multinational companies.


PRICE OF HOME HEATING OIL
John Barry Turner: Mr. Speaker, my question is directed to the Parliamentary Secretary to the Minister of Energy, Mines and Resources. The Minister of Energy wrote to the oil companies many months ago asking them to pass on the lower energy cost to the consumer, and we have seen some reduction at the gas pump. However, why have we not seen the price of home heating oil drop as well, before our tanks are refilled with expensive home heating fuel?
April 7, 1986


John Horton McDermid: Mr. Speaker, I thank the Hon. Member for his question. The Minister has made very clear that she expects the savings to be passed on, not only in gasoline prices at the pumps but in home heating oil and diesel fuel, as the expensive fuel is used up by retailers. We expect the same excellent action which we have seen in the reduction at the pumps, which is now some 48 cents per gallon.


PHARMACEUTICAL INDUSTRY
George Baker: Mr. Speaker, the Minister of Consumer and Corporate Affairs said in the House on March 17 that he was "concluding our consultation process" regarding the possibility of restricting the manufacturing of generic drugs. Did this consultation process, which he said was concluding three weeks ago, involve consultation with the most important people affected by this decision-average Canadian consumers?


Michel Côté: Mr. Speaker, we have indeed carried out a vague series of consultations over the past few months and, in the course of these consultations, we have indeed met with representatives of pharmaceutical and generic drug companies on the one hand, and with consumers on the other.


EMPLOYMENT IMPACT
George Baker: Mr. Speaker, the Minister also stated that the policy "will ensure that it creates jobs and brings investment to Canada". If the Government is to legislate generic drug companies out of business, how is it possible to create employment and to compensate for the massive increase in costs to average Canadian consumers?


Michel Côté: As I said already on a number of occasions, Mr. Speaker, after the policy has been made public and adopted by the Cabinet, we will have a policy which will meet the need of consumers as well as favour job creation and investments in Canada.
Oral Questions


WESTERN GRAIN STABILIZATION ACT
Stanley J. Hovdebo: Mr. Speaker, my question is directed to the Minister of State for the Canadian Wheat Board. The Minister will be aware that the western grain stabilization plan will generate an approximate $500 million payment during the next few weeks, I hope, which will cover last year's shortfall in grain receipts. Is it the Minister's strategy to announce the stabilization payments at the same time as he announces the initial prices for grains, in order to soften the blow of those prices being so low? When will he be making that announcement?


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, the Hon. Member is correct. The Government amended the Act a little over a year ago to allow for an interim payment. We are now in the process of determining whether in fact there will be an interim payment. We hope to have the figures generated and the money in the hands of producers by the first of May, if we can. When the Hon. Member talks about initial prices, I guess I would ask for his advice as a farmer. He knows full well that grain prices are not very favourable. I would ask him whether he thinks we should make the two announcements at the same time.


DEFICIENCY PAYMENTS INQUIRY
Stanley J. Hovdebo: Mr. Speaker, when the Minister makes the announcement on initial prices, will he also announce that there will be deficiency payments to compensate for the low Canadian grain prices and the losses which are being generated by the U.S. Farm Bill? Will he take the advice of the advisory board and announce deficiency payments as well?


Charles James Mayer: Mr. Speaker, we face a very difficult situation in world grain prices. It is not entirely the fault of the U.S. Farm Bill. The European Community has been producing excessive amounts of grain, which I believe is the main reason for the fall in world grain prices. The American action is a reaction to what the Europeans are doing. We are looking at all kinds of avenues to support western and Canadian grain producers in this very difficult time. One of the means we have at our disposal is the Western Grain Stabilization Act which the Hon. Member mentioned in his previous question.


UNEMPLOYMENT INSURANCE
Mr. Howard Crosby (Halifax West):: Mr. Speaker, my question is for the Minister of Employment and Immigration.

April 7, 1986
Oral Questions
Media reports indicate that the report of the Forget Commission will be delayed until the end of September, 1986. 1 know the Minister is aware of the concerns of pensioners across Canada, particularly those of the Canadian Forces. Is it possible to request from the Forget Commission an interim report on the matter of pension income so that this matter could be settled earlier rather than later?


Some Hon. Members:: Hear, hear!


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, the Forget Commission will be reporting to me in a preliminary way at the end of June, which has always been the target date. The full report will be coming in before the fall. I have therefore asked the Forget Commission, as the Hon. Member will know, to take a specific look at this issue and to report to me at that time.


THE ARTS
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, my question is for the Minister of Communications. The Government seems to have a well-defined plan to discourage creative minds in this country, especially among francophones. This last month, the CBC and the CRTC have reduced the opportunities for our singers and composers, artists, actors, and so on to become known to and appreciated by the public. My question is as follows: What is the basis of the Minister's decision to distribute a few million dollars among the artists to develop their talents if, at the same time, he removes the most sought-after and effective means of making these talents known?


Hon. Marcel Masse (Minister of Communications):: Mr. Speaker, the budget of the CBC amounts to $869.5 million, which is an increase of nearly 3 per cent over last year.
Second, as concerns the recording industry, the Minister of Finance has allocated substantial amounts to this sector and the Government should be able to announce a policy in this regard after consultation with the people involved in the coming weeks.


Sheila Finestone: Unfortunately, Mr. Speaker, I have not had an answer to my question.


MINISTER'S POSITION
Sheila Finestone: Mr. Speaker, what will the Minister do now that the artists and technicians will be without a profession and without a job because of reduction in French contents from 75 per cent in 1973 to 50-


Mr. Speaker:: Order, please.


Marcel Masse: Mr. Speaker, the CRTC has announced a new policy in this sector and the Government is aware of it. The people involved are being consulted and, as I have said, the problem is also related to the recording industry because broadcasters generally use records to make up their quotas. This is therefore first and foremost a production problem in the recording industry, and it is in this context that the Minister of Finance has made an additional allocation and that a new policy should be announced within a few weeks.


Mr. Speaker:: Order, please.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Cote (Langelier) that Bill C-91, an Act to establish the Competition Tribunal and to amend the Combines Investigation Act and the Bank Act and other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Mr. Speaker:: Order, please. Can the Cabinet meeting be held somewhere else?
Order, please. Could I ask all those having meetings to have them somewhere else? The Hon. Member might allow his own colleague to have the floor.


David Orlikow: Mr. Speaker, when I spoke earlier today I was making as clear as 1 could the concern and the opposition of our Party and the people we represent to the increasing concentration and tremendous power which now resides in the hands of a very few individuals and companies in Canada, power which has been increasing at an alarming rate. The views I expressed are not held only by members of our Party.
I draw the attention of Members of Parliament to a news article which appeared in The Toronto Star March 19, 1986. Let me read just a few paragraphs from the article written by Diane Francis:
Nine families control stock worth 46 per cent of the value of the most important companies on the Toronto Stock Exchange, according to a new survey prepared by Canada's major bankers.
The "major bankers" being the Canadian Bankers Association. The president of this Association, Robert Macintosh, said:
The amount of concentration is dangerous.
The nine families include the empires of Kenneth Thomson, Edward and Peter Bronfman, Edgar and Charles Bronfman, Paul Desmarais, the Reichmann family, Galen Weston, Conrad and Montegu Black, Ron Southern of Calgary and the Siemen brothers of Calgary-
April 7, 1986

In addition, the report points out that two other huge financial instititions- the Laurentian Mutual Assurance Co. and Caisses Populaires Desjardins-have assets that rival the chartered banks.-Robin Korthals, president of the Toronto-Dominion Bank said-''the banks biggest concern is that their own rivals in the financial services business- insurance, trust or mutual fund companies-are not bound by the same ownership rules as banks, but should be-
No one can own more than 10 per cent of a Canadian chartered bank; and banks, in turn, cannot own more than 10 per cent of companies outside banking-
Bankers are not only concerned about the growing size of such family owned financial institutions, but are concerned about "cross ownership"-the linking of trust companies, insurance or mutual funds to other non-financial assets.
That is precisely what I was speaking about and that is precisely why so many questions were being asked today about the probably takeover by Genstar and, therefore, Canada Trust by Imasco.
I want to put on the record in the minute or two I have left the history of what has happened in recent years, Mr. Speaker. I am talking about larger mergers in Canada in which the transaction value is over $500 million. The period covers 1979 to 1985.
In 1979 Petro-Canada took over Pacific Petroleum Ltd. for $1.4 billion; the Woodbridge Co. Ltd., that is Thomson, took over Hudson Bay Co. for $641 million; Carter Oil and Gas Co. Ltd. took over Hamilton Bros. Petroleum Corp. for $522 million; Dome Petroleum Ltd. took over Mesa Petroleum Ltd. for $640 million.
In 1980 Hiram Walker-Gooderham and Works Ltd. took over Consumers Gas Co. for $1.2 billion; Dome Petroleum Ltd. took over Kaiser Petroleum Ltd. for $700 million; British Columbia Resources took over Kaiser Resources Ltd. for $665 million.
In 1981, Petro-Canada took over Petrofina for $1.4 million; Olympia & York Development took over Abitibi-Price for $618; Sulpetro took over CanDel Oil for $546 and Noranda Mines took over MacMillan Bloedel for $626. Dome Petroleum took over Hudson's Bay Oil and Gas for $2 billion; Canadian Pacific Enterprises Ltd. took over Canadian International Paper for $1 billion; Brascade Resources took over Noranda Mines for $1.6 billion; Canada Development Corporation took over Aquitaine Co. for $1.6 billion and Canada Development Corporation took over Texasgulf for $2.2 billion.
In 1983, Bell Canada Enterprises took over TransCanada Pipe Lines for $600 million; Olympia & York Developments took over Gulf Canada for $2.8 billion; Gulf Canada took over Abitibi-Price for $1.2 billion; Petro-Canada took over Gulf Canada for $880 million and Genstar took over Canada Trustco for $1.2 billion. That is just a partial record of the larger companies, Mr. Speaker.
I say, as have the bankers and many Conservative Members of Parliament, that this trend has not been useful to the country. It has not provided new jobs, nor has it made us more competitive. It is time the Government took steps and brought in legislation which would give the people of Canada at least some say about what happens in future economic development.
Competition Tribunal Act


Mr. Bill Domm (Parliamentary Secretary to Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, I thought perhaps I would draw attention to the fact that Bill C-91 brought before this House today is 85 pages long. In order to comment on the following statement by the Hon. Member for Papineau (Mr. Ouellet), a former Minister of Consumer and Corporate Affairs, I would first like to quote him as best as I can recall. He said that it has taken the Conservative Government too long, and asked why it took so long to bring in a competition piece of legislation. Either the Member for Papineau selectively chooses to forget the history of this Bill or he fails to recognize that it was he himself who introduced into this House, unsuccessfully, amendments to the Competition Bill that we are discussing today as Bill C-91.
He said the Bill does not go far enough and that that Bill C-91 is better than nothing. If this Bill is better than nothing, Mr. Speaker, then I might suggest perhaps the Liberal Government's Bill when in office and the Minister who introduced it must have had a Bill that was less than nothing. Then to confuse me further about what is the Member's actual position on this Bill, which is badly needed, he said he would like to get on with it. We will have an opportunity to answer a couple of the questions of the former Minister from Papineau. I hope we will be able to give this legislation second reading speedily in order to do what the NDP critic, the Member for Winnipeg North (Mr. Orlikow), says we have not done; that is, listen to the people he maintains we have not listened to in the last 19 months. The Member for Winnipeg North says that we have not listened to consumers and small businessmen and that he will hold this Bill up as long as he can until these people are heard from.
I think it is worthy to mention that in the months of July and August of 1985 we consulted extensively with both small and large business groups. It was implied in debate this morning by members of the Opposition that we were talking to big business rather than small business, that we were dealing with the banks rather than the entrepreneurs, the small businessmen who are the engine of economic growth in Canada.
I do not know whether the Chamber of Commerce in Winnipeg represents only banks, but I know that the Chamber of Commerce in Peterborough has 800 members from all sectors of the economy. In addition to bankers the members include farmers and small businessmen who really care about issues such as dominant position in the marketplace, and how they as small businesspeople can compete against large corporations. They are the first to recognize that over the last 16 years of Liberal domination of the economy of the nation, through policies established in the House of Commons in conjunction with the NDP, there have been no major changes to the competition legislation.
Hon. Members have said that we have not worked fast enough and that we have not consulted. I refer them to the

April 7, 1986
Competition Tribunal Act
announcements of the Minister of Consumer and Corporate Affairs (Mr. Cote) that we have consulted with the Business Council on National Issues, the Canadian Chamber of Commerce, the Consumer's Association of Canada, the Canadian Manufacturers Association, the Canadian Bar Association, the Grocery Products Manufacturers of Canada, the Canadian Federation of Independent Business, the Canadian Federation of Independent Petroleum Marketers, and the Petroleum Marketers Association of Canada.
Surely we can be realistic enough to admit that not only has there been more adequate consultation during the last 19 months, but that there was 16 years of consultation by the former Government. Many of the things contained in this legislation were introduced by the former Government through at least two cabinet Ministers since I became a Member 1979. Changes to the competition legislation have been next to nil for 75 years. We are dealing with obsolete legislation that makes it virtually impossible to get a conviction on dominant position or conspiracy, or whatever you wish to pursue in the marketplace today in order to give the small businessman a break. It is difficult to prove that big business may or may not be taking advantage of dominant position in the marketplace. If the present legislation had any teeth we would have some convictions. I do not believe there is anyone sitting on either side of the House who does not feel that there are areas in which we would like to proceed to bring changes to the competition legislation in order to give a better deal to small business persons.
The central objective is simple. In Canada we need a charter for the marketplace, something which we do not now have. We need rules which can be enforced. We need an understanding of amendments to the Act, and we also need full consultation on an on-going basis in the future. We must recognize the need for continual changes to competition legislation.
The Minister of Consumer and Corporate Affairs outlined some major proposals in the House this morning. The former Minister of Consumer and Corporate Affairs, the Liberal Member for the riding of Papineau, recognized that we should get on with it. This legislation may not contain everything he wants, but I am sure the former Minister would agree that the legislation which he introduced did not contain everything he wanted either. However, I think we all generally agree that we need to make changes, and to make them fast.
We need a charter for the marketplace, as explained by the Minister this morning, because we recognize that the drive and momentum must come from Canadian small businesses. These are businesses which employ up to 50 people and make sales of up to $2 million each year. Amendments are needed to ensure the full and continued contribution of this sector to our wellbeing as a nation, and what a contribution they make.
I am not sure that we realize that small business is the wellspring of a large share of our economic output. Ninety-seven per cent of the business enterprises in the country are in that category. Of every 100 people employed in Canada today, 47 work in small business. Furthermore, Mr. Speaker, this sector
has been playing a central part in the current economic recovery. In the 19 months since the last election there has been a net increase of 580,000 jobs. One hundred and ninety-four thousand of these jobs, one-third of the total job creation, are in the service sector, a sector which is 98 per cent small business. In short, the role of small business is large in the economic future of our nation, as in any nation in a free marketplace today. It is indispensible. Its contribution must be protected and cultivated. Several of the key amendments in this Bill are designed to let us do that more effectively than we can today.
I would like to consider first the section which deals with the abuse of dominant position; in simple terms, the misuse of market muscle to restrict competition. As any thinking person understands, "big" is not synonymous with "bad". Many big businesses have grown to their size because they are very efficient. We can point to some Canadian examples of that in telecommunications. Companies have become multinational giants because they got to market with innovative products earlier than their competitors. Bigness may be what you need to bankroll exploration and to gamble on research and development. Bigness is often what you need in order to be audacious on a grand scale.
Competition law is not aimed at market power per se, but at its abuse. The amendments before us make it clear that the practices to be discouraged must be anti-competitive in nature. They allow for the defence based on superior competitive performance. However, market power, like any other power, can be abused. One example of this is its use to close the door to new competitors entering the marketplace. Another is to squeeze a vulnerable competitor out by cutting off its supplies, or through what is known as "predatory practices". Flaving been in small business myself for 25 years, I can verify that I have seen instances of that, with no legislation present to deal with it.
This Bill proposes that we approach abuse of dominant position monopoly as a civil matter rather than a criminal offence. As the Minister has pointed out, the criminal approach has not worked. In criminal law you must prove all the elements of the offence beyond any reasonble doubt. With respect to abuse of monopoly the effects are often perspective. We are concerned about the reduction of competition further down the road. This inherently conflicts with the criminal law approach.
Moreover, monopoly problems often raise complex economic questions with which the criminal courts are not equipped to deal. The competition tribunal composed of judges from the federal court and lay appointments will have the necessary expertise to deal effectively with abuses of the dominant positions while ensuring a fair and equitable judicial procedure.
The criminal approach has another drawback. You do not have much room to manoeuvre to correct a problem, the
April 7, 1986

emphasis is on punishment rather than on correction, on penalties for damages already done. Under civil law, which is where these matters will be dealt with in the amended Act, it will be possible for the tribunal to get the practice itself stopped by issuing a cease and desist order, as an example, or ultimately, if necessary, by ordering to restore competition to the market-place they order divestiture.
This Bill will also give us a law that can deal with anticompetitive behaviour more effectively. The amended Act will provide examples of these practices for the guidance of the tribunal. This list of examples is something that has traditionally been very important and valuable to the small business community.
The other improvements have to do with the focus on the provisions. In some respects the present Act misses the point. These amendments will focus on the real problem. For example, the monopoly provisions in the present Act deal with situations in which market power is used, or is likely to be used, and I quote, "to the detriment of the public". That really does not give the courts a precise course to steer by. It does not point the process at the really crucial question: "Does this practice reduce competition or doesn't it?"
That is one reason why, as we have heard so often in recent days, there has been only one conviction for monopoly in 75 years. These changes will put the focus on the question and in so doing they will give us a better tool with which to defend small growing firms against the abuse of market power of their larger rivals.
Another aspect of the Bill that concerns small business directly is conspiracy. It is a major concern of small business. The conspiracy provision is, of course, the backbone of the competition law. It is the most pernicious of anti-competitive behaviour-it is what the gang has to do before it gangs up and it has to agree to lessen competition unduly. Conspiracy, under these amendments, remains what it has always been-a serious criminal offence.
Ideally these provisions should have a deterrent effect. They should stop a conspiracy before it starts. In cases where conspirators are not deterred the law must be an effective basis for prosecution. The conspiracy sections of the present law have worked fairly well. The sections are a century old and time has caught up with them. One major problem is the type of evidence which must be produced to get a conviction in court. When the unscrupulous get together to conspire they are not likely to leave a paper trail of written agreements.
Until a few years ago it was possible to infer conspiracy from all the surrounding circumstances-you could base your case on circumstantial evidence as long as you could prove, beyond any reasonable doubt, an agreement to lessen competition unduly. But in 1980 the Supreme Court of Canada handed down the Atlantic Sugar judgment which created a number of ambiguities in the law. For that reason the Bill now before us contains an amendment under which the existence of
Competition Tribunal Act
a conspiracy may be inferred from circumstantial evidence. This merely restates the law as it was prior to 1980.
The second change is in penalties. The Act now allows for fines up to one million dollars. In the last attempt to amend this Act by the former Government the anti was raised to two million. To be truly effective, though, the penalty must be much higher. The Bill before us increases the maximum penalty to five million dollars.
However, the Government recognizes that when you're competing in export markets the law should allow firms to get together to promote Canadian export overseas. Bill C-91 proposes to relax the rules on the formation and operation of export consortia and these changes should help small business to take advantage of the enormous potential in greater Canadian trade with other countries.
Finally, there is a change in this Act that deals with prenotification of mergers. The amended law will require companies with combined assets or sales in excess of five hundred million dollars planning mergers representing a value of more than 35 million to tell the Government about them in advance. It is high time we were able to evaluate the merits of mergers before they have taken place. Small businesses in Canada have let us know through their organizations that they attach a high importance to this change.
We know how important small business is to our economic future; it is a matter of record. We know its importance as a source of jobs and national income, but we should never forget another aspect of its contribution, one that does not necessarily show up in surveys from Statistics Canada. Small business is a well-spring of another kind. It is the source of new products, new ideas and new thinking. Small business is the challenge that keeps the established older sectors alert, uncomplacent and competitive. Small business is the youth of the economy.
To meet the economic challenge of our time at home and abroad we need the full, unimpeded contribution of this sector operating at its full potential. These amendments will take us a step toward that objective. They merit our support. I support these amendments and I urge the Hon. Members to do the same. I hope that finally after 75 years we will see a Competition Act passed in this House that will be current with the times, will address the needs of the small business community, will make it possible to close in on areas where conspiracy occurs and will allow parliamentarians, on a clear conscience, to say that they have done their bit collectively to deal with a nasty situation that is, in some cases, getting out of control in no small part due to the long years of procrastination and delay in dealing with changes to the Competition Act.


David Orlikow: Mr. Speaker, I would like to ask the Member a question. Is the Member aware that the Conservative chairman of the finance committee, the Member for Mississauga South (Mr. Blenkarn) and the Member from Don Valley East (Mr. Attewell) have expressed their concern publicly about the takeover of Genstar by Imasco and pointed out the possibility that they can use that power which they will

April 7, 1986
Competition Tribunal Act
get by tapping the assets of Canada Trust for their own purposes, and not necessarily to protect the interests of the depositors in the Canada Trust company. Given that kind of objection by Members of his own caucus how can the Member stand up in the House and say that this Bill deals with the problems it is supposed to deal with.


William Henry (Bill) Domm: Mr. Speaker, I am not surprised that the Hon. Member for Winnipeg North (Mr. Orlikow) is somewhat alarmed by the fact that Members of Parliament have the right to freedom of speech and should be able to express their opinions freely. That does not mean that their opinion is not debatable. I can understand the Hon. Member's comments, coming from the New Democratic Party. His Party will take a position which really involves a conscience issue and dictates that position so that everyone must toe the line. Therefore, I can understand why he is concerned about a Member of Parliament expressing an opinion that differs from the opinion of another Member.
I suggest that if he persists in delaying this legislation from moving forward to committee where we can hear from important witnesses such as small businessmen, small petroleum dealers, small grocers and consumer associations, then he is showing irresponsibility in his job as a Member of Parliament. If he intends to follow through with his threat in his speech this morning to oppose this legislation as long as he can, then 1 say he is irresponsible in his job as a Member of Parliament.
We want to get on with the job and see the Bill move forward so that we may hear responsible people at committee and develop a competition Bill that really means something. He knows as well as I do that there has only been one prosecution under the current legislation and there should have been a lot more.


David Orlikow: Mr. Speaker, I do not need lectures from that Member or any other Member about the way in which members of our Party arrive at conclusions and how they will vote. We have just as much freedom and have expressed those freedoms whenever there was a question of conscience.
I notice that the Member did not deal with my question at all. He did not indicate whether he agreed with the opinion expressed by Members in his own caucus.
Let me put another question to him. Brascan is a company which owns Noranda, among other corporations. Noranda owns mines, forest companies and so on. Does the Hon. Member not realize that when a company like Brascan controls Trilon, the decisions it will make for investment by Trilon may well be decisions which are good for the owners of Brascan but not good for the people who invest in the trust company controlled through Trilon? I am not saying they would make those decisions; I am putting the same question that was raised by the Canadian Bankers' Association.


William Henry (Bill) Domm: The Hon. Member was in the House today and he knows that we have introduced not one but two pieces of legislation that would give us far more than we have now to deal with the situation he is raising. One of those pieces of legislation deals with financial institutions. We could either go before a tribunal and review the situation as we are proposing in Bill C-91 or we could give the Minister of State for Finance (Mrs. McDougall) the opportunity to react and decide on actions taken for controlling interest in other financial institutions.
We should get on with the job. I agree with what he says but I am sure he also agrees that we do not have anything now which allows us to deal with some of those matters the way we would like.
The Government is simply suggesting that if we can get on with this legislation and the legislation presented this morning by the Minister of State for Finance, we might be able to do more. Filibustering this Bill because everyone has not been heard will not solve any of the problems we have had for 75 years, nor does it deal with the fact that we have tried more than three times to introduce badly needed changes to the competition Act. The Hon. Member will recognize the need for those changes and we would like to get on with it. I am sure he will co-operate in the final analysis because he wants to do something about it.


Mr. Redway:: Mr. Speaker, the Parliamentary Secretary is aware that two main issues arise in relation to the legislation dealing with competition, the current Combines Investigation Act and the Bill presently before the House. First is the question of the restriction of competition and second is the question of concentration of power.
At present there are two cases of great concern relating to the concentration of power. One is the proposed takeover of Genstar by Imasco and the other is the proposed takeover of Hiram Walker Resources by Gulf. The Genstar and Imasco situation may very well be dealt with by the legislation introduced this morning by the Minister of State for Finance.
If the Bill before the House now is put in place with the terms provided for in the current legislation, will the Parliamentary Secretary state whether it will be effective in dealing with the concentration of power such as that in the proposed Gulf takeover of Hiram Walker Resources?


William Henry (Bill) Domm: Mr. Speaker, the intent in Bill C-91 is that the merger of two corporations totalling a value of $500 million or more, where one of the companies being merged has a value of $35 million or more, would be a notification to the Government that the merger could be investigated before the fact. The tribunal is being set up in order that we can do what is not possible now.
The Government requires pre-notification, and setting the size of the merger company at $35 million-which is not a huge corporation-at least provides pre-notification and the opportunity to place the merger before the tribunal. We would
April 7, 1986

be able to assess before the fact whether undue pressure was being applied on the market-place as a result of that amalgamation.


John V. Nunziata: Mr. Speaker, with respect, the Parliamentary Secretary did not answer the question put by his colleague, the Member for York East (Mr. Redway). The question was very simple. Will this Bill have retroactive effect? Will it address itself to the Gulf takeover of Hiram Walker? It was not a general question with respect to Bill C-91, but whether or not this Bill, once passed, will be applied to the takeover of Hiram Walker by Gulf.


William Henry (Bill) Domm: Mr. Speaker, my gut feeling-which is what it is at this point-is that if we get on with the job quickly enough we will be able to deal with more than one or two mergers being contemplated today.
I believe this Bill was introduced in December, 1985. If we can move fast enough we can address some of these problems.


John V. Nunziata: Answer the question.


William Henry (Bill) Domm: I cannot answer the question directly because it is all hypothetical. We could still be doing this 16 years from now if we adopt the attitude of the New Democratic Party. If we are addressing the subject 16 years from now, nothing will happen.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Burnaby (Mr. Robinson)-Canadian Armed Forces- Policy governing homosexuals and lesbians, (b) Government position; the Hon. Member for Don Valley East (Mr. Attewell)- Corporate Affairs-Legislation affecting takeovers; the Hon. Member for Trinity (Miss Nicholson)- The Budget-Effect on middle-income taxpayers, (b) Economic forecasts.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Cote that Bill C-91, an Act to establish the Competition Tribunal and to amend the Combines Investigation Act and the Bank Act and other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Competition Tribunal Act
Lloyd Axworthy: Mr. Speaker, I believe we all recognize that the debate today is very timely, dealing as it does with a very important piece of legislation at a time when Canadians are very much seized by the fundamental changes taking place in the economic structure of this country. The recent wave of acquisitions, takeovers and mergers highlight what is becoming a very serious matter of concern to Members on all sides of the House and Canadians throughout the country, that is, the concentration of economic power in fewer and fewer hands having a deleterious effect, I would say, on the political economy of Canada, the question of who decides, who has influence and who makes decisions. The trend over the past 10, 15 or 20 years has been substantially accelerated over the last year or two years. The amassing of large amounts of capital has been part of that strange disease which has infected all parts of the free market system in the western world. Certain people in the United States, Great Britain and Europe believe that bigger is better, and we see the advent particularly of the horizontal acquisitions of the large conglomerates for which there is no economic rationale other than the acquisition of assets. That has become unquestionably a matter of very serious public policy and concern. This is not a matter of some kind of game which is being played in the boardrooms of downtown Toronto, Montreal, New York or Houston. It is a matter which really reaches into every town, village and hamlet because the results of those kinds of actions have very serious repercussions on the availability of capital for other kinds of businesses. It has a very major impact upon the workings of the stock market as an allocator of resources for the development of new businesses or the restructuring of old businesses. When we have a situation where close to 60 per cent of the assets of the large 300 corporations in the Toronto stock exchange index are controlled by six or seven major economic groups, one really has to ask oneself whether that will either result in a proper allocation of resources according to the most efficient use or whether it will be based upon who has the smartest set of lawyers, accountants and corporation manipulators. It has become part of the game, and the purpose of the game can be glossed over or hyped up in the most elegant of terms but I do not believe it can be justified in terms of the strict economic interests of this country.
This piece of legislation is really one of the few tools the Government has to meet that problem. But legislation by itself is not enough. We can have the most efficient and effective law on the statute books but if there is no policy to accompany it, if there is no set of clear guidelines, a declaration of commitment or a clear sense of purpose by a Government, then those laws will be abdicated. They will lie fallow. They will simply be there on the books. Any tribunal, regulatory agency or group of public servants follow the signals of the Government which sets the tone. We can look at the anti-trust actions in the United States. Whether it is a Democratic or Republican administration will determine how effectively anti-trust actions
11958

April 7, 1986
Competition Tribunal Act
will be pursued. It is interesting to note that the number of anti-trust suits taken by the U.S. Department of Justice under the Reagan administration is almost half of those taken under the previous Democratic administration. It is the same law but a different Government, therefore there is a substantial reduction in the number of anti-trust actions which have been taken.
I believe all Hon. Members came to this House with some interest and expectation with respect to the position of the Government not on the legislation per se, important as that may be, but on how the Government intends to use those new legislative tools and instruments in order to deal with the major fundamental change taking place today. We received part of our answer today in Question Period. We asked the Minister of Consumer and Corporate Affairs (Mr. Cote) if he intends to apply this law retroactively as his colleague, the Minister of State for Finance (Mrs. McDougall), says she intends to do in the case of financial takeovers. We asked if he would apply the same rules retroactively based upon this legislation to the Gulf Oil Hiram Walker takeover. All we received was an adroit dancing on the head of a pin. There was no answer and no commitment. That was repeated by the Minister's Parliamentary Secretary who, in his period in opposition, ran to the barricades hoisting banners high in defence of the interests of the competitive market-place. All of a sudden he has found a reason to hide behind his desk and behind government bafflegab such as: "Well, maybe. Who knows. We'll have to see. Its hypothetical". We have all been through that, Mr. Speaker. It is greatly disappointing that the Hon. Member for Peterborough (Mr. Domm), who acquired such a reputation as a Member of the Opposition for his crusading defence of the consumer, now finds himself engaging in what can only be called dissembling.


John V. Nunziata: Hypocrisy.


Lloyd Axworthy: "Dissembling" I think is a more parliamentary word. It is one I prefer because it carries with it an even broader definition of someone who simply has wheels for legs and runs up and down the aisles looking for cover.
What we have here is a clear example of no policy. We have asked questions as to what the Government intends to do about the obvious and clear evasion of market-place standards by the major oil retailers, refiners and wholesalers. Time after time examples have been brought forward where the downstream pricing of oil products has been convoluted, restricted and, in fact, constipated by decisions taken not by the market-place but inside corporate boardrooms. What answers have we received? We have received evasion, obfuscations and dis-sembly, no policy. What more evidence does the Government require? We gave the example this afternoon of Canada's largest oil supplier clearly dumping off its extra supply in the United States at below market prices in order to cream off its surplus in the Manitoba market so as to keep its prices high. That is a very obvious demand for action to which I hope the Minister will give his attention.
The reactive demands of the Opposition would not be necessary if the Government had a policy, if it recognized that its theology of the market-place, which has been pronounced from on high from every pulpit since that Party arrived in government, applies both ways. It does not just mean giving the oil companies a free ride on the tax system. It also means making sure the benefits flow cleanly through the system and are subject to market discipline and pressures.
It makes one think that this devotion to the market-place is not a devotion at all but simply a camouflage to cover up some really unhealthy practices carried on by its friends in big business. The Parliamentary Secretary can rise in the House with his hand over his heart portraying his Government as the defender of small business, but its actions belie those words.
I applaud in part some of the Conservative back-benchers who, over the weekend, were bold enough to say some action should be taken. However, by Monday morning they found reasons for not being here and for forgetting their commitment. They got themselves all the publicity they needed over the weekend but, once again, where is the action to support words? What we are finding is that this is a Government simply made up of words. It is a Government in which the public relations mimeograph machine is far more important than the effects of action, policies and programs. That is not excusable when we take into account the circumstances we now face. We are not dealing with some trifling matter or some kind of small marginal legislation. We are going to the very heart of the economic structure of this country. We are going to the question of who will be making decisions. It would seem to me that whether one is Conservative, Liberal or socialist, that question must set up a major concern about growing economic concentrations of power. Those who control the avenues of money begin to control the avenues of communication, of advertising and of political payment. Before we know it, it is they who will decide what is in the public interest, not the people who are elected to decide. The first question we must ask is: Are there sufficient powers in this legislation to respond to that concentration? The second question is: Does the Government have the guts and the willingness to put a policy in place to make it work?
As my colleague said this morning, we contend that the legislation has been weakened from the original legislation, Bill C-29, which was presented by the previous Government by the then Minister of Consumer and Corporate Affairs. There have been some very interesting shifts in terms of the language. One now has to prove that there is an intent, a purpose, to frustrate competition. It will have to be shown that there is some type of malicious intent. All that the perpetrator will have to say is: "Gosh, I didn't know it was going to happen that way. I'm as innocent as Huck Finn. I've just been out on the raft, folks. I don't know what's going on. The fact that my acquisition has now given me full control over the energy sector, or the drilling sector, is something I didn't know would happen". Thus everyone will say: "You are obviously not
April 7, 1986

responsible". Setting this as a condition seriously weakens the ability to implement the type of action which will be required to deal with a situation involving a major conglomerate acquiring that type of economic power.
Furthermore, as we have pointed out, the question of a tribunal is a very interesting one. Will it really work the way it is intended to work when it has part-time judges and part-time lay people appointed by the Government? I suppose they will be subjected to some sort of Order in Council review by a parliamentary committee. Nevertheless, they will be working without full-time resources and capacity.
This also raises an interesting question with respect to the inherent latent potential for some conflicts of interest. Take the case of a private sector person who belongs to the right kind of clubs. He will talk to his friends who are part of a milieu which gives him a certain feeling of compatability. Is this the type of person we want judging his peers? I suppose one can say that there is nothing more dominating in pure human behaviourial terms than peer pressure, whether it is found within a teenage gang or a group of business people sitting around a table at the Albany Club or the Manitoba Club. I am not saying that this is something malevolent. It is not. It is simply a matter of acquiring the coloration of one's environment, to put it politely. This will draw people out of this type of environment. In effect it will be saying to them: "Judge your peers. You tell them they have to divest themselves of hundreds of millions of dollars worth of assets". I ask Hon. Members: Does that give us the confidence that the tribunal will have the zeal and intensity to come to grips with conditions which we all know are taking place and which will continue?
I believe that unless this Bill is substantially amended and strengthened, the signal which will emerge from the Parliament of Canada to all those people out there who have legions of lawyers and accountants poring over their account books to see what the next raid can be and who can be the next victim is that it is business as usual. The message will be: "There is a licence, folks". Without a policy and some type of legislative commitment, the signal being sent out of these hallowed halls is a very weak one indeed. It does not carry with it the type of strong and deliberate belief that Parliament is deeply concerned with the economic make-up and structure of the country. It does not carry with it the belief that there should be competition in a real sense, that is, within sectors. Therefore, the response will be: "We have a licence to do what we want".
I would like to add a further consideration which I did not hear mentioned in either the speech of the Minister or his Parliamentary Secretary. We are now proposing to negotiate with the United States a free trade Bill. The major priority of the United States is in the area of technology and services. The Americans have stated time and time again that their major objective in these trade negotiations will be to have a complete and open market in the area of high technology and services, which includes the financial world. It includes a host of sectors of our economy which heretofore have been subject to
Competition Tribunal Act
regulation because we felt that it was in the best interests of Canada to maintain a fairly strong level of Canadianization in those industries.
As Members of Parliament what we must recognize is how this competition Bill meets with the requirement to ensure that there is not a whole new era of intra-corporation management, collusion and rearrangement. We know that our economy is dominated by a high level of foreign ownership. We know that our economy suffers from a series of decisions made in intracorporate trade and investment. These are matters which never reach the public view because they are conducted between corporations, carried out in head offices in Pittsburg, London or Atlanta. What we have to look at clearly is putting together a demand for a total "open sesame" in terms of trade and the services industry. There must also be demands to weaken or eliminate the sort of intellectual property copyright laws. There must be a competition Act. What is really being opened up is the potential for major international corporate decisions which will be totally unaccountable to any national body. There will be no form of accountability to Parliament, or to our courts, or to any legitimate body which can hold these corporations responsible for their decisions.
What does the competition legislation say about these types of practices? Absolutely nothing. If the Prime Minister (Mr. Mulroney) gets his way and there is a total economic free trade in the area of services and high technology, how will we be able to prevent large scale corporate decision making being made outside our boundaries? This may impact on our trade, our jobs and our investment. One of the few areas potentially available to us is in the area of competition legislation. I see absolutely no preparation, no consideration, of that whatsoever. Thus here we are launching into one of the most significant historical economic decisions in the history of the country and we are not arming ourselves properly for it.
There have been major discussions in the United Nations with respect to establishing a code for trans-national behaviour. The same type of thing is taking place in the European Economic Community. What is being prepared for us by the Government in order to respond to that condition? Absolutely nothing. There has been no preparation, no looking at the potential. Yet we are being told that the Bill before us is the answer to all our concerns.
I say to Members of the House that we must look carefully at the competition Bill and ask ourselves how it will ensure a level of accountability under the new regime which this Government is practising. If this is not done then we had better go back to the drawing board and take another look, otherwise it will not do the job.
Of course we can say this measure is an improvement over old practices. The real test and standard is how it will meet the realities of today. How will it meet the restructuring of our economy? How will it meet the real fundamental changes which could occur under the proposed free trade? How will it meet the economic political power which is being brought together by these amalgamations in order to protect, defend

April 7, 1986
Competition Tribunal Act
and nurture not only an economic market-place but a democratic market-place? These are the concerns which we raise on behalf of the Opposition. We will pursue them as diligently as we can.


Mr. Deputy Speaker:: Are there questions or comments? The Hon. Member for Edmonton-Strathcona (Mr. Kilgour).


Mr. Kilgour:: Mr. Speaker, the Party of the Hon. Member was in office for 23 years but for seven months before the election of September, 1984. What did his Party do during that time? Does he have no sense of humility when he gets up now and lectures us with respect to the deficiencies of our Bill?


Lloyd Axworthy: Mr. Speaker, I am sure the Hon. Member for Edmonton-Strathcona (Mr. Kilgour) is enjoying his newfound publicity in the Edmonton Journal and therefore feels emboldened enough to rise to his feet. I would remind him that if he had been a Member of the House during those times, he would realize that one of the major reasons three different attempts to bring in stronger competition laws did not work was the major filibustering on the part of his Party. The kind of parliamentary hijacking that went on time after time prevented that legislation from passing because the Tories were working in concert with their friends in big business.


David Orlikow: Mr. Speaker, let me put the same question to the Hon. Member. I will not go back to Mackenzie King and the more than 50 years of the last 65 years in which Liberals ran the country. However, the Liberals formed the Government from 1962 to 1984. They did ask the Economic Council to study the question. The Economic Council made recommendations and at least three times the Liberal Government brought in draft legislation which was not very good. Now that the Hon. Member is in opposition, he is making the same criticisms of this Bill which we made of the Liberal Bill.
The Liberal Government had the same power to impose closure as this Government has and the Liberal Government did use its power to impose closure although not as often as the Conservatives. If the Liberals had really wanted legislation passed, they could have had it passed. I suggest to the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) that the reason they did not pass the legislation was that the business community really did not want good anti-competition legislation and the Liberals were not prepared to take issue with their financial supporters. That is why the legislation did not pass and that is why the Hon. Member is now making the kind of speech that he should have made when he was a cabinet Minister of the Liberal Government.


Lloyd Axworthy: Mr. Speaker, first I would remind the Hon. Memer that my oath of the Privy Council prevents me from indicating what kind of speeches I made as a member of the Cabinet regarding these matters, but I would say that on this issue, I have certainly been pretty consistent.
I would say to the Hon. Member that his rewriting and interpretation of history is not quite accurate. I would only point to the last major effort to bring in substantial amendments to the Combines Investigation Act in 1983-84, an effort which was prevented by the bell-ringing tactics of the opposition Parties with which I suppose his Party was in concert. The bell ringing was a major frustration in the implementation of that Bill. We had brought in the amendments and if we had had the kind of co-operation that they are now proposing, we would have had a new competition Bill a full two and a half years ago. We would not need to ask for retroactivity from a Minister who is obviously not prepared to give it. We would have been able to implement and activate many of the measures that now exist. We are saying that it is now time for strengthened measures, not the kind of weakened measures that are in this Bill.


Alan Redway: Mr. Speaker, I would like to comment on what I feel is the somewhat selective memory of the Hon. Member with respect to the facts as they have occurred over the last few years. The Hon. Member was a Member of the House and a Minister of the Crown for many, many years. He was a Minister of the Crown back in 1976 at the time when a court decision in the K.C. Irving oil case literally put an end to the effectiveness of the present legislation that was put in place many years ago, the Combines Investigation Act. After that, in 1977, the Government introduced Bill C-42. Later in 1977, the Government introduced another Bill, namely, Bill C-13. In 1984, it introduced a further Bill, namely, Bill C-29. All those Bills were aimed at amending and trying to make more effective this particular legislation.
The Hon. Member has talked about the question of the Government's commitment to try to make this thing work. Where was the commitment of the Government of which he was a part at that time? What is the official policy of his Party at the moment with respect to combines and competition legislation? Is it the official policy of his Party to make sure that competition is effective and in place and that there is legislation to allow it, and is it also the position of his Party that we ought to make sure that there is no concentration of power whatsoever in Canada?


Lloyd Axworthy: Mr. Speaker, again we are dealing with the interesting question of whose history is more accurate. I would only amend the Hon. Member's comment for the sake of the record. In 1976, I did not have the pleasure of serving in this House. It was only a gleam in my eye. At the time, I was serving the interests of the people of Manitoba in the Manitoba Legislature, but my views on this particular issue were as consistent then as they are now.
I would remind the Hon. Member that he might wish to go back to his history books to learn that in 1976, the then Liberal Government did bring in a series of amendments to the Combines Investigation Act in response to those conditions. Once that Bill was passed, we needed some time to look at the impact of it but were prevented from doing so by the election
April 7, 1986

of 1979 that brought in the Conservative Government. After the 1980 election, we started another major review which culminated in the consultations undertaken and legislation proposed by my former colleague, Mrs. Judy Erola, and at that time we had what we thought was an effective Bill that provided the answer to the Hon. Member's two questions. Yes, we want an effective combines Bill and we do not want economic concentration of power.


John V. Nunziata: Mr. Speaker, as Hon. Members are aware, the primary purpose of the competition Bill is to protect consumers. Bill C-91 which is now before the House was the result of some very intensive negotiations with the so-called Gang of Five, the Canadian Chamber of Commerce, the Canadian Manufacturers' Association, the Business Council on National Issues, the Grocery Products Manufacturers and the Canadian Bar Association. Is it any wonder that the business community is in general agreement with this Bill? In effect, the business community drafted this Bill which contains a number of loopholes.
It seems to me that one of the reasons for the previous Bills on this particular issue not passing Parliament was that the previous administration was not prepared to cave in to the large business interests in Canada, the Gang of Five. As a result of the input of the Gang of Five, the legislation was watered down.
I would like to ask my hon. colleague a question with respect to the competition tribunal. He indicated that he had certain concerns about the make-up of this particular tribunal in that its members would be lay people. In the view of the Hon. Member, would it more appropriate to have a judicial member sitting on this particular competition tribunal and would it be advisable, rather than having part-time members sit on this tribunal which is to hear merger and monopoly complaints, to consider the possibility of turning it into a form of court of record or a court of law?


Lloyd Axworthy: Mr. Speaker, the Hon. Member reminded me, with his description of the role of the Big Five, that in the kingdom of the blind, the one-eyed man is king. When the Government is blind, obviously that one-dimensional group is acting in a sovereign role.
As far as the tribunal is concerned, I think that as my colleague, the Hon. Member for Papineau (Mr. Ouellet), said today, it almost verges on being unconstitutional. Our position is that to give that tribunal the strength it needs, we should have full-time lay members in order to provide a balance but also members drawn from the legal or judicial fraternity as full-time members who do not serve part time in another court. We think that this would give the tribunal the effectiveness, consistency and power it needs and, most important, would provide it with the independence and autonomy it needs to ensure that it is, beyond a doubt, totally independent in making its decisions.
Competition Tribunal Act


Mr. Deputy Speaker:: Order, please. Resuming debate. The Hon. Member for Bellechasse (Mr. Blais).


Mr. Pierre Blais (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, it is always somewhat astonishing to see that Members of the Official Opposition who had every opportunity to come up with practical solutions for Canadians when they were on this side of the House, now that they are no longer at the helm seem to have an answer for everything. I find that rather astonishing.
It is also somewhat surprising to see that those who then were bed fellows in Opposition, are now tearing each other's hair and blaming one another for amendments made by the Official Opposition when it was last in office.
Mr. Speaker, the work we did before introducing this major legislative measure was the result of exhaustive consultations with the various Governments and parties interested in this Bill. Again we might remind our colleagues in the Official Opposition that they forgot the word consultation, a process for which they did not have much use when they were ensconced in their ivory tower. Ever since we took over we have always made sure that Canadians and the interested parties were consulted before our legislative measures were introduced. It is an important consideration which is giving renewed confidence to Canadians but which had been completely forgotten in recent years, Mr. Speaker.


Alfonso Gagliano: Did your Government consult before adopting new unemployment insurance regulations?


Pierre Blais: When the time comes to speak about these regulations, you can do so. As usual, your comments are beside the point. You can never discuss issues at the proper time. When it is time for you to speak, you always try... Earlier, you had an opportunity to rise to ask questions and make comments. You should have done so.
You may laugh, but when you do not know what a piece of legislation is about, it is easier to laugh and to speak about unemployment insurance even though the subject being discussed is an Act to establish the Competition Tribunal. It is much easier.
Mr. Speaker, our discussions on Bill C-91 have clearly shown that competition is the main asset of a free enterprise system, even though it has been badly neglected in the past.
It is therefore proper to note that the purpose of the Act which we are now amending and updating is to protect this advantage, because, as the Minister of Consumer and Corporate Affairs (Mr. Cote) pointed out this morning, our competition law can be described as a charter of the market. It spells out the rules of the game for competition among businesses in Canada.

April 7, 1986
Competition Tribunal Act
Mr. Speaker, if this were its only role, legislation on competition would be relatively easy to prepare. However, there is more to it. As we all know, the laws on competition also have an impact on the conditions in which Canadian businesses compete with foreign interests in Canada and abroad. The legislation therefore operates on two levels, namely on the Canadian market and on the international market.
Mr. Speaker, in both cases it is very important to freshen up the Act, to make it workable and bring it in line with current Canadian realities. Those realities have changed considerably with the passage of time; it is a far cry from the situation a century ago when the legislation was put in place. Now, with all the upheavals in international economic relations, it is time to update the Act, Mr. Speaker.
Going back even some 20 years ago only, in 1969, when the Economic Council of Canada recommended that the Act be modernized, Canada was the fourth trading nation in the world, closely followed by Japan. But today, we are down to the eighth rank and Japan exports twice as much as we do. And since then, trade talks, whether the Kennedy Round or the Tokyo Round, have lowered tariff barriers and increased international competition.
The shortfall sustained in recent years before we came to power must now motivate us. In the early '80s, in the late '70s the previous Government should have taken strong measures to stimulate the economy, especially in the area of competition. Nothing was done. We therefore must respond with the legislation now before us.
Mr. Speaker, the amendments contained in the Bill allow for current realities. This shows in the opening paragraph, the preamble where, as opposed to the present Act, the purpose of the new legislation is expressly stated. The preamble sets down, for the benefit of those who will be called upon to interpret the Act in the future, the intent of Parliament in enacting the new provisions. I will simply quote a few words. "The purpose of this Act is to maintain and encourage competition in Canada in order to expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada". This is quite clear, Mr. Speaker, and it has been our approach to clearly enunciate at the outset what our enactments will be used for and what their purpose is.
Mr. Speaker, I would like to bring to the attention of the House four major aspects of the amendments, concerning specifically international trade. The first aspect deals with mergers. Provisions regulating mergers must be stringent and efficient, because non-competitive mergers can be detrimental to the efficiency of our economy. The proposed amendments offer effective protection against that danger. God knows how much we need that, in view of the meager results achieved over a century. There have been eight prosecutions and not a single conviction.
But there are also other requirements. Provisions concerning mergers must be drafted in such a way as to encourage competition between Canadian businesses at home in Canada, without putting them at a disadvantage when carrying out business dealings in international markets.
The Act as it now stands unfortunately does not meet that requirement. It does not provide for the necessary distinctions, because it takes little heed of international trade. The amendments proposed in this legislation would on the other hand expressly call upon the Tribunal to consider that aspect. When looking at the merits of a proposed merger, the Tribunal would consider the impact of competition from imports, a very important aspect if we are to have an accurate and precise view of a merger. In so doing, Mr. Speaker, the Tribunal would be led to make distinctions. It would have to decide on the difference between a situation where Canadian businesses would be protected against foreign competition, by tariff barriers for instance, as opposed to another where they would have to stomach the full impact of imports.
Canada is a trading nation. One job out of three depends on international trade. This is why when a merger would greatly improve efficiency, thereby increasing exports or substitutions to imports, the Tribunal will have to authorize it.
The second aspect, Mr. Speaker, on which I should like to dwell concerns the various ways of considering copartnerships under this Bill. Once again, each case will have to be assessed according to the advantages and disadvantages of those operations. It is quite obvious that under certain circumstances, involved corporations can reduce competition.
The provisions of the Bill take that possibility into account. A copartnership which reduces competition will be subjected to the provisions dealing with mergers generally. On the other hand, copartnerships are also of some value to Canada. They allow the pooling of human resources, of skills in the areas of energy management, research and development. Under the proposed amendments, the Competition Act will allow copartnerships with respect to projects which could not be carried out without risk sharing among several partners.
The third point which I wanted to raise deals with specialization agreements. As the word suggests, it refers to agreements between corporations which would like to specialize in a line of products or of services rather than competing with everyone in all areas.
Sometimes corporations conclude such agreements because the market in which they operate is too small to accommodate several suppliers. They feel that the rationalization of production resulting from these agreements would lead to improved efficiency and major economies of scale. Thanks to this new legislation, the specialization agreements approved by the Tribunal will be exempted from the provisions governing conspiracies and exclusive dealings. It is clear that we must keep this aspect in mind, since abuses can still occur. Part of
April 7, 1986

the legislation must always provide for punitive action. Agreements which contribute to increasing Canadian exports and substituting Canadian services and products to imports will be eligible for this exemption. The Tribunal will have to take into account these trade realities when deciding whether to authorize these agreements.
Mr. Speaker, another provision of this Bill should help Canada strenghten its position on world markets by relaxing the regulations which govern the creation and operation of joint ventures. Under the current legislation, agreements between competitors affecting only exports are exempted from the conspiracy provisions. However, they are no longer exempted when they limit competition in the domestic market. Well, Mr. Speaker, many observers have pointed out that the wording of the current legislation is vague, extremely restrictive, and likely to impede our performance in foreign markets. There is no doubt that we must clarify and widen this exemption if we want Canada to improve or at least maintain its position as a great trading partner in the present circumstances where international trade is in constant movement and where we must act in the interest of Canadians generally, but especially of our workers who are involved in the export industries, and who need stability and assured markets.
For Canada, Mr. Speaker, international trade is practically a matter of life and death. Through our domestic market of 26 million people, we enjoy the standard of living of an economic superpower. To maintain this enviable position, we must succeed as a trading nation. Out of every dollar of our national income, nearly 30 cents come from sales to foreign countries. That is a lot. These sales to foreign countries are responsible for over 3 million jobs in Canada. Let us not forget it. By making a lot of noise over the past few weeks, Members opposite have tried to lessen the positive impact of the steps taken by our Government to create for Canadians over half a million new jobs, more than 83 p. 100 of which are of a permanent nature.
Mr. Speaker, that is exactly what the Canadian people wanted . That is exactly what they asked us to do. If they have elected us, it is because they wanted us to maintain the permanent jobs we had already and create new ones.
The strategy which our Government has put together to strenghten our economy-in other words, to increase the national income, create jobs and help the economy recover- has given excellent results. Over the past 15 months, this strategy has helped Canadian corporations to become serious competitors on international markets. That is the key to our economic growth. Instead of being afraid to attract attention on international markets, we have strenghtened our position over the past few months, and the results are quite positive.
If we had listened to those prophets of doom and gloom in the Opposition every time we took a step or considered it, either in terms of foreign investment in Canada or the economic steps that were taken, nothing would have been done and we would still be stagnating in the economic situation left by the former Government which only bothered to create
Competition Tribunal Act
temporary employment and provide funds which were borrowed by mortgaging the future of young Canadians and our families.
We have changed that. We decided, Mr. Speaker, to reverse that trend, we decided to give back to our fellow citizens that sense of pride that they had lost. It is not with money borrowed by an already heavily burdened Government that we shall put our country on the path to economic recovery. I believe that is obvious. To those prophets of gloom and doom who predicted a loss of 200,000 jobs when the previous budget was introduced in May 1984, we answered by creating over 500,000 jobs during the past year, which means a difference of 700,000 jobs. That was not the first macro-economic blunder of our neighbours in the Official Opposition. But it does not matter. It is not serious. It is only one of those . .. They made so many mistakes that this one blends in with the rest. They don't mention it. They talk about something else.
Mr. Speaker, it is of course up to the businesses themselves to be successful in the market place of Canada and elsewhere. The position of our Government has been to make way again for our companies, our 750,000 small- and medium-sized Canadians companies, which were only waiting for a little help from our Government to feel that they were understood, that there were people in the Government to back them and speak for them.
At this moment of truth, Canadian businesses must come out as the winners by outdoing their competitors with better ideas, better products, better services and a better commercial strategy. Our past shows that we can trust Canadian businesses to meet that challenge. But the Government, and by this I mean Parliament, also has its responsibilities. We draft the basic rules that allow companies to live and thrive. It is up to us to see that those regulations are consistent, that they are relevant and that they foster rather than impede excellence. It is also up to us to see that those regulations are in keeping with the realities and demands of international competition. The Bill before the House will help us, I am sure, assume those responsibilities. I believe this Bill deserves our support and should deserve the unanimous support of the House.


Mr. Rodriguez:: Mr. Speaker, in the merger section of the Bill, if this Bill is as good as the Member purports it to be, why is it that conglomerate mergers are not included in the competition policy of Government? Why are conglomerate mergers not included, Mr. Speaker?


Pierre Blais: Mr. Speaker, I do not know whether the Hon. Member is familiar with the Bill as a whole. If we look at it that way, I would suggest that we took the existing legislation and tried to improve it.
I could go over the major provisions of the Bill, but in that respect I think that no particular problems came up in recent months. The matter has not been the subject of recent consultations, but if the Hon. Member can think of a specific

April 7, 1986
Competition Tribunal Act
provision which might be improved as a result of representations made in the context of our consultation process, I think he will have every opportunity to raise the issue before the legislative committee. I do not know whether the Hon. Member sits on the committee to which the Bill will be referred, but we will be pleased to debate the question at that time. But each particular case . .. Perhaps you should wait. The Bill is not designed to deal with each particular case. We are proposing a tribunal which will review each case submitted. Then we will be able to see-Sir, you should be listening because I am giving you the answer. If you do not want me to-Was it simply your question you wanted to hear or the answer?
If all you want to hear is the question, no problem, I will just sit down.


John R. Rodriguez: Mr. Speaker, I was having a little chuckle because I do not think the Member has read the Bill and I really do not think he understands what a conglomerate merger is because he says that that has not been a problem. As a matter of fact, Mr. Speaker, it is the Imasco takeover of Genstar and the Gulf takeover of Hiram Walker. I cannot see how he can say that that has not been a problem. It is a problem and that is why the Government introduced this Bill this morning. Where has he been? How can he say that he just wants to fancy the Bill up? Surely he wants to make an effective competition policy. Of course, if the Tories are not interested in effective competition policy, they would be satisfied with that.


Pierre Blais: Mr. Speaker, the provisions of the Bill are there. The cases will be dealt with to their satisfaction. Provision has been made for a tribunal, but they are referring to deals which in some cases have yet to be completed.


André Ouellet: Mr. Speaker, I had not planned on asking a question to the Parliamentary Secretary, but I feel that I have to rise following his reply to my colleague for Nickel Belt (Mr. Rodriguez). It is obvious that the Parliamentary Secretary has not examined Bill C-91 properly. It is obvious that he received a paper prepared by the officials of the Department of Consumer and Corporate Affairs or the Minister's office, which he has obediently read, and that he does not understand at all what our competition law is about. His reply clearly shows his crass ignorance about this matter.
Since this Bill will soon be referred to a committee, I urge him to make a serious study, to do his homework and to read the Bill so that he can make an objective and rational contribution when this Bill is considered in committee.
The question asked by the Hon. Member concerned mergers. Bill C-91 is much weaker than Bill C-29 introduced by the former Government, which contained a whole series of factors to be considered for rejecting a merger which would
have harmful effects on the Canadian economy. The Minister has ignored these twelve factors. He has put them aside. He has substantially reduced the strength of the provisions of the law on competition which allow the Government to take action to prevent a merger which would have harmful results for the Canadian economy.
What the Hon. Member for Nickel Belt asked was why the bill was not stronger and did not have more bite as concerns mergers.
Let me ask the question again: Why does the Government not provide itself with a rule that would adequately prevent mergers that are detrimental to the country?
In conclusion, let me say that the previous Government intended to introduce legislation that had teeth. This was hampered by the systematic and unacceptable obstruction of the Tories who were then in opposition. They did not want Bill C-29 to be passed because it would have had the teeth to prevent the kind of excessive mergers now being carried out by big corporations in Canada.


Pierre Blais: Mr. Speaker, if they speak of "crass ignorance", 1 will counter with "crass negligence". The Hon. Member was a member of the Government, he was a Cabinet Minister for a number of years, so he had every opportunity ... It is easy now to blame us for opposing certain provisions of their legislation. But when he himself was in Government, when he was a Minister, he had every opportunity to enact legislation that could have had the teeth he is referring to. He should have done so at the time. That is negligence. It is not by saying today that we have not enacted, or that they had a bill that would have been better... You only had to pass your Bill. Such ruminations are mere navel gazing and totally disregard your own responsibilities when you had them. We will not answer that kind of question. That was negligence on your part, and today you are bearing the consequences.


John V. Nunziata: My, my, my, Mr. Speaker, how defensive the Hon. Member has become. In his submissions, the Hon. Member indicated that people were consulted with respect to the drafting of Bill C-91. We know that the Gang of Five was consulted. I indicated earlier who the Gang of Five was, but just to refresh the Members' collective memory, I will reiterate who they are. They are the Canadian Chamber of Commerce, the Canadian Manufacturers Association, the Business Council on National Issues, the Grocery Product Manufacturers of Canada, and the Canadian Bar Association. This is the representative group of business which helped draft this legislation. One commentator said that it is like asking convicted burglars to assist in drafting amendments to the Criminal Code dealing with burglary.
We all know that the purpose of this legislation is to protect consumers rather than to allow big business to find loopholes in it.
April 7, 1986

The Hon. Member spoke of a new era of consultation. Why did the Minister allow the Gang of Five literally to draft this legislation? Why did the Minister allow big business to bulldoze this legislation across his desk? On the other hand, why did he reject some of the major recommendations of the consumer organizations in Canada? Is this indicative of who, in effect, is calling the shots with respect to Bill C-91?


Pierre Blais: Mr. Speaker, as usual the Hon. Member for York South-Weston (Mr. Nunziata) "buzzes" through with an obvious lack of consideration of the whole issue.
Mr. Speaker, there was consultation. Canadian consumers were consulted, over a hundred briefs were submitted at the federal-provincial conferences at which all Canadian provinces were represented. People submitted-
Of course, your Government at the time could not know about that, because it had no notion of consultation. It never did know what it was. For 20 years, there were only groups of five, four, three, ten ... Our Government has been involved in true consultation with the Canadian people. If I may ... You listed them a while ago, Mr. Speaker, but rightly or wrongly, probably by mistake, about a hundred papers which have been tabled were not mentionned; there have been consultations with the provinces, with the Business Council on National Issues, with the Consumers' Association of Canada, with the Canadian Manufacturers' Association, and with the Canadian Bar Association.
It was ridiculous to say that when the time came to amend the Criminal Code, criminals were consulted ... That is ridiculous, and a comparison so insignificant that it does not even deserve to be mentioned in this forum. These people are working in the interest of Canadians. What our Government is doing is relying on Canadians, on associations made up of Canadians. You should stop seeing groups, whether on the business level or whatever, as enemies of the Canadian people. This is over now, because our Government trusts the Canadian people.


Mr. Deputy Speaker:: Resuming debate.


John R. Rodriguez: Mr. Speaker, it seems to me that I have been through this process before. I recall when the Hon. Member for Papineau (Mr. Ouellet) was the Minister of Consumer and Corporate Affairs. I remember his words very well when he was piloting that Bill through the House. I remember his quote in The Globe and Mail when the Bill was finally passed when he said, "I hope this Bill will never have to be used". I think he can rest assured that it has not been used very much. Certainly it has never been abused.
Here we are dealing with C-91, the great great grandson of Bill C-256. This Bill is called the competition policy. Here is a Conservative Government, and before it was a Liberal
Competition Tribunal Act
Government, both dedicated to the free market system, to free enterprise, to initiative, and here is this Government that is the arch representative of that kind of philosophy. The Government keeps telling us that that is what the system is based on, and that these businesses out there in the market-place are only willing to compete.
I ask myself why it is necessary that a Government has to force people to compete. I asked that question and I said to myself, well now, let me read this Bill and find out if that is what actually is going to happen. Is that just the cosmetology of the thing or is this just the trimmings and the window dressing to give the impression to the people at large that this Government really is interested in competition policy?
In fact that Party over there that is the Government, which is so dependent on corporate contributions-in fact we only have to see the recent convention in Quebec where the Minister of Consumer and Corporate Affairs (Mr. Cote) got the Conservative Party off the hook and guaranteed it its corporate contributions-that in fact postponed limitation of corporate contributions to the Conservative Party. This is the same Minister that has introduced Bill C-91. This is the Government that wants the consumers and the public at large to believe that it is really interested in taking on corporate concentration, and really forcing the corporations that act like white sharks out in the market-place, as opposed to hammerhead sharks, to give the consumer a fair shot.
My colleague, the Hon. Member for York South-Weston (Mr. Nunziata), who consulted on this Bill called them the Gang of Five. They were the ones, all the corporate elite in this country, advising the Government on consumer policy on a Bill that is designed to give consumers in the market-place some protection. That is equivalent to asking the chickens to expect Colonel Sanders will look out for their interests. That is the height of impunity.
I remember when Bill C-42 was before the House and it was a little bit better than this one. The Conservatives, led by the now Minister of Regional Industrial Expansion (Mr. Stevens), Chairman Sine, late of South Korea, fought that toothless tiger, Bill C-42, into submission, and the Liberals rolled over and they were not too anxious to get any kind of tough legislation on the books. They said, "We are held up to ransom, we give up". Mr. Speaker, they lay down. They surrendered. They were only too anxious to surrender because they were getting heat from the corporate world that their contributions were going to be cut off. It was called the silent surrender. What we have here is a watered-down version of Bill C-42. That one was a toothless tiger; this Bill C-91 is a roaring rabbit.
Why have we New Democrats opposed it? We see right through the flimsy neglige of Bill C-91 and we strip it away. We want to point out that if you are going to have competition policy in this country then it has got to be tough. I do not see why they always say they can never accept the position that the Government should be dominant in the business community and in the market-place. That is the problem. Why then

April 7, 1986
Competition Tribunal Act
should the Government accept the dominance of any corporate conglomerate in the market-place? It should be consistent. What the Government should do is to bring a Bill forward that really attacks corporate concentration in this country. It does not do that in this Bill.
I know that my friend from York South-Weston will feel a bit sensitive about it, but one of the groups they had advising them on the drafting of this Bill was the Canadian Bar Association. The Government had to have lawyers there because it needed some weasel words. If you look through the Bill, you find weasel words like "unduly restricting competition". What does "unduly" mean? Well, that is a field day for lawyers and for the courts. If you look carefully at the merger section, the dominant market section, you see the words "substantially reduced competition". What does "substantially reduced" mean? It means anything you want it to mean. Every time you have weasel words like that in there, you are not going to get effective competition policy because you create loopholes that elephants can go through. The history of prosecutions for monopoly in this country in the last 100 years total one conviction. That is why J. P. Morgan came to Canada and established Inco, because he was getting heat from United States because they were tightening up the laws on monopoly practices. He came into Canada and established Inco.
We New Democrats have said that we should have an effective competition policy. For example, in 100 years we have had just one successful prosecution on an illegal merger, and that was a guilty plea. He copped a guilty plea, did some plea bargaining and got some time off.
In the last 100 years there has only been one successful prosecution concerning market monopoly. The legislation was regarded as unenforceable with respect to price discrimination and nothing was done about it. With respect to conspiring to fix prices, it was regarded as weak but workable. That is an evaluation of the competition policy that is designed to protect consumers in the market-place. That is why I called it a roaring rabbit. In fact, it is not there to protect consumers or prevent the predatory pricing practices and monopolistic practices of certain capitalists in this country. It is there to give the illusion that something is being done.
We remember the Bertrand Report that said gasoline companies were ripping off Canadian consumers by some $12 billion. What happened to that report? It has been shuffled off somewhere in the court system and nothing has happened.
We have talked about weasel words. Let me read the section concerning monopolies. Of course, the tribunal consists of part-timers. Clause 51(1) states:
Where, on application by the Director, the Tribunal finds that-
It sets out conditions (a), (b) and (c). Condition (c) states:
the practice has had, is having or is likely to have the effect of preventing or lessening competition substantially in a market,
There are three conditions which must apply, and then we see weasel words like "lessen competition substantially". I suggest that it could never be said that this clause is effective because they will weasel out of it. That is why they are called "weasel words".
The clause dealing with monopoly must be clarified before it is acceptable to us. That weasel word "substantially" would have to be removed. It seems to me that any lessening of competition cannot be to the benefit of the consumers but must be to their detriment.
With respect to mergers, we see the same wording in Clause 64(1) which states:
Where, on application by the Director, the Tribunal finds that a merger or proposed merger prevents or lessens, or is likely to prevent or lessen, competition substantially-
It must be proven that competition is lessened substantially. In fact, the clause even allows lessened competition as long as it results in gains in efficiency. Even the weasel words make it clear that a lessening of competition is acceptable in this policy, even though the consumer will pay through the nose, as long as it results in gain in efficiency. The Government is not satisfied with its weasel words in that clause, it must give added protection to the companies.
Furthermore, since conglomerate mergers are not included in this clause, how can the Government develop an effective merger policy to deal with the reality of conglomerate mergers today such as the Imasco takeover of Genstar? Consequently, while we are debating Bill C-91 in Parliament today, the Government has introduced a Bill this morning to deal with a conglomerate merger.
Banks are not allowed to take over other banks, but not only is the Government allowing a concentration of power, there is no prohibition of self-dealing. How can any Government that is serious about competition policy and the protection of investors and people who put their money in trust companies develop an effective policy when it does not include a prohibition against self-dealing? What is good for the banks must be good for those who buy out or merge trust companies.
I believe the Bill is flawed because it does not take into consideration the reality of the market-place. Canada has the worst record for corporate concentration and corporate takeovers in the western industrialized world.
We cannot accept the provisions of this Bill regarding conspiracy. Prior to 1976 the Crown won approximately 90 per cent of the conspiracy cases it prosecuted under the present law. Since 1976 the Crown has won only 55 per cent. This indicates that there has been a lessening of the ability of the people, as represented by the Crown, to prosecute for conspiracy. The law has become less effective in the last few years.
We have heard today that nine families control a large percentage of the economic activity in this country. That cannot be healthy and the Government must be concerned about setting up the rules of the game so that consumers in the market-place receive some protection. The conspiracy clause
April 7, 1986

seems to condone conspiracy and allow the tribunal to ignore the argument of lessening competition unduly as long as it can be shown that some efficiency in the market-place is provided. In other words, it is acceptable to rig prices according to this clause. While competition has been lessened unduly, which is wrong according to the law, the tribunal can ignore that as long as there is some improvement in efficiency.
The Government proposes to increase the punishment from $1 million to $5 million. That does not even take inflation into consideration. It is as harmful as getting six lashes with wet spaghetti. Analysis has shown that the average fine in conspiracy cases is $71,000 for the period from 1983 to 1985, which has really only kept pace with the inflation rate on such fines since 1900.
It seems to me that there must be a more powerful deterrent to price fixing. Price fixing is worse than robbery. It is deliberate. We New Democrats oppose the Bill. It does not include class actions. We have not had the kind of input into the Bill which should have been there in the first place. The Bill does not include any prohibition of conglomerate mergers and does not deal with interlocking directorates and management restrictions.
If this Bill ever gets to committee, you can expect, Mr. Speaker, that it will be thoroughly analysed. Hopefully, it will be tightened up in the areas we have pointed out.


Alan Redway: Mr. Speaker, the Hon. Member is aware that the thrust and main issue of this Bill is to ensure that there is not a lessening of competition. The purpose of doing that is not because competition is all powerful in itself. The Bill is aimed at trying to improve the situation for the consumer, to make sure that competition does create lower prices, better quality and more choice. That is the main thrust of the Bill. I know that the Hon. Member is quite aware of the sort of merger and monopoly the Bill is aimed at. He talked about the conglomerate takeovers and mergers. He knows this Bill has provisions to deal with those takeovers if in fact they do restrict competition. However, as he has pointed out, they do not deal with the situation if competition is not restricted. If there is one of those wonderful conglomerate mergers about which the Hon. Member spoke, and it does not restrict competition, then it is not dealt with in this Bill.
The Bill introduced this morning by the Minister of State for Finance (Mrs. McDougall) deals with that to a limited extent with respect to the banks and financial institutions, but this Bill does not. I understand from the thrust of the Hon Member's remarks that he would like to see this Bill deal with that sort of thing. I would like to know from him what the official policy of his Party is with respect to allowing or not allowing mergers that perhaps do not restrict competition in any way but even encourage competition. What is the official policy of his Party in that respect? Would he not allow any mergers whatsoever? And I wonder if his answer is going to be
Competition Tribunal Act
one which his Party often espouses, an unrealistic one, or is he going to weasel out of an answer?


John R. Rodriguez: Mr. Speaker, no one can ever accuse the New Democrats of weaseling out of any answer. In fact, if we want to look for weasels giving answers, we just have to go back to the promises made in the election campaign and compare them with Government policies now that it is the Government. That is where we will find the real weasels. Those people say things they think a lot of people want to hear and so will vote for them. But when they get into office, they stick it to them. I can only think of the Unemployment Insurance Commission and the way it treated people who took early retirement. Those are the real weasels.
I thought I made it quite clear in my speech that we should have a competition policy with teeth. We ought not to include such weasel words as "It's all right to do it as long as it does not substantially lessen competition". It seems obvious to our Party, and we have said this very clearly, that any lessening of competition-if that is the mentality which prevails in this Chamber-will be detrimental to the interests of the consumers. When we use the words "substantially lessen competition" the competition policy becomes not very effective. We have a competition policy which deals with vertical and horizontal mergers but does not deal with conglomerate mergers which are taking place in the reality of today. Why does the Government have to deal on an ad hoc basis with Imasco taking over Genstar? That should be part of a comprehensive competition policy which also provides class actions for consumers who do not feel they have received a fair shake in the market-place. It should also deal with the interlocking directorships and prohibit self-dealing. There is no prohibition against selfdealing in this Bill.
We have no objections to mergers but there should be protection within the legislation so that the consumers, when those mergers do take place, will be protected. We are saying they are not protected in this Bill. In fact, it is the opposite. The Bill is deliberately designed to give the impression, just as the Hon. Member did with his question, that it is an effective Bill when in fact it is nothing but a roaring rabbit.


John V. Nunziata: Mr. Speaker, I want to thank the Hon. Member for Nickel Belt (Mr. Rodriguez) for his most entertaining submissions. They were a little weak on substance at times but nevertheless very entertaining. The Hon. Member made a number of good points. He indicated that the Bill has a number of loopholes. We in the Liberal Party are also concerned about the so-called "weasel words" referred to by the Hon. Member, particularly with respect to mergers. The new competition tribunal will look at proposed mergers and try to decide whether they are likely to prevent or substantially lessen competition. The Hon. Member for Nickel Belt is concerned about the addition of the word "substantially". He argues that the clause should simply read: "-the proposed merger is likely to prevent or lessen competition". I am sure the Hon. Member will recognize our concern with that. There

April 7, 1986
Competition Tribunal Act
will be mergers which will lessen competition to a certain degree. Those mergers might be in the best interests of consumers per se. To suggest that the tribunal should not allow mergers which will in any way lessen competition is to take an unrealistic position because competition might be restricted by a very small percentage but the merger itself may be in the best interests of consumers generally.
Would the Hon. Member agree that even though there may be some lessening of competition, some mergers might be to the benefit of consumers? And does the Hon. Member agree that although Bill C-91 is full of loopholes, is inadequate and does a disservice to consumers in a lot of respects, it is at least a step in the right direction? Rather than being obstructionist as the New Democratic Party is suggesting it will be, would the Hon. Member not agree that we would be more productive as legislators and parliamentarians if we tried to work in committee and convince the right wing opposite to toughen up the Bill? Rather than delaying the Bill unduly, would the Hon. Member not agree that we should work towards improving the Bill in concert at committee?


John R. Rodriguez: 1 just want to say to the Hon. Member for York South-Weston that I thought my speech was replete with very concrete criticisms of the Bill as well as suggestions of things which should be part of it. I thought 1 did that very well in 20 minutes. I recall that when I first came here in 1972, the Liberal Government brought forward Bill C-256. It was an anti-monopoly Bill. It was a competition policy Bill. Of course, the corporate sector of the country put up a great howl and cut its contributions to the Liberal Party. It was then decided that the Hon. Member for Windsor West (Mr. Gray) was too progressive. So he was taken out of the area of consumer and corporate affairs and somebody else who was more amenable to the corporate sector was put in. The Liberal Party split the Bill and left measures such as price fixing, double ticketing and so on. It then put the merger questions in another Bill and, of course, nothing happened. We end up with the puffball legislation which is presently before us.
With respect to the question of mergers, the Hon. Member asked me whether or not we would still be opposed to the legislation if it lessened competition but was of benefit to the consumer. I say that we start from the position of strength. In fact, we should prohibit it and give the merging groups the right to appeal. Let them prove in an open court that a merger would be of benefit to the consumer. I would also include in the Bill the right to class actions so that if consumers believe that it is not in their best interests, then they can haul the beggars before the court, as they do in the United States and other enlightened jurisdictions. However, the Liberals fought such a provision. I moved an amendment to that effect in the previous Parliament. The Hon. Member for Papineau, who was the then Minister of Consumer and Corporate Affairs, would not have anything to do with it.
I say to the Hon. Member: We will not obstruct the Bill. But there are certain philosophies and principles which we want included in it. We must get those in committee or else we will have a Donnybrook here on the floor of the House of Commons. We will also see how the Hon. Member will vote.


Aideen Nicholson: Mr. Speaker, in welcoming this Bill as a useful first step in dealing with concentration, I must say that it is timely. At the present time we are seeing a great rush of mergers such as we have not seen since 1981. I would like to focus in particular on concentration in the financial services industry. There are three sections in the Bill before us which deal with bank mergers. The Bill introduced by the Minister this morning, which is specifically on financial services institutions, also makes reference to competition policies. Thus there is a connection here.
Hon. Members will be aware that a Green Paper on financial institutions was released by the Government last year, following which there were very extensive hearings held by the Finance Committee. Many of the witnesses who appeared before the committee chose to focus on two issues. They were, first, concentration in general and the problems associated with it; and, second, the potential for conflicts of interest associated with ownership of financial institutions by non-financial institutions. The Green Paper proposal on domestic ownership proposed that cross-ownership of financial institutions be permitted through a particular mechanism, that is, an upstream and inactive financial holding company. It also recommended accepting closely-held ownership as opposed to broadly-based ownership. That proposal was a reversal of previous domestic ownership policy which favoured widely-held financial institutions.
The Finance Committee did not accept those recommendations in the Green Paper but had some alternatives to propose. One was that the Minister of Finance be empowered to review and prohibit the merger with, or acquisition of, an existing institution, and that explicit criteria be developed for the application of such a review procedure. There was also a very specific recommendation by the Finance Committee at that time to the effect that the Minister of Finance not approve any merger between Canada Trust and Canada Permanent Trust until an ownership policy for financial institutions had been developed and implemented. The Government ignored the second of the two recommendations which I have described, that being Recommendation No. 58. The merger went ahead and was finalized in January of 1986. This is how Genstar came to own Canada's largest trust company, which has been the basis of some of our questions today, as we now see a further concentration with Imasco proposing to take over Genstar.
Members of the Finance Committee were unanimous in expressing concern with respect to concentration of financial power and also in stating that the committee did not believe that financial activities and non-financial activities should be combined. I would like to quote briefly from the report of the committee which states:
April 7, 1986

Concern for concentration of economic power, and in particular financial linkages, was overwhelming in the evidence presented to the Committee. The Canadian Bankers' Association and consumer groups, such as the Consumers' Association of Canada, the Canadian Federation of Independent Business, and the Canadian Organization of Small Business, expressed serious reservations in this regard and recommended an imposition of ownership limits and a roll-back of non-financial ownership of financial institutions.
I think that the Finance Committee looked rather carefully at the question of roll-backs and was somewhat divided on the issue since this is a rather major and disturbing request to make. The committee was concerned with the increasing trend toward non-financial ownership of financial institutions, as I have said, and considered that concentrated ownership, particularly that of large financial institutions, should be limited.
I would like to provide some samples of the type of evidence which was given before the committee at that time. The Canadian Bankers' Association stated:
We believe that this co-mingling of non-financial and financial businesses is undesirable. It would try the confidence and trust that Canadians place in their financial system.
More recently the President of the Canadian Banker's Association has been quoted as saying that the increase in takeovers and concentration is becoming "intolerable". The Consumers' Association of Canada was concerned that if the present trends go on we would end up with a few financial conglomerates having bought up most of the competition. The Canadian Federation of Independent Business was concerned about the implications of what it called the "unremitting trend toward greater concentrations of economic power". It was stated on the federation's behalf that it was wary of any measures which would tend to increase potential concentrations of power.
I do not think it needs much imagination to see the type of thing with which small business is concerned. If there is a nonfinancial institution, for example a development company which owns financial institutions, then there is the risk that its lending practices will favour its corporate brethren and discriminate against the small entrepreneur, the small business owner.
Cadillac-Fairview presented a very interesting brief in which Mr. Justice Wyzanski of the U.S. Federal Court was quoted. He stated:
Concentrations of power, no matter how beneficially they appear to have acted, nor what advantages they seem to possess, are inherently dangerous. Their good behaviour in the past may not be continued; and if their strength were hereafter grasped by presumptuous hands, there would be no automatic check and balance from equal forces in the industrial market-
That is a very strong statement-perhaps a little too strong for some of us here. There probably do exist cases in which concentration will assist in efficiency and economies of scale. It has traditionally been said that in Canada, because our population is relatively small and our country immense, there is a case for greater concentration of power than that which is found in the United States. However, when looking for evidence that concentration does in fact enhance R and D and marketing ability, it is very hard to find. Concentration
Competition Tribunal Act
certainly does not create new jobs or innovation. In fact, what we have seen most often recently is that as assets get shifted around among fewer players, jobs disappear.
Corporate concentration with respect to financial institutions has potentially greater ramifications than it does on the non-financial side of the economy because of the particular characteristics of money and related near-money assets. As well, once this concentration of power has been permitted, it would be very difficult politically to reverse the process and reestablish a widely held ownership structure in the financial sector. This is certainly a situation for which prevention is better than a cure.
That leads us to the example we had put before us today, one which had been dealt with in Question Period to some extent and will undoubtedly continue to be of concern to all of us. That is the situation with Imasco and Genstar. At the end of 1985, there was a specific recommendation made in the Finance Committee report that the Government block the merger of Canada Trust and The Permanent until such time as there was a clear policy. The Government did not accept that recommendation and the merger went ahead. The new entity, Canada Trustco Mortgage Company, was born. Canada Trustco Mortgage Company is Canada's sixth largest financial institution with assets of over $20 billion and is the centrepiece of Genstar's holdings.
In fall of 1985, Genstar, having already owned Canada Permanent Trust, acquired Canada Trust in a $1.2 billion takeover. In March of 1986, Genstar shares rose $7.63 to $55 in a flurry of trading on the Toronto Stock Exchange. On Monday, March 24, Imasco, with extensive holdings in consumer products, announced its bid of $54 per share for 100 per cent of Genstar's 36.9 million shares or $1.9 billion total. The offer is open until April 25.
On March 24, a question was raised in the House by a Conservative Member who asked, since the proposed takeover would result in a financial institution being owned by a nonfinancial institution, if the Government would block the takeover. The Minister of State for Finance (Mrs. McDougall) said that she would review the takeover bid. Today we learned that apparently the review is still going on and the Minister is not prepared to indicate when she might be able or willing to announce her decision.
On Thursday, April 3, Genstar and Imasco reached an agreement on the takeover, the price now being $58 per share. Imasco is to look for a way to spin off a restructured Genstar without Canada Trust. If no agreement is reached by April 15, Imasco will simply buy out all stock at $58 per share.
Let us look at these companies and what is involved with them. Genstar is San Francisco based with a nominal head office in Canada. About 60 per cent of the assets and 60 per cent of the shareholders are in Canada. It has other holdings in construction and property and 70 per cent of its business is in

April 7, 1986
Competition Tribunal Act
the financial sector. It is the fourth largest holder of personal savings accounts in Canada after the Royal Bank, the Bank of Commerce and the Bank of Montreal, and it is Canada's largest mortgage lender.
To be sure, this company is reputable. There is no reason to anticipate any conflict of interest except that in this situation there surely is the potential for conflict of interest. Managements do not stay forever. People move, people change, circumstances change. One would have to raise a question about the wisdom of having a company which is itself involved in development also having a large mortgage company. It may very well be and probably is the case that all people concerned will always be absolutely objective in their lending practices, but the potential for problems exists.
Imasco's extensive holdings include Imperial Tobacco, Shoppers Drug Mart and Hardee Food Systems in the United States, it is about 40 per cent British owned but was deemed Canadian under Investment Canada rules and therefore the Genstar acquisition could not be reviewed by Investment Canada. It also qualifies as a Canadian company under the present trust company law. It has total assets of $2.8 billion so it is really very small compared to Genstar. It is like having a snake proposing to swallow an elephant. The takeover is being funded by a line of credit with Citibank.
This may prove to be a situation from which Canadian consumers and Canadians generally will benefit, but that has to be proven. Surely the risks as spelled out by the Finance Committee and by so many witnesses are such that a careful examination is required. Imasco was prepared for that examination. It notified the Minister of State and her officials of the proposed takeover bid before the bid was made public. It offered to provide documents and to participate in a review on the same terms as if the legislation which was tabled this morning by the Minister of State for Finance and has been available as draft legislation since November 29 were already in law.
Presumably the Minister's officials acted on this offer, although the Minister was less than forthcoming during Question Period today. Since Imasco is proceeding, presumably it has been encouraged to proceed by Department of Finance officials. If so, the House is due a very full explanation of the reasons for that approval. There may very well be sound reasons, but there are also sound reasons why it is not a good precedent and why it flies in the face of the advice received by the Finance Committee from many, many sources and the advice which the Finance Committee gave to the Minister.


Stanley J. Hovdebo: Mr. Speaker, I was interested in the comments of the Hon. Member about the merger involving Imasco. Does she see any particular value in this merger? Will any new jobs be created? Will consumers receive the benefit of lower priced products? Will there be better control of pollution? Will there be less waste in the country? What are the
good things in this merger for which we might look, if we were to be generous?


Aideen Nicholson: Mr. Speaker, indeed that is a central question. As I said earlier, the experience has not been such as to inspire confidence that these mergers bring good things. We have not seen evidence that they provide jobs, greater innovation or greater R and D. However, we have seen great evidence of potential for problems.
I do not know how it would benefit someone who has a savings account in a trust company to have the trust company amalgamate with non-financial firms involved in fast foods, tobacco and construction. I would think that there would be certain hazards or risks in the lending practices being skewed to the needs of the corporate cousins rather than to the needs of the depositors or shareholders. Until such time as the Minister is prepared to show us some of the advantages which Imasco has demonstrated to her, which are encouraging her to approve this merger, I am unable to say that I can see any advantages in it.


Stanley J. Hovdebo: Mr. Speaker, I should like to deal with the other side of the question. Because in many cases these are international corporations, I suppose one could say that there is the possibility of ripping off consumers by charging a higher price than is required for consumer products. Because of these interlocking directorates or these large mergers which control several kinds of companies, are there any teeth in the Act which would allow the Government or the regulatory body to take action?


Aideen Nicholson: Mr. Speaker, I think the Act as it is before us is an improvement of the present situation but it needs to be strengthened somewhat. I should like to see some further changes at committee stage. I am sure the Minister will be open to amendments and suggestions for improvement at committee stage. I think it is a useful First step.


Alan Redway: Mr. Speaker, I am pleased to have an opportunity to rise in the House this afternoon in support of Bill C-91, an Act to establish the Competition Tribunal and to amend the Combines Investigation Act and the Bank Act and other Acts in consequence thereof.
This piece of legislation is really the culmination of a great many efforts over a long period of time. It is a culmination of efforts aimed at reforming the law as it relates to monopolies and mergers which restrict competition. That is not to say that the principles of this law are aimed at allowing competition just for the sake of competition. This law is certainly not aimed at glorifying the concept of competition. However, over many hundreds of years now economists have been telling us that competition is one of the keys to having an economy which works and benefits consumers, to having an economy where consumers can buy products at the lowest price, have a wide choice of products and at the same time have a better quality of products. That is the aim of this Bill. It is trying to allow for competition in order to benefit the consumer. Of course, the
April 7, 1986

way in which competition benefits the consumer is by creating a competitive situation where there is greater efficiency in the market-place. Of course, with greater efficiency there is greater productivity and greater industrial growth. All those things create the environment for competition which will benefit the consumer through lower prices, better quality goods and more and wider choices.
We have had competition legislation in the country for a long time. It is nothing new in Canada or in other countries around the world. In fact, I am told that we have had competition legislation since about 1889, a long time back. The modern legislation, the present Bill which is in force at the moment, with some modifications is called the Combines Investigation Act. It was originally passed back in 1910. The piece of legislation which we have for controlling mergers and monopolies is an old one. We have found that as time has gone on it has not been doing the job it was put in place to do. As we look at what has been happening in the market-place, we see that more and more mergers and monopoly situations have taken place and have come into effect in recent years than ever before. At the time the original Combines Investigation Act was passed, there was very little in the way of corporate mergers. As time has gone on, there have been more and more of them. Between 1945 and 1949, something like 50 corporate mergers per year were taking place. By 1960, that had increased very substantially from 50 to some 250. Between 1977 to 1984, just about 500 corporate mergers were taking place each year. Since 1975, the 100 largest companies in the country have been involved in more than 150 corporate mergers or takeovers. More than 25 per cent of the total corporate growth of those companies has come through a form of corporate mergers, corporate takeovers and amalgamations rather than through the traditional form of increasing sales through the market-place.
The legislation we have had in place to monitor and to control merger and monopoly situations during this period of time has been a criminal type of legislation. It has been a criminal type of law. It has made illegal certain types of mergers and certain types of monopolies. A merger where a person or a company acquires any interest in another business which lessens or is likely to lessen competition to the detriment of the public is illegal. A monopoly where one or more persons or companies have substantial control of some area of the market and which operate or are likely to operate to the detriment of the public is illegal too.
The problem, of course, has been in trying to enforce those provisions. Because those provisions are criminal types of provisions, the criminal law is generally applicable to them. The first criminal law provision applicable is the whole matter of the standard of proof.
You know, Mr. Speaker, that there is a difference in the standard of proof between civil offences and criminal offences. In civil offences the standard of proof is considered to be the
Competition Tribunal Act
balance of probability on the evidence, but in a criminal offence, the standard of proof is the question of beyond a reasonable doubt. That is where one of the problems has come in in trying to enforce the current legislation effectively. It has been criminal in nature and, therefore, in order to establish that an offence has occurred, an offence of an illegal merger or an illegal monopoly, the Government under the Combines Investigation Act has had to try to establish that this has happened beyond a reasonable doubt and that there is no reasonable defence that can be offered by the accused company or accused person.
In addition, because it is criminal in nature, the whole procedure has been a slow one. It has been a costly one and it has been procedurally cumbersome. Because of all these things, the present law has proven to be completely ineffective in dealing with merger and monopoly situations.
The culmination, I suppose, of the situation came in 1976 with the K.C. Irving case. After that time, the Restrictive Trade Pactices Commission under the authority of the Combines Investigation Act threw up its hands and since that time has been virtually completely ineffective in dealing with merger and monopoly situations in Canada.
It was obvious at that time, and a number of my hon. colleagues in this House were here and have pointed it out this afternoon in some of their comments and remarks, that we needed to make some changes in this legislation if it was to be effective. A number of attempts were made to introduce new legislation to try to make changes to make the legislation effective in order to control mergers and monopolies.
In 1977, for instance, a Bill C-42 was introduced by the previous Government. That did not solve the problem. In fact, Bill C-42 never got through Parliament. In the same year, the Government of the day introduced another Bill, Bill C-13, which also did not get anywhere. In 1984, there was a third attempt at introducing legislation which would amend the Combines Investigation Act and put some teeth into the procedure to control mergers and monopolies. That was Bill C-29 at the time and that, too, never passed through Parliament nor did it go into effect.
Finally, as a culmination of the frustration that has gone on, at least since 1977 and before, and the attempts that have been made successively to try to put something in place, to try to introduce some legislation which would be effective and which would generally meet with the approval of the Canadian people, we have Bill C-91 before us today.
One of the previous opposition speakers said that it was important the Government show a will, a direction and an ability to carry through with this legislation and its intent. I agree with that. It has taken a long time for us to get that will and to get that intention to carry through, in fact since 1977. Now we are at a stage where, apart from criticisms of the Opposition, which is a natural kind of criticism, and apart from the criticism of the odd other commentator, generally there is an acceptance across the country that we have a piece

April 7, 1986
Competition Tribunal Act
of legislation before this House which will be effective, perhaps not perfect, but be effective in restricting and controlling mergers and monopolies.
What does this Bill provide, Mr. Speaker? First, it makes a very substantial change in the previous law. It changes the whole concept of that law from a criminal law to a civil type of procedure for dealing with mergers and monopolies.
The criminal law proved to be ineffective in dealing with it and so we are going to take a stab at trying to deal with it as a civil offence. The Bill itself changes this method dramatically. First, it creates a competition tribunal composed of members appointed from the private sector, business people, people with experience in the whole area of dealing with business problems, mergers and amalgamations, people who will know what they are talking about when they are dealing with this sort of thing. At the same time, it puts in place with that tribunal judges who will officiate and provide an appeal panel once the competition tribunal deals with a particular case. The Bill abolishes the old Restrictive Trade Practices Commission. It requires in the case of mergers that certain things take place.
First, where a company which is involved in taking over another company has assets or sales in excess of $500 million in Canada, and where the company that it proposes to take over has assets and sales in excess of $35 million, a prenotification requirement is necessary on the part of the companies involved in that merger or amalgamation so that the competition tribunal will have the opportunity to review the application to see if it meets the standards set out in the Bill.
Let me outline some of those standards set out in the Bill. It is aimed at preventing, lessening, likely to prevent or likely to lessen competition substantially. In order to determine that, it sets out a number of tests. What is the extent of foreign competition in the market affected by the merger? Are any of the parties about to go out of business, go bankrupt? Are there substitute products available in the market? To what extent is there effective competition going to remain in the marketplace? All of these things are provided in the Bill.
There is also provision with respect to a monopoly, changing the offence from a criminal one to a civil offence. The Bill sets out extensively the tests to apply in all these cases. It also sets out penalties that were not available before, not just criminal penalties of imposing fines and sending people to jail, but penalties which would also provide orders prohibiting the engaging in anti-competition acts and penalties which would require the divestiture of assets or shares. Those are the sorts of things that are contained in this Bill. Those are the sorts of things that are going to put some teeth in the competition law of the country. That is why I call upon the House to support this Bill and to pass it quickly.


Sheila Finestone: Mr. Speaker, I have a question for the Member for York East (Mr. Redway). What does the Member see in the interaction under this proposed legislation
between the Investment Canada Act and this Bill? As an example, Investment Canada is looking at the impact of the Gulf and Western potential for merger. What would happen if it were being looked at under the Competition Act as unfair competition, as a restriction on the distribution of books or films? If that were in the cards, would it be examined under Investment Canada or under this Competition Act?


Alan Redway: Mr. Speaker, I thank the Hon. Member for her question. Of course, I must offer only my own opinion on this. As a lawyer with some past experience relating to FIRA and the Combines Investigation Act provisions, as it now stands, it would be my opinion that any company contemplating a merger would have to comply with both of the provisions. In the past they would have had to have complied with FIRA and the Combines Investigation Act. With Investment Canada in place, it may very well be not as restrictive and, therefore, easier to comply with Investment Canada. However, in my view, they will still have to comply with the competition legislation. They will certainly have to satisfy all of the tests. If they can do so, fine, and if not, it will be caught by this piece of legislation.


John R. Rodriguez: Mr. Speaker, I listened carefully to the Member for York East (Mr. Redway). He made the argument that he thinks this Bill will be effective. One of the reasons he gave was that it is now removed from the ambit of criminal consideration. Why does he think it is necessary to provide all these "outs" with words like "substantially lessen competition"? Why does the defence for conspiracy have to be built in? Why do you build in the defences against the breaking of the law?
Why is there no provision in the merger section to outlaw self dealing? That is one of the more potentially serious drawbacks to the mergers.


Alan Redway: Mr. Speaker, I am delighted to have the opportunity to answer the Hon. Member's question. After the Hon. Member made his speech he was asked whether or not all mergers may be bad for consumers. My comments will relate to that question as well as to the questions he has put to me.
There was a recent case in which it can be argued that a merger took place which was good for the consumer. That was the merger involving Genstar and Canada Trust. That merger restricted the number of trust companies. In that sense it was restricting competition. On the other hand, by improving its financial position, it is now the sixth largest financial institution in the country and is very competitive with the chartered banks. Therefore, it is, in effect, increasing competition in the banking area.
At the same time, the amalgamation of the real estate sales operation of Canada Trust and The Permanent has created a larger and more effective competitor for the Royal Lepage company which has been in the market for a number of years. There is an argument that in that case, even though competition was restricted, it will be beneficial for the consumer. I
April 7, 1986

suggest that the answer to all of the questions put to me by the Hon. Member lie in that example. In this case we need to build in some defences because it may be that a merger may be beneficial to the public at large through lower prices, more choices, and better quality products. That, in essence, is the answer to the Hon. Member's question.


John R. Rodriguez: Mr. Speaker, just as the Member for York East (Mr. Redway) can quote an example of where he thought this was beneficial, we can pick out examples where mergers have been absolutely disastrous for individuals. For example, in the Rosenberg case of the buy-out of the trust companies, the people lost all their savings. Would he not agree that there should be prohibition and the right to appeal in an open court in order to prove that it is in fact beneficial to consumers? Second, why is there no provision for class action suits which, it seems to me, is one of the most effective ways of keeping the corporate sector on its toes?


Alan Redway: Mr. Speaker, if the Hon. Member had listened carefully to my remarks and had read carefully the Bill before us, he would have noted that in a merger situation there is a requirement for prenotification to the competition tribunal where there are assets or sales on the part of one company of $500 million and assets or sales on the part of the company being taken over of only $35 million.
The Hon. Member has spoken about the Rosenberg situation and other cases of trust companies. If the Hon. Member looks caefully at the assets of those companies, he will find that they were far in excess of the bottom line limit for the requirement of the prenotification notice to the tribunal. Therefore, there is going to be, not only a review, but an opportunity on the appeal for the public hearing to which the Hon. Member has been referring. If he examines this piece of legislation carefully and does not close his mind to it, as he so often does on other matters, I am sure he will be quite happy with it as this is going to be an effective piece of legislation.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, on March 4 of this year I directed a question to the Minister of National Defence (Mr. Nielsen) concerning the policy of the Canadian Armed Forces with regard to the hiring and retention of homosexuals in the Canadian Armed Forces. At that time I asked that the Minister confirm that these policies, as set out in Canadian Armed Forces administrative order 19-20, be immediately rescinded to ensure full equality for gays and lesbians as recommended unanimously by the parliamentary
Adjournment Debate
committee on equality rights. At that point, the Minister of National Defence replied that the response of the Government was set out on page 25 of the report which had been tabled that day.
He quoted from that report the following extract. "The Government believes that one's sexual orientation is irrelevant to whether one can perform a job or use a service or facility." While the Government, through the Minister of Justice (Mr. Crosbie), on March 4 in its response to the report of the parliamentary committee on equality rights entitled Toward Equality did indeed say that it believes that one's sexual orientation is irrelevant to whether one can perform a job or use a service or a facility, it would appear that there is a great distance between those words and reality, and a real change in policy. The policy continues to deny employment to gays and lesbians within the Armed Forces. The requirement that any person who happens to be gay or lesbian be fired from the Armed Forces is still on the books today.
I want to note the arguments that were made by the parliamentary committee on equality rights on this subject. I had the honour of serving as a member of that committee. We travelled from coast to coast and we heard from many individuals and organizations with respect to this very sensitive question. We noted the Armed Forces has a policy of not recruiting homosexuals and of dismissing homosexuals from the Forces once detected. We noted as well that the individual in question was often subjected to interrogation by the special investigation unit of the Canadian Armed Forces. Within the last four years, 37 members were discharged in 1981; 45 in 1982; 44 in 1983, and 38 in 1984, solely on the basis of their sexual orientation.
The committee heard stories of a number of former members of the Canadian Armed Forces who served in the Forces for years without any problem whatsoever but were released for only one reason, their sexual orientation. These members describe the arbitrary, grossly insensitive treatment to which they were subjected as part of the investigation of their personal lives. They were detained in isolated conditions for many hours and subjected to intensive interrogation about their activities and those of others. The committee unanimously recommended-and I emphasize the unanimity of the committee here with five Conservative Members, one Liberal Member, who I see in the House today, the Member for Mount Royal (Mrs. Finestone), and myself-that this policy be repealed. We stated that in this day and age there is no place in Canada for such a policy. The arguments put forward by the Canadian Armed Forces do not justify the present policies. We recommended an amendment to the Human Rights Act to prohibit all discrimination on the basis of sexual orientation.
When the Minister of National Defence appeared before the equality rights committee, he made it very clear that he fundamentally supported and approved of the policies of the

April 7, 1986
Adjournment Debate
Canadian Armed Forces that denied full equality to gays and lesbians. He stated in a letter which was addressed to a number of individuals who wrote to the Government on this issue: "No change is currently being contemplated to the Canadian Forces' position in respect of homosexuality". Fortunately the Minister of National Defence was outvoted by his cabinet colleagues. The Cabinet has made it very clear that it will not tolerate a policy which discriminates in this systematic manner against gays and lesbians.
I would note that thousands of homosexuals have had distinguished careers in the Canadian Armed Forces. One example is Major Sutcliffe of Toronto who served for 18 years in a variety of fronts, and rose from the rank of private to major, has seven campaign medals as well as the M.B.E. and the C.D. He was fired solely on the basis of his sexual orientation. It is not a question of opening up the Armed Forces to gays and lesbians. It is a question of recognizing the reality that there are already homosexuals within the Armed Forces. Surely we should recognize that these individuals who serve their country with distinction should not have to live in conditions of pain, oppression and of hiding their true reality.
I would note that there are other countries which have long since abolished these policies. The Netherlands, for example, has stated very clearly that one's private sexual orientation is in no way a bar to membership in the Armed Forces. I note that according to NATO, they have one of the finest navies in NATO. Clearly that has not been a barrier to them.
I hope the Parliamentary Secretary to the Minister of National Defence (Mr. Wenman), who is responding on behalf of the Government today, will recognize that the time has come for change and that the words of the Government, which call for an end to all discrimination on the basis of sexual orientation, must become a reality. I ask the Parliamentary Secretary when the Government will repeal Canadian Forces Administrative Order 1920? How many more task forces and committees must the Generals set up before this employer, which is clearly the most homophonic employer in the country, finally recognizes that equality must at last come to the Canadian Armed Forces as well?


Mr. Robert Wenman (Parliamentary Secretary to Minister of National Defence):: Mr. Speaker, the Hon. Member has often expressed his view on this subject. After the Minister of Justice (Mr. Crosbie) tabled the Government's comprehensive response to the recommendation of the Parliamentary Committee on Equality Rights several weeks ago, the Hon. Member asked the Minister of National Defence (Mr. Nielsen) the question which he posed today. At that time the Minister appropriately referred him to the page where the Government's position was stated in clear and understandable language by the Minister of Justice.
I want to inform the Hon. Member that on all issues affecting the Department of National Defence, we are actively pursuing which procedures and policies are necessary in order to conform with the principles of the Charter as stated by the
Minister of Justice in the House on March 4. To that end, the staff of the Chief of Defence has set up a departmental task force which will look at all issues and recommend an appropriate course of action.
I believe it is very clear that the major responsibility of the Armed Forces of Canada is to ensure the security of Canada and our alliances, to ensure the operational effectiveness, morale and discipline of the Armed Forces and that we uphold standards of behaviour and conduct compatible with the objectives as stated by the Minister of Justice.
I am sure that these accommodations will be found and these objectives can be met within the response of the Minister of Justice when the task force reports. In the spirit of tolerance, justice and the interest of individual Canadians and the Canadian Armed Forces, I am confident that these values of tolerance, discipline and effectiveness of the Armed Forces will be upheld within those principles as enunciated.


CORPORATE AFFAIRS-LEGISLATION AFFECTING TAKEOVERS
Bill Attewell: Mr. Speaker, on March 25 I asked the Minister of Consumer and Corporate Affairs (Mr. Cote) a question about the mergers and acquisitions that are sweeping this country. I referred to, as reported at page 11860 of Hansard:
-the insidious mobilization of corporate concentration which may destroy competitionand went on to ask:
When will Canada have effective competition and anti-combines laws to curb the voracious appetites of giants such as Gulf Canada, lmasco, and Petro-Canada-
Indeed, I believe we have a serious topic on our hands. It is evident just from what has happened in the past week. My question was asked just a day after the bid by lmasco for Genstar which, in turn, controls the giant Canada Trust.
I believe that particular acquisition is very dangerous for the main reason that this involves a potentially very big and successful non-financial conglomerate taking over one of the most successful and largest trust companies in Canada, Canada Trust.
With good management it might work out, but I do not think we can leave it to chance. The temptation could often be too great. There are temptations in terms of lowering competition. There are temptations as far as insider trading. For those reasons, that particular deal causes me concern when one considers what has happened.
In many cases, the depositors of various banks will be funding this acquisition to the tune of $2 billion. We have the great risk of competition being lessened. In an acquisition just a few months ago there was a tax concession, legal at the time, given to a large conglomerate of $590 million. Ironically, the average Canadian depositor is funding the very types of deals of these monolithic structures which are going to come back and haunt them and, indeed, hurt them through less competition in the market-place.
April 7, 1986

We last had a royal commission into the question of corporate concentration in 1975. That was brought about at the time of the threat of Power Corporation trying to take over Argus which at that time held such companies as CFRB, Dominion Stores and so on. The conclusion of the royal commission, which reported back in 1978, was that there was no real threat of lessened competition in the market-place, so nothing was done.
I feel very confident that if we were to thoroughly examine the record over just the last five years, we would see that the wave of mergers and acquisitions has accelerated. A professor at Dalhousie University reported recently that the ratio of our last 20 mergers is something like two and a half times as great in size as those in the United States. I believe it is time for action. The Government has taken certain steps. Bill C-91, which was debated extensively today, is a step in the right direction. However, I doubt that it was drafted with the real threat of the huge conglomerates having such extensive power in mind. I do not believe it has roll-back provisions.
Today another important Bill was brought forward by the Minister of State for Finance (Mrs. McDougall). Bill C-103 does indeed have the type of power for which I am looking. It could stop the Imasco deal right in its tracks. 1 believe under Clause 48.19 that Imasco would need to have the Minister's approval in writing before the deal could be consummated. I want to go on record as being strongly against that particular merger. One of the finest and largest trust companies, with assets well over $20 billion, could be gobbled up by this group and who knows what use could be made of its huge deposit level.
Another aspect of these takeovers I would like to comment on is the loss of jobs. All too often through these mergers and acquisitions hundreds and thousands of jobs just evaporate. The process is called "rationalization". It happened recently with the merger of Canada Permanent and Canada Trust. Hundreds of employees were no longer needed both in head offices and in the branch structures. If the two companies had outlets on the same corner, one of them would go in the name of efficiency, with the resulting loss of jobs.
There is an argument for size of scale. For us to be competitive at the world level we need large companies, but we do not need them at the expense of thousands of jobs or at the expense of competition being lessened. We certainly do not need laws which will permit consumer funding, not only by way of deposits but through foregone taxes, because a large corporation is given a tax concession of $500 million.
In summary, I want to recommend in the strongest possible terms that the subject be given a fresh look because of these activities over the last five years. I do not really know whether a royal commission would be the best vehicle, but that is the one I favour. If it does go to a finance or special committee, it must be given the financial wherewithal and the people to do
Adjournment Debate
an in depth study. A superficial look will not do on an issue which is so serious. I hope the Government will move in this direction. The train is moving. We cannot pause and look at this forever. We need to get on with this important topic in an in-depth way in order to protect the consumers of Canada.


William Henry (Bill) Domm: Mr. Speaker, the Hon. Member for Don Valley East (Mr. Attewell) has always been quick to speak out in support of consumer issues. No doubt the two events which took place in the House today will bring some ray of light to a very involved, comprehensive and serious problem. I refer to the introduction of Bill C-91 by the Minister of Consumer and Corporate Affairs (Mr. Cote) and the introduction of Bill C-103 by the Minister of State for Finance (Mrs. McDougall), both of which have been mentioned by the Hon. Member for Don Valley East.
Over the years we have tried desperately not once, twice or three times, but many times-in fact, the former administration worked on it for 16 years-to try to bring about major changes to the competition legislation. We did this in order that we could deal with companies which had acquired, or were acquiring, a dominant position in the market-place through mergers, thus creating unfair competition to small businesses which were having very difficult times.
I think that the pre-notification provision initiated in Bill C-91 answers many of the questions raised by the Hon. Member. No longer will large corporations whose assets total over $500 million collectively be able to merge without first being reviewed by the tribunal which will be set up under the new legislation. If either one of the two being merged has sales or assets of more than $35 million, then they will fall into this trap whereby they will have to pre-notify. Within a period of approximately 21 days the Government, through the tribunal, will have a chance to respond to the pros and cons of such a merger. I think that a volume of $35 million alone will handle the problems brought to the attention of the House by the Hon. Member. Under the merger pre-notification provision we will be able to first review whether or not it will have a negative effect or impact on business.
The one exception under Bill C-91 is that we will permit companies to merge which, perhaps, will create a dominant position, but only for export purposes. That is to say that such a move would have to make us competitive on a world basis. They would then be able to merge.
We are seriously looking at the situation. I am optimistic, as is the Minister of Consumer and Corporate Affairs, that all Parties in the House will come to the realization that after 75 years our competition legislation is obsolete and that it is time to move on for better protection for consumers and small businesses.

April 7, 1986
Adjournment Debate


THE BUDGET-EFFECT ON MIDDLE-INCOME TAXPAYERS. (B) ECONOMIC FORECASTS
Aideen Nicholson: Mr. Speaker, on March 13 I asked the Minister of Finance (Mr. Wilson) a question with respect to a budget document entitled "The Canadian Budget in Perspective". This document was not included in the package of budget documents released on budget night, February 26. Its existence came to light a couple of weeks later, at which time it was learned that the document had been specifically prepared for distribution from Canadian posts abroad. It provides a certain perspective on the Budget and conditions in Canada but not at all the same perspective as that given to Canadians in other budget documents.
Canadians were treated to a grim-faced Minister of Finance (Mr. Wilson) who opened the Budget Speech with the following statement:
My message today is a serious one, and in many ways not pleasant.
However, statements of this tone and tenor were nowhere to be found in the document prepared for distribution overseas. By contrast, that document is determinedly upbeat and selfcongratulatory. It is a slick and obvious selling job and an unabashed effort to substitute style for substance.
The document prepared for distribution overseas brags about the following:
In many key respects the Canadian economy is now performing better than the United States.
We were not informed of this in the Minister's Budget Speech, nor were Canadians told, as were the foreign readers of this document, the following:
On the basis of economic assumptions consistent with the U.S. Administration forecast, the ... growth in Canada would be such as to balance the Budget by the end of the decade.
There is not one word in the Budget Speech made in this House about a balanced Budget. In fact, according to the Budget Speech, Canadians can look forward to a $22-billion deficit by the end of the decade.
In the Budget Speech, Canadians were also presented with the following:
-the truth about our financial problem. The billions we can save through better management are not enough to resolve Canada's financial problems.
That statement appeared on page 8 of the Budget Speech yet this great truth does not appear anywhere in the perspective document prepared for the international community whose confidence the Government is so transparently courting. In fact, I am not sure that the word "problem" appears in this document at all in connection with anything the Government has done or will do.
Whereas the Budget Speech told Canadians that they still have a tough row to hoe, the perspective document would have the reader believe that we have already turned the corner. On page 2, it says the following:
The government's expenditures, deficit, and debt have all been restrained significantly.
On page 6, it says:
The economic recovery can be expected to continue ... The prospects for the expansion continuing in Canada remain good .. .
There are a couple of interesting discrepancies. The issue of federal-provincial transfer payments is an extremely sensitive one for Canadians. From the Government's previous economic statements, we know that transfer payments are to be cut by $2 billion. There was not one word about that in the Budget Speech; however, in the perspective document, we see that reductions in transfer payments to provincial Governments for health care and post-secondary education are listed among the Government's so-called efficiency measures on page 6.
Then we might turn to the question of the closing of Canadian posts abroad. We might expect that to offend some potential international investors so, not surprisingly, it is not mentioned in the document that purports to sell the Budget to that constituency. However, in the Budget Speech prepared for Canadians, we see the closure of diplomatic posts in foreign countries listed among the Government's cost-cutting measures.
The Budget was accompanied by an unprecedented amount of salesmanship. There were special functions in U.S. posts on Budget night, officials were dispatched to sell the Budget and this document was produced. Is anybody fooled? Are international investors impressed enough with the show to overlook the fact that the entire exercise is based on assumptions that are tenuous at best and inaccurate at worst?


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Unfortunately, Mr. Speaker, the Hon. Member for Trinity (Miss Nicholson) is commenting on two different documents which she has not read in their entirety. The same charts can be found on page 9 of the document entitled "The Canadian Budget in Perspective" and on page 4 of the document entitled "Towards A Sustained Expansion: Canada's Economic Prospects, 1986-1991". The same charts can be found in both documents.


Aideen Nicholson: Ah, but interpreted differently.


Pierre H. Vincent: Charts are charts, Mr. Speaker, they do not change from one document to the other.
Mr. Speaker, I should think it is quite normal to send a summary of the Budget to other countries. It does not have to be as elaborate as the document tabled here in the House. Surely the Hon. Member for Trinity can appreciate that.
What may have thrown off the Hon. Member for Trinity, and perhaps that is where the danger lies, is the fact that we have had an economic statement in November 1984, a Budget in May 1985, and a second Budget in February this year, and every time Members opposite have said: "We are going to lose
April 7, 1986

jobs. The value of the dollar will decline. Interest rates will climb." And every time, Mr. Speaker, we found out that in those 18 months the actual number of new jobs created has been higher than in all European countries as a whole during the same period.


Sheila Finestone: And interest rates as well?


Pierre H. Vincent: And interest rates went down 2 per cent since September 1984, while the value of the Canadian dollar has been steadily rising since the February 1986 Budget. The dollar has gone up and down every time a Budget was introduced in the past 25 years. It has nothing to do with the Conservative Government. It was the same thing under the previous Liberal administration. The people must be made aware of that. Such fluctuations are normal the day following a Budget, and eventually the value of the dollar becomes stable, as is the case now. Interest rates are declining and job creation is at an unprecedented level.
Again this weekend it was announced that the unemployment rate had gone down in the riding of Trois-Rivieres, as it did at the national level. Mr. Speaker, that is good news.
Adjournment Debate
Of course, the Opposition is not happy and will check whether the chart is on page 5 or page 6 and whether there are two different documents, one for Canadians and another one for the other countries. I can understand it. That is the role of the Opposition. However, Mr. Speaker, people are also beginning to say that, instead of always criticizing, instead of checking whether the chart is on the right page or not, the role of the Opposition should also be to propose solutions and to make valid suggestions, instead of speaking about whether a chart should be on one page or another. Mr. Speaker, that is certainly the role of the Opposition.


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


[Stage Direction]
The House adjourned at 6.29 p.m.
[Stage Direction]

Tuesday, April 8, 1986