1986-06-09

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 response of the Government to the following 14 petitions: 331-469, 331-479, 331-565 to 331-574 inclusive, 331-583 and 331-586.


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Philip Derek Lewis: Mr. Speaker, the following question will be answered today: No. 558.


Mr. Parry: 1.	Were criteria established for federal assistance and tax relief for workers affected by plant closures in single industry communities and, if so (a) on what date (b) what are they (c) how were they implemented?
2.	Were workers in Ear Falls, Ontario, denied such a tax relief and, if so, will the government table (a) the documentation leading up to the decision (b) departmental opinions in favour and against this decision and, if not, for what reason?


Hon. Barbara McDougall (Minister of State (Finance)):: The criteria for tax relief on severance payments were established prior to the November, 1984 Economic Statement. They are: (/') the permanent closure of the primary employer in a single industry remote location; (if) significant job loss in the area; (iii) a high regional unemployment rate; (fv) significant distance from any buoyant labour market; and (v) a broadly based settlement package.
As the criteria make clear, the measure providing tax assistance on severance payments is intended only for those exceptional situations where the cessation of operations of the principal employer effectively results in a town closure for lack
of a viable economic base. This is clearly not the case with Ear Falls. The Minister of Finance has met with the Hon. Member for Kenora-Rainy River to discuss this issue and has given him a copy of the criteria.
All applications for tax relief on severance payments are evaluated using these criteria. The Griffith situation was also assessed. Tax relief was denied because it does not fall within the intent of the measure.
The Minister of Finance has discussed the Ear Falls case with the Hon. Member and has indicated that he is prepared to carefully consider any additional points the Hon. Member wishes to raise. This is clearly indicative of the Government's interest and responsiveness in this matter.


Mr. Speaker:: The question as enumerated by the Parliamentary Secretary has been answered.


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.


Philip Derek Lewis: Mr. Speaker, if Question No. 522 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. 522 be deemed to have been made an Order for Return?


Some Hon. Members:: Agreed.


Mrs. Browes: 1.	Since 1980, what amount did the Government spend, either directly or through grants to companies, for modifications to make private and public buildings accessible for disabled persons?
2.	Since the inception of the job strategy program, what amount was spent or allocated through grants to make private and public buildings accessible to disabled persons?
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June 9, 1986
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Return tabled.



GOVERNMENT ORDERS


Hon. Lloyd Axworthy (Winnipeg-Fort Garry) moved:: That this House condemns the lack of care and concern for workers in the cedar shakes and shingles industry and in the softwood lumber industry shown by the Prime Minister in his letter to President Reagan, in which he clearly put his personal interests ahead of those of working Canadians and calls upon the Government to take immediate action (1) to assist workers in the lumber industry and in the shakes and shingles industry by invoking the Employment Support Act; (2) by assisting in every way the softwood lumber industry in making the Canadian case before the United States International Trade Comission; (3) to ensure that proper time is given to make this case by, if necessary, obtaining extensions to the hearing time; (4) and by initiating proper and effective action under the rules of GATT to ensure that this matter is satisfactorily considered by the international trading system.
He said: Mr. Speaker, I would like to begin by welcoming all my colleagues to another opening Monday morning session. I think it is appropriate that we start the week with a debate that concerns some very central questions that are at the hearts and minds of many Canadians.
One of the important advantages of being a Member of Parliament is the opportunity to leave Ottawa on Thursday or Friday to go back to one's constituency. That is the moment of truth, as they say, because that is when you find out what Canadians in your own region and across the country are thinking. I think it is incumbent upon us to come back here, as we do at the beginning of the week, and try to reflect upon the feelings and concerns of the people on current issues.
I have a report to make this morning. Having spent a couple of days back in my riding meeting with an interesting and wide variety of people, all the way from the learned academic, that my friend from Essex-Windsor and I had the opportunity to address, to a series of weddings, bar mitzvahs and various other forms of social engagements, there is one thing that comes through very clearly on the minds of Canadians about the present Government's position on trade, and that is total, complete confusion. They do not know what this Government is trying to do, what it is trying to say, its goals, where we are going or why we are going there. They are told something totally different every 24 hours and the Prime Minister (Mr. Mulroney) is the embodiment of that confusion. He is the source of that wide ranging muddying of the waters. The Prime Minister's incredibly optimistic objectives about creating jobs and entering a new era of co-operation can only be characterized now by total and complete disillusionment with those goals. One need only to ask the workers in British Columbia who are being laid off in the cedar shake and shingle industry this morning, or members of the lumber industry
across the country who are facing a most incredibly devastating blow, if they thought it was such a wonderful idea.
[DOT] (mo)
Consider the consternation in the minds of Canadians when they read this morning of the price they had to pay in order for the Prime Minister to have his ego massaged, as he so eloquently stated in his letter to the President. The price we had to pay in order to get those free trade talks launched was a commitment by the President of the United States to put the fix in on the softwood lumber industry. In an interview this morning a senior adviser to the Senate Finance Committee said that whatever happens before the International Trade Commission, and whatever quasi-judicial process takes place, the President of the United States had to commit to the Senators on that committee that he would do something about Canadian softwood lumber.
This whole process is a farce if the deal has already been made behind closed doors. That clean launch was in fact a dirty launch because it carried with it the threat to thousands of jobs in this country. How can Canadians have any sense of confidence about one of the most important and vital issues facing them when the Government will not tell them what is happening, because it obviously does not know itself?
Let us consider the statement made by the Prime Minister as reported in the weekend press. He was speaking to his partisans in Toronto during his so-called opening campaign speech in defence of his free trade talks. However, what did he defend? He defended the Auto Pact and said: "1 am going to go out and sign a whole series of Auto Pacts." If that is what he wants, we can agree and stop the debate right now. That was a good deal but it had nothing to do with free trade. It was a managed trade agreement arrived at through a carefully negotiated settlement on an important sector concerning the two countries. It gave safeguards and guarantees to both sides about jobs, research and the industry.
The Prime Minister says that he wants to sign a series of Auto Pacts, including a hydro pact for Quebec and, a fishing pact for the Atlantic Provinces. He said: "I want the benefit of the oil pact to be applied to all these other sectors." We said that three years ago. The Government has said that the Liberal proposals in the past made no sense, but we said that we were prepared to negotiate sectoral arrangements.


An Hon. Member:: Why didn't you?


Lloyd Axworthy: We started to negotiate them but you came along and changed the rules. It was your Party that developed the grand design with the "the big picture" as the Prime Minister says, of comprehensive total free trade. Now he wants to sign agreements on a series of sectoral arrangements.
How can Canadians be expected to understand what the Government is attempting when the Prime Minister himself obviously does not understand what he is trying to do? It is
June 9, 1986

difficult for anyone, whether they are Government Members, Members of the Opposition, the media or the general public, to make sense of the Prime Minister's position when he does a summersault on a 24-hour cycle and changes his mind from day to day. We do not have a statesman for a Prime Minister, we have a gymnast who spends his time doing double fail-back summersaults every 24 hours. Furthermore, he is doing this on a vital issue and we are paying the price. That is why we have introduced this resolution. When this motion comes to a vote, we hope that we will have the support of Members on both sides of the House for a plan of action to deal with the trade issue.
On Friday, the Secretary of State for External Affairs (Mr. Clark), in the unctuous tone that only he can use, berated my colleague, the Hon. Member for Saint-Henri-Westmount (Mr. Johnston) and said that "this Government believes in action". Our resolution contains a prescription for dealing with this issue. Members opposite can vote in support of that prescription and therefore decide today what action they want to take. They can disregard the brave sounding words because we have put forward what we believe are a number of constructive proposals that would establish a more coherent approach to the existing trade problems. If Government Members vote against this resolution we will know that they are not really interested in action and that once again Canadians are simply being treated like a large field of mushrooms- being kept in the dark and having a lot of manure thrown on them. This resolution is an opportunity for those Members to show if they are prepared to reveal the whites and blues of their eyes.
During the past three weeks we have been arguing in the House that we want the Employment Support Act to be invoked right now and not at some time in the future, as the Secretary of State for External Affairs was musing about on the weekend. The fact is that workers are being laid off at this moment. Fortunately, a previous Government had the foresight to pass the Employment Support Act which is specifically designed to provide for assistance to those industries that are injured by unfair trade actions or import levies by other countries. What can be a more dramatic illustration of that than the American imposition of the tariff on shakes and shingles and a threatened imposition of a new tariff on the lumber industry?
It takes time to set the machinery of the Employment Support Act in motion. The Government must establish an employment support board. Precedent tells us that the Government has taken almost a year to get its advisory committees together. Therefore, the Government should begin appointing that board now so that there can be someone in place to accept applications from the industry in order that they can stay in business.
We know that this mechanism is effective. In 1971, when the Americans invoked a surcharge on import duties, the Employment Support Act was passed and some $19 million was allocated. That meant that those industries affected by that surcharge could stay in business because that allocation of funds made up the difference between the import surcharge
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and the cost of doing business. The shakes and shingles industry could stay in business today if that Employment Support Act had been invoked three weeks ago, the board established and a budget allocated, as we had asked. That industry could still be shipping its products this morning, but the Government is still delaying such a measure.
That is why this resolution is so important. It will put the full weight of the House behind the Government to invoke that Employment Support Act. We could also show the Americans that we mean business on the softwood lumber issue. By considering invoking the Employment Support Act with respect to the lumber industry as well as the shakes and shingle industry, we would very clearly tell the Americans that we will not be blackmailed out of business, intimidated or pushed aside. We will be saying that we are prepared to support our industry even though they may threaten the use of unfair and unequitable trade reactions.
I do not think there should be any argument in the House about the importance of using the Employment Support Act now and being able to announce tomorrow that the board has been established, a budget has been set and the industry can begin putting together its plans to use that employment support assistance. If the Secretary of State for External Affairs is really dedicated to what he says, then he should brook no delay. I do not think there is any argument in the House about the importance of considering how we can help our industry to fight the process that is taking place in the United States.
Last week in an interview given to Canada A.M., Miss Paula Stern from the International Trade Commission said, and I want Hon. Members to pay attention, that it expects to be voting in the week of June 23, which is less than three weeks away, on a preliminary finding on injury in the softwood lumber industry. That is a timeframe of incredible concentration. It will take an overwhelming representation to put the argument and case before the ITC which starts its hearings tomorrow.
As we suggested in the House last Friday, it would seem to make some real sense to ask for extensions so our industry can properly prepare its case and that proper persuasion and bargaining with the United States administration could take place. The Secretary of State for External Affairs (Mr. Clark) seems to discount that idea. Once again, he is countenancing inaction, the strategy of do-nothing, wait and see, hold back. That is what happened to the shakes and shingles issue. No action was taken, nothing was done and "zap", to use the Prime Minister's famous expression, 4,000 workers were affected.
By this resolution we want the House to go on record as clearly indicating that in that process we want to be treated fairly. We want a fair hearing and the opportunity to present our case in its most effective terms. We do not want to be rushed, pushed or harried into doing something we are not ready to do. So I hope Hon. Members will support that part of the resolution.

June 9, 1986
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I would like to spend a moment talking about what I think is perhaps the most important part of the resolution, and that is the need to invoke as quickly as possible the protections we have under the international trading rules. This Party has taken a very clear position on trade. We have said that the most important way to offset the increased protectionism in the United States and other countries is to rely upon international trading rules. We think the Government has made a vitally flawed strategic mistake in its over-emphasis and obsession with bilateral talks because it has ignored the kind of rules written into the international trading system.
The genius of Canadian trading strategy since the Second World War is that we realize in trying to deal with the very large country beside us that it is an unequal balance, it is asymmetrical, and the best way to protect ourselves is to have other countries of similar size and interests writing laws and rules and applying standards which would control the muscle of the big powers. This Government consciously abandoned that choice. It gives lip service to it, but if one examines statements made by the chief trade negotiator, the Minister for International Trade (Mr. Kelleher), such as, "GATT does not really work very well any more, it takes too long, we cannot trust it", and other things, one can see that the Government has placed the reliance and importance of the international trading system off from the central focus of our strategy. It is now secondary. It is now an after-thought.
The fact is that both the shakes and shingles case and the softwood lumber case prove the incredible value of GATT itself. First, because shakes and shingles were left off the GATT list, the Americans had the right, as we found out, to impose unilaterally the kind of tariff it did. Second, the best protection we have against the U.S. action is to invoke the rules of GATT because we have already fully paid our dues to the Americans and others at the last GATT round for free access of our lumber. We brought down our tariffs on over two-thirds of our manufactured articles. We paid our bills. We have already signed a contract. It is the Americans who are threatening to break that contract and who are charging new subsidies, new damages.
That is not only a threat to the Canadian softwood lumber industry, it is a threat to GATT itself. Once again the United States is showing a disregard for the rules which were established by believing they can shortcircuit those rules. That is why the bilateral thing is a danger. It opens up the invitation to shortcircuit GATT. It opens up the invitation to deal one on one, to do things bilaterally or unilaterally. We have opened up a Pandora's box in this case. We can close that box by once again reasserting our belief in, our commitment to, and our usage of the GATT rules, and we should be doing it now.
The Secretary of State for External Affairs said: "Perhaps in the future, down the road, down the hatch", but that will be too late. We found out in the shakes and shingles issue that if we wait too long the door is closed and there is no way of recourse, no way of coming back. So it would seem to me that one of the most important and vital decisions this House can take is to clearly place our commitment on that GATT process and ask for a convocation of the GATT Council, of the
contracting parties, to bring our complaint forward so we can start the early preliminary discussions of consultation. If the time comes somewhere down the road when we receive a ruling from the Department of Commerce and the ITC that not only is there injury but they are now claiming subsidy, then we had better have GATT ready with a dispute mechanism in place, because if we wait for four or five months it will be too late, it will be all over.
We should be at the GATT Council today asking for its participation. That would once again show that Canada, which has taken the lead for decades in reforming, enhancing and strengthening the GATT system, strengthening the international trading system, and using its rules, is once again onside. There are a lot of countries out there who are now saying that Canada is scurrying for cover by going into the Canada-U.S. negotiation, that we are looking for a way out. There is a message being circulated that if Canada, traditionally one of the great defenders of the international trading system, is now looking for some sanctuary in a regional continental system, then perhaps we had better start looking for cover. As a result, we will have an erosion of the entire system. We have a chance to correct that. We have a chance to turn it through protection of our own interests, which is clearly called for in this circumstance.
We should be using the GATT system, making it work for us, clearly saying that those threats of the United States calling our activities on lumber a subsidy, is a clear contradiction of those rules. We would also be doing something very important in strengthening the over-all system, putting that once again front and centre in our trade strategy. We should put the reinforcement and strengthening of the international system as a number one priority, as the most important part of our trade strategy.
That does not mean we do not continue to negotiate with the Americans. Of course, we do. We should have been negotiating with them months ago on shakes and shingles. We should have been using our influence in those areas. But because of the the grand design, because of charge of the life brigade the Prime Minister has been advocating, the full steam ahead, damn the torpedoes attitude, we are going to be cut to ribbons. We must get away from the life brigade attitude. We must extricate ourselves from that fool-hardy risk taking about which the Prime Minister likes to talk. No one likes to take fool-hardy risks. We should be prepared to take chances, but should do so with intelligence, with smarts and from experience. We should not rush off charging against the barricades when we do not have the proper tools behind us.
As a Liberal Party and as a Liberal caucus, we know we have the tools, we have used them in the past and we can use them in the future. Our best chance of fighting off U.S. protectionism, of enhancing our market access, of encouraging a brand new era of trade, is to do what Canadian have always done, and that is to use the international trading system to our benefit and to the benefit of other people in this world.
June 9, 1986


Mr. Hockin:: Mr. Speaker, I have a brief question for the Minister from Winnipeg-Fort Garry.


Mr. Darling:: Minister?


Mr. Turner (Ottawa-Carleton):: Former.


Thomas Hockin: The former Minister. The former Minister has lived through sectoral discussions with the United States and I want him to share with the House what kind of success the previous Government had in those discussions with the United States? Why does he feel that kind of strategy would be more effective today than a comprehensive strategy? Does he have a long litany of success stories in the latter years of his Government to tell us about?
My second question has to do with the GATT arrangements. Why does the Hon. Member not believe in operating against the American protectionism on two tracks instead of one? Why is it not wise for us to deal directly with the offender in this case, the Americans, through a comprehensive trading agreement, and in that way to roll back protectionism, plus the GATT negotiation track? Why just one track? The Hon. Member would like to have us on the GATT track alone and not have anything to do with the bilateral track in terms of a structured long-term negotiated framework.
Those are my two questions, Mr. Speaker. I would be grateful if the Hon. Member would answer them.


Lloyd Axworthy: Mr. Speaker, I thank the Hon. Member for the questions and also for the promotion. I would be quite happy to take his question as the future Minister from Winnipeg-Fort Garry; I am glad to answer it in those tones.


Some Hon. Members:: Hear, hear!


Lloyd Axworthy: Mr. Speaker, the Prime Minister (Mr. Mulroney) said that we will fight the next election on his trade policy. If the Prime Minister wants to take a suicide run, then that is his business. We are all in favour of it. Ask him to call it now, we are ready and waiting. If that is what he wants to do, then let us go. There is no argument about that.
I would now like to deal with the Hon. Member's questions. First, with respect to the issue of sectoral arrangements, there has been a kind of presumption that before September of 1984 there was no history in Canada. The presumption has been that somehow everything started brand new in September of 1984. The fact of the matter is that we have been negotiating and dicussing trade with the Americans on a wide variety of fronts for years. We have negotiated all types of agreements.
One of the last measures I took when I was the Minister of Transport was to negotiate successfully a major agreement on international civil aviation with the Americans. That negotiation opened up new airline routes between countries. We got along. We worked things out. We had differences of opinion; but a deal was made and struck. The problem is that as soon as one raises the matter to the level of a grand blueprint, as soon
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as it is put forward as an over-arching sort of Armageddon, the fact is the Americans know they have us in a corner.
The Prime Minister himself came close to the truth when he said on Friday or Saturday in Toronto that he wants to negotiate a series of sectoral arrangements and that the AutoPact should be the model. We put that forward in our trade policy issued in late 1983. We had started negotiations in that respect. It was the Government of the Hon. Member which changed that. If it had continued on that track, the Hon. Member and his Party might have been much further ahead than they are now. But when they arrived in September of 1984 those discussions and talks which had already been started were erased, wiped away. This was the case because they had the great new design.
We never said that there should not be talks and discussions. This is something which can be done at different levels. It can be done at the level of a major agreement, such as a sectoral trade arrangement like the Auto-Pact. It can be done to negotiate a series of irritants. It can be done to work out various accords and understandings. There is a wide range of instruments which can be pursued in dealing with bilateral trade issues.
The important point that we have raised is that those bilateral discussions, whether they are with the United States, Japan or with the European Common Market, should be carried out in the context of a major commitment on multilateral international trade. What has happened is that the Government has made a very clear break away from the official policy of a Government that had been followed for years, and a very major break away from continuity of trade strategy in Canada. The Government said: "We believe the singularly most important trade initiative is a Canada-U.S. agreement". So the Government turned it on its head. It made it the primary motivation of trade strategy. It made it a primary focus of our trade operation. If it had simply said: "Let's negotiate with the Americans, but inside the parameters and framework of broader international strategy", it would have been much better off.
The Hon. Member asks what is the difference. He asks why we cannot do the two at the same time. First, there is the question of resources. The Hon. Member has been chairman of a committee of which I feel honoured to have been a part. It was an excellent committee which studied international relations. The testimony of many groups that appeared before the committee was to the effect that both cannot be done equally well at the same time. We have been told that it is impossible to devote the same type of resources, energy, commitment and focus on one major initiative versus another. If one reads the daily press and looks at all the headlines we must ask what the Government is talking about. It is talking about Canada-U.S. That is the major play in town. That is the drama that is being played out on the Canadian stage.

June 9, 1986
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I would also make the following case, which is a technical one but still important. One of the real problems with the bilateral agreement is that it carries with it the potential for being discriminatory against other countries. This Government has never made it clear, even though it has been asked, when it makes an agreement or signs a deal with the Americans whether it will be based on the most favoured nation principle of GATT. In other words, is it non-discriminatory? Is it available and accessible to all other countries? The Government has never been prepared to make such a commitment. That is what creates serious bad vibrations among the other countries of the world.


Mr. Speaker:: Order, please. Questions and answers are supposed to be short and sharp. The Hon. Member for Cariboo-Chilcotin (Mr. Greenaway).


Mr. Greenaway:: Mr. Speaker, I would like to ask the Hon. Member if he can explain to us why shakes and shingles were not bound into the GATT agreement. I think that is something which probably happened during the previous administration. Perhaps there is a reason for it, although I am not aware of it and I would like to know what it is.


Lloyd Axworthy: Mr. Speaker, that is a question which I have asked myself. I have had discussions with some of the negotiators who were involved at the Tokyo round of agreements. I have had to ask why it was left off. I think the reason was that it went back so far. Perhaps the Minister for International Trade might elucidate in this respect. However, there had been a free flow of activity going back some 30 or 40 years. I honestly say that it was a mistake not to do it. I do not know if it was our Government which did it. If we slipped up then, fine, let us say so. However, it does make my point that we should have all of these articles clearly within the GATT system since that is the way in which we can obtain the best protection. That is why, in a sense, the shake and shingle industry is a case in point that we should carefully examine.
I can only suggest to the Minister that I have tried to trace the history of this matter. I have talked to people who were on the negotiating team and I have not received a satisfactory answer yet. It is one which I think would be worth pursuing.


Mr. Speaker:: Further questions. If there are no further questions or comments, then debate.


Mr. Caccia:: Mr. Speaker, I have a question.


Mr. Speaker:: I am sorry, but the Hon. Member rose after I called debate. I said questions.


Charles L. Caccia: Mr. Speaker, I have a question.


Mr. Speaker:: With respect, the Hon. Member rose after I called debate. On debate, the Hon. Member for Essex- Windsor (Mr. Langdon).


Charles L. Caccia: I rose on a question, Mr. Speaker.


Mr. Speaker:: The Chair called questions and comments twice and then called for debate. I am sorry. I am sure the Hon. Member will have a chance to participate later. The Hon. Member for Essex-Windsor.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I look forward very much this morning to a debate that I think can be one of the most important debates we have had in the House of Commons on this issue. Over recent weeks there has been a series of exchanges dealing with the issue. However, I think we are at the stage now, because of statements by the Prime Minister (Mr. Mulroney) and the Secretary of State for External Affairs (Mr. Clark) this weekend, at which some new possibilities have been opened up. I very much hope that the exchange which takes place around this quite useful motion will help to make some progress in what has been a very difficult debate thus far.
I wish to concentrate my remarks on what the Government's strategy has been. I wish to offer some challenges to that strategy. However, I want to start out by suggesting that the motion before us is straightforward and one we can support. However the approach being taken by that Party perhaps places too much emphasis at this time on GATT and multilateral negotiations as the solution to a more immediate crisis than the GATT system is able to handle. GATT is very much the framework within which our broad trade policies should be pursued as a strategy over the years, but at this point, with the crisis faced by the lumber sector, the capacity of GATT to move quickly and to play an effective role in this problem is relatively limited.
Having said that, let me concentrate on what the Government itself has done with respect to trade policy. Frankly, since election day there has been a confusing, tangled web of shifting strategies and, even more important, contadictory statements on the part of the Government. This has left many Canadians with a sense of great unease and concern over the lack of leadership and direction exercised in this area.
If I may say so, Mr. Speaker, this whole thing has been like a dance of the seven veils. There has been at least seven clear positions taken by the Government, positions which were gradually stripped away leaving us at this point in time-and I say this quite genuinely-without any clear sense of direction. We do not know where these people are trying to take us.
The great strategy at the beginning of the debate was to keep the issue in as low a profile as possible. The Government felt that if it kept a low profile on this issue, it could possibly run this thing through, somehow escaping the notice and opposition of the Canadian people, and simply put it into effect. Clearly that particular approach has been thrown to the winds. That was the first veil to go.
June 9, 1986

In the early part of this year, the Prime Minister took a campaign of insults against the Opposition across the country. Now he is beginning to go across the country saying that his neck is on the line and he is prepared to fight the next election on this issue. We have seen quite a reversal in approaches.
Second, the basic argument which the Government attempted to sell to Canadians at the beginning of the discussions was that Canada would escape from countervail proceedings, if not permanently then at least while this set of negotiations was going on. Last summer I can remember witness after witness coming before the special committee that looked into free trade saying that at least we would be freed of countervail actions during the negotiations. In fact, that veil has been thrown to the winds as well. We found that rather than being freed of countervail actions, we have become even more the focus of countervail actions, countervail actions on steel, fish and now lumber.
Third, the Government told Canadians that the whole issue of free trade is about getting lower tariffs for Canadians. So far, what have the consequences been? I would ask Hon. Members to ask themselves how our tariff situation today compares with that of a year ago. The United States now has much higher tariffs on shakes and shingles, fish and specialty steel parts. Here in Canada, we put into place higher tariffs on books, computer parts, teabags and even Christmas trees. Again there has been a massive contradiction between the strategy which, it was promised, would reduce tariffs and the reality which is that tariffs have increased.
The fourth veil of this great strategy was that free trade talks would help the regions. Again, the regions have been hurt most desperately by the changes that have taken place. Central Canada has not been hit nearly as hard as the fishing industry in the West and the steel industry and wheat producers on the Prairies. The wheat producers are now faced with U.S. actions to subsidize exports of wheat.
The dance continued with the words of the Prime Minister. I am convinced that until I finish my days on earth, the day will stick indelibly in my mind when the Prime Minister rose, with a toughness we have not heard since John Diefenbaker, to attack the United States for a lack of notice for something that was unacceptable and appalling in its impact on Canada. Ten days later, however, the Prime Minister wrote: "Dear Ron, what I was really concerned about was my personal reputation and my political reputation. After all, our personal reputations will survive these minor occurrences".
If the dance had finished at that stage, it would have been exciting enough for all of us who were watching, but it is going on. Every day, the dance seems to take a new reversal and a new veil is thrown to the wind. Instead of the Government being after this, it is now after that.
For instance, the Secretary of State for External Affairs, when I first raised the question of using the Employment Support Act to support workers in the lumber sector in British Columbia on March 26, said to us that that would be terrible
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and would be seen as using threats against the United States. He said he did not believe in that kind of thing. Last night, on CTV's Question Period, the Secretary of State for External Affairs said precisely what we asked him to say six weeks ago. He said that the Employment Support Act would in fact be used.
Finally, I have to talk about the emperor in the dance of the seven veils. I have to talk about the Prime Minister who has, up to now, talked about getting fast-track freer trade talks going with the United States. Suddenly this weekend he threw that veil to the winds and said that is not what we want, what we want is something just like the Auto Pact, right down to its safeguards. He said we want a hydro pact for Quebec, a fisheries pact for Atlantic Canada, a mining pact and a steel pact. It was such a total reversal in position that I think the term "U turn" coined for Margaret Thatcher in Britain will have to be turned into "corkscrew turn" for our Prime Minister.
The Government has pursued these policies with total ineptitude. I fear we could talk about that ineptitude with particular sarcasm in respect of the shakes and shingles case and the softwood lumber case. Last week we saw the Prime Minister refusing to pick up the telephone to phone the President of the United States about softwood lumber, and we heard the weak excuses of the Secretary of State for External Affairs on Friday about that failure. However, somehow out of this has come, ironically, something we as a House might not have expected. It is something which in fact, if one believes what the Prime Minister and the Secretary of State for External Affairs were saying over the past weekend, gives some prospect of progress ahead of us.
Our Party has taken a consistent position throughout the entire debate. We have said that we favour trade concern and trade expansion with the United States through safeguards associated with sector based deals just as in the Auto Pact. We have also said that we favour a trade dispute mechanism which would attempt to work with both sides to try to give us some kind of future in which we could work out disputes before they become crises. We have said that the Employment Support Act should and could be used to help our people when necessary. We have said that there cannot be the comprehensive, free trade, fast-track exercise which they are trying to go through in the United States.
Today we issue a challenge to the Government. We challenge it to live up to the rhetoric of the past weekend and to put its trade policy in the very rhetorical terms which were used over the weekend. Our first challenge to the Government would be to come to the House of Commons and make it absolutely clear that the mandate which it is seeking to talk with the United States is related to a series of sectoral deals with safeguards associated with each of the deals just as in the

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Auto Pact. Our second challenge to the Government is that it accept the recommendations of the special committee of last summer and set up with the United States a trade dispute settlement mechanism, not one which will try to be super national and replace what the Americans will never give up, but something which will work to help both sides get together to work out problems. Third, we challenge the Government, as the Secretary of State for External Affairs put it, to put into effect the Employment Support Act, and we will support it on that. Fourth, we challenge the Government to restart the lumber talks and make them the centre-piece of an attempt to get for the lumber sector the first of those sectoral deals. This would give us some sense of security in that market in the future. However, it should be done by concentrating on problems like that of lumber, instead of trying to spread oneself entirely across the map through a free trade thrust. The last challenge would be to show a seriousness about the new approach to which the rhetoric this past weekend referred. At this stage the challenge has to be to abandon Simon Reisman and his approach to comprehensive freer trade and the team which has been assembled to try to seek that comprehensive freer trade.
If the Government accepts that challenge there is a very real possibility of a consensus in Canada in respect of our trade relations with the United States. If that challenge is not accepted, then what was said this weekend shows us yet again that it is one of those empty veils or one of those subterfuges to perplex Canadians rather than to lead them.
I put those challenges to the Minister. I put those challenges to the Government. It is possible to move ahead with some unity in the country on this issue. However, it will take a firm recognition on the part of the Government that in this case it has accepted a new direction instead of the direction in which it started last September.


Hon. James Kelleher (Minister for International Trade):: Mr. Speaker, I should like to start by making a point. Leaving aside the political rhetoric of the first paragraph of the motion before the House, the Government of Canada would find it hard to oppose the sentiments contained in the resolution. The Opposition has just reinvented the wheel, but it is our wheel.
Let us look at the substance of the motion. The first point calls upon the Government to assist workers in the lumber industry and in the shakes and shingles industry by invoking the Employment Support Act. The Government is already examining that option. However, in the case of softwood lumber, there is no injury to the industry as yet. All that has happened is that the United States Department of Commerce has agreed to examine the petition filed by the U.S. lumber lobby.
The Opposition acknowledges this in the second point which indicates that the Government should assist in every way the softwood lumber industry in making the Canadian case before the United States International Trade Commission. The Government intends to assist the softwood lumber industry in every appropriate way. Indeed, we have made extensive plans for that assistance.
The third point of the motion is to ensure that proper time is given to make the case by, if necessary, obtaining extensions of hearing time. Again, it is government policy to give the industry all possible help. On the matter of time, however, the limits are set by U.S. law and they are not subject to outside intervention.
The Opposition's last proposal, Mr. Speaker, is that the Government initiate "proper and effective action under the rules of GATT to ensure that this matter is satisfactorily considered by the international trading system." Again, we intend to take such action at the appropriate time and in the manner best suited to obtain the support of the GATT. Indeed, the Canadian position has already been set out clearly on May 22 in the GATT Council as is permitted under its rules of procedure. I would point out that we are extremely well positioned to take action under the GATT.
As members of all Parties in this House are aware, this Government has been playing not only an active role but a leading role in the GATT. Since we came into office, Canada has been a principal player in getting the next round of multilateral trade negotiations started. We have also been asked to play a leadership role on behalf of Third World countries in that round. We have a great reserve of international sympathy and support.
In short, we have already put into action the measures proposed by the Opposition in so far as those measures are within our power to put into action. Indeed, we have gone far beyond them. We are now fighting battles on two quite different fronts: cedar shakes and shingles and softwood lumber. It might be useful here to review exactly what has taken place.
On May 22 the United States Government moved, without prior notice, to protect American producers of cedar shakes and shingles by imposing a 35 per cent duty on imported shakes and shingles. This action was taken in full knowledge that Canadian producers were competing fairly, without subsidy, and that a major factor in the decline of the American industry was a shortage of American cedar logs.
The Canadian Government found this action unjustified and unacceptable. We have made a determined effort to regain full access to the U.S. market and we will continue to do so. We will continue to do so even though the U.S. administration has said that it is not prepared to remove the tariff, that it is not prepared to provide compensation to Canadian producers and that it is not prepared to take any measures that would help Canadian producers maintain reasonable access to the U.S. market.
In the face of this attitude, the Canadian Government determined that an appropriate and measured response was required, and my colleague, the Minister of Finance (Mr. Wilson), announced those measures effective this past Friday, June 6.
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In addition to those measures, the Government announced it would closely monitor the impact of the American duties on Canadian shakes and shingles exports. We are meeting with industry representatives on an ongoing basis to assess the impact and to determine what measures might be necessary and appropriate to assist the industry.
The second action against Canada's forest products industry was taken on Friday when the U.S. Department of Commerce announced that it would accept a countervailing duty petition against our softwood lumber. This action was not unexpected, but it is highly regrettable. As my colleague, the Secretary of State for External Affairs (Mr. Clark), told the House on Friday, we had urged the administration not to accept the petition which was filed by a group of U.S. lumber producers because it was simply going over the same old ground, bringing up the same issues that had been raised in a similar action only three years ago, an action that was determined in Canada's favour on essentially the same facts under the same U.S. law.
But there are significant differences between the shingles and shakes issue and the softwood lumber issue. Unlike the tariff imposed by the administration on shingles and shakes, the countervailing duty action is not a discretionary decision by the President. It is a quasi judicial process in which the administration has little discretion regarding the acceptance of a properly documented petition and virtually no discretion thereafter, except with the agreement of the affected industries on both sides.
The decision to consider the countervailing duty petition against our softwood lumber must also be kept in perspective. It is not a sanction. It is not a judgment. It does not even reflect the merits of the case. In recent years the U.S. Commerce Department has carried out seven countervail investigations on Canadian exports, since 1982, and only three of them have resulted in the application of actual countervailing duties. Morever, there will be no immediate impact on our softwood lumber exports. Even in the worst case scenario a countervailing duty is unlikely to be levied before December, although a bonding requirement could be imposed in early August pending the outcome of the examination. We draw some comfort from the assurance of the U.S. administration that this proceeding against our softwood lumber, like the other countervail actions that come before the Commerce Department, will be decided on its legal merits, that due process will be observed and that political considerations will not intrude into the process. We will make every effort, in co-operation with the Canadian softwood industry and with the provinces, to fight this case in the U.S. system and to win it, just as we won the case in 1983.
On Friday of this week three members of the Cabinet, the Secretary of State for External Affairs, the Minister of State for Forestry (Mr. Merrithew) and I will be meeting in Vancouver with provincial Ministers and representatives of the lumber industry and labour to review all aspects of our strategy to turn back this threat to a vital Canadian industry.
There are those who would suggest that these two American actions, the duties on shakes and shingles and the countervail
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investigation on softwood, provide sufficient cause for cancelling the over-all trade negotiations between Canada and the United States. I would suggest just the opposite, that both actions serve to underline the need for negotiations to establish a broad trade agreement, an agreement that would create acceptable dispute solving mechanisms and would secure our access to the U.S. market.
It is clear, Mr. Speaker, that the current international rules do not provide the certainty and security of access to the U.S. market which Canadian producers need to plan and invest. It is also clear that the existing rules can be improved only through international negotiation and that there are two avenues along which such negotiations can take place. One is bilateral with our principal trading partner, and the other is multilateral under the GATT. This Government is pursuing both avenues.
As Members opposite are aware, the General Agreement on Tariffs and Trade is the current contractual basis of our trade relations with the United States. It represents a careful balance of rights and obligations. The General Agreement on Tariffs and Trade recognizes that subsidies may have harmful effects on trade and production. It therefore permits the application of countervailing duties in situations where subsidized imports are found to be injurious to domestic producers of the same product.
Detailed international rules were negotiated in the Tokyo round of multilateral trade negotiations, rules aimed at ensuring that these countervailing measures do not unjustifiably impede international trade, but that relief is available to local producers adversely affected by foreign subsidies.
The Tokyo Round also established an international framework of rights and obligations for countervail actions. Indeed, from Canada's perspective one of the most important achievements of the Tokyo Round was agreement by the United States to incorporate an injury test into the countervailing duty law. As a result, several longstanding countervail findings against Canada were wiped from the books. Both Canada and the United States have equipped themselves to exercise their rights under the GATT to apply countervail duties to protect their domestic producers.
The countervailing duties which are currently being applied by the United States to our exports of live hogs and fresh groundfish are the result, not of a political act by either the Congress or the administration but of a quasi judicial proceeding under U.S. laws and the rules of GATT. The only immediate recourse is through the U.S. courts, an option which the Canadian producers concerned are currently pursuing. The U.S. administration simply does not have the authority to rescind a quasi legal finding whether it agrees with it or not. Similarly, I am sure the Opposition would agree that it would be inappropriate, if not impossible, for the Canadian Government to reverse a decision by a similar quasi judicial proceeding in Canada. We will still continue to respect the rule of law.

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It might be well to point out that the U.S. has no monopoly on countervailing actions. Canada, too, has equipped itself through the Special Import Measures Act to deal with injurious subsidized imports. We are determined in administering this legislation to ensure that Canadian producers can obtain relief from injury caused by subsidized imports. The Canadian Import Tribunal is currently investigating whether imports of subsidized beef from the European Common Market are injurious. The Ontario Corn Producers Association has requested a countervail investigation against corn imported from the United States. Canadian agricultural producers are acutely aware of massive subsidies made available to U.S. farmers by their Government.
Should a countervail action be launched against American corn it would be the first such case involving imports from that country. Surely the Opposition should not suggest that Canadian producers should unilaterally be denied their right to seek relief from injury while the trade negotiations with the United States are under way.
Finally, Mr. Speaker, let me reiterate for the benefit of the Members opposite that the Government recognizes the threat posed by the U.S. countervailing duty actions for Canadian exporters. The Government has launched a major initiative to negotiate a better framework for the conduct of our trade relations with the United States. The U.S. and Canada have the most extensive business relationship in the world. Because the relationship is so large and so broadly based there are bound to be occasional difficulties and disputes in our business with each other. There have always been and there always will be. A key objective to these negotiations will be to negotiate better rules to resolve our disputes. These include rules to ensure that countervailing duty actions do not impede our exports to the United States or theirs to us. If the members of the Opposition are genuine in their concern for Canadian lumber workers, they will lend their support to this important endeavour.


Lloyd Axworthy: Mr. Speaker, I am disappointed that the Minister was not more specific about his timetable for the Employment Support Act. As he knows, we have been asking for this for several weeks. The Government quickly found its voice this weekend after this resolution was introduced on Friday. The Government is now saying that it is examining it. The point I am making is that the workers are being laid off today, tomorrow and the next day. Once again the Minister seems to be saying that the Government is going to fritter away its time while people are being hurt. I wish the Minister had been a little more direct and explicit about when the Employment Support Act would be invoked, how much money would be allocated, and when it would go into place.
The Minister said in the last part of his speech that the launching of the general discussion on free trade is the best protection that Canadian lumber workers could have. In this morning's edition of The Citizen there is an interview with Mr. Leonard Santos, the senior trade adviser to the U.S. Senate Finance Committee. Mr. Santos says that because of the free trade talks the President of the United States made a deal with the U.S. Senators on that committee. The article reads in part:
Len Santos said in an interview that President Ronald Reagan has made a "dear deal" to take action against Canadian lumber imports in return for the powerful senate finance committee giving a green light to free-trade negotiations.
In effect he is saying that the launching of those talks was the licence for the lumber industry and those Senators to take those actions. Mr. Santos goes on to say that whether or not there is a decision by the ITC perhaps the ITC will do the dirty work for the President but that if they do not do it the President will impose duties unilaterally under Section 301.
My question to the Minister is obvious. Does he not now concede that the so-called clean launch was a dirty launch, that it had the incredible price attached to it of the introduction and initiative of import procedures against the Canadian lumber industry? Perhaps most important, what is the Government going to do about it? The Minister is talking about a so-called quasi judicial process. It is clear that this is a direct political process and that regardless of which way the ITC and the commerce department decide, we are going to be had.
Now that the Prime Minister has agreed to sectoral negotiations, is that what the Government will end up agreeing to? Is the real game plan that we will start negotiations on lumber and that they will ensue over the next three or four months?


James Francis Kelleher: Mr. Speaker, the Hon. Member asked that I be more definitive with respect to the Unemployment Support Act. We have already met with the industry. We are continuing those meetings and, as we determine the extent of the injury and unemployment being suffered, we will be in a position to apply a proper remedy. It is very difficult, without knowing the extent of the injury we concede is occurring, to measure adequately the support that is required. Once that is determined we will do everything we can to assist that industry. The Secretary of State for External Affairs made that very clear last week in the House.
With regard to the question about whether there was a clean launch and whether there were preconditions, I can only repeat what I, the Prime Minister, and the Secretary of State for External Affairs have repeated before in the House. There were no preconditions. It was a clean launch. If the Hon. Member has some evidence and definitive proof to the contrary, he should bring it forward and let us see it. I do not accept a newspaper article interviewing an aid to a Senator as the kind of proof we require. There is no use making these allegations day after day in the House without substantive proof, and that is not proof, a newspaper article by some aide to a senator. What I am telling you is there were no preconditions. The action that has been started here was an action launched by the industry, not the Senate, not the adminsitra-tion and, not the President. It was an action initiated by the industry under their laws, which they are entitled to do. It is a quasijudicial proceeding and we have the right under their laws to be involved. The industry is going to be involved and the industry is going to be fully supported by this Government in that action.
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Steven W. Langdon: I wish the Minister had not stuck to his text so closely this morning, and instead had taken some of the signals that came from both opposition parties, that we were quite interested in looking at some of the new rhetoric and the new commitments that came out this weekend. If that had been done I think there could have been a constructive step forward in this debate.
With respect to clean launch, I just cannot resist saying, the evidence builds up from every quarter. It started with the wholesale shift of the lumber senators themselves. It now comes out with statements by senior staff to senators which are relatively important in the senatorial makeup. If they are prepared to come out and specifically talk about the clear deal which they saw made, I for one see that as one more piece of evidence that I am not prepared to ignore.
My questions, however, are the following. First, the point which to this stage has never been made to the Minister, and I think it has to be made to him, is that as soon as we were into-the Minister and I have talked about this-a petition from the U.S. lumber producers we had to know that our chances of success were much less than if we could solve the problems by direct talks. Now the Minister took us through, I believe, five occasions of direct talks. I have to ask him, why did those talks fail? Why was this Government not able to obtain some kind of arrangement with respect to this sector that is so crucial to us? It was the failure of those talks which led to this petition. The petition has, as he said, taken its quasi judicial route on to what I fear will be disaster for us in the end.
My second question is, the Secretary of State for External Affairs stated very clearly last night on CTV Question Period, in talking about the employment support Act, "I can't say we'll move on it this week, but that's certainly something that we're intending to move on". There were no ifs, there were no buts. Yet the Minister this morning has said if we decide to proceed we may do this or we may do that. I want the Minister to give us a clear answer. Are we, in fact, to now expect from this Government a commitment to use this Act to support the shake and shingle workers in B. C.? I think at least that much is owed them in face of the ineptitude of previous government policy with respect to the wood sector.


James Francis Kelleher: Mr. Speaker, in reply to the first question posed by the Hon. Member, it is quite correct, we did have discussions with the Americans attempting to head off the filing of a petition by the lumber industry. I beleive that we met five times, in the months of January to May, inclusive. The stumbling block in those discussions was the American insistence that we must change our stumpage system, that it did not coincide with theirs, that it was not the same as theirs, and that the rates contained or derived from the stumpage system that we use in Canada is different and lower than that used in the States. Because it was lower, that in effect
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constituted a subsidy. We could not agree to that. In 1983 we fought the countervail case on the existence of our stumpage system. It has not changed since then; it was good then and it is good now. We did not see anything wrong with it. That is why those talks failed, because we were not prepared to change our stumpage system.
With respect to his second question about which Act we were going to operate under,, we have given our pledge that we are going to assist the industry. There is no doubt in our mind whatsoever about that, nor should there be in yours. All we have said is that we are trying to determine the best way to assist that industry. It may be that the best way is under that Act. We may also find other ways to assist the industry that may be better. Whatever it is, we are going to assist them; I can give you that unequivocal assurance.


Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, I am pleased to be here to participate in this debate. Let me remind Members what the debate is all about. It is a motion that condemns the Government for the lack of care and concern for the workers in the cedar shakes and shingles industry and in the softwood lumber industry shown by the Prime Minister (Mr. Mulroney) in his letter to President Reagan.
In the Prime Minister's "Dear Ron" letter to President Reagan he calls the cedar shakes and shingles industry and the
4,000	workers employed in that industry an incident. That is the only reference he makes to them. He sums them up by saying, "This incident will not alter our personal relationship". The 4,000 employees in the industry in British Columbia have been defined finally by this Government in the context of its priorities as a mere incident that should not get in the way of the personal relationship between the Prime Minister and the President.
What does he say about the softwood lumber industry? How does he define them? What word did he pull out of Webster's as he pored over it before his desk, the same book where he finds such words as "voracity", a word he obviously has not found the meaning of yet, nevertheless uses quite frequently. What word did he find for the softwood lumber industries and the workers? No word at all. There is not a single reference in this letter written to the President of the United States a few days before the Americans decide to proceed with the petition on softwood lumber-not a single word, not an utterance, not even a clearing of the throat about the softwood lumber industry.
One has to feel not only great compassion today and empathy for the cedar shakes and shingles worker, and not only compassion and empathy for the great uncertainty that has gripped all of those associated with the softwood lumber industry, one has to feel compassion and empathy for the Minister for International Trade (Mr. Kelleher). He is almost more to be pitied than to be blamed.

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Watching the Minister's performance today in the House, watching him explain to Members that there was no deal done, there was no selling out of the cedar shakes and shingle industry, there was no selling out of the softwood lumber industry-as evidenced by the comments this morning in The Citizen by the senior trade adviser to the U.S. Senate- watching him try to make the case that all of that is not so when 4,000 jobs are already about to go down the tubes, the toilet has been flushed, the water is rushing about and people are being affected even today in cedar shakes and shingles, reminds me of the poor young fellow in the school yard whose knees are scuffed out of his pants, whose lip is split and eye blackened but who says that he is not hurt, He says: "I am not hurt. I stood my ground and never felt a thing." The poor young fellow says he never felt a thing and is not hurt, because to admit that he is hurt is to admit that his pride has been damaged. The Minister, like the poor young fellow in the school yard or, unfortunately, like Shawn O'Sullivan in the third round on the weekend, with his arms by his side and unable to respond or block a punch any longer, says: "I am still in good shape. I do not know why they stopped the fight." It is a sad day when one tries to understand the policy of this administration with respect to such an important bilateral issue, and can only congure up the image of the young fellow in the school yard or the boxer in the third round who no longer knows in what round he is but says: "I'm okay, he never landed a punch."
In case the Minister has not understood this yet, let me tell him that whether he recognizes from his position in the ring that a punch has been landed, whether he recognizes that his knees are wobbling and he is seeing double from a devastating blow, or whether he recognizes from his position in the ring that the gong has been sounded and we have lost another round, the 4,000 workers in the shakes and shingles industry in British Columbia know that they have been hit hard. I can also tell him that the people involved in the softwood lumber industry are looking up to that ring and are watching that brutal blow being delivered by the opponent which, in this case, is the American adminstration that sold us out to get the extra votes in the Senate Finance Committee for the free trade talks. Those people in the softwood lumber industry are pretty damn nervous about getting into that ring because they have a sense that the fix is in with this particular bout. They have a sense that Canada is about to take a fall because it is a rigged fight.
The Minister takes the naive view that since we won the 1983 softwood lumber petition hands down, in 1986 we will win again. He says this in the face of a letter written on May 8 by the President of the United States to Senator Packwood of the U.S. Senate Finance Committee, who delivered the necessary votes to proceed with free trade talks. It is a letter indicating to Senator Packwood that the President will solve the softwood lumber question one way or another. The President told the Minister that either the International Trade Commission will look after the problem or, in the unlikely
event that Canada wins, since the fix is in, he will look after the problem anyway.
The senior U.S. Senate trade adviser pointed out in the Ottawa Citizen this morning that the President has the power to impose duties unilaterally if he finds that a foreign practice unfairly or unreasonably hurts U.S. industry. If you want a new definition of "fixed", Mr. Speaker, we can use the analogy of the fight again and state that even in the event that the big burly opponent does not land a blow, it does not matter because Canada's softwood lumber industry will take a fall anyway. That is what the senior trade adviser to the U.S. Senate is saying.
Yet today, we have seen the spectacle of the Minister wobbling about on his legs, dazed and confused, saying that they have not landed a blow. The situation conjures up the image of the fighter, but the only problem in this place, Mr. Speaker, unless you decide to take unprecedented action, is that we do not have a referee to step in and pull the Minister out of the ring in order for him to come to his senses.
Last Thursday, myself, a Government Member, the Member for Mission-Port Moody (Mr. St. Germain), and an NDP member, the Member for Skeena (Mr. Fulton), were in Washington at the invitation of the Minister. I appreciated that invitation and went down to Washington last Tuesday to sit in on a briefing session with Canada's fine Ambassador, Ambassador Gotlieb, who does a very good job. We were to be briefed before the Ambassador went to see Secretary Baldrige and we were to be debriefed after the meeting.
When I was told on Tuesday that I would have an opportunity to go to Washington I thought that while I did not know about the Government's intentions it obviously was organizing a significant and serious last minute representation to the U.S. Secretary of Commerce, Mr. Baldrige, to prevent the petition from proceeding. I considered this invitation by the Minister as a serious request, a departure from what I believed was a preoccupation with managing the public relations difficulties the Government is experiencing in Canada, rather than a preoccupation with dealing with the American administration, the American public and Congress. I thought that the Prime Minister had finally stopped worrying about trying to impress Canadians with all of his rhetoric that he was giving us only a few weeks ago and was prepared to let us go to talk to the Americans.
However, one can imagine the shattering experience it was for a young idealistic Member of Parliament like myself to discover that this much trumpeted and important last ditch effort turned out to be a shallow, pathetic public relations exercise. Three Members of Parliament left Ottawa without any briefing. We arrived in Washington but received no briefing in Washington other than that which we gave each other in the taxi from the airport to downtown Washington. We arrived at the hotel and spent six hours talking to each other because there was no briefing. We arrived at breakfast for a 20 minute tete-a-tete with Ambassador Gotlieb who told us that this was not really a political question but a quasi judicial question on which he was making Canada's argument. At that point, one begins to wonder why we were there.
June 9, 1986

Our agenda consisted simply of that briefing in advance of a 20 minute session between the Ambassador and Secretary Baldrige, and a 10 minute briefing afterwards. We did not see any Americans or talk to any American media. There was no meeting set up with American congressional leaders. We simply went to a meeting room with the Ambassador and, as if by magic, Canadian press representatives showed up at the embassy to take our picture with a very earnest looking Ambassador. Furthermore, when we called home we discovered that, magically, the newspapers contained headlines about a last ditch attempt being made to stave off the petition. We posed as best we could for these pictures since we were part of this last ditch effort. However, if this shallow exercise deserved the description of a last ditch serious attempt by the Government to stave off the petition that now threatens our softwood lumber workers, then we are in bad shape. My earlier suspicions that the Government is preoccupied with managing Canadian public opinion rather than our affairs with the Americans were confirmed.
A few hours later, we were on a plane coming back to Ottawa. However, we learned a lesson. The Government, like the young fellow in the school yard with the seat out of his pants and his eye blackened, is more interested in saving face in front of the Canadian people than trying to address our problems south of the border.
The whole attitude of the Government is personified by the actions of the Prime Minister in the last few days. He has in the last few days behaved like someone going through the pains of puberty. At one time he runs around the country complaining about the Opposition having its head in the sand, and a couple of days later he complains we have our heads in the snow. He is suffering from hot and cold flashes. He has launched what he says will be the issue on which he will fight the next election. He will fight the Grits and the NDP, but while he is doing so Ronald Reagan is taking pokes at him from the side.
What does he do when Ronald Reagan takes a poke at him from the side? He comes back and says: "I will battle the Liberals and the NDP. I will fight the next election on this". And Reagan punches him again, but all he says is: "The Liberals have their heads in the sand". And the President punches him again, and he is so confused he now has us with our heads in the snow.
Let Canadians understand that when we talk about a 35 per cent tariff on the Canadian cedar shakes and shingles industry, we are not talking about cedar shakes being penalized or shingles being penalized, we are not talking about trees being discriminated against, we are talking about people. We are talking about men and women and Canadian families who, for reasons they do not understand, have discovered that a bolt of lightning out of the blue has, in a remarkable way, altered
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their lives. It has set them on the course to the unemployment lines.
Why has this happened? It has happened because the President of the United States has a omnibus trade Bill before the Congress. It is kind of a grab-bag of protectionist measures which is incoherent and quite dangerous. That we all agree and acknowledge. The President wants to stop the Bill. In order to do so he has to demonstrate that he already has the means to impose trade sanctions. So he picks up his trade hammer and looks around the world. He has to strike that hammer somewhere. It used to be that the Americans would focus on Japan on trade problems. But he cannot strike Japan because President Nakasone is having an election on trade issues. He does not want to interfere in that process. The President looks at Great Britain but says: "No, my friend Maggie, is third in the polls. She already has enough trouble". So he cannot strike there. He looks at Europe and he says: "No, I cannot take a major trade initiative there because it will affect our foreign policy, our defence policy, and we still do not have our nuclear missiles in place in Denmark". Then he looks at Canada. He see 211 Members of Parliament out of 282 forming the Government. He says to himself: "There is a stable Government. It is not going to be defeated for a few more years". He looks at the record of the Prime Minister and what does he see? He sees a Prime Minister who has stated: "In all circumstances, we shall give our great ally, our best friend, the U.S., the benefit of the doubt". He sees a Prime Minister who is desperate to start a free trade negotiation. So he gets the Prime Minister his free trade negotiation in the U.S. Senate and the price is a tariff on cedar shakes and shingles, and a blow yet to be struck against the Canadian softwood lumber industry.
Why has that happened, Mr. Speaker? You will recall the meeting between the President and the Prime Minister in Quebec City on St. Patrick's Day last year. The Prime Minister came out of the meeting and told the press: "You can be sure that when the protectionist winds blow, they will not be blowing at Canada. If I'm wrong, you can cut me into little bits". That bears repeating. The Prime Minister of Canada in the present context of a tariff on cedar shakes and shingles and a threatened tariff on softwood lumber said: "You can be sure that when the protectionist winds blow, they will not be blowing at Canada. If I'm wrong, you can cut me into little bits". I have no intention of cutting the Prime Minister into little bits, but if I held him to his word he would resemble chopped cheese before this day was out.
Over the last year and a half while the American protectionist sentiment was brewing in the United States, while it festered and finally erupted into an open sore which afflicted some of our trading partners, particularly Canada, over that whole period our Prime Minister was running around saying: "If I'm wrong, you can cut me into little bits. I have a special relationship with my friend, Ron".

June 9, 1986
Supply
The U.S. administration, Congress and, indeed, the American people, have taken the nature of their relationship with this country for granted because of the signals consistently given by the Prime Minister since his election in September of 1984. Friendship is based on respect. It was certainly not an act of respect for Canada or, indeed, for the Prime Minister personally, when a tariff measure to the extent of 35 per cent was taken against cedar shakes and shingles without, in the Prime Minister's own words, "any personal notification", although one would have to be lacking in all senses not to see it coming.
The Government of Canada has to begin the process of spending less of its time preoccupied in an incestuous manner with Canadian public opinion. It has to begin the process of sensitizing not only the U.S. administration and Congress but, indeed, the American people, to the grave nature of the threat against Canada's interests which is implied by this threatened tariff on softwood lumber. That cannot happen by Members of Parliament talking to each other in the House of Commons in Ottawa. It cannot happen by sending three Members of Parliament to a farcical meeting for a photo opportunity to be used back home. It cannot happen by the Prime Minister saying that the very nature of free trade talks are threatened and the Minister for International Trade (Mr. Kelleher) saying: "Free trade talks are going ahead, come what may". It cannot happen when the Prime Minister can take a 35 per cent tariff on cedar shakes and shingles as a matter of personal vanity, a personal attack, in his letter to the President, rather than a question of the jobs and security of 4,000 workers.
I say to the Government that it ought to take seriously this motion which reflects the views of Canadians who are incensed that our ship is adrift without a rudder and certainly without a captain at the helm.


Ms. Copps:: Mr. Speaker, I am happy the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) introduced the issue of the "Dear Ron" letter which the Prime Minister (Mr. Mulroney) in a very egomaniacal fashion wrote to the President, in essence, to seek his forgiveness for his own outburst in the House of Commons. I wonder if the Hon. Member could tell us, given the statement by the Minister for International Trade (Mr. Kelleher) today that the Government knew for some time of the potential of a further action on softwood lumber, what he thinks about the Prime Minister's commitment to the softwood lumber industry when he did not even mention it in his infamous 'Dear Ron" letter, apparently because he did not want to sever his own "personal" good relationship with the President?


Brian Vincent Tobin: Mr. Speaker, I said a moment ago, and I think most Canadians would agree, that some kind of mutual respect for each other often leads to good friendship. Most of us have neighbours on the other side of the fence, and someone once said that good fences make good neighbours.
When the Prime Minister, Canada's chief executive officer, writes a rare letter-because personal letters are not
exchanged every day between Presidents and Prime Ministers-just a few days before the Minister for International Trade had the Canadian Ambassador in Washington and three Members of Parliament down in Washington supposedly making the last ditch attempt at preventing the petition from proceeding on softwood lumber-if the Minister for International Trade's initiative through the use of the Canadian Ambassador and through the abuse, I say, of three Members of Parliament was serious-then surely the Prime Minister would have reflected the seriousness of that attempt in his letter to the President. Instead, there is not a single utterance, not a reference, not an ackowledgement of the existence of that industry or its importance to our citizens in the letter.
I believe the Prime Minister's biggest problem is that he has never stopped the election campaign of 1984. He is forever on the election trail, worried more about tomorrow's headlines than about today's reality. I think we have paid a heavy price for that attitude.


Mr. Fontaine:: Mr. Speaker, I welcome this opportunity to speak, following the speech by the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin). I think he shows great courage in being prepared to defend the interests of the western part of this country, as a Member from our eastern shores. This is indeed a rare occurrence. So the Liberal Party is starting to show some consideration for Western Canada-thinking about the next election campaign, may be? In years past, it seemed routine for the Liberals to forget that the West existed. This morning, it might have been more appropriate for the Hon. Member for Vancouver Quadra (Mr. Turner) to defend the interests of the residents of his province. However, I noticed that the Hon. Member for Humber-Port au Port- St. Barbe was alone amid the vacant seats reserved for the Liberal caucus. The other Members were probably still at their weekend conference. I would like to ask the Hon. Member whether, in 1983, when-


The Acting Speaker (Mr. Paproski):: Order, please. The Hon. Member should not indicate who is and who is not in the House. I bring that to his attention. I know that he is a fairly new Member of Parliament, but I hope he will not do it again.


Gabriel Fontaine: Thank you, Mr. Speaker. I would like to ask the Hon. Member why his Government did not deal with the problem we are discussing today in 1983. Why did they leave it up to us? They could have dealt with it for good. If the Hon. Member was also able to take a more general view of the problem, why did he fail to mention a trip made by our Prime Minister (Mr. Mulroney) to Japan, a trip that proved the quality of our lumber, because during that trip he made representations to the Japanese Government, asking it to include the use of our Canadian lumber in the standards set by agencies comparable to the Canada Mortgage and Housing Corporation here in Canada. The Liberals never mentioned that.
June 9, 1986

I also would like to know why he is being so negative about our negotiations with the United States, when we have access to a market of 240 million people.
Mr. Speaker, since the auto pact has been profitable for this country, the same approach can work today. I would ask the Liberals to be a little fairer in their comments and to stop their nit-picking.


Brian Vincent Tobin: Mr. Speaker, the Hon. Member has raised three or four different questions. Near the end of his remarks he asked why there is so much negativism today. Let me say that there is much to be negative about. I would suggest that ringing the bells when the house is on fire is not a negative action but a very positive one.
The Hon. Member disappoints me. Perhaps as he spends more time here he will adopt a different attitude. To stand in the Parliament of Canada-not the Legislature of Quebec, Newfoundland or Alberta-and ask: "Why are you as a Member of Parliament from Newfoundland concerned about western Canada?" begs another question to be asked. That is to say: "What, sir, are you doing here if you would even put such a question?" The Hon. Member is a Member of the Canadian Parliament. If he does not feel as at home in this Parliament in the Province of Ontario as he would in the Province of Quebec, and if he does not feel as welcome in my great riding of Humber-Port au Port-St. Barbe as he might in Skeena or in Vancouver, then he had better go back and ask himself why he decided to seek a job as a Member of Parliament of Canada.
Why am I concerned? Because I am a Canadian who comes from Newfoundland. But my fellow Canadians live in British Columbia, and I have been there. I have been to Prince George, I have been to Prince Rupert and to Vancouver. I have heard the stories of the people who live there. I talked to a very good friend of mine yesterday who lives in Smithers. This is a person with whom I grew up, who used to live in Newfoundland and who is now a British Columbian. He gives his loyalty to and takes his lifeblood from that province. He is concerned. That is why I am here raising questions. I do not see this as some type of parochial House in which resides a whole series of feudal kingdoms. We are all Canadians in this place, are we not?
The Member asks why we did not settle the problem in 1983. Again the Hon. Member shows that he needs to spend a few more days in this place. We won the case in 1983. It was settled. For some reason during the course of the tenure of this Government the Americans have decided that we should be tried twice, an unprecedented action. If the Hon. Member did his homework he would know that.
Supply
The Hon. Members asks why I have not talked about the Prime Minister's visit to Japan. Unfortunately, the former Minister of Regional Industrial Expansion was having some great difficulties during the course of the Prime Minister's visit to Japan. I doubt if anyone knows that he was there. We were dealing instead with the large question of conflict of interest. As much as I, and in particular the Prime Minister, would have preferred to talk about his visit to Japan, unfortunately, one of the Minister's of the Government provided a much more interesting topic to talk about during that period of time.


The Acting Speaker (Mr. Paproski):: I hope the Hon. Member will entertain one more question from the Hon. Member for Carleton-Charlotte (Mr. McCain).


Mr. McCain:: Mr. Speaker, my question for the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) is this. How does it happen that this Government finds itself in a position in which there is no compensation available to Canada for either legislation or decisions concerning the quasi judicial process of the United States when it has imposed a surcharge on Canadian products going into that country? How does that happen? Is the Hon. Member prepared to answer that question in the seconds that are left in this morning's debate?


Brian Vincent Tobin: Mr. Speaker, the Hon. Member for Carleton- Charlotte (Mr. McCain), as is his practice, always comes to the nub of the question. He asks a very intelligent and worthwhile question. The Hon. Member asks how it is that there is no compensation for an unfair tariff. That is really the premise of his question; if it was a fair tariff, if it was responsible, then we might not have a complaint. However, it is an unfair, unwarranted and unjustified tariff. How is it that there is no compensation? I say to the Hon. Member that if this administration had made clear to the Americans that they cannot always expect the benefit of the doubt when they take these types of regressive measures, punishing-


Fred Alward McCain: Mr. Speaker, I rise on a point of order. The question is not being addressed in the sense in which it was asked. We are operating within the parameters-


The Acting Speaker (Mr. Paproski):: I regret to interrupt the Hon. Member but that is debate.
Before I leave the Chair at one o'clock I would like to say that the time allotted for questions and comments has now terminated. I will recognize the next speaker, the Hon. Member for Timmins-Chapleau (Mr. Gervais), when debate resumes this afternoon.
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.

June 9, 1986
14106______________________________


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon. Herb Gray (Windsor West):: Mr. Speaker, for some months now the people of the Windsor area have been concerned about the proliferation in the area of strip clubs offering so-called adult entertainment. They are concerned that what these bars offer amounts to pornography, offends standards of human dignity, creates the risk of criminal activity, and generally creates the risk of a deterioration in neighbourhoods and the quality of life in the community.
I have repeatedly called on the Minister of Justice (Mr. Crosbie) to introduce appropriate amendments to update the Criminal Code to deal with this kind of situation which is found increasingly not only in Windsor but other communities as well. The concern in my community was heightened last week when a Judge of the Supreme Court of Ontario struck down a new City of Windsor by-law intended to help deal with the problem, saying that it dealt with morality, a matter of federal jurisdiction. It was also alleged at a recent LCBO hearing that applicants for a liquor licence to operate a strip bar had criminal connections.
The Minister has been promising legislation to amend the Criminal Code to enable the-


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


Herbert Eser (Herb) Gray: I call upon the Minister to present that legislation now-


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



LABOUR RELATIONS


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, this weekend in Winnipeg, a plaque on the grounds of City Hall was dedicated to the memory of those who took part in the 1919 General Strike. Representatives of all three levels of Government were unanimous in the affirmation of the rights of labour and the courage and integrity of the strikers, who were not the seditious Bolsheviks they were made out to be by the Citizen's Committee of One Thousand but were men who were a part of and were supported by their community and who were later elected to public offices, including this House.
If we look at history with a forgiving eye, some of the men who ordered the RCMP on the strikers in 1919, killing one
man, could genuinely plead that the closeness of the Russian revolution clouded their vision. Peter Pocklington has no such excuse. His description of strikers in Edmonton as terrorists and communists who want to turn Canada into Russia is unCanadian, and is an offence to all freedom-loving Canadians who thought they had put that kind of political garbage behind them.
It is Peter Pocklington who belongs somewhere else, along with Alberta's Tory labour laws. Peter Puck would do well in Poland advising General Jaruzelski on how to relate to Solidarity.



THE DISABLED AND THE HANDICAPPED


Mr. Don Ravis (Saskatoon East):: Mr. Speaker, all too often we take our health for granted. I had the privilege in the last two days of meeting some special people who work hard to help those who suffer from diseases or handicaps. As the 1986 Honorary Chairman of the Saskatchewan Ride for Sight, I joined 300 cyclists yesterday in a ride to raise money for the fight against retinitis pigmentosa. The National RP Foundation has raised well over $2 million since 1974. Yesterday's Ride for Sight in Saskatchewan raised nearly $40,000 to help fight this tragic disease.
This morning I had the pleasure of attending Health and Welfare Canada's Volunteer Awards honouring 31 Canadians for their contributions to the well-being of their fellow citizens. I was delighted that one of my constituents was honoured for her work as a founding member of the Saskatoon Chapter of the Association for Children and Adults with Learning Disabilities and the Tamarack Foundation.
Saskatchewan has the highest percentage of volunteer participation in Canada. Our volunteers are a fine example to all of us and deserve our heartiest congratulations.



LABOUR RELATIONS


Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, from time to time many of us witness labour-management disputes which turn violent. To prevent these incidents, both the Government of Canada and the provincial Governments have laws which uphold the workers' right to strike and the employers' right to operate businesses. At times it is extremely difficult to satisfy both parties in a labour dispute and to ensure that neither side is being favoured.
June 9, 1986

A recent incident which highlights the necessity of maintaining order at an industrial site occurred at the Overwaitea Foods construction site in Langley, B.C. An injunction had been obtained on a Wednesday limiting pickets to two people per entrance to the site. Instead of obeying the law, the building trade unions chose to initiate mass picketing. As expected, violence erupted at the site and on Friday about 60 RCMP riot police were brought in to restore order.
To avoid incidents like this in the future, I call upon the Solicitor General (Mr. Beatty) to work closely with the Attorney Generals of the provinces to ensure that court orders are followed as soon as possible. Those workers and suppliers who are not on strike and want to produce should have reasonable access to the job site without fear of intimidation from a mob.



EXTERNAL AFFAIRS


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, yesterday Mr. Kurt Waldheim was elected President of Austria. His election now poses a dilemma for Canada. Should the Canadian Government send a telegram of congratulations to Mr. Waldheim, or should the Canadian Government consider barring him from visiting this country? This dilemma cannot be resolved in the absence of full knowledge of Mr. Waldheim's past.
I call upon the Canadian Government to instruct Ambassador Stephen Lewis immediately to press for a thorough, independent, international investigation of these serious allegations. The Government would then have the facts on which to take appropriate action. Only in this way will the truth about the Waldheim matter finally be known.
I am personally affronted that any person who may be connected with Nazi war crimes should be elected as president of any nation. As a Canadian I am also concerned that a cloud of uncertainty now hovers over the head of a respected international body, the United Nations, where Mr. Waldheim once served as Secretary General. For the sake of all those who suffered at the hands of the Nazis, let us clear up these open wounds and this nasty issue.
* * #



OCCUPATIONAL HEALTH AND SAFETY


Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, mining is very important to my riding of Timiskaming, so I
was pleased to learn that new Workers' Compensation Board statistics reveal that accidents in the mining industry have declined over the last five years.
Mining is now among the third safest occupational group in Ontario according to WCB figures, which puts it ahead of six other occupational groups. This record pays tribute to the cooperation between management and labour, which have concentrated on improving safety standards within the industry.
The Conservative Government supports this kind of activity. I am pleased that we are currently funding a study on ground control to prevent rock bursts, along with many other safety related measures.
Mining is a safer industry because of these efforts, but our Government is working to make it even safer.



U.S. TARIFF ON CANADIAN CEDAR SHAKES AND SHINGLES- EFFECT ON EMPLOYMENT IN BRITISH COLUMBIA

Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, the latest casualty statistics from the shake and shingle campaign the Canadian-U.S. trade wars now number 1,500 from the Mission, British Columbia front, and 800 from the Vancouver Island front. Unconfirmed casualties from the interior include: Mrs. Rosemary Drake, Mr. John Friesen, Mr. Ken Audi, Mr. John Tufts, Mr. Larry Kirk, Mr. Bob Bohac, Mr. Alex Clarke, Mr. Glen Porter, Mr. Ted Surtel, Mr. Del Shahurt, Mr. Errol Mondes, Mr. Ken Bryant, Mr. Bill Keriler, Mr. Gerald Hemminger, Mr. Gary Tubbs, Mr. Lloyd Johansson, Mr. Melvin Tubbs, Mr. Leonard Dyck, Mr. Ken Harker, Mr. Henry Kuester, Mr. Dave Klassen, Mr. Dale Harriet, Mr. Terry Tubbs, Mr. Paul Burke, Mr. Jim Desmond, Mr. Gary Burke, Mr. Kris Burker, Mr. Don White, Mr. Charlie Purdy-


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



FORESTRY


Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, the forestry industry in Quebec, and especially in Abitibi-Temiscamingue, is concerned about the announcement made last Friday by the U.S. Secretary of Commerce regarding an inquiry that may lead to a tariff of 27 per cent being imposed on all our lumber exports to that country.

June 9, 1986
Nearly 20,000 jobs in Quebec are directly dependent on this industry, and 60 per cent of our exports are being threatened in this way.
In the long run, this tariff will mean the loss of thousands of jobs and lead to many sawmills in Quebec shutting down.
Mr. Speaker, I would like to repeat the appeal made by the Secretary of State for External Affairs (Mr. Clark) for calm and organizing our defences, which must be done by mobilizing all intervenors, starting with the employers, the unions and the federal and provincial governments.
That is how we won in 1983, and it is the only way we will be able to win again in 1986. If the same criteria apply to this study, I think there is no doubt that the same conclusion will be reached, namely that our industry is not competing unfairly with the industry in the U.S.



THE GOVERNOR GENERAL


Mr. Alan Redway (York East):: Mr. Speaker, the allegations made by the President of the Liberal Party are completely untrue.
The Governor General's participation in the activities surrounding the opening of Expo and in the other official activities on the West Coast had been planned for some time. Unfortunately the Governor General, who we all know works very hard at her duties, developed pleurisy, and her entire trip had to be cancelled.
It is incorrect and discourteous to allege that the Governor General developed "diplomatic flu" for partisan political purposes.
We challenge the Leader of the Opposition (Mr. Turner) to repudiate untrue allegations of the Liberal Party President and make a full apology to the Governor General.



ADMINISTRATION OF JUSTICE


Mrs. Lucie Pepin (Outremont):: Mr. Speaker, I would like to draw the attention of the House to a petition bearing 2,800 signatures which has been presented to the Minister of Justice (Mr. Crosbie) and to his Quebec counterpart, Mr. Marx. The
petition is from Trois-Rivieres and deserves the attention of this House.
It reads as follows: " We the undersigned believe that sexual assault is a serious crime, of which women and children are the main victims. Recently, in the Trois-Rivieres area, a number of so-called exemplary sentences were handed down. These sentences were supposed to be a serious warning to possible offenders.
For sexually assaulting a 13-year-old-girl, the five aggressors were sentenced to prison terms of, respectively, two years, two years, 10 months, 10 months and 8 months. For sexually assaulting three women, the aggressor was sentenced to a total of three years, since traditionally, prison terms imposed for three crimes are served concurrently.
The women signing this petition state that sentences like the ones mentioned above are not exemplary and do not reflect the seriousness of the crime. They therefore ask that prison terms for repeated assault be served consecutively and concurrently.



FREE TRADE-LIBERALS' POSITION

Gabriel Fontaine: Mr. Speaker, the Liberals keep saying that freer trade with the United States is in the interest of Canadians.
However, they remain quite silent whenever they are expected to take a position on specific questions such as the thrust of the negotiations.
This morning's issue of The Citizen reports that, last weekend in the Atlantic region, their National President Iona Campagnolo kept contradicting herself.
The few Party delegates who got together over the weekend were unable to achive a consensus respecting free trade, just like the Liberal Party.
As for the Hon. Member for Laval (Mr. Garneau), the so-called Party expert in international trade, he keeps repeating that free trade will harm the 130,000 Quebecers who might lose their jobs.
This is a serious accusation against Quebec entrepreneurs and businessmen who, allegedly, would be unable to cope with the new conditions on international markets.
When it comes to freer trade with the United States, the Liberals are like chickens with their heads cut off-running around in circles before keeling over.


Mr. Speaker:: Order, please. Sixty seconds.
June 9, 1986



CANADIAN ARMED FORCES


Mr. Derek Blackburn (Brant):: Mr. Speaker, the Associate Defence Minister says that politicians can campaign on military bases but spouses of military personnel are forbidden to campaign for better living conditions. The contradiction in his position is obvious. The spouse of a member of the Armed Forces could campaign for better living conditions if that spouse were a candidate for the Conservative Party. But God help that spouse if he or she starts a petition for a new stop sign without the nomination of a political Party. That kind of activity is taboo.
One can just see the Minister campaigning on an Armed Forces base during the next election. He could make a brilliant speech before a packed house, but the audience would be forbidden to applaud. He could go canvassing door-to-door, but if a base resident asked him about improved living conditions he would have to report this breach of political neutrality to the base commander. The Minister will have to re-think his position. It is an unjustifiable attempt to create two classes of Canadians with two different sets of rights.



POLITICAL PARTIES

[Stage Direction]
Oral Questions NUCLEAR ENERGY

Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, the uranium resources appraisal group of the Department of Energy, Mines and Resources has recently made available its latest assessment of supply and requirements. Its report contains good news for those interested in Canada's energy future. For the next 10 years Canadian demand of some 2,000 metric tonnes of uranium per annum can easily be met from an established supply of about 12,000 tonnes per annum. The balance will generate considerable export earnings.
Low cost Athabascan Basin producers assure Canada's competitiveness in the years to come. Canadians can be justifiably proud of their $1 billion a year sales uranium industry.



PRESENCE IN GALLERY OF BELGIAN SECRETARY OF STATE FOR EXTERNAL TRADE

Mr. Speaker:: Order, please. I draw Hon. Members' attention to the presence in the gallery of Mr. Etienne Knoops, Belgian Secretary of State for External Trade.


Some Hon. Members:: Hear, hear!



CANADA-UNITED STATES TRADE NEGOTIATIONS-POSITION OF LIBERAL PARTY

Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, if Canadians are confused about the Liberal Party's position on enhanced trade negotiations, don't be too upset. It would appear that the Liberal Party President is equally confused. And if Iona, a primary spokesman for the Party, is confused, imagine the chaos going on in the minds of the Liberal caucus.
So, Iona, you say that your Party supports freer trade but doesn't like the way the Prime Minister (Mr. Mulroney) is handling the issue. The question seems to be, how do you feel enhanced trade should be negotiated? You say that the talks should not be bilateral but multilateral as well as sectoral. No, wait. You changed your mind and said that it should not be done sector by sector. Gosh, Iona, that's confusing!
However, what does appear to be crystal clear is that your Atlantic Liberal policy session was a three-day rhetoric-spewing, government-bashing jamboree, unfettered by any need to formulate constructive alternatives to a situation you condemn as unacceptable. And, Iona, for the benefit of those Liberals who justifiably feel somewhat in the dark, just how do you think the negotiations should be handled?



ORAL QUESTION PERIOD


Lloyd Axworthy: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Over the weekend there were a number of additional revelations which add further confusion to the Government's position on trade. In one of the Prime Minister's patented verbal backward somersaults he said that he now really wants to have a series of Auto Pacts.
The Auto Pact is not free trade but a managed trade system with safeguards and guarantees on both sides. Has the Government now abandoned its strategy for a comprehensive free trade agreement? Is it now instead pursuing a series of individual sectoral managed free trade agreements like the Auto Pact? Have we told the Americans this news?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, the answer to that is no.

June 9, 1986
Oral Questions GOVERNMENT POLICY


Lloyd Axworthy: Mr. Speaker, when does the Minister intend to tell the Prime Minister that, so he will not be making speeches outlining a direction for the Government which is obviously totally at variance with what the Secretary of State for External Affairs is putting forward? When is the Government going to get its act together? When will the Prime Minister, the Secretary of State and all the rest of them be able to talk with one voice, with some kind of unity and cohesion on their position?


Charles Joseph Clark: Mr. Speaker, on the weekend, after indicating that the Liberal Party policy was to proceed sector by sector, the President of the Liberal Party of Canada said:
To say that we'd negotiate it sector by sector, I don't believe that is exactly what we have in mind.
That is the clarity which exists in the Liberal Party. I know the Member would want to have the Prime Minister's statements quoted in their entirety and in context. The Prime Minister said:
That's what the trade talks are all about-extending the benefits of the Auto Pact to all industries, to all parts of Canada, not by piecemeal action but by a comprehensive duty covering all of our trade with the United States.


Some Hon. Members:: Hear, hear!


GOVERNMENT POSITION
Lloyd Axworthy: Mr. Speaker, can I assume from the Minister's answer that the Government has indeed changed its position from trying to secure a comprehensive free trade agreement and is now trying to secure a series of sectoral managed trade agreements under a general umbrella?


Some Hon. Members:: Oh, oh!


Lloyd Axworthy: If Members opposite do not know the difference, it is about time they learned. These are two very different things. It is very important in the pursuit of these negotiations that we are clear about what the Government is now trying to achieve.


Charles Joseph Clark: Mr. Speaker, the Government has not changed its policy. The Liberal Party has not found a policy.


Some Hon. Members:: Hear, hear!


PRIME MINISTER'S LETTER TO UNITED STATES PRESIDENT
Brian Vincent Tobin: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. On June 3 the Minister said categorically "no" when asked if the Government of Canada would cancel free trade talks if the U.S. tariff on softwood lumber goes ahead. Was the Prime Minister reflecting government policy in his letter of June 2 to the U.S. President when he said:
-I feel greater confidence that what we have just experienced is an isolated event; otherwise I would fear for the future of the negotiations now underway.


Charles Joseph Clark: Mr. Speaker, the Prime Minister was stating government policy. I was stating government policy. We were saying the same thing. That is a phenomenon unknown in the Liberal Party.


CONTENT OF LETTER
Brian Vincent Tobin: Mr. Speaker, perhaps the Secretary of State for External Affairs could tell us what is government policy. Is it his categorical "no" that talks are not subject to a favourable decision on softwood lumber, or the Prime Minister's implied threat to the U.S. President that, if tariff actions continue, the Prime Minister, in his own words "fears for the future of the negotiations now underway"? The Secretary of State may not be confused, but Canadians certainly are.


Charles Joseph Clark: There was no such implied threat.


SOFTWOOD LUMBER EXPORTS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, I have a question for the same Minister. According to a report in today's press Mr. Len Santos, senior U.S. Senate trade adviser to the U.S. Finance Committee, is contending that a promise was made by President Reagan to take action against Canadian softwood to ensure that the needs of the U.S. lumber industry were met, the implication being no matter what decision was reached by the ITC and the Department of Commerce in the United States, President Reagan had made a particular deal with U.S. Senators to take action after that against Canadian softwood producers.
Could the Minister tell us if the Government of Canada has looked into this report and tell us what the Government's reaction was if the report is accurate?


Charles Joseph Clark: Mr. Speaker, I have seen the report, and I must confess I do not know who Mr. Santos is, or with what authority he speaks. I do know two things. One is that the Quebec Accord made it very clear that the discretion of the American Government would not be applied against Canada to bring in protectionist measures. That is why this Government reacted with such strength and effectiveness when the Quebec Accord was breached on the shakes and shingles question.
The second thing I know is that it is very helpful to Canada that Commerce Secretary Baldrige, when he referred to the court- like atmosphere in which the softwood question is being decided, indicated that that would be decided by due process. In other words, it would be decided on its merits, not by politics.
June 9, 1986


STATEMENT ATTRIBUTED TO U.S. SENATE COMMITTEE ADVISER
John Edward Broadbent: Mr. Speaker, to inform the Minister who this American gentleman is I am told that Mr. Santos is, in fact, the senior adviser to the key U.S. Senate Finance Committee, senior adviser in trade, a rather important position I am sure the Minister will agree. Just a few moments ago I talked with the man, following this report, and he has confirmed with me that it is his strong belief that the U.S. lumber industry does believe it has a commitment from the United States President to take action independently of these hearings.
In terms of the documents that were released recently by our Government on trade talks certain important passages are left out about the course of action that the U.S. Government might be-


Mr. Speaker:: Order, please.


John Edward Broadbent: Could the Minister tell us if a passage that was left out has any reference to this kind of independent action by the United States President?


Charles Joseph Clark: Mr. Speaker, I am pleased that the Leader of the New Democratic Party found out who the gentleman was before he talked to him. Second, I think it is fair to say there was no reference to that unlikely eventuality in any of the matters to which the Hon. Member is referring.


REQUEST THAT GOVERNMENT MAKE INQUIRIES
John Edward Broadbent: Mr. Speaker, given the importance of this to the 300,000 Canadians working in the industry, will the Minister now, today, get in touch with Washington to find out if the American President made such a deal with U.S. Senators, because it could affect thousands of jobs unfairly in this country?


Charles Joseph Clark: Mr. Speaker, what is important is that we have a guarantee of due process. We have a guarantee that this courtlike procedure will be conducted in a court-like way. Canada's case will be judged on its merits, not on the basis of politics. Last week the New Democratic Party was inviting us to have the Prime Minister intervene in a way that would create a precedent of political intervention. Had we done that, that would have opened the way for U.S. Senators to interfere themselves in that court-like proceeding. That would have hurt Canada's interests. We want to protect Canada's interests, and that will be done if due process is respected, as we expect it to be.


U.S. PROCESS-POSSIBLE RESIDENTIAL INTERVENTION
Herbert Eser (Herb) Gray: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Is it not correct that Mr. Len Santos, senior trade adviser to the U.S. Senate Finance Committee, said that, even if there is due process, after it is over the President is going to intervene? If that is the case isn't the whole American process meaningless and part of some complicity involving this
Oral Questions
Government and the Americans to sell out 100,000 softwood lumber jobs in Canada?


Charles Joseph Clark: Mr. Speaker, that question has been answered. Let me now put a question to the House Leader of the Liberal Party. When is the Liberal Party going to repudiate their president for her unwarranted attacks upon the Governor General of Canada?


SECURITY OF CANADIAN WORKERS
Herbert Eser (Herb) Gray: Mr. Speaker, all that this shows is that the Government is incapable of answering the simplest question on this crucial matter. Will the Secretary of State for External Affairs publicly state right now that the hundreds of thousands of workers in the Canadian softwood lumber industry will not be held hostage so that the Prime Minister can lift up his tattered ego with respect to enabling these trade talks to go on? Will he say that these hundreds of thousands of workers will not be held hostage to the success of these foundering free trade talks?


Charles Joseph Clark: Mr. Speaker, our principal preoccupation is to protect the security and the opportunity of those Canadian workers and others who are threatened by protectionism in the United States. That is precisely why we are involved in trade negotiations that we hope will lead to a better system than that which, after years of administration by the Liberal Party, leaves Canadians exposed to the kind of threat we are facing now.


Herbert Eser (Herb) Gray: It only happened after you became the Government. That is when it all happened.


UNITED STATES PRESIDENT'S LETTER TO U.S. SENATOR
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. It concerns the comments by Len Santos who said in the interview today that President Reagan:
-has made a "clear deal" to take action against Canadian lumber imports in return for the powerful senate finance committee giving a green light to free-trade negotiations.
What does the Minister make of the wording in President Reagan's letter to Senator Packwood in which he says:
-I intend to press for an expedited resolution to this problem independent of comprehensive negotiations.
What does that mean?


Charles Joseph Clark: Mr. Speaker, perhaps the New Democratic Party, which prefers American authorities on this question, would like to find some other senior adviser to some committee of the United States Congress. I will indicate what we know. We know that we have, in the Quebec Accord, an undertaking from the President of the United States that his discretion will not be used to apply protectionist measures against Canadian workers. That is one guarantee that did not exist before, and that was secured by this Government.

June 9, 1986
Oral Questions


John Edward Broadbent: What happened to shakes and shingles?


Charles Joseph Clark: The second thing we know is that in the countervail provision we have the commitment to due process which means that a court-like atmosphere will prevail.
A moment ago the House Leader of the Liberal Party said that these matters had begun since this Government was elected. He knows that precisely this matter arose in 1982-83.


Herbert Eser (Herb) Gray: It was resolved.


Charles Joseph Clark: The difference is that when the timber industry came to the then Opposition and asked that we not make a political issue out of this question in a way that would jeopardize Canadians interests, we agreed not to make a political issue out of this question.


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: The Opposition now-


Mr. Speaker:: Order. A supplementary question.


WORDING OF LETTER
James Ross Fulton: Mr. Speaker, we know that President Reagan broke the Quebec Accord over the 201 on shakes and shingles. The Minister admitted that on Friday, here in Ottawa.
I want to ask the Minister again what he and his Government make of the wording in President Reagan's May 8 letter to Senator Packwood in which he said:
-I intend to press for an expedited resolution to this problem independent of comprehensive negotiations.
What do you think the President means? If you don't know, have you called, or has anybody called to ask him?


Charles Joseph Clark: Mr. Speaker, what I know and what I make of it is that whatever the President might say for domestic reasons in the United States-


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: -we have a guarantee in Canada, through the Quebec Accord, and we have a guarantee through the court-like provision that is set up for the countervail hearing, unless the actions by Canada intrude politics into that court-like proceeding. That is why it is so important that the Opposition, in this softwood case, will act as the Opposition in Parliament did in 1982 and 1983 and not intrude politics into this case. What you are doing when you play politics with the lives of British Columbians is making it much more difficult for Canada to prevail and for us to be able to secure the jobs and the future of the softwood lumber industry in British Columbia and across Canada.


GOVERNMENT EXPENDITURES
Hon. Douglas C. Frith (Sudbury):: Mr. Speaker, my question is directed to the Deputy Prime Minister. It was confirmed this morning that the Prime Minister sent a five-man Film crew, using Air Canada, on his recent visit to Japan. In addition, he used Hercules aircraft and large film crews on recent visits to Europe and the Caribbean. Will the Deputy Prime Minister confirm that it is now public policy that, whenever the Prime Minister travels, the taxpayers will be expected to pick up the tab for the flight crew, for the load masters, for the seven staff of the Prime Minister's Office, the large equipment, and two vans? What price must the Canadian public pay for the Prime Minister's ego?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, I can tell the hon. gentleman that the practice is quite normal and he will be interested to learn, I am sure, that comparing the last full 12 months of the previous Liberal Government with the last 18 months of this Government, the number of flights have decreased by 22 per cent and the number of hours flown have decreased by 23 per cent, thus amounting to a saving of some $2.5 million to the Canadian taxpayer.


Some Hon. Members:: Hear, hear!


Douglas Cockburn Frith: The only normal thing about this is the size of the Prime Minister's ego.


PREPARATION OF VIDEO TAPES
Douglas Cockburn Frith: Mr. Speaker, what is the purpose of preparing those video tapes? To what use will they be put? Are they going to be used as election material for the next federal election? If so, is the Conservative Party going to reimburse the public treasury for the wasted dollars involved?


Erik Nielsen: Mr. Speaker, the hon. gentleman should know better, but perhaps he did not have sufficient time to learn as a short-lived Minister in the previous Government. Those products normally wind up at the Archives and, indeed, sometimes supplant network material-


Derek Nigel Ernest Blackburn: Who would ever want to look at them?
June 9, 1986


Erik Nielsen: -which is messed up. The Hon. Member speaks of ego. We do not have an aircraft large enough to carry around the ego of the President of the Liberal Party of Canada who makes such distorted statements and slanders against our Governor General.


GOVERNMENT POLICY
Nelson Andrew Riis: Mr. Speaker, my question is supplementary again, directed to the Deputy Prime Minister. In the last Budget the Minister of Finance said: "This Government has moved decisively to bring spending under control", and: "Ottawa must become leaner and more efficient". At a time when the Government has cut back on increases to family allowance-


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: -cut back on increases to family allowance, does the Deputy Prime Minister feel that $40,000 per trip, plus the cost of the crew itself, is a proper expenditure? Is this the kind of signal the Government is trying to send out, that it is a priority for the Prime Minister to make a video of himself?


Erik Nielsen: Mr. Speaker, I have already told the House, perhaps the hon. gentleman was not listening, that the number of flights has been reduced in 18 months, as compared with 12, by 22 per cent, and the number of hours decreased by 23 per cent, for a total saving of $2.5 million.
Let me ask the hon. gentleman, does he think he contributes to that kind of saving when he and other Members of his Party, and the Liberal Party, accept rides on an aircraft which flies a normally scheduled run to Europe, thus displacing our Armed Forces who are required to buy commercial tickets-


Derek Nigel Ernest Blackburn: Come on. How many in your Party have done it?


Erik Nielsen: -as a result of-


Some Hon. Members:: Oh, oh!


REFUGEES
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. I have copies of a letter which her Department sent to thousands of individuals who are wanted for serious and violent crimes and who are being invited to apply for permanent status if they file a refugee claim.
Why is the Minister going outside the present refugee backlog and soliciting thousands of false refugee claims,
12,000	alone in Toronto, from such individuals as drug traffickers and murderers? Does she not think that this
Oral Questions
horrendous amount of extra work will only penalize the current and legitimate refugee claims which already number 22,000?


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, I can say to you that the Hon. Member's statement is grossly exaggerated. I can tell him that this review will include no one with regard to criminality measures or health considerations. I do want to say that the people who are involved in this process are already in the process and the place they can ask for a refugee determination is at the inquiry stage. The Hon. Member may say that certain people should be blocked from having access to that, but as long as we can guarantee security and health considerations we feel the process should be open to those who may want to ask for refugee status in this country.


REQUEST THAT LETTERS BE RECALLED
Sergio Marchi: Mr. Speaker, is the Minister suggesting that the drug traffickers, offenders and those with armed weapons, should be considered for refugee claims? That is not the definition of "refugee" under the UN. Is the Minister prepared immediately to recall those letters to such offensive individuals and ensure that the only individuals who can apply for the special administrative review are those individuals in the 22,000 backlog who have already submitted a claim, and not the criminals who are outside that stream?


Flora Isabel MacDonald: Mr. Speaker, the Hon. Member does not want to hear this. I have already indicated to him that this review will not benefit those who are criminals or those with health considerations who are not allowed to enter this country.


Sergio Marchi: That is not true.


CANADA POST CORPORATION
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, my question is directed to the Deputy Prime Minister. It is in regard to the Post Office. Why has the Government chosen this moment to terminate the appointment to the Board of Directors of Canada Post of one of the labour representatives? Why is it doing this now? Is it intending to change the practice of asking the CLC to nominate labour members to the Board? Did it do it now because that member wrote a letter of complaint to the Government asking for information in order to do his job? Or did the Government do it because there is an important meeting coming up to discuss plans regarding the Post Office?

June 9, 1986
Oral Questions


Mr. Bill Domm (Parliamentary Secretary to Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, I am pleased to advise the Hon. Member that none of the reasons advanced as justification for the recent changes are true. The realism is that periodically the Government does review members' appointments to the Board of Canada Post. That has been an ongoing process. It has happened in former administrations and was no different from what is happening in this administration.


METHOD OF APPOINTING LABOUR REPRESENTATIVES
Cyril Keeper: Mr. Speaker, is the Government aware that there are two labour positions on the Board of Canada Post and that it has been a practice to seek the nominations from the President of the Canadian Labour Council for those positions? Is the Government aware that there are other members of that Board who have served the same length of time as the member who has been taken off the Board, and who still continue to serve?


Hon. Bill McKnight (Minister of Labour):: Mr. Speaker, the Hon. Member states that those two Board positions which have been filled by representatives of organized labour are positions which are filled by the CLC. One of the present members on the Board of Canada Post is the President of the Letter Carriers Union of Canada. In due course other appointments will be made to the Board of Canada Post, as the Parliamentary Secretary has just told the House. Positions change and there will be more appointments in due course to the Board of Canada Post.


EMPLOYMENT
Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration.
Last week, the Minister indicated that the planning stage of the Community Futures Program in the Acadian Peninsula had been signed in February. Later on, she informed us it would take at least a year for the program to be implemented. Is the Minister prepared to recommend to Cabinet that the Acadian Peninsula be designated as a community whith particularly pressing needs?


Flora Isabel MacDonald: Yes, Mr. Speaker, it is one of the communities in New Brunswick which is being considered for Community Futures right at this present time.


LENGTH OF DELAY
Fernand Robichaud: Mr. Speaker ... But you are saying it is being considered. Are you
trying to tell me that the Peninsula's jobless will have to wait a whole year, until this special program becomes operational? [English]


Flora Isabel MacDonald: No, indeed, Mr. Speaker, the Community Futures Program is being implemented in a number of places across the country. We have situations in all the provinces where we are according priority implementation to the Community Futures Program. These are in areas where unemployment is at its highest. It does take some weeks to work out the individual arrangements, but I can tell the Hon. Member that the Acadian Peninsula is certainly one of those at the top of priority.


NATIONAL SECURITY
Alan Redway: Mr. Speaker, my question is for the Secretary of State for External Affairs. Last year the United States Government told Canada that the Polar Sea would sail through the Northwest Passage. Is it true that the Polar Sea will make the return voyage through the Northwest Passage this year?


Charles Joseph Clark: No, Mr. Speaker.


EXTERNAL AFFAIRS
Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, my question is also for the Secretary of State for External Affairs. Is it the Government's intention to obtain and investigate the information about the President-elect of Austria that is available through both the United Nations and the Government of Yugoslavia?


Charles Joseph Clark: Mr. Speaker, as was indicated, in what I thought was a very sensitive and thoughtful statement prior to Question Period by the Hon. Member for Mount Royal, this is a question of some delicacy. If I may quote the Hon. Member, it is one in which it would be unwise for Canada to act until all the facts are known. The people of Austria have just concluded a democratic election. It is not the practice of Canada to pass judgment or comment upon the results of free elections in other countries.
June 9, 1986

I should also make the point to the House of Commons that the record of this Government with regard to wartime atrocities is well known, as demonstrated by the appointment of the Deschenes Commission.


REQUEST THAT GOVERNMENT OBTAIN WARTIME RECORDS
Ian Deans: Mr. Speaker, I am not suggesting for one moment that some involvement in Austria's internal politics should take place. What I am asking is whether the Government intends to seek and obtain all of the relevant information, both from the United Nations and from Yugoslavia, in order to make a judgment about what, if any, course of action we should follow, either independently or in conjunction with other countries, given the very serious allegations which have been made over the course of the last number of months.


Charles Joseph Clark: Mr. Speaker, we think it important that all the relevant information be available to Governments and to others who must make decisions. Canada will certainly act on that understanding.


NATIONAL DEFENCE
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is directed to the Deputy Prime Minister. I would like to get back to the matter of the Armed Forces Hercules that was carrying trailers with video taping equipment. Could the Deputy Prime Minister inform the House what justification there is for these flights, and is it normal for the Prime Minister to be accompanied on his flights by a plane carrying this amount of video taping equipment?


Erik Nielsen: Perfectly normal practice, Mr. Speaker. One thing the Hon. Member can take for a certainty, however, is that unlike the previous administration this Government does not use Government aircraft for political purposes.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!
Oral Questions GOVERNMENT POLICY


Jean-Robert Gauthier: Mr. Speaker, I ask again what justification there is for having a Hercules Armed Forces aircraft-and you (Mr. Nielsen) are the Minister of National Defence-follow the Prime Minister, loaded with audio visual equipment and two little vans. Is there any justification, and is there a budget for this custom?


Erik Nielsen: That is the same question, Sir, and I again say that it is perfectly normal practice.
It is perfectly abnormal practice to have the Hon. Member for Winnipeg-Fort Garry, when he was Minister of Transport, and the then Liberal Minister of Indian Affairs and Northern Development, and a third cabinet Minister, all arrive in the City of Winnipeg to attend political meetings within two hours of each other, in three different jets.


Mr. Ouellet:: That is not true and you know it.


MEETING CO-ORDINATED ON SOFTWOOD LUMBER INDUSTRY-GOVERNMENT'S EXPECTATIONS CONCERNING QUEBEC PARTICIPATION
Gabriel Fontaine: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and concerns the co-ordination meeting on the lumber industry. The meeting, which will take place next week in Vancouver, will include representatives from the ten provinces and people from the industry, both employers and employees. What are the Minister's specific expectations regarding the participation of the Government of Quebec, a major softwood producer?


Charles Joseph Clark: Mr. Speaker, as the Hon. Member just said, we have invited all the Premiers and Territorial Heads of Government to delegate a minister to the meeting in Vancouver on Friday. We have also invited representatives from the industry. I am told that the industry intends to select its representatives on a regional basis. There will therefore be a representative from the province of Quebec. We have yet to receive an answer from the unions, but in any event they will be represented, although I cannot say whether there will be a Quebec union representative at the meeting.

June 9, 1986

Oral Questions CANADA LABOUR CODE


PRESENCE OF FOOD INSPECTORS IN ALBERTA FOOD PLANTS DURING STRIKE
Mr. Rod Murphy (Churchill):: Mr. Speaker, my question is for the Minister of Agriculture. Can the Minister of Agriculture indicate why his Department has ordered food inspectors to go into the struck plants in Alberta despite the very dangerous situation that action imposes on those workers?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, that is not the case.


William Hunter (Bill) McKnight: Mr. Speaker, the call for a decision under Part IV of the Canada Labour Code proscribing dangerous work, made by the employees to whom the Hon. Member refers, was accepted by the Labour Affairs officers. A decision on this call was made by those officers under the assumption that, first, there was adequate assurance from the authorities, and that people would obey the law.


REPORTED TELEPHONE CALL TO FOOD INSPECTOR
Rodney Edward Murphy: Mr. Speaker, my supplementary question is for the same Minister. Can the workers feel that the law is being enforced with all impartiality when a Parliamentary Secretary to the Solicitor General phones one of those food inspectors at one o'clock in the morning and asks her to go to work?


William Hunter (Bill) McKnight: Mr. Speaker, all I can say to the Hon. Member is that the employees referred to in his original question made a call to Labour Canada with respect to dangerous work. Labour affairs officers, under the criteria established, reviewed that call and found that it was not dangerous work in this case.
* *
*


SOFTWOOD LUMBER EXPORTS-U.S. INDUSTRY'S PETITION FOR COUNTERVAIL ACTION
John Alexander Frances MacDougall: Mr. Speaker, my question is for the Secretary of State for External Affairs. It is with respect to the decision last Friday of the U.S. Commerce Department with regard to the softwood lumber imports. Will the Minister tell my constituents, and other Canadians who are directly or indirectly involved in the industry, what plans his Department has, in working with both the provinces and the industry, to come up with a solution?


Charles Joseph Clark: Mr. Speaker, the jurisdiction in this matter is, of course, primarily provincial, although in our judgment the
federal Government has a role of leadership to play in drawing the parties together.
I have indicated earlier that we are dealing here with a court-like proceeding. We are hoping that the Opposition will refrain from the temptation to inject politics into this courtlike proceeding. For our part, what we are trying to do is ensure that there will be the best possible co-ordination of the strongest possible Canadian case. For that reason I am drawing together representatives of the provincial Governments, the industry, the labour unions affected, and the federal Government, in a meeting in Vancouver on Friday.
*
* *


CUSTOMS AND EXCISE
Sheila Finestone: Last Thursday, Mr. Speaker, the Minister of Finance did an about-turn and declared that books imported from France into Canada would not be subject to a 10 per cent tariff. The same day, however, over CHRC in Quebec City the Prime Minister said that Canada could not levy a tax only on American and English books, that he had to tax all books, including those from France. My question is directed to the Minister of State (Finance): Once and for all, can the Minister of Finance dispel the confusion stemming from his tariff policy on books? Whom should Canadians believe? The Prime Minister or the Minister of Finance?


Barbara Jean McDougall: Mr. Speaker, I think that the Minister of Finance made that clear when he responded in the House last week to the question regarding English language books and textbooks. The answer was totally clear.


REQUEST THAT BOOK TARIFF BE REMOVED
Sheila Finestone: Mr. Speaker, the Minister did not make it totally clear, and neither did the Prime Minister. Therefore I would like to recommend that the Government withdraw its tariff on books-


Some Hon. Members:: Question.


Sheila Finestone: Not only is the Government penalizing book-readers-


Some Hon. Members:: Question.


Sheila Finestone: My question, Mr. Speaker, is will the Government remove that tariff? You are both penalizing English or French-
June 9, 1986


Some Hon. Members:: Order.


Sheila Finestone: -or you are being discriminatory based on language. Therefore what possible lesson is there in this action and how will it benefit the B.C. lumber workers? What 1 would really like to know is how you think it is going to be helpful.


Some Hon. Members:: Order.


Barbara Jean McDougall: Mr. Speaker, I guess there was a question in there somewhere. However, I believe that the Minister of Finance and the Secretary of State for External Affairs have responded most appropriately in the circumstances to what they regarded as a situation that was very serious for Canada. We took the situation seriously and we responded in an appropriate way. I do not know if that answers the question because I do not know what the question was.


ENVIRONMENT CANADA
William Alexander (Bill) Blaikie: Mr. Speaker, my question is for the Deputy Prime Minister and is on the second task force report on the future of the Department of the Environment. I wonder if the Deputy Prime Minister could assure the House that, regardless of whatever recommendations may be contained in this second report, there will be no demotion of the Department of the Environment and that there will be no stripping away from that Department of the responsibilities it now has for the environment of Canada.


Erik Nielsen: Mr. Speaker, I answered a similar question last week when I informed the House that there was a follow-on study team. I explained the purpose of it last week. When the material is ready it will be tabled as though it were part of the 21 reports that were tabled March 11, with the same understanding that the follow-on report does not contain government policy but contains a series of options that will be referred to committee for examination there in due course.


TABLING OF REPORT
William Alexander (Bill) Blaikie: Mr. Speaker, what the Deputy Prime Minister was not asked on Friday was for an assurance that there be no demotion of the Department of the Environment and no stripping away of its responsibilities. Today we are looking for an assurance of that kind and also for an announced intention on the part of the Government to table that report now. I understand that the report is ready and has been for some time. When can we see it?
Oral Questions


Erik Nielsen: As soon as it is printed, Mr. Speaker. It is my intention to table it on the same basis that the reports were tabled on March 11. The matter will be referred to committee and examined there in the same way that all of the other study team reports-


William Alexander (Bill) Blaikie: What about the assurance?


Erik Nielsen: The same kinds of questions were asked, as the hon. gentleman will recall, on March 11 and subsequent days, and the same answers were given consistently. The answer was that this is a first orderly step on the way to cabinet discussion. The committee system will be employed as well as the usual facilities of the House.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Minister of Agriculture. Last July the Minister promised to bring in farmer-creditor arrangements legislation with real teeth to assist farmers facing foreclosure and bankruptcy. In January the Minister knuckled under to the banks and said that he would water down the legislation to suit them. Will the Minister bring in strong legislation to help the
8,000	farmers facing serious financial difficulty, not just a watered-down bankers' version?


John Wise: Mr. Speaker, first I would like to reject most of the information contained in the Hon. Member's preamble. The simple answer to the question is that the record will show that we have fulfilled our commitments and we have every intention of delivering on this one as well.


TIMING OF INTRODUCTION
Maurice Brydon Foster: Mr. Speaker, the Prime Minister promised to have this legislation passed by the end of June. Could the Minister explain why it is that the legislation has not been tabled in the House in the last five weeks if the Prime Minister is really serious about having this legislation on the books by the end of June?


John Wise: Mr. Speaker, the Prime Minister, the Cabinet and the Government are serious about moving forward with this piece of legislation. I would ask the Hon. Member to check his calendar. We have not yet reached the end of June. I would hope that we would find support forthcoming from his colleagues, and indeed from my colleagues in the New Democratic Party, so that, depending on them, we will indeed be able to meet that deadline.

June 9, 1986
Oral Questions


ACCESS TO FOOD INSPECTORS' REPORTS
Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, my question is also directed to the Minister of Agriculture but is on a different matter. Over the past several years meat inspection in Canada has shifted from government inspection to self-inspection, with occasional spot-checks to protect the public interest.


Nelson Andrew Riis: Just like the banks.


Victor Fredrich (Vic) Althouse: Can the Minister tell us why the public is not given access to these spot-check reports since public knowledge is now the only control against sloppy practices by processors?


John Wise: Mr. Speaker, the very simple answer to that is that there are two cases involved. One case goes back a number of years and indeed, as far as the Department was concerned, we wanted to make that information available to the public. However, certain segments of the industry lodged a court injunction against making that information public. In the last round of observations made by certain media people across the country, an investigation was triggered immediately. To my knowledge, that has now been completed. I see no reason for it not being made public and, if it has not already been made public, I would be happy to inquire about it.


AVAILABILITY OF REPORT
Victor Fredrich (Vic) Althouse: Mr. Speaker, it is over a month ago now that the Kitchener-Waterloo allegations were being investigated by the Minister's Department and the Director of the Inspections Branch had promised to report within a week, five weeks ago. Why has that report not been made available to the Kitchener-Waterloo Record and to the public?


John Wise: Mr. Speaker, I am not sure if it was five weeks ago. It would seem to me that a more accurate time frame might well be three weeks ago. However, I well recall receiving the report. I gave a message to the appropriate departmental official to release it. I would be happy to inquire if it has not been released.


ROYAL CANADIAN MOUNTED POLICE
Ross Belsher: Mr. Speaker, my question is directed to the Solicitor General. When a contractor finds it necessary to go to court to get access to the job site and the court gives an order limiting pickets to two per entrance, how long should the contractor have to wait for the protection of the RCMP to enforce the court order?


Hon. Perrin Beatty (Solicitor General of Canada):: Mr. Speaker, I think the Hon. Member is referring particularly to a court injunction granted in Langley, British Columbia. In this particular case the Royal Canadian Mounted Police were
operating as a contract police force for the province. It would be under the jurisdiction of the province as to what sort of time would be taken.


EXTERNAL AFFAIRS
Hon. William Rompkey (Grand Falls-White Bay- Labrador):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. I have here a memo from the Canadian Embassy in Washington to External Affairs in Ottawa that was leaked over a week ago now. The subject of the memo is the safe use of asbestos in the United States, something which of course means hundreds of jobs here in Canada. Has the Secretary of State done the investigation he said he would do? Is it complete? Who leaked the memo? What will the Secretry of State do about the bungling to make sure that our people in Washington are working on behalf of the workers in Canada?


Charles Joseph Clark: Mr. Speaker, first I will enquire as to three of the four questions the Hon. Member asked and I will get back to him. As to who leaked the memo, he probably knows that better than I do, and I would be very interested in his telling me.


PROTECTION OF JOBS
Bill Rompkey: Mr. Speaker, whether members of the Party opposite realize it or not, they are now the Government and the onus is on them to conduct the affairs of Canada on behalf of the people of Canada. It is not enough to slough off a question like that. Who leaked the memo? We want to know, and I would like to ask the Secretary of State again because hundreds of jobs in the asbestos industry in Canada depend on it. Will he do something to assure those workers that the Government is working on their behalf?


Charles Joseph Clark: Mr. Speaker, the Government is working very vigorously on behalf of the asbestos workers in Canada, as the Hon. Member knows. We have made representations before a number of bodies in the United States, and we intend to continue to do so.
Obviously it is important to the case we make on this matter, as it is on the international trade matter, that confidential information that will help Canada prevail not be leaked to other people. That is why I would like to know who is leaking information when it is leaked. Since it is the Hon. Member who has the information that was leaked, I suggest that he may know better than I, and if he is genuinely interested in helping the Canadian case on asbestos, he will reveal his sources.
June 9, 1986


PUBLIC SERVICE
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is for the President of the Treasury Board. I wonder if he could advise the House why four Departments involved in the marine sector decided to put all their ships out to sea at four o'clock on Friday in order to prevent meetings with Public Service Alliance of Canada representatives in a number of cities across the country?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, as I advised the House last week, negotiations in this labour dispute resumed last week. Unfortunately, no settlement was reached. The labour representatives walked away from the table. We are prepared to continue negotiations following a new offer that was tabled by government officials, and we would very much hope to be able to resolve this conflict as we have resolved every other collective bargaining issue which has come up over the last several months.


PRIVILEGE
Lloyd Axworthy: Mr. Speaker, I wonder if the Deputy Prime Minister (Mr. Nielsen) would like to stay in the House while I raise a matter of privilege. I see the Minister has now withdrawn, but I would like to raise-


Mr. Speaker:: Order, please.


Lloyd Axworthy: -a matter of privilege. He suggested in the House that during the course of my tenure as a Minister I was involved with three other Ministers in having aircraft at the Winnipeg airport. That is simply not the truth.


Some Hon. Members:: Order.


Lloyd Axworthy: It is not the truth. I want the Minister to withdraw that remark. It is simply not a fact.


Mr. Speaker:: Order, please. I think the Hon. Member knows full well that that is not a question of privilege.


Lloyd Axworthy: Mr. Speaker-


Some Hon. Members:: Sit down.


Mr. Speaker:: Order, please. It is not. Would the Hon. Member please resume his seat. I take it the Hon. Member is claiming that something was said which is not the case. The Hon. Member knows that there are decisions after decisions
Privilege
after decisions in the House that those are matters of dispute as to facts; those are not questions of privilege.


Lloyd Axworthy: Mr. Speaker, on a point of order. It is not right in this House for any Member to say something which is not under dispute as to whether it is a fact when it is simply not a fact. This Minister and others use that technique all the time. I want him to withdraw that remark because it is not true and he should not be allowed to get away with that tactic.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Hon. Members know full well that if they have a matter which they want to put down by substantive motion, they should do so. There is no question of privilege here. If the Hon. Member wants to make a statement through a motion he has that right, or if he wishes to make a statement tomorrow as to what is his view of the facts he has that right, but there is no question of privilege here.


ALLEGED SLANDEROUS STATEMENTS
Sheila Maureen Copps: Mr. Speaker, in answer to a question from a member of the Liberal Party, the Deputy Prime Minister (Mr. Nielsen) accused the President of the Liberal Party of making slanderous statements. I do believe, given your ruling, Mr. Speaker, in other areas, that that particular comment should be struck from the record.


Mr. Speaker:: Order, please. The Hon. Member will know that Members of this House have absolute free speech and the privilege of free speech. The only time the rules enter into the matter is when Hon. Members are saying something unparliamentary about another Member.


Sheila Maureen Copps: Oh, oh!


Mr. Speaker:: Order, please. The Hon. Member may want to check that matter with the authorities, with her Whip or with her House Leader who can explain it to her.


PRIVATE MEMBERS' BILLS-LOSS OF POSITION WHEN OPPOSITION DAY DESIGNATED
James Ross Fulton: Mr. Speaker, my question of privilege arises from the new process under which we are dealing with Private Members' Bills. As I think you are aware, Mr. Speaker, three Bills were drawn and went before the legislative committee which will come before the House for a vote.
On May 9, it was first scheduled that I would have the opportunity during Private Members' Hour that evening to debate my Bill. On May 9, as reported in Hansard, the Acting Speaker at that time ruled without prejudice that Bill C-270, dealing with the A-B line, would go to the bottom of the list, but that there would be an early discussion among House Leaders to come up with a new way of dealing with this matter in order to maintain the places of the 15 other Members.

June 9, 1986
Privilege
Any time an opposition day is designated by the Government, the Private Member's Bill that is to come up on that day goes to the bottom of the list in order to preserve the positions of the other 15 Members, so that their privilege in terms of position is not affected.
When it happened the first time I accepted it, even though I had gone to some degree of effort to organize speakers, to prepare, and to talk with the Secretary of State for External Affairs (Mr. Clark) and others to ensure that the debate would go on and that we would send the Bill to the legislative committee so that it could get back to the House. It happened again, this most recent time being today.
In terms of freedom of speech, there are several notations I should like to cite. It seems to me that the only way we can preserve the rights of Hon. Members to debate their Private Members' Bills as set or as early as possible is to come up with some new way of reintroducing the Bill, perhaps not at the next Private Members' Hour, but certainly not all the way back to the bottom. I think that effectively discriminates against that individual Member, particularly when it happens twice as it did in my case on May 9 and again on June 9.
The reason I think it is such an important question of privilege is that steps are being taken by another country in relation to the contents of this Bill.


Mr. Speaker:: Order, please. The Hon. Member is now departing substantially from that of which he sent the Speaker notice. He knows that I cannot allow him to do that. If he has citations he wants to make with regard to a putative question of privilege, I can hear them, but I wish he would come to the question of privilege.


James Ross Fulton: Mr. Speaker, there are four citations which I think are particularly germane. One is from Beauchesne's Fifth Edition, Chapter 2, under "Definition". I will not read all of it into the record because I am sure Your Honour knows what it is. In part it reads:
The distinctive mark of a privilege is its ancillary character. The privileges of Parliament are rights which are "absolutely necessary for the due execution of its powers". They are enjoyed by individual Members, because the House cannot perform its functions without unimpeded use of the services of its Members;"-
It seems to me that in this case I have not been able to do that.
The second citation I want to draw to Your Honour's attention is again from Beauchesne's, Chapter 2. Citation 55 under "Freedom of Speech" reads:
The privilege of freedom of speech is both the least questioned and the most fundamental right of the Member of Parliament on the floor of the House and in committee. It is primarily guaranteed in the British Bill of Rights which declared "that the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place outside of Parliament".
The other two citations are from Chapter 6, entitled "Privilege of freedom of speech". The section entitled "Necessity of freedom of speech" reads as follows:
Freedom of speech is a privilege essential to every free council or legislature. Its principle was well stated by the Commons, at a conference on 11 December 1667, the conference which resulted in the reversal of the conviction in 1629 of Sir John Eliot and others:
"No man can doubt", they said, "but whatever is once enacted is lawful, but nothing can come into an Act of Parliament, but it must first be affirmed or propounded by somebody: so that if the Act can wrong nobody, no more can the first propounding. The members must be as free as the houses; an Act of Parliament cannot disturb the state; therefore the debate that tends to it cannot;"-
I think that is the key passage. It continues:
-"for it must be propounded and debated before it can be enacted".
The key point in terms of the privilege with which I should like you to deal, Mr. Speaker, is the effect of not having a rule in the House or some kind of agreement whereby the rights of the individual Member who is dislocated by the designation of a day are not overly negatived by the other 15 Members who automatically slide ahead in the time schedule. The Member who happens to have his or her Bill come forward on a designated day is the one who loses so much more than any other Member.


Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, I understand the representation being made by the Hon. Member. However, procedurally I would have to argue that there is no question of privilege because Standing Order 38 indicates, whether or not we like it, that no Private Members' Business shall be taken up on an allotted day.
The Hon. Member mentioned agreements, and I should like to put on the record what I have done. I have given his House Leader and the House Leader of the Official Opposition a draft copy of an amendment to the Standing Orders, which I thought might address the dislocation which takes place. Certainly we are acting in good faith. I think all House Leaders would be interested in coming to a satisfactory resolution and in addressing the anomaly pointed out by the Hon. Member.
I will not comment on who I am waiting for, but the matter has been before the House Leaders for some time. I will be meeting with them directly after we finish with this matter. I am hoping to raise it again with House Leaders, with a view to seeing whether we can, as a matter of agreement rather than having the matter adjudicated upon by the Chair, deal with it on a mutually satisfactory basis.
I know the Hon. Member's House Leader has been very good about the matter in terms of trying to find a resolution, but I would like to find something which would apply so that we can deal with Members who have been subjected to dislocation.
June 9, 1986


Ian Deans: Mr. Speaker, I listened with interest to what my hon. colleague had to say. He did mention that he did not want to comment on whom he was waiting for. Would he mind commenting on the fact that he is not waiting for us?


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: You took the words out of my mouth.


Mr. Speaker:: Let me first say to the Hon. Member for Skeena (Mr. Fulton) that there is no question of privilege. The rules require something to be done, that is, that Private Members' time not occur on a day when there is an Opposition motion under Supply.
I may say to the Hon. Member for Skeena that, with the exception of the scheduling which is now known somewhat in advance, it was always the practice, and has been for many years, that when an Opposition day has bumped a Private Members' motion, the motion has been moved to the bottom of the list; then on subsequent days under the old procedures the Table would try to find slots for those motions. What has changed in that sense is an attempt to schedule. There is the other problem relating to the matter, as to what happens on days when there is not notice, but that is not a question of privilege.
I think the Hon. Member has a grievance with regard to the rules, but when things fall between two stools we have tried to find solutions. The Chair has indicated before that it is hoping to find a solution to these problems by consensus or by an agreement between the House Leaders. The Chair would prefer to find a solution in that way, since that normally better represents the will of the House. That is what the Chair is waiting for. Let me conclude, however, by saying that there is no question of privilege.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Axworthy;
That this House condemns the lack of care and concern for workers in the cedar shakes and shingles industry and in the softwood lumber industry shown by the Prime Minister in his letter to President Reagan, in which he clearly put his personal interests ahead of those of working Canadians and calls upon the Government to take immediate action (1) to assist workers in the lumber industry and in the shakes and shingles industry by invoking the Employment Support Act; (2) by assisting in every way the softwood lumber industry in making the Canadian case before the United States International Trade Commission; (3) to ensure that proper time is given to make this case by, if necessary, obtaining extensions to the hearing time; (4) and by initiating proper and effective action under the rules of GATT to ensure that this matter is satisfactorily considered by the international trading system.
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Mr. Speaker:: Let us resume debate. When the House recessed at 1 p.m., I think the Chair had recognized the Hon. Member for Timmins-Chapleau (Mr. Gervais)


Mr. Aurele Gervais (Timmins-Chapleau):: Mr. Speaker, I am pleased to rise in the debate this afternoon on a matter of vital importance to Canadian forestry workers.

The motion before the House today deals with issues of over-riding importance to our nation and its future, and we can only reflect with sadness on the Opposition Party's willingness to try to seize partisan advantage from the hardships of the Canadian workers. At a time when the international trading environment upon which our country depends for its prosperity is crumbling under the blows of protectionist pressures in every nation, the Opposition is telling Canadians that efforts to improve our relationship with our closest trading neighbour are destined to fail.
It is also of particular interest that the motion calls for the Government to invoke the Employment Support Act to assist workers in the lumber industry, ignoring the fact that no tariff has yet been imposed against Canadian softwood lumber. While some people may be eager to tell Canadian workers that they are doomed, it is worth noting that Canada has been successful in withstanding protectionist efforts in the United States against the sector for a year and a half, and we still have every reason to hope that this success will continue. Concerned though we are by this countervailing duty petition, we should be gratified to recognize that with all the lawyers and lobbyists the U.S. industry has been unable to convince Congress or the administration to take action directly against Canadian lumber. Instead, after a huge political effort, the U.S. coalition must turn again to the same quasi judicial procedure that failed the coalition three years ago when Canadian practices were proven acceptable under U.S. law.
While the Government is deeply disturbed by this latest turn of events, we are grateful that at least we will have our day in court. We believe that the facts will speak in our favour and that the benefits of free trade and lumber will continue to be available to both countries.
We on the government side of the House resent the implication that the case is already lost. U.S. trade law is established to ensure that producers and consumers benefit from reliable, fair practices. There is absolutely no evidence that a tariff on Canadian lumber would be good for the economy of the United States. Indeed, the negative impact on the construction, home furnishings and trucking industries, to name but a few, far outweighs the advantages gained by the U.S. economy when lumber producers become more profitable through higher prices.
There should be no doubt in anyone's mind in this House as to the aim of this petition. It is to raise the price of lumber. Discussion about Canadian stumpage practices or any other Canadian practices from job creation to industrial incentives are strictly red herrings.

June 9, 1986
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Many U.S. producers have operated in Canada under our regulations without protest over the last two decades. The sudden concern over Canadian stumpage practices is directly related to the imbalance of currencies and the enhanced efficiency of Canadian producers who undertook extensive modernization in the late 1970s and early 1980s. Comparing U.S. stumpage systems to the Canadian models really is like comparing apples and oranges. Canadians pay a low rate of stumpage on average, but must contend with much more difficult terrain, longer hauling distances, higher labour rates and a completely different forest than our U.S. competitors. The important comparison is the price at which a producer can get the logs to his mill. We believe that Canadian and American producers come out approximately equal in this measurement.
The motion calls for the Government of Canada to assist in every way possible the softwood lumber industry as it makes its defence before the International Trade Commission of the U.S. Department of Commerce. I can assure the House that the close co-operation and team work which has characterized the Canadian defence to this point will continue. Our industry will be the primary defendant. The federal Government will play a key role in ensuring that the necessary data is collected and that all the involved parties are kept well informed so that they can work as an effective team.
We should note in passing that the petition against the Canadian lumber industry has implications beyond even that huge sector. Because the main element of the U.S. case relates to Canadian stumpage practices, a decision against Canada would have a negative impact on any sector dealing with wood products and, of course, the various service sectors supporting that sector. When we consider that some 350,000 people work in forestry-related occupations in Canada, we realize that this proposed tariff is a direct assault upon the well being of our national economy.
The Government has pledged to do anything it can to avoid this frightening possibility. But, as concerned as we are, we should not indulge in undue pessimism or defeatism. Two major factors are working in our favour. The first is the historical relationship between Canada and the United States, characterized most recently by the warm and cordial relations between the President and the Prime Minister (Mr. Mulroney). As John Kennedy said in the early 1960s:
Geography has made us neighbours. History has made us friends. Economics has made us partners.
What the U.S. coalition is proposing to do to Canada will not sit well with the average American citizen when he or she begins to fully understand what is happening.
A second major factor working to our advantage is simply self-interest. The major beneficiary of low Canadian lumber prices has been the American consumer. The U.S. has had over 14 quarters of uninterrupted growth with increasing employment, decreasing interest rates and inflation. A significant player in this prosperity has been historic levels of new housing starts and home renovations.
Despite the persuasive public relations effort of the U.S coalition, Americans understand that restrictions on Canadian
lumber will benefit only a few of them while increased lumber prices will harm millions of consumers. Estimates prepared by U.S. sources suggest that the average American home contains some $7,000 worth of lumber. The same sources indicate that every time the value of a new home rises by $1,000, some
300,000	families are pushed out of the housing market. In the case of lumber, where domestic U.S. sources are simply unable to supply adequate volumes of lumber to meet overall U.S. demand, the U.S. consumer will be over a barrel. Prices will have to rise with the resultant loss of jobs.
We see, therefore, that the United States' best interests lie in continued free trade of lumber. We must wonder what would make them act in a way which was against their best interests. What would make them impose tariffs which raise the price of a product they so badly need? One of the real dangers for Canada in this issue is an escalating round of rhetoric which fuels small-minded nationalism and creates differences between people who should be friends.
One of the leaders of the U.S. coalition said recently:
We are not accusing the Canadians of anything except subsidizing their stumpage. This is not protectionist legislation; all we are asking for is relief from foreign subsidies. We want to make it where our kids can once more go to college, eat apple pie, and sing about Mom. It just so happens that we have truth and right on our side.
What a ridiculous statement; what a ridiculous frame of mind. Is it any wonder that we have problems dealing with people with such a mentality?
On our own side of the border we have people, such as members of the Opposition, who demand that the Prime Minister phone the President and threaten and bluster, the way certain members of the previous Government do. To take that sort of action is to fan the fires of protectionism and nationalism. We can see very clearly what Canada's fate would be in such a configuration.
Canada is one of the few industrialized nations which does not belong to a major trading block. No matter how difficult our relationship with the United States might become, we can see clearly that no warmer reception awaits us in the Pacific Rim, South America or Europe. For a small nation dependant on trade these are dangerous times. The Progressive Conservative Party, aware of Canada's vulnerable position in a world where protectionism is once again held up as a solution for every nation's problems, has taken a dramatic step toward securing our future. We have initiated a bilateral trade negotiation which could secure access to one of the largest and most vibrant markets in the world. At the same time we want to put behind us various forms of trade harrassment such as the continuous assault on Canadian lumber we are facing again today.
One of the major objectives of the negotiations opened by Ambassador Reisman is to design a system of trade conflict resolution which avoids the heavy-handed and expensive procedures now in use. We go into these negotiations with our eyes open. We have no illusions about our neighbours; they are tough businessmen. However, proper rules can only benefit both parties.
June 9, 1986

The coming months will be some of the most crucial in Canadian industry as these negotiations proceed and we fight various trade actions already in place against us. It will take all of Canada's strength and determination to persist in the effort to negotiate a new arrangement in spite of the frustration and anger provoked by trade actions on both our parts.
Some spokesmen have demanded a standstill of trade action on both sides of the border until the negotiations are completed. Unfortunately, this is not a practical alternative. We Canadians would never agree to refrain from protecting our workers in the event of some illegitimate or illegal practice taking place to our detriment and, of course, neither would the Americans. We do have a commitment made in Quebec City by the two leaders to fight protectionism as energetically as possible and to make sure that legitimate remedies designed to protect fair trade do not serve as a front for simple protectionism.
In a dangerous world Canada is reaching for a secure future for its workers and its entrepreneurs. The action launched by the U.S. coalition to use countervailing procedures to artificially inflate the price of lumber is a double threat. It is, first, a threat to the historic initiative upon which so many of our hopes are pinned. Second, it is a threat to the workers across this country whose livelihoods depend on the unimpeded flow of a product they produce with such tremendous effectiveness.
The Government of Canada will fight this action with all its energy. At the same time we will resist the voices of despair which urge us to cancel the trade talks in a pointless gesture. We intend to move forward with determination to build a more secure and profitable trading future for Canada.


The Acting Speaker (Mr. Paproski):: Are there questions or comments? There being no questions or comments, I will recognize the Hon. Member for Skeena (Mr. Fulton) on debate.


James Ross Fulton: Mr. Speaker, I am pleased to have the opportunity to participate in this debate. It is a debate in this Parliament as to how we will handle our relations with the U.S. in the face of protectionism which is clearly on the rise in the House of Representatives and the Senate in the United States. I would first like to deal with the motion before the House. It requires close scrutiny with regard to the potential effects. The motion reads:
That this House condemns the lack of care and concern for workers in the cedar shakes and shingles industry and in the softwood lumber industry shown by the Prime Minister in his letter to President Reagan, in which he clearly put his personal interests ahead of those of working Canadians and calls upon the Government to take immediate action-
The motion goes on to list four points which I will come to in a moment.
I am troubled by the remarks of the Secretary of State for External Affairs and the Prime Minister with regard to the so-called Quebec Accord, the agreement reached between
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President Reagan and our Prime Minister (Mr. Mulroney). That Quebec agreement has already been broken. The unilateral action taken by the President against the shake and shingle industry was a breach of what was agreed to in Quebec a year ago.
The effect has been dramatic. Some of the shake and shingle mills have already physically closed. The workers have been laid off and are applying for unemployment insurance. We have listed some names in the House. This is affecting many mills in the Fraser Valley, the lower mainland, the Queen Charlotte Islands, the western part of British Columbia, and many places on Vancouver Island where bolts, shakes and shingles are produced.
It is worth taking a look at the now famous June 2 "Dear Ron" letter from our Prime Minister to the President of the United States. It is worth reflecting on what our Prime Minister was most interested in, as we see in the first paragraph where he says:
I thank you for your thoughtful letter of May 29, 1986, received today. I accept your apology for the communications breakdown involved in the absence of prior notice to me of the action respecting shakes and shingles. I particularly appreciate it because, quite frankly, this absence of notice was damaging to me personally and to my government.
I would have hoped that our Prime Minister might have gone beyond the lack of notice from the President being damaging to him personally. I would have thought he might have mentioned the effect on workers, particularly in British Columbia where some 4,000 are directly affected. The effects include payroll costs of $100 million, benefits of $28 million, raw material in logs alone of $75 million, blocks of $25 million, $55 million in transportation, $25 million in supplies and $36 million in short term financing, for a total of $344 million. There are also a minimum of another 20,000 jobs indirectly affected. There are almost 25,000 jobs affected and the Prime Minister is saying: "Dear Ron, because you didn't tell me you were going to put a 35 per cent tariff against the shakes and shingles you have hurt me personally". What about Canadians?
I think the letter is very revealing of the Prime Minister's position on this issue. The Prime Minister went on to say:
This incident will not alter our personal relationship. Like the historic friendship of our two countries, our personal relationship is too valued to be diminished by occasional misunderstandings, however important.
I think the loss of all those jobs in British Columbia is something more than an occasional misunderstanding. I think it was a Draconian act by the President of the United States. The chair of the International Trade Commission, Paula Stern, made it clear when she voted against any tariffs being placed that it was not going to be in the interests of the United States, nor would it be in the interests of Canada because the shake and shingle industry in the United States is going to be severely damaged as well.
14124

June 9, 1986
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On May 21 as reported in Hansard on page 13478 I asked the Prime Minister what was going on in the relations between himself and the fast-track free trade negotiations and the U.S. Government. On May 8 a letter went from President Reagan to Senator Robert Packwood, the Chairman of the Senate Finance Committee. That was a very telling letter, because in the days leading up to the vote in the Senate Finance Committee on whether or not to have fast-track free trade talks, a number of lumber state Senators in particular, also Senator Natsunaga from Hawaii and Senator Danforth, all made it clear that they wanted to cut a deal. In the U.S. system where you are making a trade deal there is always the exchange of currency. These members of the U.S. Senate decided at that time that the thing highest on their agenda that they wanted to extract from the President of the United States was some unilateral action from the President in relation to the North American softwood industry.
On May 8 the President wrote Senator Packwood and indicated that he was prepared to move independently. Let me read the question that I put here in the House before either the shake and shingle action was taken or before the decision was made just last Friday to pursue countervailing duty action against Canadian softwood. I said the following:
Mr, Speaker, my question is for the Prime Minister. I think he is aware that on May 8 President Reagan wrote a letter to Senator Packwood regarding Canadian softwood lumber in which he stated: "I intend to press for an expedited resolution to this problem independent of comprehensive negotiations".
I am sure the Prime Minister is aware that President Reagan controls the acceptance or rejection of the countervailing action through Secretary of Commerce Baldrige. Has the Prime Minister himself, through his office, by phone or by letter, contacted President Reagan and asked that this countervaill-ing action be stopped?
RIGHT HON. BRIAN MULRONEY (PRIME MINISTER): Mr. Speaker, no.
Mr. Speaker, we know now that the Prime Minister (Mr. Mulroney) was not prepared to take any action even though that letter had become public. He knew that the President of the United States had written to the Chair of the Senate Finance Committee and said that he will take unilateral action. That is the deal that has been cut. In a story by Greg Weston, who is down in Washington having a look at the U.S. side of this, we see the headlines, "Lumber tariff 'price' for trade talks Reagan promised to cut softwood imports, trade adviser says". It goes to say the following:
Len Santos said in an interview that President Ronald Reagan has made a ''clear deal" to take action against Canadian lumber imports in return for the powerful senate finance committee giving a green light to free trade negotiations.
"The president is on the hook-he clearly tipped his hat on lumber and said essentially "I'll protect your flank". It's like an insurance policy".
The events that have transpired are very clear. There is direct linkage between Canada's request for the fast track free trade negotiations and the fact that the members of the U.S. Senate Finance Committee extracted a written guarantee from the President of the United States that he would take unilateral action, regardless of the ITC rules, regardless of the Gibbons omnibus Bill that is before Congress. The President
could, in fact, go ahead and take the same kinds of actions that we saw in 1971 when the United States unilaterally slapped 10 per cent and more tariffs against products coming into the United States.
One of the Government's arguments has long been that it did not know. The shake and shingle tariff came as a surprise. The President had to do something by May 24, the Saturday. As it happened, the President decided to do it on the Wednesday, a couple of days in advance. That is how much of a shock and surprise it was.
There is also the Arnold and Porter Report called the United States Trade Remedy Law, Canada United States Trade Initiative Research Papers, Department of External Affairs, Ottawa, January, 1986. This is one of the documents released by the Government under the access to information provisions regarding these so-called free trade talks. Under the section called resolution of the dispute over lumber imports on page 51 it says, "The present large-scale effort by some U.S. lumber companies to secure legislation limiting imports of Canadian lumber suggests that some in Congress may try to link progress on the free trade agreement to agreement by Canada to restrain lumber exports. However, the substantive argument for making such linkage is weak".
Then it lists, "-lumber imports are already duty free and would not be facilitated by an FTA. (2) the U.S. Commerce Department in its 82-83 investigation established that imports of lumber from Canada were not benefiting from countervail-able subsidies. Thus the U.S. industry and its congressional supporters have little basis for arguing that an FTA would facilitate lumber imports either by reducing tariffs or by reducing U.S. restraints on Canadian subsidies".
Then, of course, the key section, as we tended to find from this Government, is written in felt pen and says "Exempt, Section 15(1) of the Access to Information". It goes on page after page, "Exempt, Section 15(1)".
All of the arguments that were given by Arnold and Porter, the law firm, to the Government of Canada was that the U.S. would likely take some unilateral actions in relation to lumber. So the Government has known at least since January that this was coming, and it has known since long before that. The Minister for International Trade (Mr. Kelleher) is fully aware of the views that I have expressed for more than a year in this House. We should have been dealing with the grass roots issue in the United States. We should have been dealing with Georgia, North and South Carolina, Washington, Oregon, Idaho, northern California, getting out there to deal with the grass roots disinformation and misinformation being put forward by members of the U.S. Congress, people like Mr. Yonkers and Mr. Craig, Senator Mattingly and Senator Baucus and others who were clearly intending to use this issue over the past year as an electoral strategy. Both the Democrats and the Republicans were waving the flag saying that it was patriotic for Americans to oppose large importations of Canadian lumber.
June 9, 1986

We could have fought it off if we had started a year ago. We could have battled to have the shake and shingle issue taken off the agenda, and clearly we could have battled to have the softwood lumber taken off the agenda, rather than making last-ditch efforts. Rather than making a first-ditch effort, keeping our workers on the highway, we made a last-ditch effort, we sent Ambassador Gotlieb over to meet with Secretary of Commerce Baldrige in Washington. I was there last Wednesday and I know what we argued. We argued on the basis of natural justice and double jeopardy. It was a very simple case and it should not be proceeded with. We had appeared before the same quasi-judicial body in 1982-83, and we had been acquitted. Under British common law if you appear before a court and you are acquitted you cannot be tried on the same charge or it is double jeopardy.
The U.S. clearly was not intending to accept that. The Congress was not prepared to accept that. Arnold and Porter were aware of it in January and the Minister for International Trade has been aware for at least a year that there were growing protectionist difficulties in relation to softwood lumber. No serious efforts were made to get the kind of information out in a two-pronged attack, first, in those states that produce lumber to make sure they understand the real issues here, which is that Canadian SPF is preferentially purchased in the United States. Our increase in the market has tracked U.S. currency. The Americans know that. The differential between their dollar and ours has given us an advantage in their market.
Rather than talking about currency and the beneficial effects that a devalued U.S. currency would have on problems like this, they have argued, as Thomas Niles, the U.S. Ambassador to Canada, has, and as Paula Stern, the Chair of the ITC, James Baker and the President himself have continued to argue, that it is the size of our balance of trade surplus-they are always saying it is $6 billion in the first quarter of 1986-that is really at issue here.
When they talk about levelling the playing field, they are talking about levelling the balance of trade between our two countries. They do not want to talk about service or about dividends going from Canada to the United States, they just want to talk about the trade surplus that we have with the U.S.
Let us take a look at some of the other points raised in the opposition motion today. It goes on to say:
The Government to take immediate action (1) to assist workers in the lumber industry and in the shakes and shingles industry by invoking the Employment Support Act.
Well, my colleague from Essex-Windsor raised that in March and the Government said no in March. It said it was not going to look at that. Now on Friday we see the Secretary of State for External Affairs (Mr. Clark) saying, yes, that is what the Government is going to do, it is going to invoke it, but it is not sure when or how.
I think we have to look at history, because if we do not understand history we are going to get ourselves into a lot of trouble. In 1971, when this Act was invoked, it allowed for up to two-thirds of a tariff placed against Canadian commodities
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going into the U.S. market to be picked up through the employment standards legislation. This means that if there is a 10 per cent duty, up to 6.6 per cent could be picked up. There is a 35 per cent duty placed against the Canadian shakes and shingles industry. Very little of our product is crossing the border between British Columbia and Washington today because of that duty, and we have stockpiled some south of the border. If the Government is proposing to apply this Act to the shakes and shingles industry and is saying that it will provide up to 24 per cent or 25 per cent of the cost of that duty to the Canadian producers, the Americans will not simply stick to the 201 ruling, they will clearly go back before the Department of Commerce and file another petition stating that there are grounds for finding that there is a subsidy because it will be going directly from Ottawa to those facilities in British Columbia. I am not sure that the Government has not taken into consideration these possible future problems that may exist as a result of this action, now that the tariff is in place.
The motion goes on to say that the Government should take immediate action by assisting in every way the softwood lumber industry in making the Canadian case before the United States International Trade Commission. A few weeks ago I asked the Secretary of State for External Affairs (Mr. Clark) whether the Government would provide some financial and legal support to our case before the International Trade Commission, to which the Minister said yes. I understand that part of the negotiations in Vancouver this Friday will include looking at the amount of funds that can legitimately be provided to the lawyers who are carrying on our case in Washington.
A lot of money has been spent. The Canadian forest industry has spent so far some $10 million in lobbying and about $3 million in preparing for litigation. The litigation that will take place between now and the week of June 23 could certainly run into the millions of dollars again, and the Government has a vital responsibility to provide as much legal, technical, informational and financial support as it can.
I am sure that the Minister for International Trade will agree that substantial funds should be provided to the workers so that they can prepare not only for the legal case, but can get information about what kind of dislocation could occur as a result of the various levels of tariff. The Government has not yet conducted such a study. I disagree with Peter Bentley who said, on behalf of Canadian forest products, that a 5 per cent to 10 per cent countervail would not affect our industry. I do not know why he said that. I do not know why Mr. Widman, Mr. Buie and others have made similar statements that are not very supportive of Canada's forest industry.
I have asked in the committee and in the House why the Government has not seriously considered the ramifications, particularly for Canada's 300 single industry communities such as Williams Lake, Kamloops, Prince George, Terrace,

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Prince Rupert, Smithers and many other small communities in British Columbia. What about the other small communities in Alberta, Saskatchewan, Manitoba, Ontario, Quebec and the Maritimes? All of them are essentially business communities based on the softwood industry.
The Member who spoke before me said that there were
350,000	workers in the forest industry in Canada. When one includes those who are indirectly employed, there are over 1 million workers. There are over 300,000 workers directly employed and close to 700,000 indirectly employed.
The Government should be considering the ramifications of these actions on those workers rather than just looking at invoking the 1971 legislation. It should carefully consider into what other markets we can quickly and realistically diversify. The Prime Minister mentioned Japan as a possible market. Japan could accept a few hundred million board feet, but what about other Pacific Rim countries, Europe and other areas of the world? We must study these alternatives realistically because the Americans and the President have made it clear that there will be unilateral action. If the Americans are not satisfied with the ITC ruling, they will try to have the President take unilateral action. If that does not work, there are many Bills in the United States. The Gibbons omnibus Bill went through the U.S. Congress with a vote of three to one. According to the American Constitution, any legislation passed by a vote of more than three to one cannot be vetoed by the President. It is obvious that there is trouble on the horizon.
The fourth action proposed in the motion is to initiate proper and effective action under the rules of GATT. In Geneva on May 22, the first of what I hope are further actions were taken. I consider the Canadian statement to the GATT Council regarding the U.S. lumber countervailing duty to be a little too milquetoast for the kind of extremely unfortunate harassing action being taken by the United States. I hope that the Government will take much stronger and more forceful action through GATT.
The third action proposed in the motion is to ensure that proper time is given to make this case by obtaining, if necessary, extensions to the hearing time. That is a reference to the ITC process that begins tomorrow and will come to a vote in the week of June 23. We only have two weeks to argue the case of the largest industry in Canada before the International Trade Commission. Members of the House of Commons keep describing this hearing as a quasi-judicial process. It is very political, which is evident to anyone who reads the countervailing duty action taken against East Coast fish. They can find an injury from a 5.8 per cent duty on whole fish, while they are still alive on the deck of a boat, but when they are filleted at the filleting plants in Canada, the subsidies disappear. Anyone who believes that the International Trade Commission is a typical legal body in which there are all kinds of fairness, justice and sweetness and light, is wrong. I have read enough of these ITC rulings to know that it is very political.
In light of the very strong mood of protectionism in the United States, the Government has taken extremely weak
action so far to protect the shake and shingle producers and workers and has taken extremely weak action in terms of the softwood case. We should have been fighting this action in the United States a year ago because we knew it was coming and knew what kind of action should be taken.
The Cabinet was interested in other matters, and I suggest that when it is not interested in the largest industry in this country it is asleep at the switch. For instance, we still do not have a full fledged Minister of Forests. He is still buried in the basement of the Department of Agriculture, which I believe is unfair. The Cabinet should have made the Minister of State for Forestry (Mr. Merrithew) a full Minister with a national forest Act under which he could operate. Are you trying to cut me off, Mr. Speaker? I have much more to say.


The Acting Speaker (Mr. Paproski):: I regret but the Hon. Member's time has expired. However, there is time for questions and comments.


Jean-Robert Gauthier: Mr. Speaker, the Hon. Member showed a great deal of knowledge about this question. I would like him to speak a little more about the GATT negotiations. Could he tell us his opinion about how our interests can best be defended in front of this international forum?


James Ross Fulton: Mr. Speaker, I would be glad to deal with that.


The Acting Speaker (Mr. Paproski):: I remind the Hon. Member that there are two other Members who would like to ask questions, if he would govern himself accordingly.


James Ross Fulton: I will take a couple of minutes to touch on the GATT matter. Members of the House will know that the shake and shingle matter was not bound by GATT. We had no route of appeal, and by now the Cabinet should have introduced a massive plan of action on the case currently before the International Trade Commission. That is called the 303, or what I call the Lee Enfield approach of our pal, Ron Reagan. When that decision goes back to the Department of Commerce, it cannot be vetoed, amended or changed by the President of the United States.
On the one hand, we had an issue that was not bound by GATT and on the other hand, this matter cannot be vetoed.
The process that has begun in Geneva is important because we have alerted other members of GATT in a multilateral sense. The Government should have been considering what other sectoral agreements could have been reached with other countries around the world.
Let me deal with another matter in this appeal which, incidentally, is dealt with in only three pages. I suggest the Government could have made a stronger case when dealing with the largest industry in Canada. On page 2 of the appeal it is stated that the Commerce Department determined that all industry assistance programs together conferred benefits of less than one half of one per cent and were therefore deemed to be diminimus, which means next to nothing. It goes on to state that the petitioner did not appeal its final determination.
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We should be making all other participants in GATT aware of this kind of harassing action being taken by the United States, in concert with the President of the United States and the Senate Finance Committee. We should be arguing much more strongly with our neighbours with whom we have good trading relationships so that they can assist us in putting pressure on the U.S. administration through GATT.


Lorne Everett Greenaway: Mr. Speaker, I too compliment the Member for his knowledge of this issue. There are several things I would like to point out to him. On the one hand he says no action had been taken up until the time the countervail was presented. On the other hand, he mentions that the industry spent $10 million in the United States lobbying prior to this time. I know that the Premier of British Columbia has made several speeches in the United States on the issue. Industry spokesmen have been back and forth across the United States for the last year. I would like the Hon. Member to comment on that because I think there some action has been taken.
Second, I understand that at an ITC hearing one is only allowed to present written briefs, one is not allowed to intervene on a personal basis. I wonder how the Hon. Member would advise us to intervene other than just by presenting a written brief, which is being presented.


James Ross Fulton: Mr. Speaker, on the Hon. Member's First point, what I have seen occurring with respect, particularly, to the Premier of British Columbia and, to a certain extent, some other politicians, is what I would describe simply as photo opportunities in the United States, which means having dinner, giving a brief somewhere or a speech and saying: "This is a big industry, let's not rock the boat". What I am talking about is a very well defined and orchestrated attempt to disseminate real information, and not just the Canadian side. There are a number of facts and figures which were bilaterally agreed upon in 1982 and 1983 and again in the update regarding softwood lumber in terms of interspecies, clarification and so on, on both sides of the border. I think there should have been a two-pronged approach. We should have had people who were carefully selected and briefed to go down and open up something almost like a trade consulate in those areas, particularly in the lumber states, where it has become a real issue for both the Democrats and the Republicans, that is, that protectionism is patriotic and waving the flag, and where Canada is described in somewhat untoward terms. I think we could have counteracted that in those states.
The other part of this process as an educational process to Americans is that we have to remember there are two million Americans who take their lunch-box and, in some cases, their Mercedes-Benz to work, and who produce goods for the Canadian market. We are the two largest trading partners in the world. Our trade involves over $130 billion a year. It is enormous. We should have got information to those individuals on what the effects of these kinds of harassment tactics and unilateral protectionist acts would mean for them, because it is a two-way street. If our economy starts to decline, we cannot
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buy American products. So I think that a two-pronged attack, which I have raised many times in the House, in our committee and in the Forestry Committee, should have been pursued by Government, and then I believe we could have found ourselves in a much more tenable position at this point in time and would have lowered the protectionist sentiments and disinformation in the United States.


John Napier Turner: Mr. Speaker, the Hon. Member asked what the Cabinet was doing a year ago. I would like to tell him that the Cabinet was putting into solid place the strongest economic renewal this country has seen in the last 20 years. I think the results speak for themselves. I believe the Hon. Member will agree with that if he looks at the level of interest rates today, the level of unemployment and the fact that housing and car sales are up.
I want to take exception to part of the Hon. Member's approach to this motion which talks about the Prime Minister (Mr. Mulroney) putting his personal interests ahead of those of working Canadians. I cannot believe this motion and the degree of hypocrisy the mover has brought with it to this House. We all remember the good old days when there were lots of projects going on in the old Liberal ways of making sure the Liberals looked after their own ridings and not the interests of the average working Canadian.
The Hon. Member also spoke of the importance of understanding history. Let me remind him of something of historical importance concerning the Prime Minister. I want to put it as a question. The House may recall that in August of 1983, when the Prime Minister was first elected to this Chamber, one of the most difficult tasks he faced was when he went to Manitoba to meet a very hostile and rampant crowd of people in Winnipeg who were on the verge of lynching him with respect to the question of minority language rights. He stood up and said to them: "I will protect your minority language rights just as I will protect the rights of all other Canadians". He was not putting his personal interests first, but was looking at the betterment of all Canadians. I remind the Hon. Member of that historical fact and I ask him to keep that in mind as he makes his comments about the personal interests of the Prime Minister.


James Ross Fulton: Mr. Speaker, as the Hon. Member knows, I did not draft the opposition Motion. I am not sure the Hon. Member has properly presented history in that it was his own Prime Minister, the Leader of his own Party, who campaigned in opposition to free trade. I think we should keep that in mind. The Prime Minister was not elected on a mandate to negotiate free trade. He was at least in part elected on a mandate in opposition to free trade. His change to support of free trade came since he became Prime Minister. That is the record. Even Government Members do not want to recall that.
As to the Hon. Member's other point, I have not seen these glorious changes about which the Hon. Member talks. I represent communities in British Columbia which still have in excess of 90 per cent unemployment. No Members on the Government side have attempted in any way to deal with that.

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While I still have the floor, I would like to move a subamendment which, by deleting the period at the end of the statement-


The Acting Speaker (Mr. Paproski):: I regret, the Hon. Member cannot move an amendment during the time for questions and comments. He can do so during debate.


James Ross Fulton: Then I will get the next Member to do it. May I carry on in answering the Hon. Member's question?


The Acting Speaker (Mr. Paproski):: You have 30 seconds to complete the time for questions and comments.


James Ross Fulton: I know there will be a Government Member speaking next, but in response to the Hon. Member for Ottawa-Carleton (Mr. Turner), perhaps the next Government Member would like to tell us what he or she thinks the "Dear Ron" letter really means when it says: "I particularly appreciate it because quite frankly this absence of notice was damaging to me personally and to my Government". The Prime Minister never mentioned softwood nor the impending action in relation to the ITC. He said nothing serious on shakes and shingles. He simply said: "Oh, look, you didn't tell me you were going to do that to shakes and shingles and you hurt me personally and my Government". What about the workers? I think the taxpayers should have had some mention in the letter from the Prime Minister to the President rather than some kind of moaning and toe-scratching about damage done to the Prime Minister personally. I find this letter one of the most objectionable documents written in the history of Canada.


The Acting Speaker (Mr. Paproski):: I regret but the Hon. Member's time has expired.


André Ouellet: Mr. Speaker, I welcome this opportunity to support the motion presented by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), condemning the Conservative Government, and I quote:
That this House condemns the lack of care and concern for workers in the cedar shakes and shingles industry and in the softwood lumber industry shown by the Prime Minister in his letter to President Reagan, in which he clearly put his personal interests ahead of working Canadians.
Mr. Speaker, I have no choice but to describe the Conservative Government's total failure in its relations with the Americans.
I must say the incident involving the shakes and shingles industry and the softwood industry is typical of the deterioration in recent months of Canada's relations with the United States.
We have never before been so humiliated by the United States. If we look back on the previous history of relations between our two countries, we see that year after year, the U.S. authorities, the U.S. Administration, the United States Congress, and of course the President of the United States have always had a special relationship with Canada and
always given Canada and Canadians preferential treatment. This is not the first time Congress or the U.S. Senate has entertained protectionist motions or bills. In fact, for many years, U.S. Congressmen and U.S. Senators have annually tabled protectionist measures, and every time, the President of the United States has used his veto to promote Canada-U.S. relations and prevent specific protectionist measures from unduly affecting the Canadian economy and Canadian workers.
And now we have this recent incident, and people have realized that whatever the Prime Minister of Canada (Mr. Mulroney) may think, he does not have a special and privileged relationship with the President of the United States. The U.S. President had no hesitation in approving a proposal by the U.S. Congress which has severely affected the Canadian economy and especially some 4,000 workers in British Columbia in the shakes and shingles and softwood sectors.
The U.S. President himself approved this 35 per cent tariff on Canadian products. And this gesture, an act of reprisal, as it were, against Canada, is only one of many anti-Canadian measures taken in recent months by the U.S. Adminstration.
Remember the Polar Sea incident, in the summer of 1985. For the first time in the history of Canadian-U.S. relations, an American vessel entered our territorial waters without permission. This vessel, which entered the North-West Passage, crossed beneath the polar ice cap without first asking the Canadian authorities for permission. The Americans, since it was an American military vessel, knew perfectly well what they were doing. They knew perfectly well they were violating Canadian territory and they did so without the slightest hesitation. I think that was one of the first anti-Canadian acts committed by the Americans and by the President of the United States, who in so doing turned his back on the so-called chummy relationship with the Prime Minister of Canada.
Subsequently, we had an incident where Canada was excluded from meetings of the Finance Ministers of the United States with its principal economic allies. In the winter of 198586, Canada suffered a serious affront in that it was not invited to participate in discussions among the U.S., French, British, German and Japanese Finance Ministers, who met to talk about the value of the U.S. dollar in relation to the currency of the other countries, in other words, the U.S. dollar in relation to the mark, the yen, the French franc and the British pound sterling.
There was no mention at all in these discussions of the Canadian dollar, and we know how strongly the Canadian dollar is affected by upward pressure on the U.S. dollar. We know how serious the impact of a rising U.S. dollar can be on our Canadian currency.
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These meetings were held without advising the Minister of Finance of Canada (Mr. Wilson) and without any consideration for Canada's interests.
Once again that is what I would describe as anti-Canadian action by American authorities who could not have cared less about their so-called friend Brian.
Finally, we have this incident which is like a slap in the face, this unprecedented levy. Never before in the history of Canada-U.S. relations did the President of the United States sign a document to impose a 35 per cent tariff on Canadian products going to the United States. Well, I say that the American approach should not surprise us because, unfortunately, we have to admit that since his election our Prime Minister has been behaving more like an American state governor that the head of a sovereign nation. To please the United States, to please his so-called good friend Ronald, the Prime Minister repeatedly kowtowed to the American authorities. For openers, he abolished the Foreign Investment Review Agency to please the Americans. Offhandedly and strictly to please American interests he axed an organization which enabled us to pass an impartial judgment as to whether or not these American investments would economically benefit Canada. Now the Americans can come over here to buy any Canadian company, they can make any kind of investement in this country; without asking for permission from Canadian authorities, without fear of sanctions or intervention from the Canadian Government, they can buy out a company and then close it to get rid of an embarrassing competitor and conclude a merger to benefit an American company which will then be in a position to make more profits once the Canadian company has disappeared. In my opinion, sooner or later this kowtowing and bootlicking by the Prime Minister of Canada to please the Americans will have a disastrous impact on the Canadian economy. We have lost this screening agency which was our insurance policy to make sure that any investment in Canada would be of significant economic benefit to our economy because our Prime Minister thought he should kneel before the President of the United States.


Jean-Robert Gauthier: Bootlicking indeed!


André Ouellet: And again to please the Americans our Prime Minister tore our Canadian energy policy to shreds. It is very symptomatic to realize that the first move made by United States President Reagan after his election was to order his Minister of Justice to drop legal proceedings against the oil multinationals which had breached the American antitrust legislation. It is rather symptomatic that the first move of the Prime Minister of Canada was to allow the major oil multinationals to recoup huge amounts of money, billions of dollars which poured into the coffers of the oil multinationals right after his election, yet he keeps telling people he has no money to maintain old age security pensions at decent levels, no money to pay for decent health and education programs, no money to implement a regional development policy to help Canada's poorer regions, yet he could find enough money for
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huge handouts to the major oil multinationals and systematically dismantle the National Energy Policy which had been established by the previous Liberal administration. And why? Again, just because our Prime Minister wanted to do his American friends a favour.
Similarly, the Prime Minister promised to introduce a Bill that would benefit the U.S. pharmaceutical industry, at the expense of the Canadian consumer. It is a fact that the extremely strong and powerful U.S. drug company lobby has managed to make itself heard by the U.S. President, and one of the first conversations the newly elected Prime Minister of Canada had with President Reagan concerned what he could do to remove those provisions of the Patent Act that were not to the advantage of the U.S. pharmaceutical industry. We know now, because the Minister of Consumer and Corporate Affairs (Mr. Cote) has had to admit as much in the House, that the Prime Minister of Canada, as a favour to his friend, the President of the United States, promised to introduce this Bill that will very substantially change the situation in the drug industry, a change that will benefit the big U.S. multinationals at the expense of the Canadian consumer. Of course, the Prime Minister said nothing, absolutely nothing when the Polar Sea, this U.S. vessel, violated our territorial waters, ignoring our sovereignty. The Prime Minister of Canada remained silent once again, to be nice to the U.S. President and his American friends.
Similarly, the Conservative Government accepted everything the Americans wanted when our North American Aerospace Defence Treaty, commonly referred to as NORAD, came up for renewal. When this treaty was renewed, everything that the Americans wanted was agreed to and accepted. Even worse, to make the President happy, the Prime Minister agreed to let Canadian companies take part in the Star Wars Project which is so dear to the heart of the President.
After all the concessions made by the Canadian Prime Minister to the United States month after month, how could the President and the Congress of the United States take the claims of this Conservative Government seriously? Our Prime Minister has acted like the governor of an American state too long to be considered a real head of state who wants to negotiate on equal footing with his American partner. This is the great tragedy of the present situation. How can we hope to have valid free trade negotiations with the United States if we cannot have the respect of our American vis-a-visl
We realized how precarious our situation was when the American negotiator indicated during a press conference that, as far as he was concerned, the United Stares entered the discussions on free trade with Canada with no preset conditions. The American negotiator told us publicly that, as far as he was concerned, everything was on the table. Everything could be negotiated for this new free trade agreement between Canada and the United States. Obviously, Canada has a lot to lose in such a case.

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If everything is laid on the table, we can certainly expect to see whole Canadian industries severely affected in the months ahead.
It is not without reasons that the Union des producteurs agricoles, the large Quebec farmers' organization passed resolutions urging the Canadian Government to protect our Canadian farming industry, to protect our farmers who at great pains to themselves have secured a decent, reasonable life-style by opening up markets for their dairy, pork, egg or chicken productions.
Now, our farmers, especially in Eastern Canada, have much to lose with those free trade negotiations. And I submit that if the President of the United States did not hesitate to personally sign a 35 percent surtax decree that threatens the jobs of workers in the softwood industry and the shingles and shakes industry in Western Canada, I am not at all confident that comes the first occasion the President of the United States, in order to try and protect American farmers, will not do the same thing with farm products and completely disrupt the current Canada-U.S. farming trade relations, that he will not, as has been the case with that surtax which is destroying 4,000 jobs in British Columbia, make a similar move that will force thousands of farmers in Quebec and Eastern Canada out of business because of protectionist measures the President might take.
Mr. Speaker, I suggeest in conclusion it is very important that we should review our stand vis-a-vis the U.S. that the Prime Minister should stop behaving like the governor of an American state and find the courage to act as the head of a sovereign State.


The Acting Speaker (Mr. Paproski):: Order, please. Questions and comments. I recognize the Hon. Member for Levis (Mr. Fontaine).


Gabriel Fontaine: Mr. Speaker, before directing a few questions to my colleague the Hon. Member for Papineau (Mr. Ouellet), I should like to comment a little on his remark concerning the Polar Sea. That ship was seen last summer in Canadian waters and, during the same days over the same period, the Secretary of State for External Affairs (Mr. Clark) immediately provided a response and took the necessary action. This situation compares strangely with that of the U.S.S. Manhattan which, in 1969, had cruised in the same area without the Liberals ever reacting in 17 years.
When he refers to good relations between the two Governments, he should also talk about the United States which, for all practical purposes, decided to declare war on Grenada in 1983, something about which the Prime Minister of Canada learned in the newspapers.
Also, we could wonder why the Liberals set up the Foreign Investment Review Agency. That was not a way to encourage friendly relations. We have done away with it.
Mr. Speaker, my first question is therefore the following: Does the Hon. Member for Papineau think it is more important to have a general principle accepted by the U.S. Senate
Finance Committee which, later on, would either accept or reject as a package deal all our bilateral negotiations?
I have a second question for the Hon. Member for Papineau who, I know, is quite capable and willing to reply to enlighthen me, contrary to some of his colleagues who can never answer. Our exports of cedar shakes and shingles account for what percentage of our $95 billion in trade with the United States? Also, our exports of lumber account for what percentage of our $95 billion in trade with them every year?
To conclude, Mr. Speaker, I should like to ask the Hon. Member for Papineau what is the percentage of the added value to these basic commodities. In other words, are these highly sophisticated products requiring a long manufacturing process, or are they close to raw material?


André Ouellet: Mr. Speaker, I should like to reply very briefly to the many questions which the Hon. Member for Levis has directed to me.
He should know-and if he doesn't, I am pleased to remind him-that when the Manhattan cruised at the time in Canadian territorial waters, there was a Canadian on board that ship and that trip had been sanctioned by Canadian authorities, while this time around there was no Canadian on board the Polar Sea and it is clear that this trip had not been authorized by the Government of Canada. As the Hon. Member for Levis stated himself, the Secretary of State for External Affairs had to act after the fact and move a motion in the House, introduce a legislation to say that he would not want to see such a thing ever to happen again. And he even said at the time, after that trip, that he might appeal to the International Court of Justice in The Hague to complain against such a violation of Canadian territory.
In other terms, the Prime Minister of Canada (Mr. Mulroney) and the Secretary of State to External Affairs of Canada (Mr. Clark) were caught with their pants down. They only reacted after the event, once they realized that American ship was violating Canadian territory. I find that absolutely inconceivable, because never in the past, under any Prime Minister, either during the short term of Prime Minister Turner or under Prime Minister Trudeau, Prime Minister Pearson or even Prime Minister Diefenbaker, did the Americans have the courage to launch an attack against the sovereign territory of Canada.
Now, if by magic, the first time the Americans find that courage is under this Prime Minister. And why did the Americans suddenly find the courage to enter Canadian territorial waters? Certainly because they knew that the Prime Minister of Canada would not take strong measures to prevent the Polar Sea from proceeding with that trip.
They were right, because of course the Prime Minister of Canada did let them do it and his Secretary of State to External Affairs took action only after the event.
June 9, 1986

I see your signal, Mr. Speaker, warning me I have to conclude. Unfortunately, I would have liked to answer the other questions asked by my colleague. But if there is time for other questions, I would be pleased to do so.


Mr. Edwards:: Mr. Speaker, as a westerner and as one who suffered with many others through the devastating effects of the National Energy Program, I find it an unwarranted revision of history to suggest that the Prime Minister (Mr. Mulroney) donated or turned over to multinational oil companies something from the Treasury of Canada.
In actual fact, the record of the oil industry, be it multinational or domestic, is a reinvestment record of some 105 per cent. To have suggested to us by a dubious ornament of the rump, which governed Canada from 1980 to 1984 without a national mandate, that the Prime Minister of the current Government is doing anything less than restoring justice to western Canada is an insult to the people of that part of our country.
The estimate has been made by none other than the great former Premier of Alberta, Peter Lougheed, that something in the order of $17 billion up to as much as $40 billion of wealth was looted from Alberta by the National Energy Program. These funds could have gone to develop the diversity of the economy of that region, had it not been for the rapacious policies of the previous Government.
The Hon. Member said that the present Prime Minister acted immediately after the election. He did, because he delivered on a promise which had been made to the people of Canada that the National Energy Program would be obliterated. We wait with keen anticipation for the day when it will truly be totally obliterated with the total elimination of the PGRT.
I should like to give the Hon. Member an opportunity to correct the record. I am sure that he was, in his fine oratorical style, getting carried away with himself. There was certainly no gift to any multinational oil company by the Prime Minister of Canada or the present Government of Canada.


André Ouellet: Mr. Speaker, I respect the fact that the Hon. Member wants to represent the interests of his province and of his region. He wants to ensure that the Canadian Government is passing legislation and implementing policies which will affect his region in a positive sense.
However, I should like to refer to his interpretation of a short four-year period in the history of Canada, when a national Government in Ottawa was trying to implement a national energy policy for the benefit of all Canadians. Obviously it was his own interpretation of history. Perhaps I have an opinion that is different from his opinion, but I want him to realize that Canada is probably one of the only
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countries in the world with the unique position of establishing a national energy policy in consultation with other levels of Government.


James (Jim) Stewart Edwards: Nonsense.


André Ouellet: In my view it was because of the unique character of our Government. If we look at any other country in the period of crisis throughout the seventies, we see that the shots were called in Washington in relation to energy policy. The shots were called in London in relation to energy policy. The shots were called in Paris in relation to energy policy. In every country of the world the shots were called in the national capital. Why were the shots not being called from Ottawa in relation to Canada?
The Hon. Member feels that what was done in the interests of Canadians was not right. However, I want to tell him that he should make a distinction between a Conservative Government of Alberta being hand in hand with the multinationals and the citizens of Alberta who over the years did not benefit greatly from the cozy deal of the petroleum multinationals and the Alberta Conservative Government.


Lorne Everett Greenaway: Mr. Speaker, I certainly have a difficult time agreeing with the last comments of the Hon. Member for Papineau (Mr. Ouellet).


John Napier Turner: It is unanimous.


Lorne Everett Greenaway: Yes, I think it is unanimous. It is absolute rubbish.
I think it would be interesting to take a brief look at what has happened in the shake and shingle industry both in Canada and in the United States since the invoking of a 35 per cent tariff on May 22. Several predictions were made at that time, one of which was that Canadian jobs would be lost. That certainly has happened. A second prediction was that the entire industry in Canada and the U.S. would be severely damaged. That is also happening.
For the record I should like to read several quotations from some United States newspapers which graphically indicate what is taking place in the United States. Here is an editorial from the San Francisco Chronicle, "The Voice of the West", dated May 28. It is entitled "A Case of Shingles", and reads:
The Reagan administration began talks on freeing trade between this country and Canada last Thursday. That evening, without notice to Canada, the administration announced a tough 35 per cent import tariff on Canadian cedar shakes and shingles, a duty which will effectively shut these products out of the U.S. market. Canadians will lose sales of between $180 million and $200 million annually.
Canadian Prime Minister Brian Mulroney has termed the action "bizarre". We agree. The decision to abandon a dedication to the principles of the free market place is unfortunate and difficult to accept. Up to now, the administration has been fairly consistent in resisting protectionist arguments.
Prime Minister Mulroney is an ideological supporter of President Reagan and has battled to increase and widen relations with the United States. The shake and shingle tariff is severely damaging to a man who is dedicated to building closer ties to this country.

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The decision further defies reason when it is considered in the context of geography and commerce. Canada and the United States are the two largest foreign trade partners in the world.
The Reagan administration action against Canada is not only an action taken against a friend, but also against a trading partner which has ample means of retaliation at hand. Canada simply is not Uruguay or Uganda. It is a step and a handshake away.
It is certainly comforting to know that we still have some good, staunch friends and supporters in the United States. I have a couple more quotes that are of interest. There is one here from the San Jose Mercury News of last Thursday, June 5. It reads:
But members of the Canadian industry assert that the tariff will hurt everyone because higher prices will force home builders to buy asphalt or composition shingles.
Americans have lost market share, they contend, because they've run out of cheap trees to cut and failed to modernize their facilities.
I want to draw attention to that situation later in my speech because it also applies to the softwood lumber case. The articles goes on:
They note that Reagan imposed the sanctions on the same day that House Democrats passed their own protectionist measure to save domestic jobs-a bill the president denounced as "kamikaze legislation" that would lead to economic peril.
In the same paper for the same date, June 5, in the San Jose Mercury News, there is an article by the news business writer entitled "Tariff on shingles hits Valley with increase in roofing prices". It reads:
The effects of the U.S. tariff placed on Canadian cedar products already have hit home, literally, for some Santa Clara County residents.
The price of a wood shingle roof has increased by $300 to $500 since the tariff was announced two weeks ago. Prices are expected to rise further after the tariff officially takes effect Friday.
"We expected a real banner year (for new roofs) because of lower refinancing costs," said Jeff Fierstein, San Jose branch manager for Marshall Supply Inc., a roofing supply company. "But homeowners are switching all over to other materials or cancelling orders (for new roofs) altogether." American producers are taking advantage of the tariffs by raising prices, local contractors and suppliers say.
Fierstein said that on the first business day after news of the tariff broke his U.S. cedar suppliers notified him they were raising prices 17 per cent immediately and another 17 per cent when the tariff goes into effect.
Roofing contractors with fixed contracts to build roofs for tract homes have been hardest hit by the prices increases. "Contractors are in a bind," Fierstein says. "They want to renegotiate their contract but some developers won't let them."
The increase in cedar prices is expected to drive consumers to alternative roofing materials. After hearing about the tariff, "I went out and bought a fork lift to start lifing tiles," says Ed Martinez, owner of Saiz Roofing of San Jose. "The shake roof market is dying."
Martinez thinks the tract home market for shake roofs will completely dry up. "If a guy's building 100 houses and he can save $500 a house, he's going to switch (to another material),'' he said.
Price increases may not be limited to just wood roofs. "Composition manufacturers have been trying unsuccessfully (because of a soft market for roofing materials) to raise their prices for two years," -The increases in cedar prices may allow them to finally do so-
I think that this just points out the effect tariffs have on both sides of the border. If a tariff is imposed on softwood
lumber exports to the United States, we can expect a severe fall-out in the U.S. as well as in Canada.
In reply to the shake and shingle action taken by the U.S., Canada, we know, retaliated by placing tariffs on various items coming into Canada that are not bound by the General Agreement on Tariffs and Trade. We heard this morning from the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) that it was the previous Government's fault for not making sure that shakes and shingles were bound in GATT negotiations. At least the Hon. Member was charitable enough to admit that it was an oversight by the previous Government.
Our Government is considering other options for the shake and shingle industry, but no action will be taken until our Government has met with representatives of that industry. Obviously such actions would have to have the full agreement and co-operation of the industry.
With respect to the motion before the House today, I think that the concerns of the motion were adequately and thoroughly addressed this morning by the Minister.
This afternoon I would like to put on record some facts about the softwood situation that I feel are worth noting. What has been taking place in the industry, north and south, in the last several years? First, it should be established that the forest industry is extremely important to both countries. Of the 53 billion board feet of softwood produced in North America in 1985, approximately 31 billion board feet were produced in the U.S. That amounted to a revenue of about $8 billion to the U.S. forest industry.
In the late 1970s things were booming in both countries. Lumber prices were high and the value of our respective currencies was not far apart. On the strength of these bullish markets, U.S. producers bid very aggressively for their wood supply. Unheard of prices were paid, much of the money up front, for timber supply. This action was to come back and haunt the U.S. industry in the downturn of the 1980s.
Because I come from British Columbia, let us look particularly at the U.S. Pacific northwest, an area that no doubt was hard hit. As I mentioned, that area was caught with an extremely high cost for timber. Demand in prices fell dramatically. It faced stiff competition from a planted pine forest coming into production in the southern United States. Not only was this southern wood cheaper, but wages paid in these southern mills were considerably less than those paid in the north. Mills in the Pacific northwest were mainly unionized, and high wages play an important role in this entire issue. What resulted from all of the above was the closing of about 100 or 500 mills in the northwest United States. It is interesting to note that a considerable number of mills in that area which closed have now reopened under new management. They are non-union mills. There have been some very tough labour industry disputes in the U.S. northwest since 1982. I maintain, Mr. Speaker, that the cost of labour is one of the factors that makes Pacific northwest wood and lumber products uncompetitive.
June 9, 1986

Another factor that must be considered in this picture is that B.C. mills, especially those in the interior, are more efficient than most of their U.S. counterparts. In the 1970s, the B.C. industry used existing capital and borrowed heavily to modernize. It modernized to the point that it now has the most efficient dimension mills in the world. All of the very latest technology such as lasers and computers have been incorporated. These mills are really a sight to behold.
It is interesting to me as a Member from British Columbia from a lumber riding that exports probably more lumber than any other constituency in Canada to watch on national television the pictures the media uses of sawmills these days. I am sure most of these pictures are 10 to 20 years out of date. I would urge the media to take pictures of some new and modern mills, because what we see on national television are pictures of mills that are right out of the Dark Ages.
I often visit the mills in my riding. Practically every time I go through a mill, I am shown a new modification. I cannot help but remember that in January I visited Ainsworth Lumber Company at 100 Mile House. I was shown around the plant by the superintendent. He showed me an innovation which had been put into effect a few weeks before. In this area they cut mostly pine logs of various dimensions and lengths. It has always been the custom to run the logs through the mill with the machinery adjusting for the diameter of every log. In the stud mill, where they cut two-by-four-by-eight foot lengths of lumber, they generally cut logs into an eight-foot four-inch length. These are then randomly shoved through the process until they get to the saw. One of the workers thought it might be a good idea to size these logs into bins and then run one size through at a time. In that way the machinery would not have to adapt for the size of each log. That was put into effect and it increased the production of that mill by 25 per cent. These mills are working hard to keep abreast of all modern technology. As I said before, they are the most modern in the world.
That is another problem which the U.S. faces. They have not modernized their mills, as was proven in the shake and shingle situation. One of their problems, besides the fact that they have run out of wood, is that their mills are badly outdated. The lumber offered by Canada, and particularly British Columbia, is usually, if not always, a superior quality product which is highly desired by U.S. contractors.
Another innovation recently added to mills is stress-testing. Each board goes through a stress test and any weak boards are put in a cull pile. All of these things make this lumber very desirable and a product superior to that produced in the U.S. The softwood coming from the southern part of the United States, the loblolly pine, is a very inferior type of lumber for house building. All of these things cause a lot of the problems which the U.S. producers are having. Another issue is the difference in the value of our currencies. This is, of course, an advantage in our favour, but I do not think the Canadian industry should be faulted for the difference in currency.
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In my opinion it is unfair that the American industry sees fit to call foul and launch another harassing action against Canada. We know that some mills in the United States have closed down and that jobs have been lost. However, this has happened in Canada as well. Only modern, efficient operations can compete and in a free enterprise system such as the U.S. espouses, it should be looking at the real cause of its problems rather than attempting to curtail competition.
For many months B.C. Conservative Members of Parliament have been carefully monitoring this issue. Many of us were here in 1982 and 1983 when the same action was launched and we went through the agony of that exercise. We were in opposition at that time and we offered our full cooperation to the Government of the day and the industry. We were well briefed at all times by industry and followed their instructions very carefully. As the countervail process is a quasi-judicial one rather than political, we were requested to say little, if anything, publicly, especially in the House of Commons. It was not always easy for us to go home and explain to our constituents why we were not making interventions in the House of Commons and why we were not complaining in a very loud voice. It would be nice to be able to expect the same co-operation from the present-day Opposition.
Last summer members of our caucus met on two occasions in Vancouver with our American political counterparts. We had some very open and frank discussions with these gentlemen. They told us very bluntly of the tough situation they face in their constituencies. They told us of the tough political problems they face in the elections coming up this fall. We told them that we have tough situations in our constituencies as well and that often the unemployment rate in regions of British Columbia is even worse than it was in their constituencies in the United States.
On several occasions further meetings were held with the Americans through the medium of the Canada-U.S. Parliamentary Association and the softwood lumber issue was discussed at great length. In recent weeks we have had a number of briefings with the Minister of State for International Trade (Mr. Kelleher), the Minister of State for Forests (Mr. Merrithew), and the Secretary of State for External Affairs (Mr. Clark). These meetings were on both the shake and shingle issue and softwood. The issues have been well aired in our national caucus and the importance of this issue is well understood by the Prime Minister (Mr. Mulroney), the Cabinet, and all Members. In addition, our B.C. caucus has had several meetings with industry officials and has held private discussions with labour. As late as May 30 our caucus met in Vancouver with Mr. Mike Apsey of the Council of Forest Industries for briefings and strategy planning.
In our judgment the Ministers of our Government in direct charge of these issues have handled and are handling them well. The fact that the first response to the acceptance of the countervail action in the U.S. was the announcement of a meeting of all major players in Vancouver this Friday indicates the priority with which this issue is ranked.

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We, as Members, also have a duty now to do all possible to assist our industry in presenting a strong and unified case to the U.S. Department of Commerce. We also have a duty to explain to our constituents what is taking place and not to cause undue concern and panic by making irresponsible statements and using inaccurate and inflamatory rhetoric in the House of Commons.
I think the Member for Skeena (Mr. Fulton) raised a good point when he asked to have a government study undertaken to try to ascertain what damage would be done if and when a tariff is exacted on our lumber exports. We heard some very incorrect and inflamatory statements in the House of Commons no later than in Question Period today when the Member for London West (Mr. Hockin) stated that we will lose
100,000	jobs in Canada. A study done recently by Peter Pearse, a well respected professor of forestry at U.B.C., indicates that there would be much less damage than that done. I do not want to leave the impression that this is not an extremely important issue and that we are not going to lose a good many jobs, but I would ask Hon. Members not to use figures which they pluck out of the air, because that can have a very serious effect on people in the industry and people whose jobs depend on the industry.
As Chairman of the B.C. Conservative caucus I am convinced that the Govenment is handling the issue well. I have been at daily briefing sessions with the Secretary of State for External Affairs, and I would like to compliment the right hon. gentleman for the grasp he has of this issue and the confidence which he is giving to me, my caucus and the rest of the country.


The Acting Speaker (Mr. Paproski):: Are there any questions or comments? There being no questions or comments, I will recognize the Hon. Member for Kenora-Rainy River (Mr. Parry).


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, I am glad to be able to rise in the House today to address this Opposition Day motion on the question of the cedar shake and shingle industry, the softwood lumber industry, and the action that the Government has or has not taken in the face of the evident threat to Canadian jobs and Canadian industry which is posed by the current trade situation. Already years ago this was flagged as a matter of concern for Canadians and a matter on which the Government should be taking action.
Before I review the record of the action which the Government has and has not taken, I would like to say that the motion as tabled is straightforward and easily debatable. However, it is also somewhat deficient in that it does not really attempt to give the Government much guidance or to press a course of action on the Government which we could really dignify with the description of a substantive course of action. After all, the measures that are mentioned in the motion tend to be on the level of apple pie. They are predictable things that any Government in this country, regardless of its ideological composition, could and should, indeed, be doing. Later in my
speech I will get into how we in the New Democratic Party would like to see this motion toughened up and how we would like to see the motion amended to provide some real instruction to the Government rather than the somewhat loose and limp direction which the motion in its present form gives.
Let none of us doubt that we are at a serious point in Canada's economic history. We are at a point when one of our major export industries, indeed, in many ways our major export industry, built up over a period of time through favourable economic and favourable demand circumstances from our southern neighbour, is now at a crossroads at which this industry could be drastically cut back.
I think I would take very well the caution of the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway) and note that he applied it as much to his own colleagues in the Progressive Conservative Party as to anybody else in this House when he talked of not overemphasizing the number of jobs that would be lost.
Well, the figure of 100,000 that his colleague from London West used may, indeed, be overemphasized when we talk in terms of direct job loss within this industry.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Cariboo-Chilcotin (Mr. Greenaway) rises on a point of order.


Lorne Everett Greenaway: I meant the Member for Windsor West (Mr. Gray). I made a mistake and I would like it to go on the record that it was the Member for Windsor West that made that statement, not London West.


John Edmund Parry: Mr. Speaker, indeed, I myself did not hear the Member for London West (Mr. Hockin) make any such statement. I was proceeding on the authority of the Hon. Member. I am very glad we have the record corrected.
In terms of direct job loss, I would not doubt that the direct job loss in the forest industry from the presumed countervail action by the United States would be less than 100,000. I would caution the Hon. Member, and I would certainly caution our economic planners, that when we take into account the indirect job losses, and when we take into account the multiplier effect of any job lost through the economy, I have to say that it may indeed be possible that many Canadians will lose their jobs. If that does come to pass, it is going to be a tragedy. It will be a tragedy, I think, as the Hon. Member for Kamloops-Shuswap (Mr. Riis) said last month when we were debating the rescission of existing countervail duties. It is going to be a tragedy that will be felt in pockets across this country where the impact will be very hard. Indeed, the impact will be brutal.
He characterized it as an issue which will affect the hinterland more than the heartland. I think that was accurate, because we have already seen the impact that has been coming in British Columbia as a result of the Draconian level of duty that was imposed as a countervail on shakes and shingles.
June 9, 1986

If that level of duty were imposed on softwood lumber, we would see a decimation of the far larger softwood lumber industry that would render the decimation that has already started within the shake and shingle industry small by comparison. Our news services, our economic analysts, the people themselves in interviews have told us how dramatic and adverse that effect is going to be on them and on their communities.
The lumber industry employs people right across Canada, not so much in the prairie provinces, but in Atlantic Canada, in Quebec and Ontario and, predominantly in percentage terms, in British Columbia. The lumber industry is one of Canada's leading industries and one of our major industrial players. When we speak of a decimation of employment in this industry, what we are talking bout is not 1 per cent or 2 per cent of Canadians losing their jobs in major centres. What we are talking about is 10 per cent or 20 per cent or 30 per cent or 50 per cent or 70 per cent of those employed in smaller centres losing their jobs. That is the fear which I have, and I think it is a fear that this Government has to address. It is a reality that this Government must address in assessing a measure that can be taken against the American action; that is the petition before the ITC.
Well, many commentators, many Members of this House, many economic analysts and many representatives of both unions and management in the softwood lumber industry have warned this Government of the dramatic adverse effects that a countervail tariff could have. The calculation depending on the price of lumber, is that the countervail tariff would run in the order of 27 per cent to 31 per cent. That is going to mean that, because of the characteristic mark-ups and add-ons and the need to recover overhead, we will see retail prices in the United States, building yard prices and contract prices to the larger builders increase by similar amounts. That is going to have some pretty severe effects through the United States economy, but they will be nothing compared to the effects on the producer economy in our own country, Canada.
I see from my correspondence file that I also wrote to the Prime Minister (Mr. Mulroney) on this matter on November 23, 1985, and, as yet, have had only an acknowledgement, but I do not make any great instance of that. It seems, after all, to be something that is fairly commonplace.
I am particularly concerned for communities in my own riding, the community of Kenora where there is a stud mill, the community of Dryden where there is also a stud mill producing dimensional lumber and, most particularly, the community of Hudson where there is a mill run by a relatively small regional producer which, in fact, supplies most of the jobs in that community.
These are the areas and the parts of Canada that are far from the public view and far from the press in Ottawa, Toronto, Montreal or Vancouver. They are far from the economic analysts in their glass and concrete towers, and far from us in this Parliament. These are the areas with which the Government's economic policy must concern itself. These are
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the people who must be reassured that their Government is not merely sitting back and taking a let-it-happen or wait-and-see sort of policy. These are the people that the Government will have to, in some way, recompense for the loss of their jobs when or if those job losses occur.
In referring to this motion I would like to bring out a couple of facts that have come to us through studies on the whole question of softwood trade across the border. One is that the United States of America is, after all, looking towards Canada to make up its shortfall in supply. If the United States of America prices Canadian lumber out of the U.S. market, this will lead to very substantial increases in the cost of home building, in the cost of home improvements, in the cost of all sorts of construction which utilizes Canadian lumber, which is recognized, preferred and demanded as a premium product in that market.
This Government should be taking the case to the natural allies of Canada's softwood lumber industry in the United States; the builders, the home buyers, those who are involved in lending, those who are involved in non-residential construction, those who are involved in the retailing and the distribution of this premium product that Canadian softwood lumber exports represent. Those are the people who have substantial influence on American public opinion, which our Government, given the best will in the world, and given a far more competent public relations approach than they have currently demonstrated, could not have. One study has pointed out that the virtual absence of trade barriers has made the North American market for softwood lumber virtually a single market. We should be considering what can be done so that there are cross-border flows in the opposite direction and American lumber can be sold in some parts of Canada, whereas at most points across the border the flow is in the opposite direction.
It has also been pointed out that the arguments that have been used against the Canadian softwood lumber industry in previous hearings of the United States International Trade Commission are largely spurious when examined and fall apart in the light of analysis. Our attention is very legitimately focused on British Columbia since that province has the largest proportion of participation in the softwood lumber industry. However, I think it is worth noting that the share of the U.S. market held by eastern Canadian lumber has doubled since 1976, while the share of the American market held by British Columbia producers has not grown since 1978.
In a study prepared for the Department of External Affairs last year, it was stated that technological improvements enabled smaller logs to be milled economically and competitively, which contributed to the increase in Canadian production, especially from eastern Canada which generally has smaller logs. The usefulness of computer and laser based sizing systems and cutting prescription systems was greater there than it was in the British Columbia industry.

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The core of the argument suggested by the American producers in 1983 concerned stumpage fees. We should be promoting a very good and supportable hypothesis in the United States that that argument on stumpage fees is fallacious. After all, the International Trade Commission itself found that the auction of timber rights in the United States encouraged speculation, just as the auction of oil exploration rights has encouraged speculation. That resulted in American stumpage prices being two to six times greater than Canadian prices. Of course, this was partly a function of the fact that 72 per cent of all timber land in the United States is privately owned and the cutting rights are sold by auction, unless the owner uses them himself, herself or itself in the case of a corporation. In contrast, virtually all timber land in Canada is under Government ownership and control and cutting is done on a licence system rather than an auction system. While our system has perhaps resulted in there not being enough revenues to undertake proper reforestation and proper forest management procedures, it can hardly be said that by having a stumpage system that relates the final price of the timber more closely to the price paid to the land owner than does the American system, Canada has in some way taken a discriminatory, predatory or unfair action against U.S. producers.
The fact is that the timber auction system in the United States has largely priced American producers out of their own market. Therefore, they should look to their own traditions, laws and economic system if they are to correct what they see as an unreasonable degree of penetration in the Canadian market. Furthermore, as a sovereign country, we must reserve the right to set our own stumpage system and our own timber cut licence system in the best interest of our forests, our jobs and our Canadian workers. We are not talking about subsidies, we are talking about definite fees that are paid to the Government for the use and the harvesting of the timber.
We note with some suspicion the deletion of certain sections from the study that was carried out by Arnold and Porter on the United States trade remedy law. Did those sections in fact indicate that the American Senate and Congress would impose pre-conditions for the approval of the talks? We believe they may well have done so and we think that the interview that was published in today's Ottawa Citizen with Mr. Len Santos, a senior U.S. Senate trade adviser, indicates clearly that we are not talking about a judicial process, as the Government would have us believe. It is not a quasi-judicial process as the mandate of the International Trade Commission would indicate. It is a combination of a quasi-judicial and a political process and, indeed, we as Canadians would claim that our rights were being violated if we were not allowed to apply a similar system in this country.
I believe that the motion which I originally criticized for lack of content needs amending. Therefore, I move, seconded by the Hon. Member for Prince Alberta (Mr. Hovdebo):
That the motion be amended by deleting the period at the end of the statement and adding
"(5) and ensure the free-trade negotiations not proceed until such time as the mandate of such talks focuses on a sector-by-sector approach with Canadian safeguards, and the countervail procedures against each country by the other be suspended until such talks are concluded."
Let me give a couple of examples of our need for a bilateral trade commission. We have had continuing permanent bilateral arrangements with the United States for the better part of a century.


The Acting Speaker (Mr. Paproski):: Order. I want to reserve on the motion but I will give the Hon. Member the minute that he has remaining in his debate.


John Edmund Parry: Mr. Speaker, the International Joint Commission, the International Boundary Commission and the International Boundary Water Commission are examples of the permanent institutions that we have had jointly with the United States. While these bodies regulate matters which surely are of great significance to Canadians, they are of less importance than the trade upon which so many Canadian jobs depend.
The European Economic Community is a glorified trade commission, whose trade regulation and trade management is a very significant and important part of its mandate. Our Party believes that this is one concrete initiative that the Government could take. If the Government looked at historical precedent, it would see that this initiative would be entirely in order in erecting the institution as a first step in trade talks. It would be a necessary precursor of those trade talks, rather than an afterthought when we find that after two years of intensive negotiations most of our industries have been left in a position where they can be entirely cannibalized by competition from across the border.
We also urge the Government to take this sectoral approach. Our Party believes that we cannot effectively protect Canadian jobs and industries by a headlong rush into an across-the-board free trade agreement with the United States that would not allow the sectors which presently have some protection to benefit from the sort of management arrangements that have characterized the Auto Pact which we commend to the Government's attention.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, the motion before us expresses care and concern for workers in the cedar shakes and shingles industry and goes on to recommend four specific ways in which the Government should take action. Of those four proposals, I want to address my remarks to the fourth which concerns itself with Canada's initiating action under the rules of GATT, the General Agreement of Tariffs and Trades. Since this particular issue concerning the cedar shakes and shingles industry, which is upon us now, grows out of the Government's attempts to bring a free trade agreement to Canada, I want to go back and look at that in a broader way.
Last fall the Government announced it was considering initiating discussions on free trade, later becoming freer trade, liberalized trade, and the language was changed in various ways; the Special Joint Committee of the Senate and the House of Commons on Canada's International Relations made a full examination of the issue at that time. I would like to quote from page 38 of the committee report as follows:
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The Committee recommends that there be immediate bilateral trade discussions with the United States.
The discussions should centre initially on resolving current trade irritants, especially prevention of the imposition of additional non-tariff barriers to trade between the two countries, issues such as the definition of the net effect of subsidies provided by both sides and the identification of the appropriate jurisdictional authorily for implementing changes in non-tariff barriers should be dealt with explicitly. These discussions should be used to explore the potential for additional trade liberalization between the two countries and for securing and strengthening access to each other's markets. Issues such as trade in services, Government procurement, and reducing remaining tariff barriers should be dealt with explicitly.
That is a very clear prescription which was arrived at by a joint committee of the Senate and House of Commons with, I understand, all-Party agreement. It is a very clear prescription for discussion on current trade irritants, especially to prevent imposition of additional non-tariff barriers and identifying better ways to deal with disputes; then following those discussions, to explore the potential for additional trade liberalization.
The Government chose to proceed in another way. Trade irritants, so called, have been a real problem for Canada from time to time over the years, leading Canadian companies to spend enormous amounts in legal fees, and also leading to a number of serious attacks on the integrity and the independence of the nation, for example, our unemployment insurance scheme has been described as a trade subsidy and we have had to go to the international courts to defend it. More recently, so called stumpage costs, the fees charged by the Province of British Columbia for cutting lumber, have been regarded by the Americans as a subsidy because, in the American view, those fees should be higher.
This is somewhat unwarranted interference in the matters of another country. This is the kind of trade irritant that the committee suggested should be dealt with first. However, the Government in its wisdom decided to take the other route. It decided it would go in search of an all-encompassing trade agreement and it would give away all the bargaining chips before it started. Since our American neighbours and friends did not particularly like FIRA, the Foreign Investment Review Act or the National Energy Program, those programs were immediately removed. When the Americans decided to send a tanker through our territorial waters, it was taken very calmly. The theory was: "Be nice to the President of the U.S. and sing songs with him, give him everything he wants and we will be able to get what we want". That was a disastrous policy from the beginning.
All our bargaining chips were given away before we started. As an example of how ineffectual that policy was, last fall we saw a change in our exchange rates about which Canada was not even consulted. I think that was either at the end of September or at the beginning of October, more likely at the end of September. In New York, the United States Secretary of the Treasury invited the Minister of Finance for France, the Chancellor of the Exchequer of Great Britain, the Minister for Finance for Japan and the Minister of Finance for West Germany to join the United States in a discussion with respect to the devaluation of the American dollar.
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Canada is the nation most vulnerable to the movement of American currency. In fact, the exchange rate for us is more important than the tariff because 80 per cent of our goods already move in free to the United States and 15 per cent move in at 5 per cent or less. So the movement of the exchange rates is a more important factor as well, of course, as the various non-tariff barriers. We have a larger trading relationship with the United States than does Japan, about three times as large, yet we were not consulted or invited, nor were we even informed about that meeting. That is the nature of the special relationship with the President of the United States on which the Government has placed so much faith.
For some reason some Hon. Members who have taken part in this debate have said they do not quite know where our Party stands. That was spelled out very clearly in a release on January 19 of this year following a special caucus on trade. The press release was issued, and if anyone wishes another copy, I would be very happy to have one sent. Essentially, we stated that our position had never changed. We are not antiAmerican. We are pro-Canadian. We consider that the whole free trade debate needs to be broadened. Canada's status as a middle power country with good international relations seems to us to be a building block which we should develop further. We thought that to discuss trade issues almost exclusively in terms of two-way U.S.-Canada trade was ill advised. There are other options. We thought it was certainly useful to have twoway discussions or bilateral discussions with the United States but that this should always be in a multilateral context.
Section 21 of the GATT does not ban bilateral agreements. However, it certainly cannot be considered to be encouraging of them, or of regional blocks. In fact, quite recently there was a warning statement about bilateral agreements issued by one of the ambassadors to the GATT who regards bilateral agreements as possibly risking the integrity of the multilateral agreements.
We are living in very protectionist times. It is particularly important to protect and defend our international agreements. The view of the Official Opposition is that we require a global and not a continentalist trading policy. We need an internationalist trading policy. That would meet the concern that international problems, including the international debt situation, lead to trading problems.
We think that Canada can continue to exercise leadership in world trade. As I said earlier, the special committee of the Senate and the House of Commons took a rather internationalist position and recommended that bilateral negotiations be done in that context. In the case of the Macdonald Royal Commission, the bilateral arrangement with the United States was also contemplated in a wider multilateral context. The position on the world stage fostered by Mr. St. Laurent, Mr. Pearson and Mr. Trudeau, in our view, is the position with which Canada should continue.

June 9, 1986
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However, any changes that do come about in trade policy need to be very carefully considered from the point of view of the impact on workers in Canada. As the Government rushed ahead with its very open policy-open for the United States but not for Canadians-bargaining chips were given away before we began. All the impact studies were issued in a very censored variety. We were told that if Canadians had access to all the impact studies concerning the possible effect of changes in our arrangements with the United States on employment and so on, this would facilitate the Americans' bargaining position. I find that hard to accept. Surely the Americans are sophisticated enough to have done their own impact studies; they are not sitting waiting for ours. But Canadians would like to know what to expect. Canadians would like to have had some warning of the disastrous results we are now seeing in the shingles and shakes industry.
If there are to be changes in our trade policy, we will have to talk about education, training and retraining. There will have to be moneys for labour adjustment. The Government has not spoken of any of this. We ourselves in Canada have many substantial interprovincial barriers to trade that block the movement of goods and services. We have not begun to deal with those. How can we go into a free trade agreement with the United States when we do not have a free trade agreement in our own country?
In any case, trade, important though it is, is not the full answer to increasing prosperity for Canada, nor is a trade agreement the full answer to enhancing trade. We should be doing more research and development. We have to modernize our plants and improve our marketing. We have to do these things because we have to be competitive in order to benefit from any trade agreement, whether it be with the United States or with some other country.
As the Government is talking about a free trade agreement with the United States, we are also seeing the moneys that go to the provinces for post-secondary education and medical care being capped. In the next six years something in the order of $4 billion less than anticipated will be going to the provinces for post-secondary education and medical care. That does not seem very logical.
The sad fact is that the Americans have bargained their way around this Government to date and have run circles around it. We gave away the store before the talks began. The Government did not take Canadians into its confidence. There should have been a full, frank public debate within Canada on this major economic initiative before negotiations even started. The Government did not mention anything about free trade in the last election campaign; but three years ago the present Prime Minister (Mr. Mulroney) was opposed to free trade arrangements. Before we got as far as we did the Government should have had full consultations with the people of Canada. There should have been a full debate in Parliament. There should have been full consultations with our provincial Governments
and extensive public hearings with leaders of industry, commerce, labour and academia.
Has the Government considered any free trade agreement discussions that it is going to have? What is going to happen to our medicare, our unemployment insurance and our regional development programs? We have already had our regional development programs and our unemployment insurance cited as non-tariff barriers or hidden subsidies. How is the Government proposing to avoid this happening again? These are all questions that have not been answered.
Essentially, we on this side of the House are all for improving our relations with our trading partner and neighbour, the United States. We are all for finding some sensible solution to the trading disputes that seem to come up very often. However, we think that our negotiations with the United States should be carried on in an international context, in the context, as the motion before us states, of the General Agreement on Tariffs and Trade. Any multilateral or global trading policy that we would develop must, of course, have a very important U.S. component. But there are other countries too. Pacific Rim trade is important to us, as is European and Commonwealth trade.
We have always played a role on the international stage. We have balanced our close, friendly relationship with the United States on the one hand with a strong support for multilateral and international institutions such as the United Nations, the International Monetary Fund and the General Agreement on Tariffs and Trade on the other.
I mentioned earlier that Ambassador Dunkel, the Director General of the General Agreement on Tariffs and Trade, has issued a warning about bilateralism. I have now found the quotation. Ambassador Dunkel said:
The tendency towards bi-lateralism-in Trade policy is the greatest danger, both politically and economically, to order and prosperity in the world economy.
We agree with that viewpoint. We in the Official Opposition believe that we must reinforce the multilateral or world economic system so as to expand Canada's international trade.


The Acting Speaker (Mr. Paproski):: Order, please. I must rule on the amendment proposed by the Hon. Member for Kenora-Rainy River (Mr. Parry). I must say that the amendment raises a new question. It puts forth a proposition dealing with a matter which is foreign. Nowhere does the main motion have anything to do with free trade. It talks about softwood lumber. Therefore, I must rule against the amendment.


Mrs. Monique B. Tardif (Parliamentary Secretary to Minister of Regional Industrial Expansion):: Mr. Speaker, I too would like to comment briefly on the motion before the House today, particularly on the first point concerning the Employment Support Act.
June 9, 1986

Mr. Speaker, what strikes me in the recommendations before us today is their illogical thrust. The recommendations are divided into four points, and point one contradicts point two. The first point recommends invoking the Employment Support Act while the second point urges doing our utmost to make our case before the United States International Trade Commission.
If we refer specifically to the softwood lumber industry, I suggest that we cannot implement these two recommendations.
Since I am still a relatively new Member of the House, Mr. Speaker, I had to do some research over the weekend to find out what the Employmenmt Support Act is all about. This legislation was assented to in 1971 and its purpose is to support levels of employment in Canada by attenuating the negative impact on Canadian industries of import surtaxes levied by foreign countries or of other action having a like effect.
Mr. Speaker, not only had this legislation been assented to or approved in 1971, but so had the regulations which pertained to the establishment of an employment support program and which had been the subject of an order in council. According to the document I was able to find, the seven members responsible for administering the Act had also been appointed by the Governor in Council.
In a report which dates back to 1972 and which I would like to refer to for the enlightenment of my colleagues, here is what it says about the provisions of the Act:

The levels of employment in the Canadian industry are supported by cash grants available under the Act. Any Canadian manufacturer who establishes that the work force at his plant is, or is likely to be, significantly reduced during a specified period by reason of the application of foreign import surtaxes, or other actions of like effect, could apply for a grant. The grants were authorized and administered by a seven-member Employment Support Board, of which three members, including the Chairman, were from outside the Public Service.
The criteria of eligibility for the Employment Support grants, as embodied in the Act and Regulations, required that:
1)	employment at the plant of the applicant be significantly reduced, or
likely to be reduced, as a result of a surtax,
2)	not less than 20 per cent of the total value of all goods produced at the
plant in 1970 was exported to the country imposing the surtax and would have
been subject to the surtax, had that surtax been in force in 1970.
Notwithstanding the above, and where a manufacturer who applied under this
Act was unable to comply with any Regulations, the Board could recommend to the Governor-in-Council that a grant be authorized for the manufacturer where, in the opinion of the Board, such a grant would be consistent with the purposes of the Act.
The grants were authorized for individual plants of a manufacturer for assistance periods, not exceeding 90 days, during which the applicable surtax remains in efect. The grants were conditional upon the manufacturer maintaining a prescribed level of employment at the plant during the assistance period.
The amount of any grant authorized by the Board was limited by the Regulations to a maximum of two-thirds of the amount of surtax which would have been payable by the applicant in 1970, had the surtax been in full force and effect, prorated for the number of days in the assistance period. In no case, however, could the amount of a grant be greater than that deemed adequate by the Board to maintain employment at the applicant's plant at a satisfactory level.
Where, in the Board's opinion, circumstances so warrant, the Board could recommend to the Governor-in-Council that a grant greater than two-thirds of the relevant surtax, but no higher than the aggregate amount of the applicable 1970 surtax, be authorized.
The grants were payable after completion of the assistance period, and were treated as current income for the purposes of the Income Tax Act.
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Mr. Speaker, what I was unable to find are specific cases where this legislation was used, and if we look at the Employment Support Act, it clearly refers to subsidizing Canadian manufacturers whose products become subject to a surtax imposed by a foreign country.
In the case of the softwood industry, I think such measures are entirely premature, since the International Trade Commission has now decided to hear the case, and we will have a chance to defend ourselves. The U.S. softwood lumber industry insists that the Canadian product is subsidized by the Government and as a result should be subject to an import surtax. There is none for the time being. The Commission will have to decide whether or not there is a case for an import surtax.
Since this case is going to be heard before the Commission, if we were to apply the Employment Support Act now, it would be a clear admission to the Commission that the Government is prepared to subsidize the industry, and would more damaging than for us to go and defend our case. The entire Canadian softwood lumber industry is now being threatened because of this review by the International Trade Commission. The U.S. industry's case is based on the argument that stumpage fees in Canada constitute an unfair subsidy. It is our duty to convince them they are wrong, and we will not be able to do so if we put into effect another provision that is clearly a subsidy and would thus make our case impossible to defend.
Mr. Speaker, the Employment Support Act was drafted at the beginning of the Seventies, when because of circumstances prevailing at the time, the Government wanted to provide short-term assistance to plants that were threatened by unemployment as a result of the imposition of a surtax. Section 2 of the Act makes it clear that the assistance is for a specified period. Under the regulations, the maximum payment period may not exceed 90 days. The measures already taken and now being scrutinized by the United States are not sporadic in nature. Furthermore, the U.S. surtax problem affects the buyer and not the manufacturer. Because of the surtax, Canadian products would become too expensive for the American buyer. The Employment Support Act could do no more than help accumulate staggering inventories that would become impossible to sell.
Mr. Speaker, if we were to use measures like the Employment Support Act, we might, in the case of the softwood industry, jeopardize the case now before the International Trade Commission. I think that it would not be at the advantage of Canadians or the employees of this industry. As for the second part of the motion which asks the Government to assist "in every way the softwood lumber industry in making the Canadian case before the United States International Trade Commission", that goes without saying. I cannot believe that the Government would act otherwise. We shall do everything possible to present a solid case to the International Trade Commission.

June 9, 1986
Supply
I believe that there is a change of attitude reflected in what was said this morning by the Hon. Minister for International Trade (Mr. Kelleher), who announced that he would meet Friday with the main parties involved, namely the industry and the provincial Government, to try to identify the best alternatives. This Government has no intention of imposing its own views on anyone. There are industries and provincial Governments involved. We have to examine the best solutions to this problem. Naturally, we have had to make some changes.
If we look at the various issues which have been the subject of sporadic controversy, it becomes obvious that it was more than time for the Canadian Government to take a comprehensive look at the framework of our trade negotiations in recent years. Our current problems have existed for a long time. Canadians are now very much sensitized to the problems associated with our trade relations with the United States. They want to hear about them. This is part of what the Government can do to help them.
Since last year, there have been some changes within the Canadian Government. I have heard people speak about the foreign investment act, the National Energy Program and all the programs implemented by the former Government which exacerbated the problem. We all know, Mr. Speaker, that we have known difficult times. We are now coming out of them. However, when, during a difficult period for trade, we add to the problem with legislation which unilaterally makes Canada hostile to trade, we find ourselves with problems such as the one we are now having.
We have a second problem which will have to be resolved by the International Trade Commission; Afterwards, we shall be able to decide what action to take to help the industry. In this specific case, it is important for the Canadian Government to provide immediately some practical assistance to the industry and the province most affected to guarantee their defence before the International Trade Commission.


The Acting Speaker (Mr. Paproski):: It being 5.45 o'clock p.m., it is my duty to interrupt these proceedings and put every question necessary to dispose of the supply proceedings now before the House in accordance with the provisions of Standing Order 82(9). The question is the following one. Mr. Axworthy, seconded by Mr. Gauthier, moved:
That this House condemns the lack of care and concern for workers in the cedar shakes and shingles industry and in the softwood lumber industry shown by the Prime Minister in his letter to President Reagan, in which he clearly put his personal interests ahead of those of working Canadians and calls upon the Government to take immediate action (1) to assist the workers in the lumber industry and in the shakes and shingles industry by invoking the Employment Support Act; (2) by assisting in every way the softwood lumber industry in
making the Canadian case before the United States International Trade Commission; (3) to ensure that proper time is given to make this case by, if necessary, obtaining extensions to the hearing time; (4) and by initiating proper and effective action under the rules of GATT to ensure that this matter is satisfactorily considered by the international trading system.
All those in favour of the motion will please say yea.


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


The Acting Speaker (Mr. Paproski):: Call in the Members.
And the division bells having rung:


Mr. Speaker:: Order, please. I am sorry, the Hon. Member is too late. Hon. Members who have just walked in are too late. Let me make that clear.


Mr. Speaker:: I declare the motion lost.


Mr. St. Germain:: Mr. Speaker, I would just like to clarify that I did not abstain from voting. Due to the age of the green
Supply
buses, I was just a couple of seconds late. I just want to put that on the record. I would have voted with the Government.


Mr. Speaker:: The Hon. Member for Blainville-Deux Montagnes (Mrs. Landry) on the same point of order.


Mrs. Landry:: I find myself in the same situation as the Hon. Member, and I would like to point out that I did not abstain from the vote, but was held up by the same green minibus.


Mr. Speaker:: All day the vote has been called for six o'clock. It must have been a slow bus.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: It being 6.09 o'clock p.m., this House stands adjourned until tomorrow at 11 o'clock a.m. pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.09 p.m.
[Stage Direction]

Tuesday, June 10, 1986