1986-04-16

Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, The Gazette published the results of a survey showing that seven out of seven firms which offer their services to complete tax returns for Canadians were unable to prepare correctly the tax return submitted by the newspaper.
Not long before the Toronto Star had revealed that 43 per cent of income tax inquiries directed to Revenue Canada had been erroneously answered.
The Minister of National Revenue is dumbfonded by these facts but has no solution or guarantee for Canadians now facing various problems. The Conservatives made all kinds of promises during the election campaign, but they are not very good at coping with present difficulties.


SHIPBUILDING
Mr. Rod Murphy (Churchill):: Mr. Speaker, this morning I returned from meetings with groups and concerned individuals in Nova Scotia and Prince Edward Island. Among the important issues raised was the lack of clear Government policies regarding the shipbuilding industry. The present Government and previous Governments have failed to provide this clear direction. We do not have a policy on shipbuilding and this has resulted in the closing of shipyards and the laying-off of many workers.
Some Government financed contracts and Crown corporations have gone offshore. Some cabinet Ministers have promoted this process. Some Government work is designated for certain yards while other work is placed for open competition. Yet there are no clear guidelines for taking these diverse courses of action.
Our shipbuilding industry is in shambles. We cannot expect private industry to build ships in Canada, to fly Canadian flags, and to have repair work and renovations done in our own yards if the Government itself fails to provide the necessary leadership.

[ Translation]


GASOLINE TAXES
Mr. Vincent Della Noce (Duvernay):: Mr. Speaker, further to an article that appeared in one of the major Montreal newspapers last Saturday, under the headline: "Ottawa to put 3-cent tax on gas", I want to reassure the many Quebecers who are worried about this rumour which has no basis in fact.
Quebecers have hardly had time to enjoy the recent 10-cent drop in the price per litre when someone tries to spoil it. 1 hardly think there will be a 3-cent increase per litre, and personally I am confident there will be further price reductions, especially in Quebec. As you all know, we have a 6-cent surtax per litre which has been around for too long.
Furthermore, although our Government realizes that the oil crisis is a matter of national importance and has created a very critical situation, it has not yet made a decision.
But 1 know that whatever the Government's decision will be, it will be in the best interests of all workers and consumers.


NATIVE PEOPLES
Mr. Guy St-Julien (Abitibi):: Mr. Speaker, it is a pleasure to inform the House that on February 6, 1986, Justice Rejan Paul, Mr. Robert Kanatewat from Abitibi and Mr. Richard Saunders were appointed members of the Cree-Naskapi Commission. The appointments were made by the Governor General in Council, on the recommendation of the Minister of Indian Affairs and Northern Development, the Hon. David Crombie, and the Cree and Naskapi themselves.
The Commission was established under the Cree and Naskapi of Quebec Act, the first piece of legislation passed by

April 16, 1986
Parliament that native people can call their own. The Commission's terms of reference include receiving and considering grievances from all parties concerned with respect to implementation of the Act; second, making recommendations with respect to implementation of the legislation, and third, submitting to the Minister of Indian Affairs and Northern Development a report on the Act's implementation, every two years. This Commission is one more step in the Government's plan to support the development of native people's autonomous government.


THE LATE SIMONE DE BEAUVOIR
Mrs. Lucie Pepin (Outremont):: Mr. Speaker, I rise in the House today to pay tribute to a great feminist and humanist who died the day before yesterday, Simone de Beauvoir.
In addition to having been one of the foremost intellectual figures of the 20th century and an avant-garde militant for every radical cause, she is without a doubt a major figure of contemporary feminism.
Many passages from her brilliant essay, "The Second Sex", have kept their extraordinary resonance today, thirty-seven years later.
With great intelligence and sensitivity, Simone de Beauvoir delivered her response to Aristotle and Freud and others who saw women's inferiority as a result of human nature.
She demonstrated that one is not born a woman, one becomes one. The Western feminist movement is deeply indebted to her.


OFFICIAL LANGUAGES
Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, the Commissioner of Official Languages expressed his disappointment yesterday about the Government's lack of action on official languages.
There has been little action in the key areas of service to people in their chosen official language in ensuring equity in public service participation by the official language minorities, and in the use of French as the language of work.
The Government's lack of action has affected the Standing Joint Committee on Official Languages. Last spring the committee was contemplating holding hearings in the regions, but this resolve collapsed in the fall. This failure to carry the flag into the provinces reflected the Government's lack of
energy on such vital federal-provincial matters as education in the minority official language. Deficit reduction conflicts with the national interest in these areas. Statements of good intention become empty protests when Governments do not find the means to demonstrate their resolve.


VETERANS AFFAIRS
Mr. Barry Moore (Pontiac-Gatineau-Labelle):: Mr. Speaker, ever since he was sworn in as Minister of Veterans Affairs (Mr. Hees), our colleague has established a new policy based on fast service, generosity and courtesy.
Pension applications have been processed twice as fast since we came into office and the number of favourable responses has doubled.
Veterans now get higher benefits. Under a Pension Act amendment in force since January 1, 1986, the guiding principle is that pensions should increase at the same rate as a mixed salary.
Other improvements include higher deductions for casual earnings, longer disability allowances, extension of Aging Veterans Program benefits, and a number of other measures to help these people who served their country.
Mr. Speaker, I can assure you that the many veterans in my riding of Pontiac-Gatineau-Labelle fully appreciate these improvements which attest to our Government's gratefulness to them.


TERRORISM
Mr. Gordon Taylor (Bow River):: Mr. Speaker, Americans are not warmongers. All over the world there is evidence of their concern for the poor and the needy. I saw the hospitals and the roads they built in Central America. Wherever tragedy strikes, they are there to provide help. They stand four-square against terrorism, hijacking, and the murdering of innocent travellers.
Terrorism has been succoured, encouraged, and promoted by Khadafy and his terrorist friends. In answer to the pleadings to cease killing innocent people, he answered with more bombings and threats. Well, enough is enough. The U.S.A. called his bluff. Now he knows and his people know, and the
April 16, 1986

world knows, that terrorism will not be tolerated. If he ceases his terrorism all will be well, if he continues to live by the sword he will surely die by the sword.
I thank God for the U.S.A. and its President, Ronald Reagan.


FALLING OIL PRICES-CALL FOR WORLD-WIDE PRODUCTION CUTS
Mrs. Barbara Sparrow (Calgary South):: Mr. Speaker, the Petroleum Services Association of Canada, in an employment survey accompanied by projections from engineering and oil companies, indicates that more than 20,000 Albertans will lose their jobs in the next few months as a result of the plunge in world oil prices.
While eastern consuming provinces are benefiting from lower prices and are in a position to take advantage of greater opportunities for exports to the United States, it is Alberta that will experience most of the losses in exploration, development, production, and construction in the energy field.
I believe today is the day that OPEC meets again. There must be some agreement on production cuts world-wide. This is vital to the future of the City of Calgary, the Province of Alberta, and indeed for energy security in our country.


OFFICIAL LANGUAGES
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: In his
fifteenth annual report tabled yesterday, Mr. Speaker, the Commissioner of Official Languages gives a depressing account of the equal status of French and English as working languages in the Public Service. I quote the Commissioner:
Perhaps it is impossible to do better under the existing policy-unfortunately the Federal Establishment did not get the message: generally speaking, senior management gives a pitiful example.
To confirm the Commissioner's statements, I should like to read to the House a memo sent by a Fisheries and Oceans Deputy Minister to one of his employees whom he was asking to have someone check the French version of an invitation to the Neptune awards presentation. Here is what the Deputy Minister wrote:
Have this checked again by an half decent frog.
The memo is signed L.T.
That, Mr. Speaker, is a pitiful denigrating example given to the employees by some senior Public Service officials. Whether he wanted to denigrate employees or their work, or whether, for example, he wanted to display his morbid sense of humour, the Assistant Deputy Minister has no choice but to apologize to all Francophones in Canada for this insult to-


Mr. Speaker:: Order, please, 60 seconds. The Hon. Member for Temiscamingue (Mr. Desjardins).


CANADIAN JOBS STRATEGY
Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, this year again, Temiscamingue is going to meet the challenge, Challenge '86. Thanks to a favourable response from the private sector, nearly 500 jobs for students will be created in my riding as part of the summer employment program for students, Challenge '86.
We owe this remarkable performance mainly to active participation by the private sector, which has received 31 per cent of the program's budget and will provide 200 jobs. As a result of this very substantial involvement of the private sector, it will be possible to create as many summer jobs for students in '86 as we did in the summer of '85, despite the fact that we have a smaller budget this year.
Mr. Speaker, this is just another example of how you can do more with less money.
I would like to take this opportunity to offer my sincere thanks to the 107 businesses, industries and companies in Temiscamingue that were willing to invest in the talents and know-how of our young people.


ENVIRONMENTAL AFFAIRS
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I was disturbed to learn this morning that the Govenment has not come through with funding that it promised to the environmental groups Pollution Probe and Friends of the Earth in order to facilitate their continued participation in the hearings being held by the alachlor review board.
I call on the Government to live up to its commitment to those groups to provide funding. They have had to cease their participation in those hearings.

April 16, 1986
Resignation
It is very important for voluntary groups like Friends of the Earth and Pollution Probe to be able to participate in the environmental hearing process. I hope the Government will soon make it clear to them that it will live up to that commitment and that the review board that has the responsibility for administering the money will be forthcoming with the funding.


CANADIAN BROADCASTING CORPORATION
Mr. Bob Pennock (Etobicoke North):: Mr. Speaker, yesterday I spoke about the alleged cuts being claimed by CBC President, Pierre Juneau. The same week that he announced the elimination of 350 jobs, 122 hours of original Canadian programming, and 1,000 hours of regional television, he embarked on a 10-day trip to Communist China. He must be lonely, though, because he has taken not one, not two, but three senior vice-presidents with him. He claims it is to explore the potential for an export market for Canadian programming.
I agree we should attempt to sell Canadian programming abroad, but I question the wisdom of sending four of the Corporation's top officials abroad at a cost of $5,200 each for return air fare, while at the same time giving 350 CBC employees the golden handshake.
This effort to sell Canadian programming abroad is hardly consistent with the latest cut-backs in Canadian programming he announced before he left. The Canadian taxpayers deserve better treatment than this.


VACANCY
Mr. Speaker:: I have received a communication advising me of the following vacancy which has occurred in the representation, namely, Peter Elzinga, Esq., Member for the electoral district of Pembina, by resignation. Accordingly, I have addressed my warrant to the Chief Electoral Officer for the issue of a new writ of election for the said electoral district.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Deputy Prime Minister. The Prime Minister left him to meet with the American envoy with respect to Libya. We received from the Prime Minister a totally vague statement on the Libyan crisis and the Canadian reaction to it. He refused to answer questions from reporters after making that statement. He was vague yesterday in Question Period. Despite the potential effect on the peace of the world, he did not show up last night to participate in the debate. He is not here again today when we have persistent questions-


Some Hon. Members:: Order.


An Hon. Member:: Coward.


Some Hon. Members:: Order.


John Napier Turner: Was the Deputy Prime Minister speaking last night on behalf of the Prime Minister and the Government when he said that it was his view that the Americans had no alternative but to launch the strike against Libya? If that is so, and he was speaking on behalf of the Government, why did the Prime Minister not say so earlier in the day?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Well now, let us look at the other side of that, Mr. Speaker. The Prime Minister on behalf of the Government issued a statement late Monday evening. The Prime Minister issued a statement again yesterday morning. The Prime Minister was in the House open to a broad range of questions yesterday.


John Napier Turner: You took the questions.


Jean-Robert Gauthier: He didn't take the questions.


Erik Nielsen: And he again saw the media as recently as this morning. There is no inconsistency, indeed there is utter consistency, in what he has been saying as Prime Minister of the country and what I have been saying on behalf of the Government.


LIBYA-REQUEST FOR CLARIFICATION OF PRIME MINISTER'S DISCUSSIONS WITH UNITED STATES PRESIDENT
John Napier Turner: have a supplementary, Mr. Speaker. If the Prime Minister were here, we would be asking the following questions and I will therefore put them to the Deputy Prime Minister. Did the Prime Minister speak directly to the President of the United
April 16, 1986

States on the subject of Libya? Did he ask for evidence to justify the action taken by the U.S.? What kind of answer did he get? Did he suggest any alternatives for other options? Could the Deputy Prime Minister explain to the House what he said and tell us what kind of questions he put to the President of the United States?


Erik Nielsen: Mr. Speaker, the right hon. gentleman obviously has not read both statements to which I referred which were issued by the Prime Minister on behalf of the Government Monday evening and yesterday morning. He obviously was not listening yesterday, nor was he listening to me, or he would have heard that we have been in touch with the United States Government all along.
I do not know where the right hon. gentleman finds inconsistency in what we have been saying repeatedly, which is the same thing.


Mr. Speaker:: Question, please.


John Napier Turner: I suggest to the Deputy Prime Minister that press statements are no substitute for facing the people of Canada through their representatives in the Parliament of Canada.


Mr. Speaker:: Order. Is there a question?


CANADIAN WORKERS IN LIBYA
John Napier Turner: My
supplementary question is directed to the Deputy Prime Minister. Would he not consider it hypocritical on the part of the Canadian Government to condemn terrorism at one of its sources in Libya, yet allow Canadians to work in that country as technical experts to help the economy which funds that terrorism? Is that not a hypocritical position?


Erik Nielsen: Mr. Speaker, I do not know how many times this has to be repeated before it sinks in. On January 10 the Prime Minister started with a full, complete, and detailed statement at that time with respect to Canadians in Libya. Our primary concern throughout has been the safety of Canadians. As recently as a few minutes before walking into the House, the situation is that there are no Canadians who have been injured, killed or affected, nor has their safety been affected in Libya.


John Napier Turner: They've been told to stay indoors now.


Erik Nielsen: However, they have to look to their own assessment of the circumstances, as they were urged to do on January 10, and again last Friday because of the changing circumstances.
Oral Questions


ROLE OF CANADIAN GOVERNMENT
Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is for the Deputy Prime Minister. How can the Deputy Prime Minister leave it to Canadians working in Libya to assess their own situation when it is supposed to be the position of the Government that it does not condone Libyan terrorism? Obviously the economic system there finances that terrorism. How can it tell Canadians it is up to them to stay there and, potentially at least, support that terrorist activity?


Some Hon. Members:: Oh, oh!


Erik Nielsen: Sir, one might put this question to the hon. gentleman: would the Hon. Member evacuate all Canadians from Libya, even against their will, notwithstanding the fact that we have the assurance of the Government of Libya that they will be protected, and notwithstanding the fact that there is no indication of any threat against any Canadian in that country?


SANCTIONS AGAINST LIBYA
Herbert Eser (Herb) Gray: Mr. Speaker, my supplementary question is for the Deputy Prime Minsiter. Does he realize that there is another issue here other than the safety of Canadians? Is the Government serious about effective action against Libya by way of sanctions? If it is, how can it condone and allow Canadians to keep the Libyan oil industry going, the revenues from which support Mr. Khadafy's actions?


Some Hon. Members:: Hear, hear!


Erik Nielsen: That is simply not correct. Sir. If the hon. gentleman will refer to the statement of January 10 he will see that there were sanctions imposed. Indeed, among our allies Canada has been in the vanguard in leading us toward a solution to the vicious cycle of terrorism. Certainly what is in issue is getting at the root causes of terrorism and finding a cure. But paramount to all considerations here, surely must be the well-being and safety of Canadians in that country at this moment.


INQUIRY IF PRIME MINISTER MADE FIRM SUGGESTIONS BEFORE UNITED STATES DECIDED ON USE OF MILITARY FORCE AGAINST LIBYA
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is on the same subject. Yesterday, the Prime Minister said outside the House:

We urge-a renewal of efforts by all concerned to reach negotiated settlements to the tensions that have long plagued the Middle East.

April 16, 1986
Oral Questions

In other words, he suggested an approach that did not include military force. Did the Prime Minister actually make such suggestions before the Americans decided to send a military force against Libya?


Erik Nielsen: Mr. Speaker, I listened with care to the Leader of the New Democratic Party last night when, toward the end of his remarks, he brought forward some useful and constructive suggestions with respect to getting at the root causes of terrorism and finding a solution. He can be sure that those considerations have been brought to the attention of the Prime Minister and of the Secretary of State for External Affairs who is having discussions this week, at the official level, with those who are planning for the Tokyo Summit where the matter will be raised.
If the hon. gentleman has any further suggestions along the line of those he was making last night, I would be very happy if he would forward them to the Prime Minister so that they can be added to the agenda.
[DOT] (U25)


REQUEST THAT CANADA INTERVENE ON ISSUE WITH SUPERPOWERS
John Edward Broadbent: Mr. Speaker, my question pertains to action that I hoped had been taken before the American Government decided to use force to deal with the situation. I heard the Deputy Prime Minister say that the suggestions I made are going to be considered. I have another concrete suggestion to which I would like the Deputy Prime Minister to give a serious response right now, if he would.
The Soviet Union and the United States have only two strong points upon which they can agree regarding the Middle East and they are important ones. First, they both have opposed state-sanctioned terrorism by the Khadafy regime in Libya. Second, they both have had terribly lamentable hostage experiences in the region. Considering this, will the Government of Canada urge the two superpowers to use their influence, given their strong agreement in the Middle East, to deal with the root problems of tension in that area?


Erik Nielsen: Mr. Speaker, of course all along that has been the objective of the Canadian Government. Indeed, before we took office, as far back as the Bonn Summit, Canada led the way in urging upon other nations a solution which would end the cycle of violence. It is that ongoing work that will be addressed once again in Tokyo, hopefully-and I think we all feel this way- with even more positive results than we have seen in the past.


CANADIAN APPROACH
John Edward Broadbent: Mr. Speaker, in the past the Government of Canada has had a good reputation for constructive involvement in the Middle East. Considering that the Soviets put considerable distance between themselves and Mr. Khadafy through a statement made by Mr. Arbatov in the last 72 hours, and considering that the Americans are obviously concerned with terrorism, I would like to ask the Deputy Prime Minister if the Government, rather than waiting for the summit, will diplomatically, correctly, and concretely approach both the Soviet Union and the United States and ask them to begin to work constructively together now to deal with the root causes of terrorism in the Middle East.


Erik Nielsen: Mr. Speaker, again I remind the hon. gentleman that there are discussions at the official level this very week in preparation for addressing this matter at the Tokyo Summit which is only two weeks away. Certainly the suggestion the Hon. Member makes is a useful one and l am sure it will be considered very carefully by the Secretary of State for External Affairs when that agenda reaches its final stages of preparation and talks begin.


GOVERNMENT POSITION
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is for the Deputy Prime Minister. The Deputy Prime Minister did not answer the question put to him by the Leader of the Opposition regarding the contradiction between his statement and the statement of the Prime Minister. Last night the Deputy Prime Minister said that the United States had no alternative but to take the action it took the day before, whereas the Prime Minister, in a statement he made yesterday morning, urged negotiated settlements. Would the Deputy Prime Minister tell us which is the official position of the Canadian Government, what he said last night or what the Prime Minister said yesterday morning?
Erik Nielsen: Mr. Speaker, there is no difference between what the Prime Minister has been saying and what I have been saying. We have been saying all along that terrorism is reprehensible and evil, something which all members of the international community must work to eliminate. We accept the evidence of Libyan complicity in the Berlin nightclub attack. The United States Government, as President Reagan said on television on Monday night, vigorously pursued a variety of diplomatic and economic options but found it was left with no alternative but to attack military installations in Libya-


Mr. Speaker:: Order. Order, please. Order.
April 16, 1986


CANADIAN RESPONSE TO TERRORISM
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, everyone agrees that terrorism is reprehensible. That is not the question. The question is how we deal with terrorism. The Deputy Prime Minister said last night that the only alternative to this terrorism from Libya or elsewhere was the military attack launched on Libya by the United States, while the Prime Minister said we must have negotiated settlements-
Mr. Speaker:: Order, please. Does the Hon. Member have a question?


Mr. Allmand:: Mr. Speaker, he is not answering the question. Once again I ask him what is the Government's response to that situation of terrorism, the answer he gave last night or the answer the Prime Minister gave yesterday morning? The two reponses are different. What is the official position?


Erik Nielsen: Mr. Speaker, there is no difference, as hard as the hon. gentleman works to manufacture a difference. I reread into the record what I said last night and what the Prime Minister said in his statement. They are entirely consistent, and try as he might to distort that consistency, I am afraid it is there for all to see as plain as the nose on my face.


CANADIAN ALTERNATIVES
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, in order to help clear up this inconsistency for all of
us-


Mr. Crosbie:: There is no inconsistency.


Pauline Jewett: -would the Deputy Prime Minister, and I give him this opportunity now-


Mr. Epp (Provencher):: Oh, thank you.


Pauline Jewett: -tell the House what specific alternatives the Canadian Government presented to the United States in response to the crisis in the Middle East over the past year?


Erik Nielsen: Mr. Speaker, it is not necessary to stay within the last year. We can go all the way back to Bonn when economic sanctions were first proposed. When the United States imposed sanctions, we were the first to support that route. Diplomacy has not worked. Efforts have been made there. Economic sanctions have not worked. Efforts have been made there. The alternative was left to act as the United States did with the objective of eliminating an evil which we all recognize as evil and reprehensible. That does not mean to say that the matter is cured and stops there. Of course not. Ongoing efforts have to be made, as suggested by the Hon. Member's own Leader. We will take all those suggestions into account in the discussions in Tokyo in two weeks' time.
OraI Questions


FORCING DOWN OF EGYPTIAN AIRLINER
Pauline Jewett: Mr. Speaker, let me be absolutely specific. Did the Government, at the time of the forcing down of the Egyptian airliner, propose specific alternatives to future military action to the United States?


Erik Nielsen: Mr. Speaker, specifically, efforts have been made, not only by Canada which has led the way, but by other nations ever since Bonn to find a solution to the terrorist problem. Those efforts will have to go on in good faith and in co-operation with other like-minded nations to find that solution. It certainly does not help to try to manufacture discrepancies that do not even exist in respect to our policy, that is, Canada's policy in this regard, which has displayed a good record over the past many years, even before this Government came into office.


NOTIFICATION OF PRIME MINISTER OF PROPOSED U.S. ACTION AGAINST LIBYA
John Napier Turner: Mr. Speaker, my question is directed to the Deputy Prime Minister. Did the Prime Minister learn in advance about the American military action from the President directly in any conversation and, if so, was he given evidence by the President justifying such action?


Erik Nielsen: Mr. Speaker, the right hon. gentleman knows, or should know, that a detailed response to a question of that nature is certainly not helpful to the discussion.


Some Hon. Members:: Oh, oh!


Erik Nielsen: It is certainly not helpful to the safety and well-being of our own citizens in Libya. It is not my intention to respond in that kind of detailed fashion, and the right hon. gentleman should know better than to expect me to, having been a member of a Government and privy to the very reasons which compel me to answer as I do.


Some Hon. Members:: Hear, hear!


CANADA-UNITED STATES RELATIONS
John Napier Turner: Mr. Speaker, I do not accept that advice for one moment. Every time the Prime Minister sees or telephones the President of the United States, he loves to boast about it. This time we do not know the answer. If he did not receive a private communication from the President of the United States, how else was the matter dealt with and how else do we have the direct proof of a justification for the American action?


Erik Nielsen: Mr. Speaker, I have given the answer to that question. However, I could ask the right hon. gentleman to cast his memory backward, in respect of domestic security

April 16, 1986
Oral Questions
for a moment, to when I was asking the same kind of question of him and he was on this side of the House as Minister of Justice. He had very good reasons then for not responding in the detail that I wanted, and I have very good reasons now for copying his example of those days.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, my question is directed to the Deputy Prime Minister. He will be aware that the escalating agricultural trade and pricing dispute between the United States and the European Community is a major topic at the OECD meeting which is taking place in Paris this week. Could he explain why Canada, which is already suffering great losses in its agricultural industry, has no one from the federal Government with a background in agriculture to speak for its agricultural interests or to represent Canadian producers?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I appreciate the Hon. Member's observation, but I think the record will clearly demonstrate that we have always been in full and complete support of the agricultural industry. One can always find ways and means in this modern world, particularly with the friends we have throughout the world primarily as a result of the election of this Government, to represent this industry.


PRICE OF CANADIAN WHEAT
Victor Fredrich (Vic) Althouse: Mr. Speaker, since the next move of the OECD talks is to Tokyo where Japanese farmers will be getting $20 Canadian per bushel of wheat, while the Europeans will be getting 30 per cent more than the Americans, who next year will be getting in excess of $6 Canadian per bushel, how does the Minister expect Canadian farmers to stay competitive in the world with their pittance of just over $3 Canadian?


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, the people representing Canada outside our borders are well aware of the agricultural situation and are well able to speak on our behalf. One of the things we have done since assuming office is to ensure that there are representatives of the various industries when we negotiate. It is a healthy development, when we look at what the past Government did.
We have a Prime Minister who has said that there is more we have to do for western agriculture and that we would do it within the constraints imposed upon us by the economic situation. That is a healthy sign. Not only western farmers but all Canadian farmers realize it, as opposed to one of the previous Governments which left a phrase ringing in farmers'
ears in the West when its Prime Minister said: "Why should I sell your wheat?" We are very happy to have a Prime Minister who cares.


Mr. Speaker:: Order, please.


CANADA-UNITED STATES NEGOTIATIONS-STATEMENT ATTRIBUTED TO CANADIAN NEGOTIATOR
Hon. Douglas C. Frith (Sudbury):: Mr. Speaker, my question is directed to the Deputy Prime Minister. In a speech in Toronto yesterday, Canada's free trade negotiator, Simon Reisman, said: "I made it clear here that I am proceeding on the assumption of a clear launch with everything on the table". How can the Government square the position taken by the trade negotiator with that taken by the Prime Minister and his Government who have repeatedly told Canadians that the Auto Pact was exempt, that cultural industries were exempt, and that unemployment insurance programs were exempt? Who speaks for Canada?


John Napier Turner: I guess Nielsen speaks for Canada on almost everything.


Erik Nielsen: The Prime Minister and his Government, Sir.


NEGOTIATION AGENDA
Douglas Cockburn Frith: Mr. Speaker, can the Prime Minister and his Government at least get their act together and inform the trade negotiator what is for negotiation and what is not? The Government simply can not confuse Canadians any longer with contradictory positions between itself and Simon Reisman.


Erik Nielsen: Mr. Speaker, any time I can assist the Hon. Member, or indeed any other Hon. Member in his Party, in curing their confusion, I will be very happy to do so.


AIRPORTS
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I have a question for the Minister of Transport. The Minister will know that 1,400 airport firefighters have been without a contract for almost two years now. On April 3 a majority conciliation report was handed down and reluctantly accepted
April 16, 1986

by the employees. Would the Minister explain why that settlement was rejected by the Government, and would he now indicate that he is prepared to reverse that decision?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, I think the Hon. Member would agree that that is a matter between the firefighters and the President of the Treasury Board who may wish to respond to it.


POSSIBILITY OF STRIKE
Iain Francis Angus: Mr. Speaker, I have a supplementary question for the Minister of Transport, who is responsible for the operation of the airports. Press reports indicate there is a possibility of using fire chiefs from across Canada to take over airports in case of a strike. Could the Minister tell us how he is going to get the fire chiefs into airports like Ottawa or Thunder Bay if the employees go out on strike? Will he fly them in without any airport fire protection?


Donald Frank Mazankowski: Mr. Speaker, naturally if there is a strike Transport Canada will have to make the necessary contingency plans. I can assure the Hon. Member that that will be done in an orderly fashion.


INTEREST ACT
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, my question is for the Minister of State for Finance. Several months ago the Minister responsible for CMHC indicated that there would be changes brought forward to the Interest Act. Would the Minister of State for Finance tell us what the Government has in mind, especially as it pertains to the interest of consumers?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I think it is important to note that the Government has done a great deal for homeowners. We have seen average mortgage rates come down 2.75 per cent since the Government took office.


Ms. Copps:: Answer the question.


Barbara Jean McDougall: The purpose of this Government is to promote further housing measures and to lower interest rates further, which are of benefit to the consumer.


John Napier Turner: Which memo are you reading now?


Barbara Jean McDougall: 1 have discussed the Interest Act with the housing industry, with my cabinet colleague, and with my provincial colleagues. We will be doing more for housing, including the Interest Act.
Oral Questions FINANCE


MIDDLE-INCOME TAXPAYERS
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is for the Minister of State for Finance. Since over 40,000 taxpayers felt strongly enough to write to a Toronto newspaper to protest the burden placed on middle-income Canadians by the Government's recent Budget, will the Minister tell the House why neither the Minister of the Finance nor any Minister of the Crown was willing to meet with representatives of this group today?


Barbara Jean McDougall: First, let me point out, Mr. Speaker, that the Minister of Finance is representing this country with great honour at the OECD meetings in Paris.


John Napier Turner: What about you?


Barbara Jean McDougall: Let me also point out that the great burden on the Canadian taxpayer is the average debt of $38,000 per family brought about by the Party which the Hon. Member represents. Third, let me point out that when the Leader of that Party was the Minister of Finance, you could buy a house for half that amount.


REQUEST THAT MINISTER MEET REPRESENTATIVES
Aideen Nicholson: Mr. Speaker, the Government is depending for its deficit reduction program on the taxes of those people whom the Minister is not willing to see. Surely it is worth while to see them and to hear their views on alternatives?


Barbara Jean McDougall: Mr. Speaker, the latest Budget that was brought out by my colleague, the Minister of Finance, reduced expenditures by $3 for every $1 increase in taxes.


John Napier Turner: Why don't you see these people?


Barbara Jean McDougall: What we have to do for this country is to get rid of that deficit which the Hon. Member's Party brought about.


EXPO 86 EXPENDITURE OF FEDERAL FUNDS
Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, my question is for the Minister of Regional Economic Expansion. Would the Minister explain to this House why all the federal moneys available for Expo 86 have been spent in Vancouver? Can he tell us why the federal Government has not provided any support in the other areas of British Columbia so that

April 16, 1986
Oral Questions
other British Columbians and communities can benefit from the Expo situation?
Could the Minister explain to this House why all federal moneys were in fact spent in Vancouver and no other support facilities were put into other areas of the province?


Donald Frank Mazankowski: Mr. Speaker, a number of initiatives were undertaken in conjuction with Expo 86, support for the ALRT and a very beautiful Canadian pavillion, Canada Harbour Place Corporation, in Vancouver.


An Hon. Member:: Vancouver.


Donald Frank Mazankowski: Vancouver is part of British Columbia. It will be something which all Canadians and all British Columbians will enjoy.
My understanding as well is that much of the infrastructure that will be removed after Expo 86 is over will be distributed among the various communities throughout the province. I think the Hon. Member should welcome that.


ALLOCATION OF FUNDS THROUGHOUT BRITISH COLUMBIA
Raymond John Skelly: Mr. Speaker, my supplementary question is for the Minister of Regional Economic Expansion. Would the Minister explain to this House why the federal Government, in a sense of fairness, has not allocated funds for a structure in other areas of the province so that local communities could benefit from the tourist initiatives that Expo 86 will draw into Canada and British Columbia?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, obviously from the two questions put by the Hon. Member he is unaware of the federal activity, not just in Vancouver but in B.C. generally. The Hon. Member must know of the hundreds of millions of dollars we have committed to an agreement under ERDA, including tourist and forestry activity throughout British Columbia. He must be aware of the fact that we have one of the most extensive programs through the Federal Business Development Bank in British Columbia which has put, on a per capita basis, perhaps more in that province than in any other part of Canada, the hinterland of British Columbia-


Mr. Speaker:: Order, please.


WESTERN GRAIN STABILIZATION ACT
Gordon Edward Taylor: Mr. Speaker, my question is for the Minister of State for the Canadian Wheat Board. Since the Minister has arranged so expeditiously for an early pay-out, will farmers, who have paid into the Western Grain
Stabilization Fund for a number of years but during the last couple of years, because of drought, grasshoppers, cutworms, et cetera have made no payment into the fund because they had no crop to deliver to the elevators, be denied a payment this spring?


Charles James Mayer: Mr. Speaker, a simple answer to the question is no, they will not be denied. The Hon. Member should know that the calculations used to determine the interim payment were based on contributions from the beginning of January, 1983, to July, 1985. The Hon. Member should also know that that includes the crop grown in 1982. If the Hon. Member wants to go back, that would also include Final payments from the crop grown in 1981. The Hon. Member should also know-


Mr. Speaker:: Order, please.


Mr. Rodriguez:: Send a memo.


Mr. Speaker:: Order, please. The Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan).


HEAVY OIL UPGRADER PROJECT
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. The Minister of Finance in his budget forecast predicts that the price of oil will be $22.50 U.S. a barrel for 1986, which is more than enough to justify the loan guarantees for the Husky upgrader. Why won't the Government guarantee these loans for this project, or doesn't it believe its own budget forecasts?


John Carnell Crosbie: That's a dirty one.


Sheila Maureen Copps: Get your act together.


Mr. Benjamin:: Don't Fight ladies.


Hon. Pat Carney (Minister of Energy, Mines and Resources):: Mr. Speaker, the question is clearly budget related. It should be directed to the Minister of Finance.


Sheila Maureen Copps: They don't know what they are doing.


GOVERNMENT ACTION
Russell Gregoire MacLellan: Mr. Speaker, my supplementary question is likewise to the Minister of Energy, Mines and Resources. Maybe she will be able to answer this one.


Sheila Maureen Copps: I doubt it.
April 16, 1986


Russell Gregoire MacLellan: The very least the Government could do would be to show some confidence in the industry and guarantee these loans. How many jobs have to be lost before the Government stops talking and takes some action?


Pat Carney: Mr. Speaker, the Government has taken action in the past which has generated more jobs in the oil patch than existed under the policies followed by the Party opposite when it was in government.


LABOUR CONDITIONS
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is for the Minister of Employment. Is the Minister aware that in the Kootenay region of British Columbia, where unemployment has been 21 per cent, the B.C. Telephone Company will add to this tragedy by eliminating 70 jobs for telecommunication workers? Will the Minister approve the request of the Telecommunication Workers Union for a grant to study the impact of technological change, which is causing the women workers to be laid off in large numbers with no employment alternative in this area of very high unemployment?


Hon. Flora MacDonald (Minister of Employment and Immigration):: Mr. Speaker, I am delighted to have the question from the Hon. Member. As she and other Members of the House know, the Canadian Jobs Strategy has a number of programs which allow us the flexibility to look at projects put forward. A great many projects in the Province of British Columbia have been funded. I am sure if she encourages various groups to submit projects in the future they will be considered.


IMPACT OF TECHNOLOGICAL CHANGE ON WOMEN
Margaret Anne Mitchell: Mr. Speaker, I am talking about 70 women working for a telephone company who are being phased out of their jobs because of technological change. Will the Minister work with the Minister of Communications and ask the CRTC to hold special hearings in Cranbrook, B.C., into this emergency? Will she also respond to the community request for a one-year moratorium on these lay-offs? She is interested in technological change and women, and here is her chance to do something about it.


Flora Isabel MacDonald: Mr. Speaker, in her first question the Hon. Member asked whether or not a project to address this issue could be considered. I said if a project were put forward it would be considered. I am not quite sure what the Hon.
Oral Questions
Member expects me to do other than that. I welcome such projects.

[ Translation]


REGULATIONS
Mr. Gabriel Fontaine (Levis):: Mr. Speaker, my question is directed to the President of the Privy Council, Government House Leader and Minister responsible for regulations.
The Government of Quebec has set up a task force to analyze regulatory aspects.
Has the Minister responsible taken steps to be in touch with the Government of Quebec, in order to avoid duplication and encourage satisfactory co-ordination of these efforts?


Hon. Ray Hnatyshyn (President of the Privy Council):: Mr. Speaker, I have asked my senior officials at the Secretariat to work in close co-operation with other provincial Governments.
In the case of Quebec, we have had two meetings with Mr. Reed Scowen, Chairman of the task force on regulations.
Mr. Speaker, there is every indication that our efforts will be successful, for the greater benefit of Quebec and the country as a whole.


AGRICULTURE
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is directed to the Minister of Agriculture. It concerns the meetings he conducted yesterday with the Maritime Farmers' Council. He will know that the Council of Maritime Premiers supports their cause for long-term funding for grain price assurance programs, livestock feed development certificate programs, and infrastructure assistance. Will he recommend to his cabinet colleagues full funding of that request? Will he also provide in the first year $23.5 million in order to make that a viable plan to meet a very, very serious problem?


John Wise: Mr. Speaker, I appreciate the Hon. Member's representations. However, I must remind him and the House that the representations I get on that subject are far more numerous and frequent from Members on this side of the House. I did have an excellent
12310

April 16, 1986
Oral Questions
meeting yesterday as part of the two and a half hour meeting 1 had with the CFA, and the project is moving along quite well.


GOVERNMENT POSITION
David Charles Dingwall: Mr. Speaker, I say this to the Minister sincerely. In view of the urgency and demonstrated need for this funding, in view of the fact that all Members of Parliament on both sides support this project, will he not undertake to assure this House that funding will be provided to the tune of $23.5 million for the first fiscal year, and order that farmers in the Maritime region receive their just due?


John Wise: Mr. Speaker, again I appreciate the Hon. Member's representations on behalf of that specific project. One has to recognize we made a number of commitments, 16 in all. Indeed we take a back seat to no one in the fulfilment of those commitments. We feel very strongly about this one as well.
The Hon. Member knows that a project of that kind must clear all necessary legislative challenges and requirements before any Minister can stand in this House and make an announcement one way or the other.


CORPORATE AFFAIRS
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, will the Minister of Consumer and Corporate Affairs explain why, with hundreds of jobs threatened by the potential takeover of Hiram Walker, he has failed even to respond to a letter from the Hon. Member for Essex-Windsor and myself asking him to intervene to help save those jobs?


Hon. Michel Cote (Minister of Consumer and Corporate Affairs and Canada Post):: Under the Combines Investigation Act, Mr. Speaker, the director enjoys full discretion to review the deals as they occur. He acts as an impartial examiner in each case, as he will do in this one as well.


REQUEST THAT MINISTER MAINTAIN SURVEILLANCE
Howard Douglas McCurdy: Mr. Speaker, will the Minister promise to maintain a close watch to ensure that he is in a position to exercise the powers accorded to him under the Competition Act in any takeover attempt which would result specifically in job loss in the Windsor area?


Michel Côté: Mr. Speaker, that is always the
preoccupation that the Director has in mind and that is what he does.


CANADIAN ARSENALS
Mr. Don Boudria (Glengarry-Prescott-Russell):: On
behalf of the 800 Montreal employees of Canadian Arsenals, Mr. Speaker, I direct my question to the President of the Treasury Board.
The Minister will know that the result of privatizing Canadian Arsenals will be a considerable reduction in employee pension benefits, to such a degree that some of them stand to lose $17,000 a year.
What does the Minister intend to do to help these employees? Or does he plan to stick to the usual Conservative justice standards and do nothing at all?


Hon. Robert de Cotret (President of the Treasury Board):: This morning, Mr. Speaker, I met with Public Service Alliance spokesmen before holding discussions with representatives of the Canadian Arsenals union concerning a problem we have been talking about for a number of months, namely pensions.
I can assure my colleague that in the case of the 600 Canadian Arsenals employees the provisions of Bill C-87 contain a prospective solution which they should all find fair and equitable.


MINISTER'S POSITION
Don Boudria: Mr. Speaker, is the Minister telling us that losing $17,000 a year in pensions is, in his words, just and equitable? Is this Tory justice being administered to those public servants, our employees?


Robert René de Cotret: Mr. Speaker, what this Minister is saying is that the Hon. Member opposite does not know what he is talking about and does not have the right numbers.


FINANCIAL INSTITUTIONS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, I would like to ask the Minister of State for Finance if there is any truth in the recent statements of the President of Canada
April 16, 1986

Trust when he said that the Government's position on takeovers of financial institutions is "a political decision ... swayed by the views of influential party backers and fund raisers rather than by sheer logic" and "common sense" since "several of the trust company owners fall into the category of influential Conservative Party backers and fund raisers."


Barbara Jean McDougall: Mr. Speaker, I think the Hon. Member knows better than to ask a question like that.


Nelson Andrew Riis: Perhaps I will ask another question then. Is there any truth to the recent report that Imasco and Genstar contributed $55,830 to the Conservative Party in 1984?


Mr. Speaker:: Order. That question is clearly out of order.


Some Hon. Members:: Why?


Mr. Speaker:: Order, please. The Hon. Member for Montreal-Sainte Marie.


UNEMPLOYMENT INSURANCE
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration.
Yesterday in Montreal, a group of early retirees got together to challenge your decision to cut unemployment insurance benefits. In addition, Bell Canada employees confirmed that the Personnel Director at Bell Canada got in touch with the Minister's Office, where he was told they could take early retirement without being penalized.
Considering these facts, could the Minister inform the House . . .


Mr. Speaker:: Order, please. It is now three o'clock. Order, please, order, please. I tried to get in one more question and 1 am afraid the preamble simply ran us into three o'clock. Order, please. Order, please; order, please; order, please.
Point of Order-Mr. Turner (Vancouver Quadra)



ROUTINE PROCEEDINGS


Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour of tabling, in both official languages, the Government's response to Petitions Nos. 331-16, 331-17, 331-18 and 331-19.


Mr. Speaker:: I am in receipt of an application on a question of privilege arising out of Question Period from the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart).


PRIVILEGE
Jean-Claude Malépart: Mr. Speaker, regarding what just happened, perhaps I may remind you, and you can check it in the blues, that I had started on my question. You could have let me proceed with my question ...


Mr. Speaker:: Order, please. I would be perfectly happy to check the blues, but in fact the Member will find that 1 rose before he began his question. I was listening carefully to the beginning of the question. I say to the Member-

I said to the Member that I tried to allow one more question, but his preamble was too long to let him proceed.


POINT OF ORDER
Mr. Speaker:: On a point of order, the Right Hon. Leader of the Opposition (Mr. Turner).


John Napier Turner: When you are reflecting on this matter over the evening, Mr. Speaker, perhaps you might recall the farce conducted by the House Leader which consumed a good many minutes of Question Period.


Mr. Speaker:: Order, please. The right hon. gentleman knows full well that neither the contents of the questions nor

April 16, 1986
Point of Order-Mr. Turner (Vancouver Quadra)
the answers are the Chair's responsibility-neither the questions nor the answers. Order, please.


Ramon John Hnatyshyn: Mr. Speaker, if the Right Hon. Leader of the Opposition takes some offence at me trying to speak French, I take exception to that. He should know better. That is a divisive and racist kind of statement.


Mr. Speaker:: Order. Order, please, the Hon. Member for Brampton-Georgetown (Mr. McDermid), and Hon. Members over here. Order, please. Can we go on? Order, please. The Right Hon. Leader of the Opposition wishes to raise a question of privilege?


John Napier Turner: I think the House Leader imputed absolutely false motives to what I suggested about the farce. The farce was that there was a prearranged question and a prearranged answer, either in French or English, that took up the time of the House.


Mr. Speaker:: Order, order. The right hon. gentleman will resume his seat. Order, order. The Hon. Member will resume his seat. Hon. Members over here will come to order.


Mr. Guilbault (Saint-Jacques):: The worst Speaker we ever had.
specific Standing Order which states you are not allowed to read from pieces of paper into the record, which is exactly what the Hon. House Leader of the Government Party did during Question Period and for which he was not-


Mr. Speaker:: Order, order, order. There is, indeed, a Standing Order to that effect. The Chair has seen many Members on both sides holding pieces of paper during Question Period, which the Chair has always assumed represent notes for the purpose of the questioner or for the purpose of the answerer. Order, please. The Hon. Member is asking the Chair to find that no Member may hold a piece of paper in his or her hand during Question Period. The Member is asking the Chair to make a determination on the spot whether something is being used as a note or is read. That is a very difficult thing to do during Question Period. On a point of order?


Mr.   de Corneille@: Is the Speaker going to allow the Hon. Member to accuse the Leader of the Opposition of being a racist? Is he going to permit that?


Mr. Speaker:: Please, I listened carefully, I did not hear the accusation made personally. I would assure the Hon. Member if I had I would have ordered it to be withdrawn.


Mr. Speaker:: I must require that to be withdrawn immediately by the Hon. Member for Saint-Jacques. The Hon. Member knows why I must require it.


Jacques Guilbault: I will withdraw.


Mr. Speaker:: Order. I have not heard a question of privilege nor have I heard a point of order. I am therefore going to proceed to statements by Ministers. I have not heard a question of privileges. I have not even heard the beginning of a question of privilege. I will hear the right hon. gentleman on the citation immediately on which he bases his question of privilege.


John Napier Turner: I in no way challenge the Hon. Member's right to use French and I compliment him on it. I wonder, if we are in the spirit of withdrawal, whether the Hon. Member will withdraw that reflection he made on my remark.


Ramon John Hnatyshyn: The question that was posed to me was a serious question of which I had notice. I have no apology to make with respect to the response that I gave. I am not totally fluent in the French language and it may offend some people that I am not able to speak clearly in that language. If there is any suggestion that my comments have offended the House with respect to an allegation made by the Right Hon. Leader of the Opposition then I, of course, unequivocally withdraw that allegation. I simply want to say that I try my best in the French language.


Mr. Speaker:: Order. I hope this is the end of it. The Hon. Member for Bourassa has a separate point of order?


Mr. Rossi:: Yes, Mr. Speaker.


Mr. Speaker:: That is not a question or privilege. Order. The Hon. Member for Bourassa (Mr. Rossi) will resume his seat. The Hon. Members over here are also out of order, and that includes the Minister. The Hon. Member for Bourassa will resume his seat and come to order or he will be required to go.
I have not heard a point of order or a question of privilege. Order, please. This is clearly a difficult moment. Order. Statements by Ministers? What is the Member from Hamilton East's point of order?


Sheila Maureen Copps: I would like to ask the guidance of the Chair with respect to a Standing Order which states that Members are not allowed to read questions or answers. There is a


PRIVILEGE
Carlo Rossi: Mr. Speaker, when comments were flying fast and furious just now, I clearly heard the Hon. Member for Beauce (Mr. Bernier) say: "Correct, la mafia, assieds-toi!" Mr. Speaker, I cannot tolerate this second slur on my origins. And if the Hon. Member for Beauce has any honour at all, even if his remarks are not on the record, let him stand up and say that once more he has referred to us Italians as the Mafia. I will not tolerate this, Mr. Speaker! If he has
April 16, 1986

any honour whatsoever, let him rise in the House and repeat what he said.


Mr. Speaker:: Order.
[ Translation]


Mr. Gilles Bernier (Beauce):: Mr. Speaker, if the Hon. Member for Bourassa (Mr. Rossi) thinks he is being attacked, he has only himself to blame. So if I ever said anything to insult him, I gladly withdraw what I said, but the fact remains that he has only himself to blame.


An Hon. Member:: Did he say it, yes or no?


INTERPARLIAMENTARY DELEGATIONS
Mr. J. R. Ellis (Prince Edward-Hastings):: Mr. Speaker, pursuant to Standing Order 101, I have the honour to present to the House in both official languages the interim report of the official parliamentary delegation of the Canadian section of the Canada-Europe Parliamentary Association which visited Italy from March 21 to March 31, 1986.
[Editor's Note: See today's Votes and Proceedings.]


REGULATIONS AND OTHER STATUTORY INSTRUMENTS
Hon. Bob Kaplan (York Centre):: Mr. Speaker, 1 have the honour to present the sixth report, Statutory Instrument No. 33, of the Standing Joint Committee on Regulations and Other Statutory Instruments, in both official languages.
[Editor's Note: See today's Votes and Proceedings.]


PETITIONS
Howard Douglas McCurdy: Mr. Speaker, again I have the honour to table petitions with respect to the cancellation of Katimavik. I have two petitions containing 200 signatures which brings the total number of petitioners from Windsor who are concerned about the cancellation of Katimavik to over 4,000.
Committee Reports


Nelson Andrew Riis: Mr. Speaker, it is my pleasure to present a petition on behalf of nearly 100 residents expressing strong opposition to the proposal to convert the National Capital Commission greenspace north of Sandridge Road into an embassy enclave and call upon Parliament to reject the proposal to build an embassy on the Mile Circle.


Aideen Nicholson: Mr. Speaker, I have the honour to present a petition signed by a number of residents from Toronto who regret the federal Government's decision to cancel the youth program, Katimavik. They are requesting the reinstatement of this program which gave young men and women a chance to fulfil their potential and show leadership by helping others.


Russell Gregoire MacLellan: Mr. Speaker, I have the honour to present a petition from hundreds of people from Cape Breton who are asking the Government to immediately revoke changes to the unemployment insurance regulations, particularly Section 57 and Section 58 which pertain to the inclusion of pension income as earnings.


Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, I have the honour and duty to present a petition signed by some 350 residents of Victoria and those who wish they were. They would like to see the price of gasoline lowered, preferably by the lowering of federal and provincial taxes.


Mr. Dennis H. Cochrane (Moncton):: Mr. Speaker, once again I have the honour and privilege to present a petition signed by a number of constituents from southeastern New Brunswick. They are expressing their concern about the assessment currently being conducted by Canadian National of their shop maintenance capacity throughout the country. They are beseeching Members of the House to do everything possible to prevent CN from downgrading these facilities which would have a drastic effect on the employment picture throughout the Province of New Brunswick.



FINANCE AND ECONOMIC AFFAIRS


Nelson Andrew Riis: Mr. Speaker, I move that the first report of the Standing Committee on Finance and Economic Affairs, presented to the House on Tuesday, April 8, 1986, be concurred in.

April 16, 1986
Committee Reports


Jean-Robert Gauthier: Mr. Speaker, I would simply ask the Chair to enlighten me and advise the House concerning the acceptability of this procedure. In support I would refer to the Standing Orders, as follows:
"A standing committee of the House does not have the mandate to report on a measure still under second reading consideration", Bill C-103 in this case.
And on page 1946 of Votes and Proceedings of the House: "The Standing Committee on Finance and Economic Affairs presented the First Report of the Committee (provisions of Bill C-103, An Act to amend the Loan Companies Act, the Trust Companies Act, the Bank Act and the Quebec Savings Banks Act in respect of certain regulatory matters)." Mr. Speaker, it is because I would not want any misunderstanding about our roles in the House as set forth in the new Standing Orders. I want to be very clear, namely that if a committee is empowered to report on a Bill before the House, a standing committee of the House in this case, I would like to know the full extent of such power.
Referring to Standing Order 96 which empowers standing committees to make certain reports, these reports have a limited scope indeed, and I would remind the House that Standing Order 96(2) clearly defines these powers:
96.(2)-in addition to the powers granted to them pursuant to section (1) of this Standing Order and pursuant to Standing Order 82-
I am reading Standing Order 96.(2):
-the standing committees, except those set out in sections (3) and (4) of this Standing Order shall be empowered to study and report on all matters relating to the mandate, management and operation of the department or departments of Government which are assigned to them from time to time by the House. In general, the committees shall be severally empowered to review and report on-
And this is the point.
(a)	the statute law-

meaning legislation adopted by this Parliamentrelating to the department assigned to them;
(b)	the program and policy objectives of the department-
-not those of the Government-
-and its effectiveness in the implementation of same;
(?) the immediate, medium and long term expenditure plans-
-and so on. The point I want to raise is that, in my opinion, a standing committee cannot report on a legislative measure still at second reading in the House because, as I see it, the Bill has not been adopted on second reading. Mr. Speaker, I fail to understand how a standing committee could have such power under the Standing Orders. That is why I rose to avoid a series of committee comments or reports on any question before the House, and so that we will not find ourselves in somewhat difficult situations. So I am asking the Chair for a clear and specific explanation, namely: Can a standing committee report to the House on a legislative measure still before the House at second reading, for instance, or even later, just so my interpretation will be wider ranging? Is that allowed? Can we do that under the new Standing Orders?


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, the Hon. Member's request is very interesting. However, the very provision that he refers to, Standing Order 96(2)(e), states:
In general, the committees shall be severally empowered to review and report
on:
(?) other matters, relating to the mandate, management, organization or
operation of the department, as the committee deems fit.
The intention of the new Standing Orders, as I see it, was to permit committees of the House of Commons to engage in reviews, as they saw fit, of all matters relating to or falling within the jurisdiction of the Department for which they are responsible. It was done in that way for the reason that, until the change was made in the Standing Orders, committees did require a reference from the House in order to engage in review.
I submit that the committee report is entirely in order inasmuch as it does not require any action to be taken with regard to the law. But rather it is suggesting that the appropriate provisions of a Bill be used to ensure that major financial institutions such as Canada Trustco not be placed under the control of major non-financial institutions such as Imasco.
I contend that it is in fact within the ambit of responsibility of the Department to determine for itself whether to accept the recommendation of the committee that those provisions which are appropriate be used for that purpose. It is not determining for one moment whether or not the Bill in its entirety is valuable. Neither is it passing judgment on the value of the Bill itself. Rather it is suggesting that the Minister, acting on behalf of the department, take into consideration the recommendation that there are provisions in that Bill which, if used judiciously, could be used in such a way as to ensure that what it has requested be done.
I would suggest that it is entirely appropriate for a committee to look at anything which does fall within the jurisdiction of a department, and to look at it in such a way as to offer recommendations on how that might be best used, and to suggest that the department can, if it deems it to be appropriate, take certain actions which it is empowered to take.
In fact, what this committee has done is entirely appropriate. The committee is not restricted in any way in terms of the areas into which it can investigate as long as those areas are deemed to fall within the responsibility of the department. Clearly, the Trust Companies Act, the Bank Act, and the Quebec Savings Banks Act, are all acts which fall within the jurisdiction of the Ministry of Finance to which the committee is responsible.
I would suggest, therefore, that it would be imposing a rather restricted interpretation on the powers of committee at this early stage in the new committee structure if we were to deny a committee the opportunity to make a recommendation to a department on the application of certain sections of Acts
April 16, 1986

already in place, or propose changes as they would affect the ongoing operations of both the department and the institutions to which they make reference.


Philip Derek Lewis: Mr. Speaker, if I may I would like to perhaps add something to this very interesting point of order that has been raised. I would draw to the attention of the Chair that the legislation proposed by the Minister of State for Finance (Mrs. McDougall) with respect to the Loan Companies Act, the Trust Companies Act, the Bank Act and the Quebec Savings Banks Act, was in fact tabled on April 7, 1986. It appears on the Order Paper as Item No. 103. The First Report of the Standing Committee on Finance and Economic Affairs presented to the House on April 8, 1986 is the one to which the Hon. Member has moved concurrence. So what we really have here is legislation proposed by the Minister and the Government on April 7 and then the committee report being presented on April 8.
It seems to me that it prejudges legislation and offends the rule of anticipation, and I refer to Beauchesne's Fifth Edition, Citation 342. The Government has the intention of proceeding with this legislation. It is on the Order Paper and would be called in due time. It would appear to me that the appropriate point for committee study of this legislation is after the Bill has cleared second reading and has gone to a Legislative committee.


Mr. Speaker:: Order, please. Let me try to deal with these points in order. First, obviously the appropriate time to raise a point of order as to the admissibility or orderliness of the report is now. It cannot be done when the report is made; it can only be done when a motion to concur is moved, in effect.
Second, as I read the report which is before the House, the Committee on Finance is not making a comment to the House on or about the legislation.


Ian Deans: That is correct.


Mr. Speaker:: As I read the report. I am going to try to be careful because I do not want to say what I might say in that situation, except to say there is nothing to say about that situation in this situation because it does not exist. I have gotten myself out of an obiter dictum, I hope.
What is before the House is a committee report making a recommendation of the committee in effect to the House or to whomever. I then advise Hon. Members that I have reviewed the rules and I find that the key paragraph appears to be Standing Order 96(2)(e) which reads in part: "In general the committee shall be severally empowered to review and report on ..." statute law and so on. Subsection (e) reads:
other matters relating to the mandate, management, organization or operation of the department, as the committee deems fit.
In that context I think I can only find that the report as drafted appears to the Chair to be in order and, therefore, a motion of concurrence is in order.
Committee Reports
The Hon. Member for Kamloops-Shuswap (Mr. Riis).


Nelson Andrew Riis: Mr. Speaker, I appreciate your ruling which gives me the opportunity to begin a discussion this afternoon of perhaps one of the most important issues facing Parliament in recent years. It is certainly one which will have immense consequences in the years and decades to come if it is not dealt with in accordance with the recommendation of the committee on finance to the Government, and especially to the Minister of State for Finance (Mrs. McDougall).
I want to say that we have moved today a motion of concurrence for two reasons. The first is to provide an opportunity for Hon. Members, and I suspect Hon. Members from all sides of the House, to speak out against a form of unprecedented corporate cannibalism which has been occurring in our country with large giant corporations gobbling up other smaller corporations in a rather spectacular, if not macabre, corporate type of feasting. There is hardly a newspaper on the newstands these days which does not have a headline on the front page, if not on the business page, heralding another major takeover, another merger, or a further corporate concentration. More and more power is getting into the hands of fewer and fewer Canadians and, in many cases, foreign owners.
This is an opportunity for Members of Parliament on the Government side and in the New Democratic Party to discuss this issue. I am not certain about those Hon. Members on the Liberal side. I was a bit astonished that an initiative was taken by the Liberal Party today to stop this debate. After all, I think this is a discussion which needs to be held, comments need to be made, and I cannot for the life of me understand why there was an effort by the Liberals to stop it unless once again they arc wavering in their support for the motion of the committee on finance.
The Department of Consumer and Corporate Affairs recently provided us with data indicating that the amounts and numbers of takeovers are in fact accelerating. In the 1960s the average annual takeovers which occurred in Canada amounted to 253. In the 1970s there was an increase in corporate takeovers averaging out to 382 each year. In the 1980s so far the average has been in access of 500 corporate takeovers each year. Not only is the rate of takeovers increasing, but the number of foreign takeovers is increasing significantly. That means, of course, a country which now has more foreign control over its economy than any other western industrialized nation is now looking at even more foreign control. For example, in the 1960s, of all of the takeovers, 38 per cent were foreign. In the 1970s, that had increased to 42 per cent. Now in the 1980s it is averaging out? at 57 per cent. Some 57 per cent of the corporate takeovers involve foreign enterprises.
The Globe and Mail provided us the other day with a rather interesting insight. It indicated that seven families, the Thomson's, Bronfman's, the Desmarais', the Reichmann's, the Weston's, the Southern's and the Siemen's, now control nearly 50 per cent of the value of the shares in the Toronto stock

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exchange 300. Only seven families have an incredible amount of economic, financial and, by definition, political control. In the last 10 years 100 of Canada's largest corporations were involved in 150 takeovers which resulted in 25 per cent of their growth.
When one looks at corporate growth and business growth in our country, and when one considers that 25 per cent of the growth of the 100 largest corporations was accomplished as a result of takeovers, it begs asking the following question. What does this paper entrepreneurialship give us? Does the fact that we are merging and taking over, and the fact that corporate concentration is increasing result in more jobs for Canadians? Not necessarily. One can make a very compelling case that it normally results in the loss of jobs, as the efficiencies of scale are introduced into the corporate sector.
On April 2, The Gazette of Montreal, in an editorial, made the following interesting comment:
What is going on in Canada's industrial circles would surely alarm even a self-respecting cannibal. Having one corporate giant swallow up another giant does not of itself create jobs.
This at a time when surely at the top of all our agendas is job creation through economic expansion. Corporate takeovers are not accomplishing that. Generally speaking, they are working against it.
A second reason for wanting to move concurrence today was to provide not only an opportunity to register our concern with respect to the level of corporate concentration which is occuring but, more important, to ask the Minister to reconsider what appears to be a decision to have the Government approve a takeover of a financial institution by a non-financial institution. Not often do members of the finance committee agree on issues. Yet as a result of nearly seven months of study, and after receiving 137 submissions and testimonies, after hearing from 79 individuals in business, industry and consumer groups, as well as from nine Government bodies, seven individuals from universities and six specialists in financial takeovers, and after holding hearings in all parts of Canada, the committee came to the unanimous conclusion that we ought to recommend to the Minister of State for Finance that no approval of any merger between Canada Trust and Canada Permanent Trust be made until an ownership policy for financial institutions has been developed and implemented.
After considerable thought and reflection, and after hearing from the most highly acclaimed experts in this area, time and time again the point was made that we should stop the takeover of financial institutions by non-financial institutions in the best interests of Canada. While the case can be made that there have been already a number of such takeovers, two wrongs do not make a right. The fact that we have erred in the past in terms of approving these type of takeovers ought not to mean that we must now continue into the future ad infinitum.
I wish to say that as a result of this inquiry by the Finance Committee it saw the whole matter coming. As a result, we
went on at some length to draw to the attention of the Government some of the concerns which we held as a result of our extensive hearings. I would now like to quote from the report of the committee which indicates:
The major costs regarding financial and non-financial ownership links is the impact of this on ownership concentration in the economy and the degree of economic and political power that would be concentrated within a few major ownership groups in Canadian society.
The submission of The Cadillac Fairview Corporation included in the report states:
The concern for public policy is not simply that those with such power will earn excess profits. Rather the concern is that these large groups will have the ability to earn an acceptable level of profits ... and be able to use their power to achieve objectives other than increasing the shareholders' wealth. This power may be used to alter the behaviour of other firms involuntarily, e.g.,
-by advancing the interests of some customers or suppliers and/or by penalizing others;
-by undermining the position of rivals in ways inconsistent with maximizing the wealth of one's own shareholders;
-by providing excess rewards-to the top management coalition that effectively controls the corporation; or
-by using economic power to influence public policy via the political process, i.e., expenditures on lobbying, advocacy advertising, public relations, campaign contributions and the ability to redirect corporate locational decisions.
As a result of The Cadillac Fairview Corporation's proposal I reminded the Minister today during Question Period that major political contributions have been made by the companies about which we are concerned today, to the governing Party. The Chief Executive Officer and President of Canada Trust, the trust company which brings us to this debate today, has indicated on a number of occasions over the last few months that if this particular move which the Government is now evaluating were to result in the takeover of a financial institution by a non-financial institution without broadly-held ownership it would be wrong. This would not be in the best interests of Canada. It would result and lead to self-dealing and conflict of interest. This is what has been said by the Chief Executive Officer and President of Canada Trust. He has made such points on a number of occasions.
The Cadillac Fairview Corporation went on to suggest the following for consideration by committee members:
Suppose macro-concentration is allowed to increase and non-financial enterprises are allowed to gain control of very large groups of financial institutions, then in a decade there is sufficient evidence of harm to move Parliament to act. Will Parliament be willing to or be able to force the dismantling of these mega-groups? One can just imagine how much pressure will be brought to bear to leave things pretty much as they are-except perhaps for a symbolic gesture to reassure anxious public opinion. The trouble with "experimenting" with even higher levels of concentration is that it is not a reversible process.
We also heard from other thoughtful groups on this whole matter. I refer to the Canadian Bankers Association. It is a group which we have to recognize has some concerns about the financial health of our country and about the need for fair competition in the financial market-place. We also heard from the Consumers' Association of Canada, which presented a number of thoughtful presentations. We heard from the Canadian Federation of Independent Business and the
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Canadian Organization of Small Business and many other groups which expressed serious reservations. They recommended an imposition of ownership limits on all financial institutions and a roll-back of non-financial ownership of financial institutions. The Cadillac Fairview Corporation expressed a concern about retroactive legislation and suggested that a grandfathering of existing ownership investment be made.
There also is a proposal as to what the Government can do. It can say that, yes, it has made mistakes in the past but that it will stop this concentration of power, particularly the takeovers of financial institutions. The Government can say that while it has erred in the past it will grandfather these decisions and from this point on this massing of power will not be seen.
We are concerned here-and I suspect that I say these words as others will on behalf of all Members of the House of Commons-that there is no benefit to Canada if the Minister of State for Finance allows this takeover to occur. My hon. friend, the Hon. Member for Mississauga South (Mr. Blen-karn), the Chairman of the Committee on Finance and Economic Affairs said that Imasco is buying itself a bank. Those are his words. He is a thoughtful individual who knows the system. He understands what is involved here and he says that it is buying itself a bank.
When one examines just exactly what is occuring in terms of the Imasco takeover of Genstar, the reason we are concerned is that this is the first opportunity since the finance committee has studied in detail the implications of such a takeover that this type of takeover is occurring. I do not have to remind you, Mr. Speaker, as a thoughtful individual who is knowledgeable about this concern, that Imasco is one of the major tobacco holders in Canada. It holds Imperial Tobacco. It operates over 2,000 fast food restaurants across the United States. It owns Shopper's Drug Mart with 415 stores across Canada. It owns and operates 800 People's Drug Stores in the United States. It owns and operates 460 tobacco, gift and news-stand outlets across Canada, as well as others. It will now be merging with Genstar Corporation if this takeover is allowed.
Genstar Corporation is involved in marine services including 50 tugboats and 250 barges off the West Coast. It is involved in a whole set of industrial services including 59 plants in Canada and the United States. It is involved in the aggregate concrete business including 100 different plants in the western United States and Canada. It is involved in real estate and land development programs and, of course, has a 10 per cent stake in Gordon Capital Corporation which is the most aggressive investment dealer on Bay Street. However, the real reason for the takeover is that the Genstar group also includes Canada Trust, the sixth largest financial institution in Canada. It is larger than many of the banks in Canada. Its asset base puts it in line with the five largest banks in Canada. Not long ago, we opened up our regional and daily newspapers to find two-page advertisements for Canada Trust saying that now it is one of the biggest financial institutions in Canada.
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Let us call Canada Trust a bank, for that is what it really is. It is a large financial institution that provides essentially the same services as do banks. If this merger or takeover is allowed, this bank will be controlled by Imasco Corporation. We are concerned with what this means. This means that there will exist the possibility of self-dealing. We are not unfamiliar with self-dealing in this country.
Earlier today, I spoke to members of the Department of Insurance who told me about companies whose names cannot be used for obvious reasons. They cited an example of a trust company making a loan to another company. The parent of the trust company, however, used the inside financial information that had been given to the first trust subsidiary to determine that the borrower would be a good acquisition. It then went out and bought this company. However, thank goodness, the Department of Insurance was doing its job. It recognized this act of self-dealing and ordered the parent company to divest itself of the company it had recently purchased. That is an example of a Government Department doing its job. I simply use this example as one of many involving self-dealing.
I do not have to remind Members of the House about the Leonard Rosenberg case. Mr. Rosenberg's three companies, Greymac Credit, Grey mac Trust and Greymac Mortgage traded real estate among each other for Mr. Rosenberg's own personal gain. That is a whole different story, but it is probably the best example of gross self-dealing that has taken place in times past.
To quote again the oft quoted Merv Lahn, Chief Executive Officer and President of Canada Trust, he has said:
1 don't want to get into all that crap about when one person owns a financial company and loots it but that's what happens.
He went on to talk about self-interest and conflict of interest and said:
They say, hell, it won't happen with a major company. But have any of the owners had their back absolutely up against the wall in a very difficult period of time? ... Have they ever been tested? The answer is no.
Again, the implication which we heard time and time again in the finance committee was that during good times when everything is fine, self-interest is not necessarily a problem, but when times are tough and competition is fierce, people will use inside information.
I would like to tell Hon. Members what Trilon is doing these days. That was one of the mistakes that was made in the past when two financial corporations were working together in a marriage. Trilon has a program entitled "Share With the Leaders" which essentially rewards its employees with Trilon shares if they buy the products of a related company. For example, if an employee opens a Royal Trust chequing account he receives $20-worth of shares. If he sells a $100,000 home through Royal-Lepage Limited, it is worth $375 in shares. There is now a new plan. The idea of it is to familiarize Trilon employees with Trilon products. This month, the share-bonus program is to be extended to employees who successfully refer clients to a sister company. In other words, if an employee

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refers clients to a family corporation he will be rewarded by receiving shares.


Mr. Orlikow:: Maybe the customer would be better off if you referred him to a different company.


Nelson Andrew Riis: As my friend from Winnipeg has said, the best advice in some cases may be to refer a client to a different company. Again, there is this incestual dealing, this corporate concentration, and now the potential of financial and nonfinancial corporations working together. In a sense, we are looking at a 21st century brand of feudalism here. Powerful groups will have tremendous, concentrated power in our economy through the economic, financial and political muscle that will accrue to them.
We are pleased to have an opportunity today-no thanks to our Liberal friends-to discuss the implications of this Imasco-Genstar takeover and to make the point that we in the New Democratic Party, the members of the finance committee, the Consumers' Association of Canada, and even the Superintendent of Insurance himself, Mr. Robert Hammond, have suggested that this kind of takeover is not in the best interests of Canada or Canadians.


Mr. McCrossan:: Mr. Speaker, I am pleased to take part in this debate because I was a member of the finance committee and worked on the study of financial institutions-


The Acting Speaker (Mr. Charest):: Order, please. Just to make things clear, I understand that the Hon. Member for York-Scarborough (Mr. McCrossan) is either asking a question or making a comment.


William Paul Joseph McCrossan: That is right, Mr. Speaker. Actually, I intend to do both.
As I was saying, I appreciate being able to question the Hon. Member because I was a member of the finance committee and I both helped produce the report and indeed voted for the particular resolution. I might begin by making a comment about the process.
On the day the takeover was announced, members of the free enterprise party were questioning this takeover in the House and three days later the representative of the Official Opposition, the mixed economy party, recognized that this was a potential threat and raised it in the House. However, it did take the Party of the Hon. Member who moved concurrence today two weeks to recognize that this was a serious threat and to raise it in the House.
I raise that point because of the process we are going through today. I value the opportunity to discuss today's motion but I would have valued much more the opportunity to discuss the Bill that the Minister of State for Finance (Mrs. McDougall) had brought in some two weeks ago.


David Orlikow: Let her bring it forward.


William Paul Joseph McCrossan: Exactly. I have three or four questions to ask the Hon. Member. Perhaps I could ask them all at once and he could respond to them all at once.
First, does the Hon. Member support the principle of Bill C-103 controlling membership, and if so, has he spoken to his House Leader about giving rapid approval in the House to that Bill so that we can get it into committee for study?
The second question I wish to raise is more a matter of record. Would the Hon. Member confirm that both he and the committee do not object to Imasco per se or favour Genstar, but indeed would object to any major non-financial corporation taking control of a major financial corporation, whether it be IBM, the Belzbergs or Dominion Stores?
Third, would the Hon. Member confirm that indeed, contrary to the allegations made in this week's Financial Times, the committee's recommendations do not imply a status quo for Genstar, but indeed the committee recommended that the first step was to stop future control and the second step was to move back the control which already exceeded the committee's limits and that the committee recommended that Genstar in particular would have five years to choose between divesting itself of its non-financial assets or reducing its concentration of its financial assets?
Fourth, would the Hon. Member confirm that the principal concern in his mind and in the minds of members of the committee has to do with non-arm's length dealings and in particular the concern that such dealings are taking place today as mentioned by the President of Canada Trust over the weekend? In a CBC interview Mr. Merv Lahn alleged that non-arms length transactions had indeed taken place between Genstar and its subsidiary trust company.


Nelson Andrew Riis: Mr. Speaker, I am pleased to respond to the thoughtful question of my colleague. Just for interest, since we are talking about Canada Trust, I should like to state on the record that according to its 1985 financial statement it made $63,430,000 before taxes. If we look to see what taxes it paid, we find that it did not pay any taxes in 1985; in fact it received a $3 million tax credit. Therefore its net profit for that year was $66,697,737.
This helps me to understand why Merv Lahn is still with the company, considering some of the things he was saying on Sunday morning this past weekend. He, in his position of chief executive officer and president of Canada Trust, said that it was in the best interest of depositors to have a widely held company. In a sense he was arguing against what was going on. However, he remained on as president and I understand why he was able to pull off that kind of situation.
First I should like to say to the Hon. Member that we have no intention of unduly holding up consideration of Bill C-103. It is what we have been calling for-
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The Acting Speaker (Mr. Charest):: Order, please. The Hon. Member for Kamloops-Shuswap (Mr. Riis) may be a little confused, as may be the Hon. Member for York-Scarborough (Mr. McCrossan). I interrupt at this time because the Hon. Member for Kamloops-Shuswap is answering a question put by the Hon. Member for York-Scarborough with which the Chair has difficulty. 1 should like to take this opportunity to remind Hon. Members that we are discussing the first report. The question put by the Hon. Member for York-Scarborough referred to the Bill itself and to what would be the reaction of the Opposition to the Bill. Of course the Chair will be lenient, as it always is in such matters, but I remind Hon. Members that the subject matter is the report, not the Bill itself; that is not what is before the House today.


Nelson Andrew Riis: Mr. Speaker, I am not exactly certain what was your suggestion. However, in response, we plan to co-operate. We have been calling to get the Bill on the floor of the House as soon as possible. While we have some serious concerns about certain aspects of it, it will not encourage us to stall its consideration or in getting it into committee.
We are very concerned about the limits suggested in the report. We believe very strongly in the 10 per cent rule. We are very strongly on the side of a number of the recommendations before the committee indicating that the 10 per cent ownership rule should remain in place for all financial institutions. Of course that is what we recommended in our dissenting report.
In response to my hon. friend who sugggested that we did not speak some time in the past two weeks or three weeks about the Imasco takeover, my friend from Regina and I actually wrote a report which was tabled in the House. It clearly laid out our position on takeovers and of course concurred with that section of the report which wanted to stop the movement on Genstar. 1 think we are all on the same wavelength.
I should like to respond to his question concerning not only Imasco. Indeed, we are clearly talking about the principle. We are focusing our attention on this particular takeover bid because of its implications in light of the studies which we have done over the last seven months. Whether it were Imasco, x, y or z, we would be making the same case as strongly, if not more strongly than we already have.
In conclusion, the arms length situation is of utmost concern and is critical in this discussion. As a matter of fact, it is one of the ultimate motivations for moving concurrence and for doing whatever is possible to encourage the Minister of State for Finance not to proceed with approving this takeover bid.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, it gives me great pleasure to take part in the discussion on the important issue of
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financial institutions following presentation of the report of the Committee on Finance and Economic Affairs.
The report tabled in the House represents a very important contribution towards solving a problem which is admittedly complex and which concerns financial institutions in Canada. 1 think that it should be pointed out right at the start that this report was prepared in an ongoing fashion and with objectivity by the members of the committee for the specific purpose of finding a practical solution to the problem posed by financial institutions.
Mr. Speaker, we have spoken about the urgency of the situation, but I think that we could say that everything we do in this House is always urgent. We are here to legislate, to pass legislation, even if we do not always have a lot of help from the Opposition, and it is always urgent.
Mr. Speaker, the situation is somewhat similar to what you certainly found when you practiced law before the courts; there are always appeals for reasons of urgency. In Trois-Rivieres, the cases were always urgent and I think that my colleague will confirm it.
However, Mr. Speaker, urgency is no justification for arbitrary decisions. Issues should always be considered with logic and intelligence. The problem before us goes much beyond the simple takeover of a financial institution. It is a problem of national significance. We should not take this problem of national significance and reduce it to the proportions of a simple takeover.
Without making too much reference to Bill C-103, I think that, we are working for the future. We cannot live in the past. Nothing has been done about financial institutions during the last twenty-five years. That is not our fault, but we have to live with it. There is now nothing in the law which could allow us to tell the Chairman of the Committee on Finance and Economic Affairs, another Member of Parliament or the Minister of State for Finance (Mrs. McDougall): "We are working on the Imasco or Genstar deal and we are for or against it". There is nothing in the statutes.
On the other hand, what have we done these last 18 months, Mr. Speaker? Six months only after we took office, yes within six months the Committee of Finance, Trade and Economic Affairs, chaired by my colleague for Mississauga South (Mr. Blenkarn), brought forth a green paper along with the Minister of Finance (Mr. Wilson) dealing with the situation then prevailing in Canada, namely what we had in terms of legislation, what the problems were and what the solution were that we of the Conservative Party wanted to bring about.
Mr. Speaker, this shows an interest. It shows that when we talk about urgency it is realistic urgency. Within six months of coming to power we tabled a green paper on that issue. Not withstanding the fact that over the last 25 years almost nothing had been done in convection with financial institutions.

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Mr. Speaker, we will not deal with the report put forth by the Committee on Finance, Trade and Economic Affairs as the previous Liberal Government attempted to do with the Quebec Caisse de depot et de placement. I suggest that we must really do our homework and come up with a sensible solution, rather than rush jobs that run the risk of creating serious problems for Quebec's financial institutions, as you will remember, Mr. Speaker.
In November of 1985, we tabled Bill C-86, a piece of legislation that, further to a private committee report and also a report from this House, dealt with the Canada Insurance Deposit Corporation problem. As I said, Mr. Speaker, this came about because of the work done by the Members who sat on the Committee on Finance, Trade and Economic Affairs.
Also in November 1985, Mr. Speaker, we tabled a piece of legislation dealing with regulatory authority, Bill C-103.
All this to say that there has been work done to this day, Mr. Speaker. Indeed, work done towards achieving something which in the long run will be important for our Canadian financial institutions.
Mr. Speaker, without anticipating too much the debate on Bill C-103, we might perhaps take a quick look at its contents. One of the key provisions of Bill C-103 provides the regulator with the authority to issue instructions to cease or refrain, in order to put an end to doubtful practices. This is something that does not now exist, Mr. Speaker, and it is in Bill C-103.
Secondly, the Minister of Finance will have the authority to regulate people who attempt to control financial institutions. As you know, Mr. Speaker, the Minister of Finance now has the authority to say to a loans or trust company that it cannot do business in Canada. Once it has the power to do business in Canada, the Minister of Finance has no way to check whether a transfer of shares is a good thing or not. At the present time, there is no legislation at this level. And that is the purpose of Bill C-103.
There is a third major element in Bill C-103. The superintendent of insurance will be able to carry out proper assessment of all assets held by our Financial institutions. Again, Mr. Speaker, this does not exist. Therefore, the superintendent of insurance will be able to assess any real estate property thus held and submit a proper report concerning both the administration and transfer of assets or shares of a loan or trust company.
Mr. Speaker, the major consideration is definitely the public interest. Concerning public interest, I suggest it is necessary to consider the transfer of control of a loan or trust company, to examine who will acquire it. Does the company taking over the control have the necessary know how and expertise to properly administer a loan or trust company the control of which has been transferred? And especially, is this transfer of ownership made in the best interest of Canadian men and women? That is the main recommendation of the finance and economic affairs Committee. That is the main point.
Unfortunately, a moment ago, the Hon. Member for Kamloops-Shuswap (Mr. Riis) mentioned that a company had failed to pay any income tax in 1985. I suggest this is not a recommendation of the Committee on Finance and Economic Affairs. The Committee was looking into the interest of Canadians. The Committee, whose report is here before us, wanted our financial institutions in Canada to be controlled reasonably and fairly.
As far as the Imasco-Genstar dossier is concerned, the Minister of State (Finance) (Mrs. McDougall) indicated in the House on several occasions that she will definitely look into the takeover, keeping in mind the criteria set in Bill C-103, for the purpose of ensuring that the interest of the public, of Canadian men and women is properly protected, as recommended by the Committee on Finance and Economic Affairs.
Mr. Speaker, both Bill C-86 and C-103 are a first step in a thorough reform of the financial sector: power of supervision, power dealing with the industry and the transfer of interests, all things which do not exist at the present time. We are being asked to take action, something the previous Government failed to do; so, we are taking the necessary action. Mr. Speaker, we must live with this situation.
Now, Mr. Speaker, in spite of the urgency of this debate, I think that the Government, the Minister of State (Finance) (Mrs. McDougall), the Committee on Finance and Financial Affairs should also do their job. The Committee on Finance and Financial Affairs has done its job. The Minister of State (Finance) and the Government still have theirs to do. Consultations have to be held. This Government does not reach decisions without consulting anyone and I think that in an 18-month period our record is there to prove it.
In the case under consideration, various consultations have still to be made and it is important to do so. If the Opposition does not agree with Bill C-103, it is unfortunate because it has been submitted to financial institutions which are in agreement. I am sure that there are minor things, that they do not totally agree with and it is normal but they approve of it generally and this is what is meant by consultation.
We have not yet received the report from the Estey Commission and it is an important document on which decisions about Canadian financial institutions will be based. I do not think we can obtain the Estey report overnight and make decisions without referring to it. It would be inconsistent. Inquiries should not be requested if their results are not to be taken into consideration, because we have to be consistent. It has not been stated often enough that this is entirely new, that people are not used to that procedure. For the past 18 months, the Government of Canada has been consulting with the Provinces and this had not been done before. As in every other sector, there were consultations with the provinces regarding financial institutions. As you know, Mr. Speaker, in Quebec we have our own financial institutions that come strictly under provincial jurisdiction. They also have a contribution to make when we are discussing legislation in this area, which is why it
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is important to reach agreement with the provinces. However, so our consultations with the provinces are not finished either.
As you probably know, Mr. Speaker, quite recently a meeting was held in Vancouver, which included the Minister of State (Finance) and her provincial counterparts. It was an excellent meeting which produced good results, but there is still work to be done, both on the federal and the provincial side. And this work must be done first, before we get into anything definitive, and this is something they do not always seem to understand on the other side of the House.
There is also the Senate, which also has a report to make on our Financial institutions, and this report has not yet arrived. I assume that with the many excellent people we have in the Senate, the report should arrive very shortly, but, I repeat, we do not have it yet.


An Hon. Member:: The fast is over!


Pierre H. Vincent: Mr. Speaker, if everybody has had a square meal I am sure we will get the report today.
So we will have to wait for this report as well, and if we start counting, this is the third report we are expecting. Time is now of the essence. We have done our share, and I think Hon. Members are to be congratulated, Mr. Speaker, because their report has already made it to the House. They did their work within an extraordinarily short time frame, considering the size of their task, but we still have to wait for the other reports.
Mr. Speaker, it is because of these considerations that we cannot just ask the Minister and the Canadian Government to make a final decision on a particular case, when we are talking about a problem of national significance and a matter of principle. We are not talking about a particular question, we are talking about the principles that have been examined. Just ask the Committee on Finance and Economic Affairs. They have been working on the subject for eighteen months, and they know it inside out. Just ask the Chairman of the Committee on Finance and Economic Affairs, and he will explain all the principles, and Mr. Speaker, you can talk to your colleague who is also on the Finance and Economic Affairs Committee. When you work on legislation, you follow the committees and you participate, and that is how you get to know the subject. It is important to know the subject matter. Mr. Speaker, the Government's objective is to come with a solution that will get a consensus, from industry, from the members of the Finance and Economic Affairs Committee, from the Senate, and also from Commissioner Estey, in order to make our financial system a better one, and not just better for the benefit of Members of this House, Mr. Speaker, but better so that the public will have confidence as well. I think that is an important point. It is important for the public to have confidence in our financial system and our financial institutions.
At the same time, along with everything I have just mentioned, we must ensure healthy competition among financial institutions, seen against the background of the kind
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of situation and the kind of society we have now and will have in the years to come.
When we are dealing with financial legislation, we are not talking about short-term measures, we are talking about longterm measures. That is why we are quite justified to take all the time we need to make sure we are acting in the best interests of Canadians.
Mr. Speaker, the committee report is along the same lines as the green paper of the Minister of State (Finance)(Mrs. McDougall) on supervisory powers and the importance of federal-provincial agreements. As I said earlier, these are new words but they are no less important. And so once again I think we should commend the Members of the Standing Committee on Finance and Economic Affairs for their report and hard work so that, in the future, we will have a policy which will promote the interests of all Canadian men and women, as well as those of financial institutions.
In conclusion, Mr. Speaker, I recommend that we reserve judgment and wait for the various reports before making any final decision.


The Acting Speaker (Mr. Hamelin):: Questions and comments. The Hon. Member for Winnipeg North (Mr. Orlikow).


David Orlikow: Mr. Speaker, as I listened to the Hon. Member speak I was reminded of that saying which has been around I suppose for 1,000 years, Nero fiddled while Rome burned. The Member is saying the Government needs more time to study the question and work out its policy. Does the Hon. Member not realize that over the last ten years or so we have had probably 25 or more trust companies go bankrupt with great losses to their depositors? An Hon. Member says "six". I think I can provide a list much longer than six. Does he not remember the case of Leonard Rosenberg who got control of three trust companies and used the depostors' money to wheel and deal in the real estate business. That might have been good for him but it could only cause tremendous problems for the depositors. Does he not remember the case of that great Conservative, Peter Pocklington, who took control of a trust company in Alberta and used the money for his real estate transactions? Most of those turned out to be very bad and they cost the taxpayers of Canada a great deal of money.
We used the report of the Standing Committee on Finance and Economic Affairs today to express our opposition to the takeover by Imasco of Genstar. That involves the takeover of a large trust company, but we are just as opposed to Power Corporation controlling financial institutions. We are just as opposed to Brascan or Brascade, whatever the official name is right now, taking over MacMillan Bloedel and Noranda. We are just as opposed to them controlling Trilon which has assets as large or larger than most Canadian banks.

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What is the Government proposing? We do not have to have all the details of the Bill at this time but we want to know where the Government thinks it is going. Is the Minister only going to give consideration to and make a decision that Imasco will not be permitted to take over Genstar and therefore control Canada Trust? Is the Minister going to look at the control which Brascade has over Trilon? Is she going to look at the control which Power Corporation has over trust and insurance companies? Those are the questions we want answered. No single shareholder in a bank can own more than 10 per cent of the shares and so the banks have said that they are opposed to this kind of takeover.
Is the Government just going to oppose the Imasco takeover of Genstar or is it going to, having passed legislation, then call on all the corporations which own mining or forest companies or steel companies and tell them that they ought not to and they will not be permitted to control financial institutions. That leads inevitably to self-dealing and arrangements which may be good for the companies and shareholders' concerned but not so good for, in fact detrimental to the well-being and welfare of the people who deposit and invest their money in those trust companies. That is the question we want answered. It seems to me that the Conservative Member skated around that question, either inadvertently or very skillfully.
[ Translation]


Pierre H. Vincent: Mr. Speaker, the Hon. Member from the New Democratic Party says that there have been many bankruptcies of trust companies in the last ten years. If the NPD had not joined with the Liberals in 1979 to defeat the Conservative Party, there would perhaps have been fewer bankruptcies between 1979 and 1984.
Mr. Speaker, we have done more for the financial institutions in eighteen months than had been done during the twenty-five years before that.


Mr. Berger:: You are a true historian. Tell us about it!


Pierre H. Vincent: There was the tabling of the green paper in June 1985, Bill C-86 in November 1985, and now Bill C-103. All this has occurred within one year, even less than eighteen months. Those on the other side who dare criticize today did not have too much to say between 1980 and 1984. There was no danger of that because there were not too many problems.
This is what we have done in eighteen months. What is important is to work on an issue to come up finally with a perfect solution. This is what we are doing. We do not use bandaid solutions. We do not dream up S-31's in the Conservative Party. We do our job, and we shall not use the special case of the Imasco-Genstar transaction to pass legislation which would not be beneficial for Canadians in the future.
We have to take the time to find perfect solutions, and this will be better for everyone. There now is the Imasco-Genstar transaction. The Minister of State for Finance (Mrs. McDou-gall) has already mentioned that, when we have a proper piece of legislation, and if the Members opposite agree that Bill C-
103 should receive passage as quickly as possible, there will be no opposition on our side, we shall finally be able to examine everything to which the NDP objects. Indeed, all that I have heard is that the NDP objects! They should also have objected in 1979.


David Orlikow: Mr. Speaker, just one last question. Is the Member seriously suggesting that if and when the Minister brings down Bill C-103-which she did not seem to want to do until there seemed to be a revolt on the part of her Conservative colleagues-it should get quick passage through all stages in Parliament? Should it be passed without hearing the representations from all of the groups that are interested, such as business groups, banks, credit unions, consumers' organizations and from many business people? It is not just in the financial services industry that we have got too many takeovers, but that most of the take-overs we have had in recent years among non-financial institutions have been useless in terms of providing any new jobs. Is the Member really suggesting that when the Minister finally brings down the Bill we should give it quick passage without the most careful and detailed consideration?


The Acting Speaker (Mr. Hamelin):: The Parliamentary Secretary to the Minister of Finance (Mr. Vincent) has one minute left.


Pierre H. Vincent: Mr. Speaker, I am quite stunned. This is the first time I see a Member of the New Democratic Party ask that financial institutions and businessmen be heard. Frankly, I am quite pleased to be in the House this afternoon to have at least seen that.
Mr. Speaker, this is not what I suggested. I said that financial institutions and businessmen have examined Bill C-103 in its draft form and have stated that they agreed with it. The two parties opposite have known about it since it was tabled in November 1985. They have seen its contents so we should proceed in an orderly manner and perhaps waste less time as with other bills, so that Bill C-103 may be passed and implemented as soon as possible.


The Acting Speaker (Mr. Hamelin):: The period for questions and comments is over. Debate. The Hon. Member for Trinity (Mrs. Nicholson).


Aideen Nicholson: Mr. Speaker, I am pleased to have the opportunity to put before the House the concerns of the Official Opposition on the issue of financial institutions being owned by industrial conglomerates-the Imasco takeover, or proposed takeover of Genstar being the case in point. The Government has yet to come forward with a policy or statement of position on the matter, apart from Bill C-103 which had its first reading on April 7.
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The finance committee of this House held extensive hearings on the Government Green Paper proposals for restructuring of the financial services industry in Canada. There was a very high degree of unanimity on the proposals. We, as the Official Opposition, did issue a minority report to spell out certain concerns we had, but Members of all Parties on that committee were concerned about the concentration of power in the industry, and the trend to increasing concentration, which was building up in the absence of a relevant and up-to-date ownership policy, even as the committee proceeded with its work.
In both the report of the finance committee and the minority report of my Party the concern about non-financial institutions controlling financial institutions was spelled out. I would like to quote those remarks. In the Liberal minority report in the Green Paper we said:
We are concerned about more concentration of financial power. Moreover, we do not believe that financial activities and non-financial activities should be combined.
The finance committee report also included these words:
The committee is concerned about the increasing trend towards non-financial ownership of financial institutions and feels that concentrated ownership, particularly that of large financial institutions, should be limited.
This was a view that was reflected in many of the briefs received by the committee. The Canadian Bankers' Association said:
We believe that this co-mingling of non-financial and financial businesses is undesirable. It would try the confidence and trust that Canadians place in their financial system.
There was also one very specific recommendation in the committee report. In the course of the committee's work last fall the merger of Canada Trust and Canada Permanent Trust was in the works, and the committee specifically recommended that the Government not approve this merger until such time as there was an ownership policy in place. The Government chose not to act on that recommendation and the merger went ahead, directly contributing to the situation we have before us today. Genstar Corporation owned Canada Permanent Trust and it then acquired Canada Trust, against the finance committee's recommendation, which gave to Genstar Canada's biggest trust company. It has been described as the jewel among Genstar's holdings now, and is the main reason for Imasco's interest in taking over Genstar.
In the case of Genstar and Canada Trust the concern is that Genstar, with very extensive holdings in construction and development, would have, in effect, its own source of capital. Canada Trust is now the country's largest trust company, one which reportedly is Canada's largest mortgage lender and the fourth largest holder of personal savings accounts.
There was another concern that ran all through the hearings of the finance committee, and that was the concentration of power in fewer and fewer hands, which is a growing trend in Canada. At this point about 25 companies control between one-third and 40 per cent of our economy. The main concern I wish to address today is the potential for self-dealing, the potential for a financial institution making business loans and decisions that are not in the best interests of the shareholders
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or of the depositors when it is owned by a non-financial institution.
The member for the New Democratic Party who asked a question just a few minutes ago said that in his view it was inevitable that there should be self-dealing in certain situations. 1 would never regard it as inevitable. In any situation where you have people of good faith and good judgment you do not necessarily have self-dealing. But faced with the situation as we are seeing it now, which has changed very much in recent years, it is not enough to just rely on people's good faith and people's integrity. It is important there be clear legislative standards as well.
The Minister, according to the new legislation, does have power to block and, if necessary, require divesting or unwinding if a merger seems to be against the public interest. The review would be based on the prospective new owner's financial strength, soundness of business plans, business record and experience, and the best interests of the Canadian financial system. The Bill also proposes that these measures be applied to all transactions occurring after November 29, 1985, which is the date the Bill was issued in its draft form. This is the background to the recommendation approved unanimously by the Finance Committee and reported to the House on April 8. The Finance Committee motion recommended that the Government apply the provisions of Bill C-103 to ensure that major financial institutions such as Canada Trustco, owned by Genstar, not be placed under the control of major non-financial institutions such as Imasco.
To date, we have not had any clear indication of the Government's intention. It is important at this time that we see consistency in the Government's approach and that we see convincing evidence that the government is according some consideration to the institution of Parliament and to the unanimous reports which have come from the Finance Committee. Will the Minister heed the wishes of her own caucus colleagues and block Imasco's takeover of Genstar Corporations? If so, will she then deal with the fact that she did not accept the Finance Committee's Recommendation No. 58 concerning the merger of Canada Trust and Canada permanent Trust? Will the Minister permit the deal to go ahead and, if so, under what conditions?
The Minister was given advance notice of Imasco's intentions and apparently she and her officials have been reviewing the matter since before it became public on March 24. The Minister said in an interview with The Financial Post that she has no problem with financial institutions being owned by industrial groups and that this was happening in a number of other countries. At the present time, American laws explicitly forbid ownership or control of financial institutions by nonfinancial institutions, although we understand that there is pressure to change that law.

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I support the motion before us because it is important that we in the House have some indication from the Government of how the Imasco matter will be decided. It is true that a Bill has been introduced, but we are not at all sure that we will have a chance to debate it before Imasco's takeover is finalized on April 25. Therefore, we do not want to be overtaken by events. We want to be able to put forward some of our concerns.
I was pleased to concur in the report of the Finance Committee on April 8. I hope the Government will take that recommendation seriously and make a considered and consistent decision.
The question of divestment or unwinding was addressed in the Finance Committee's report of last November where a five-year period was suggested for unwinding in certain cases. It has been suggested that that period may be too short. If so, it would be interesting to hear alternative proposals. However, it is important that a commitment be made not to let the present trend continue because it is a trend that has accelerated in recent years.
In the United States, a massive acceleration of corporate debt resulting from the "leveraged buy-out" boom in the past couple of years has left many people apprehensive about the underlying financial soundness of much of the American economy. On January 20, 1986, a well known American writer, Robert Kuttner, used very firm language in offering a serious warning about concentration. He said:
If the legal rules that make possible an orderly corporate and financial marketplace suddenly provide that any firm with undervalued shares is up for grabs whenever a prospective raider can borrow enough money, then the entire real economy is turned into a speculative casino, in which rearranging assets yields greater rewards than building them.
These are some of the concerns of the committee and some of the reasons why we feel some urgency about the Government having a clear policy on ownership.


Mr. Attewell:: Mr. Speaker, I serve on the Finance Committee, as do several Members who have spoken today. I believe that we are dealing with a matter that is extremely important not only to the business life but to the economic and social life of Canada. How do we envisage the future of Canada? What kind of business climate do we want in Canada? How large and how much power should some of these corporations have?
Although today's debate concerns this motion, I think we are also dealing with a grave situation in this country. A major cause of this grave situation is the ever-growing concentration of power in this country. We have five or six world banks that have a dominant position in Canada and do a great deal of foreign banking which accounts for some 40 per cent of their assets. We are very proud of the banking industry in this country. However, it is different in the United States which has almost 14,000 banks. There is no dominance in the banking industry there as there is in this country.
A number of other companies in this country have become very large as a result of their sound management and marketing practices.
We must be concerned about this concentration of power. For example, Imasco, a successful and respected company, is on the verge of taking over Genstar which is a corporation that owns Canada Trust. I might say that Canada Trust is one of the best run trust companies in Canada under the guidance of President and Chief Executive Officer, Mervin Lahn. One only needs to briefly examine its record to see that it has been well run for many years.
However, we are concerned about the issue of non-financial corporations controlling financial corporations. The unanimous report of our Finance Committee recognized some of the unique issues in the trust industry. For example, in many cases certain groups and investors had to take a great majority if not all of the share issue to get an organization going. During more difficult economic times, some of these groups have had to provide an infusion of more capital from time to time. They should be credited with keeping these organizations going.
In the report of the Finance Committee which was tabled last November, we recommended unanimously a structure of ownership on a scaled basis. For instance, for a company the size of Canada Trust with over $20 billion in assets, we recommended the maximum ownership to be 50 per cent. When a trust company's assets exceeded $30 billion, that ownership would have to be dropped to 25 per cent. When it went over $40 billion, it would have to be reduced to 10 per cent, similar to the Schedule A banks here in Canada. And 1 stress that this was a unanimous recommendation.
The problem of non-financial corporations is very much on the minds of a number of senior people in the United States. Mr. Volcker, who is head of the federal reserve, recently called a number of senior people together to express his concern, because even though the U.S. banks cannot be controlled by non-financial corporations, some of the other related financial institutions like Sears Roebuck are developing very large financial assets. So he indeed is concerned about that as well. So there are a number of issues to be looked at.
I would like to compliment the Government and the Minister of State for Finance (Mrs. McDougall). The offer came on March 24. A day later there was discussion right in the House. The next day the House rose for a 10 day or 11 day period. The day we came back on April 7, the Minister presented Bill C-103 in the House which has provisions, as 1 understand it, to deal with this. We would urge the Government that we act with speed on this matter. With all due respect, it is hard to unscramble eggs and get toothpaste back into the tube. The train is moving. The offer on all shares put forward as of April 14 is now irrevokable. The deal is to be signed on April 25, a week from Friday, which is just nine days away. I think it is only fair to Imasco and other shareholders

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that a decision be made shortly and that we not be in the awkward position of having some type of roll-back.
I have worked with the Hon. Member for Trinity (Miss Nicholson) on a couple of different committees and I have the greatest respect for her. I must take issue with only one word she uttered and that was the word "revolt". We are going through parliamentary reform and we on the committee knew we had an important issue. May 1 just ask the Hon. Member what is going on in her Party? I cannot quote the dates but I believe the Right Hon. Leader of the Opposition (Mr. Turner) was against this particular proposal fairly recently. I have now heard that the finance critic for the Official Opposition is now for the deal. I wonder if the Hon. Member could just elaborate on the official position of the Liberal Party on this particular issue.


Aideen Nicholson: Mr. Speaker, I do not believe I used the word "revolt". I believe it was someone else. I did not use the word "revolt" because I do not see as a revolt at all the fact that members of the Government Party are pressing their Minister to take certain positions. I think that that is an exercise of the responsible role of a Member of Parliament. That is what we generally do in caucus, but under the new rules it is now being done more openly. I think the Hon. Member must have confused my speech with the speech of someone else.


David Orlikow: Mr. Speaker, I would like to ask the Hon. Member for Trinity (Miss Nicholson) a question. If I heard her correctly, 1 think she expressed her opposition and, I presume, the opposition of the Liberal Party, to the takeovers or control of financial institutions by industrial corporations or non-financial institutions. I, of course, agree with that.
I would like the Hon. Member for Trinity to tell Hon. Members of the House when she and the Liberal Party came to that conclusion. I have a table here and I see that in 1981 Noranda Mines took over MacMillan Bloedel for $626 million. In the same year, Brascade Resources took over Noranda Mines. That meant it controlled Noranda Mines for $1.6 billion. So Brascade controlled Noranda Mines and MacMillan Bloedel-


The Acting Speaker (Mr. Charest):: I remind the Hon. Member for Winnipeg North (Mr. Orlikow) that we have about 30 seconds left in the time for questions and comments. If he wants an answer from the Hon. Member for Trinity (Miss Nicholson), he will have to put a question.


David Orlikow: Brascade also controls the Trilon financial corporation?which, in turn, controls trust companies, insurance companies, money market companies, leasing companies and real estate companies. When did the Liberal Party make this pretty important change in its approach to the business operations of large corporations in this country?


Aideen Nicholson: Mr. Speaker, first, concern about concentration of power in nothing new to Liberals. In fact, when our
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present Leader was the Minister of Consumer and Corporate Affairs, he introduced one of the first competition Bills. However, it is quite true, indeed, as pointed out by the Hon. Member and as I said in my speech, that we do have a very high level of concentration in Canada and that we have financial institutions owned by non-financial institutions. I think all of us here, regardless of Party, have become more concerned in the last couple of years as we have seen the problem escalate. In fact, one of the most impressive briefs the Committee on Finance had was from Cadillac-Fairview where, I believe, precisely that point was made. We have been increasingly faced with more concentration, with more takeovers by non-financial interests in financial institutions, and we have now reached the point where it must go no further.


Mr. Don Blenkarn (Mississauga South):: Once upon a time in 1980 there was a company called Genstar which owned some real estate development holdings on the West Coast and some transportation issues. About that time there was also a company called the Canada Permanent Trust Company which had a subsidiary called the Canada Permanent Mortgage Corporation. That corporation was an old, established and well respected trust institution in Toronto. There was also a company called the Canada Trust Company, another well respected institution with its head office in London, Ontario and branches throughout Ontario.
In 1981, the company called Genstar gobbled up the Canada Permanent Mortgage Corporation and the Canada Permanent Trust Company. In 1985, the company called Genstar then gobbled up the Canada Trust Company. Now it is 1986, and the largest tobacco dealer in the country, the largest drugstore owner in the country, one of the largest fast food owners in North America, intend to gobble up the Canada Trust Company, the Genstar Company, the Canada Permanent Trust Company and the whole ball of wax. The question is, when are we going to stop the gobble, gobble, gobble?
I suggest, Sir, and the committee suggests as well, that it is time that ownwership rules and requirements for financial companies be determined and established. The committee is suggesting to the Minister and to the House that now is the time to stop. Last fall the committee suggested the Minister should not permit the amalgamation of Canada Permanent Trust and Canada Trust. It was our view last fall that amalgamation should not have been permitted, but it was permitted. We think, Sir, that this further amalgamation, this further takeover, this further holding, should be stopped. We think now is the time to stop it. We as a committee do not approve the present holdings whereby a company which is in the non-financial business or partly in the non-financial business owns a financial institution, particularly a financial institution the size of the new Canada Trust, which is an amalgamation of Canada Permanent and Canada Trust, having intermediary action of at least $21 billion, together

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with its trust and trust-related activity of several billions of dollars more than that.
In order to understand the real justification and rationale behind our opposition we must understand what we are dealing with in terms of financial companies. At one time financial companies could be described as belonging to four separate pillars. This is commonly referred to as the four-pillar theory. One of those pillars was the insurance pillar, which broke down into property and casualty insurance companies and life insurance companies. Another pillar was the bank pillar, which included the chartered banks. They lent on commercial loans, which was their sole function, financing day-to-day commercial activities. Then there was the trust pillar which looked after estates and agencies, which transferred shares and kept share registers for people. It would look after one's mother's will, for example. Then there was the security dealer pillar, which traded in stocks and bonds in the market-place and made sure that new share issues were placed.
Time has gone by and there has been little, if any, leadership in the administration of financial intermediaries. The four pillars have become four hydrants. There is a merger of activities. All one has to do is to read the newspapers, listen to the radio or look at the television to be confronted with ads by one intermediary after another which state: "We will look after your mortgage". "Come in and get your car loan looked after". If one wishes to lease something, then they will look after it. Every one of these intermediaries will do the same thing, with very little restriction, except the type of restriction found in the Bank Act which prevents one's bank from leasing one an automobile. That does not prevent it from lending one the money to buy the automobile and then agreeing to buy it back when the term of the loan is over. That is another way around the Bank Act invented by the Royal Bank. However, they all do the same thing. They issue and sell debentures. They trade bonds in the market-place. They own, trade and invest in common stocks. They invest in preferred share issues and run T-bill accounts-every one of them. They will look after customer payments on Chargex, Visa or Mastercard. They allow one to apply and obtain an American Express Gold Card. They are all the same and they all do the same thing.
What we had better understand is that if they all do the same thing then the ownership rules governing them ought to be the same. Yet what have we got? We have an ownership rule for trust companies under which anyone can own a trust company. One can even be a drug store operator, apparently, and own a trust company. A mining company can own a trust company. What we have is a situation in which anyone can own a trust company and, presumably, a trust company can grow to any size under one owner.
We have a company called Canada Trust which is not able to use the word "bank" on its statements. Under normal parlance, it is a bank. It takes private placements. It places mortgages on commercial real estate. It owns real estate. It
rents that real estate out. It runs T-bill accounts, according to the little advertisement on the top of the morning paper. It will help one with one's investment portfolio. It will perform all sorts of services for its customers. It will do exactly what a local chartered bank will do for one.
An advertisement which it placed in the paper the other day, a two-page spread, stated that it is the fourth largest taker of domestic deposits in the country. If we consider its intermediary action we will see that it is the fifth or sixth largest financial intermediary in the country. It is larger than the National Bank. It is larger than the Bank of British Columbia. It is larger than the Continental Bank by far. Indeed, if we were to place all its trust activities together- and 1 ask Hon. Member to remember that in its trust activities it directs and controls those trusts which it manages-it is as large as the Toronto-Dominion Bank. If we take a look at its domestic activity as opposed to the banks' domestic activities, we will see that it is probably larger than the Bank of Nova Scotia or the Toronto-Dominion Bank in terms of their domestic activities.
There is a situation in place by which banks can be owned only to the extent of 10 per cent per shareholder. Yet this company can be owned by one shareholder. Why should this "bank" be held by one shareholder and the Toronto-Dominion Bank be held by a multitude of shareholders with no shareholder holding more than 10 per cent? Why should the Bank of British Columbia be in that position? It is a relatively small institution. Yet Canada Trust and Royal Trust can be held in a closely-held fashion. This is the situation which we must come to grips with as a country. This is something we attempted to come to grips with in the report of the Finance Committee.
I wish to say that the Tory majority on the committee was much more liberal in terms of ownership. We were prepared to say: "You can have large one-owner companies". Members of the New Democratic Party and the Liberal Party who sat on the committee would not go that far. Yet the present ownership which seeks approval revolts us. It is against the principles of what we think is necessary in the interests of Canada,
In our report, we wanted to come up with an ownership policy which would apply across the board in our report. That ownership policy would have said that until a company gets up to as much as $10 billion-which is a great deal of money- the financial intermediary could be owned, closely-held, by one group of owners or by one owner. We feel that up until that $10 billion stage the company needs the strength and backing of one owner in order to get going. However, as soon as it crosses the $10 billion threshold, we feel it should cut back. When it crosses the $20 billion threshold, it should be cut back again so that it is less than 50 per cent owned by one shareholder.
The company with which we are dealing is far over the $20 billion mark, yet it is owned by one shareholder. When Imasco takes over it will be even harder to unravel. In the case of Genstar, at least, we have serious concerns about the way it
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has operated in the past. We have summoned officials of Genstar and the President of Canada Trust to appear before the Standing Committee on Finance, Trade and Economic Affairs next Monday in order to go over some of these conflict of interest matters. At least Genstar can divest itself and become merely a financial holding company. Today, the bulk of Genstar's business is in terms of the financial intermediary business. At this point in time it would not be that difficult for Genstar to divest itself and become a strictly financial intermediary holding company. Broadly held as this company is, or was until today or yesterday, it would come within the share rules originally prescribed by the committee. However, if this takeover is to take place, then it will not be possible without a great deal of difficulty to unravel the ownership so that there will be no massive concentration of ownership in one holder.
It is essential that there be wide ownership of financial intermediaries, and the reason is that financial intermediaries are different from our local boot and shoe companies. They are not commercial organizations. On the balance sheet of a commercial organization, the leverage might be one to one or two to one. Perhaps commercial organizations borrow some money, but by and large their balance sheets contain capital and capital is used in the businesses. However, financial intermediaries operate on leverage. That is how they make profits. They put up a buck and make 20 bucks. That gives them $21 to be invested. They operate by lending precious little of their own money and putting depositors' money at risk.
With a financial intermediary, the people who are really at risk are the depositors. Those who deposit their money in Canada Trust are the people who are taking the risk when Canada Trust makes loans, not the shareholders, except to the extent of perhaps 4 or 5 per cent. It is on that basis that boot and shoe companies, drug companies, tobacco companies and tugboat companies should not be able to own the bank. That is why the Finance Committee recommended these strict ownership requirements. We have to have strict requirements on who owns financial intermediaries, particularly as they get larger.
A great number of comments have been made with respect to the testimony given before the Finance Committee by Bernard Ghert of the Cadillac-Fairview Company. There is a strange situation. I do not know who owns Cadillac-Fairview now but perhaps there was a conflict of interest between him and one of his eventual employers. In any event, Mr. Ghert very clearly pointed out how as conglomerates get larger in the finance business, they control the source of the mortgage money, the source of the land development money and which tenants can go into shopping centres. They control development and the growth of the country. It is very important that that kind of control be broadly held by many shareholders so that no one shareholder has so much control over large financial conglomerates that he can use his economic leverage for his own good and not necessarily the good of the depositors.
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When we analyse share values of the Schedule A banks in Canada, we find that those shares are being traded on the market for considerably less than their break-up or book value. In the case of Canada Trust, the offer that has been made is a payment of at least $2 for every $1 of real book value.
One might ask why one would pay so much for a trust company and so little for bank stock. The answer is pretty simple, is it not? It is power that is more important than ownership, power over the leverage of the money. Those who control this great pot of money can make deals the way they want them to be made, and that is why ownership controls are so essential. People do not buy trust companies these days for the profit they are likely to make on ordinary intermediary action; they buy them for the power that the control of that money provides.
We have to recall that we are talking about depositors' money, not shareholders' money. There is nothing wrong with having power over one's own money, but having power over one's depositors' money is another matter. There are still opportunities for self-dealing, despite the suggestion made by Canada Trust that it had passed board resolutions preventing self-dealing. This House ought to agree with the committee that there should be serious limitations on ownership and that an ownership policy should be determined before the Imasco deal is approved.
We cannot sit back and say that we have to study the matter further. It is important that the Government declare itself. I have nothing against the Genstar people. I think they are fine people and good corporate citizens. In fact, they are probably even better corporate citizens than the corporate citizens who own the group that is being purchased. The fact is that we are dealing with ownership requirements over the management of money that does not belong to shareholders but to depositors. That money has to be controlled in such a way that no one within a company of this size has the absolute power to say yes or no.


Nelson Andrew Riis: Mr. Speaker, I listened with interest to my hon. friend explain why it was so important that the points raised in today's debate be heard and presumably followed by the Minister of State for Finance (Mrs. McDougall). If the Minister decides not to stop this takeover of Genstar by Imasco as recommended by the Finance Committee, would the Hon. Member who is Chairman of the Finance Committee be able to think of any reason for this? Is there any compelling reason the Minister would use for not stopping this after all of the debate and all of the arguments have been put forward? Is there anything that would indicate to Canadians that her action in that case would be in the best interests of the country? Can the Hon. Member think of a single reason why she would not stop it?


Donald Alex Blenkarn: Mr. Speaker, there are reasons. I do not necessarily agree with those reasons, but we must take a look at them. There is a suggestion that there are a great number of financial companies in Canada and that there is ample

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competition. The suggestion is then made that this takeover will not reduce competition that much, and indeed will not hurt competition at all. The suggestion has been made that Canada is a relatively small country and therefore needs large companies with masses of capital to finance large activities in which we have to engage with foreign countries.
I happen to believe that even with those concerns in mind, the takeover is wrong, largely because we are not dealing with a boot and shoe company but with depositors' money. We are dealing with the money of those who have savings. It is essential that those savings be treated in a fashion where there is no likelihood or probability for the savings to be used improperly to enrich the owners of the company at the expense of the savers.


Nelson Andrew Riis: Mr. Speaker, 1 have three supplementary questions for the Hon. Member. First, if this particular takeover proceeds, is it the Hon. Member's understanding that there would be some possibility that the deposits of depositors would be at some risk? I place emphasis upon the words "some possibility''. Second, does the Hon. Member have any concern at all that Imasco is controlled 44 per cent by a British conglomerate? Third, rather than the 10 per cent rule, which he advocates makes a lot of sense with the big banks, if the rule were changed for Canada Trust not to 10 per cent but to 30 per cent or 40 per cent, would that satisfy him?


Donald Alex Blenkarn: Mr. Speaker, perhaps I will answer the questions in reverse order. I am not all that concerned about foreign ownership. Over the last decade and a half Canadians have been buying up, with great abandon, foreign companies operating in Canada. Deak Perera, an international currency house operated out of New York, was bought up this week by one of my constituents. The company will now be called Deak International and will have its head office at 10 King Street in Toronto, rather than in New York. That is the kind of thing that is happening. I am not too concerned about foreigners having some business here because our intermediaries have a great deal of business in foreign countries.
Having said that, I think it is not proper to maintain the 10 per cent rule for the banks in the present fashion. Some of the smaller banks in Canada would be far better off if they were owned fairly closely. Close ownership is needed to give those banks the additional strength which is required, particularly at the present time. Perhaps the 10 per cent rule is only appropriate for the very largest institutions. I would be quite content to see Canada Trust at its present size owned 40 per cent by one shareholder or one shareholding group. As it grew, perhaps that one shareholding group would have to divest or allow in more people.
I am quite happy about the recommendations of the Finance Committee. They provide that there can be sole ownership only up to $10 billion in assets and 75 per cent ownership from $10 billion to $20 billion. At $20 billion they have to get down to 50 per cent ownership; at $30 billion, to 25 per cent
ownership; and at $40 billion, to the 10 per cent rule. On that basis major banks would be at the 10 per cent rule. Perhaps there could be some narrowing of the ownership requirement for the National Bank. That suggestion in committee was well thought out. It leaves ample opportunity for development of our financial institutions and ensures that, as the institutions become larger, there is divestiture and an opening of investment opportunity.


David Berger: Mr. Speaker, I thank the Hon. Member for his very entertaining and interesting comments, and I should like to ask him a couple of questions. His general thrust was that we should be treating everyone in the same way, and he referred to the four pillars. If these rules were put in place, would we indeed be treating everyone in the same way? I understand that there are certain exceptions under provincial legislation. For example, the Laurentian Group is controlled ultimately by an insurance company. It is a holding company which I believe has interests in a savings bank and is becoming involved in many other areas. I understand that the provincial legislation in Quebec governing it is considerably looser. If rules of this nature were in place, would certain financial institutions in Canada controlled by holding companies escape these rules and therefore be at a competitive advantage in relation to other companies?
My second question relates to the self-dealing ban. Canada Trust has proposed a ban on any business dealings with any company or affiliate of a company owning more than 10 per cent of the trust firm. On the face of it that seems to be solid; it is quite a formidable ban. The Hon. Member indicated that he was not satisfied with that ban and that there was still a danger. Why does he feel that that is so?


Donald Alex Blenkarn: Mr. Speaker, I thank the Hon. Member for his question. The proposal by the Canada Trust board was a board resolution. Board resolutions can be altered the next day by other board resolutions. It is a nice resolution to have on the books. There are certain self-dealing bans already in the Loan Companies Act and the Trust Companies Act, and several further self-dealing bans will be proposed. Perhaps the Hon. Member might find it entertaining to attend the meeting of the Finance Committee next Monday. Perhaps he would find out how certain transactions were put together involving the Canada Permanent Mortgage Corporation to finance certain takeovers. Somehow those transactions managed to be treated as all right, even though they certainly do not smell all right at this point.
With regard to the Laurentian Group, the Hon. Member might find a breakdown of the financial intermediaries in the country on page 56 and page 57 of the English version of the report entitled Canadian Financial Institutions. In September the Laurentian Group was deemed to have, in total assets- that is the whole ball of wax-some $8 billion, so under our own criteria it could be a solely owned group.


Mr. Simon de Jong (Regina East):: Mr. Speaker, I wish to participate in the debate on the motion presented by the Hon.
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Member for Kamloops-Shuswap (Mr. Riis). It is an important resolution because it asks the House to concur in the unanimous decision reached by the Finance Committee. It is not very often that a committee of the House consisting of Government Members and of Opposition Members is able to agree on a certain matter. It is important as well because we are beginning a new era of parliamentary reform in the House. I think it has been recognized by all Hon. Members that traditionally we are often caught and squeezed by the political imperative, particularly if one is a Government Member. There has been a desire on the part of all Hon. Members to break out of this static role and to be able to express our own opinions and feelings in a more active way. Of course the instrument which has been devised for this purpose is our committee system. It is hoped that in the committee system we are able to step a little further back from our political role and meet with fellow representatives, men and women, around a table to grapple with the social and economic problems of the country. We can achieve and reach a certain consensus and agreements for the betterment of Canada. Certainly the Finance Committee has done that.
I participated with many of my colleagues who have spoken today from the Conservative Party, the Liberal Party and the New Democratic Party in the hearings last spring which went into our summer recess on the reform of financial institutions. Yes, there were some differences in that committee as we travelled across the country. Many of these differences occurred because of who we were, what our personal philosophies were and where we came from. But there were also some significant agreements, important agreements.
The motion today is a real litmus test, how committed the Government is to the work of committees, and how committed the Government is to parliamentary reform. If the people of Canada are to regain confidence in this institution, they have to be able to see Members of Parliament working and making common sense decisions together without being dictated to by the political process.
Canadian men and women desperately desire to see this institution reform itself to allow non-partisan ideas to be brought forward and to be acted upon. We have such an example before us today. We will all be watching to see how the Government will react to this concrete proposal. It is a very important proposal. It will deal with the economic well being and the social and cultural milieu for many years to come.
It is not just this particular item of the Genstar takeover by Imasco that is at stake, Mr. Speaker. If the Government allows the takeover, despite the unanimous recommendation of the Finance Committee, then we might as well forget the whole notion of committees of this House acting in an independent manner. At stake is not just a particular takeover by a nonfinancial institution of a financial institution. If this takeover is allowed, a signal will go out and the gates will be open to even more corporate takeovers and even greater concentrations of
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financial institutions. It will also destroy the hope that many Members of Parliament have in parliamentary reform. If the Government does not act on the unanimous decision of the Finance Committee, then surely it stands naked in front of Canadians as to what its real intention is as far as parliamentary reform is concerned. It will send out a signal that it is a farce, and we might as well all go home. We will be sitting here like robots, voting yes or no depending upon whether we are in opposition or in government.
I want to congratulate members of the Conservative Party on this committee. They are my true, real colleagues. We travelled across the country and heard submission after submission day after day. I congratulate them for playing an activist role in this House in their attempt to have the conclusion of the Finance Committee accepted by this House. I congratulate them in a genuine fashion. They are doing the job of what a Member of Parliament should be doing. We should all take them as an example. Perhaps the day will come when my colleagues and I in the New Democratic Party might be in Government, or perhaps even some day the Liberals might be in Government, and all of us will have the courage which Conservative Members on the Finance Committee have shown today. They do credit to the Government and to their Party, Mr. Speaker. It is up to the Government, and we will all be watching whether the Government will hang them or respect them. We will all be watching that with great interest.
The question in debate today is whether the financial institution of Genstar should be taken over by Imasco. It is important, as 1 and other speakers in this House have mentioned, because it is a big takeover. It means that a big nonfinancial corporation acquires its own bank, in the words of the Chairman of the Finance Committee, the Hon. Member for Mississauga South (Mr. Blenkarn).
What are the stakes here? Let us have some sense of the magnitude of what we are talking about. Who are the folks at Imasco? Imasco's total assets as of March 31, 1985 are $2.74 billion. Its revenue for the year ending March 31, 1985 was $4.35 billion, and it has a total of 18,300 employees. Imasco's holdings include Imperial Tobacco, which produces more than half of the cigarettes sold in Canada. It operates 2,540 fast food restaurants in the U.S. under the Handee's name. It owns Shoppers Drug Mart with 415 stores across Canada. It owns and operates 800 Peoples Drug Stores in the United States, and it owns and operates 460 tobacco gift and newstand outlets across Canada. Those are the folks at Imasco. That is the scale of its operation. It is pretty impressive and pretty big.
Who are the folks Imasco wants to take over, the people at Genstar? The total assets of Genstar as at December 31, 1985 were $25.4 billion. Its revenue for the year ending December 31, 1985 was $2.34 billion, and it has 18,000 employees. Genstar owns Canada Trustco Mortgage Company, Canada's largest trust company and the sixth largest financial institution in Canada with assets of $21.7 billion. It is also involved in building materials, industrial services, marine services, real estate and land development. In other words, the people who

April 16, 1986
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own fast food chains, drug stores and make cigaretts want to acquire this major trust company.
What is wrong, Mr. Speaker, with a non-financial institution taking control of a financial institution? The Chairman of the Finance Committee, I think, did a pretty good job in explaining to the House and to Canadians what is wrong with it.
Let me reiterate some of his points. It means that a nonfinancial institution has control over a financial institution and that financial institution gets its assets from depositors, not its own money but other people's money. It uses other people's money to acquire power and, the way the Chairman of the Finance Committee describes it, the leverage. It acquires this power not out of its investment and capital but from other people's deposits and the trust of other people. If you place your life savings as a depositor in a financial institution, you do it out of a sense of trust that that financial institution will manage the money properly. That money will be there on deposit when you want to withdraw it. It is a tremendous act of trust by the depositors.
The financial institution then uses that money. If that financial institution is owned by a non-financial institution, what is there to stop it from using those deposits for the interest of the non-financial part of the conglomerate as a source of cheap capital to expand or take over other companies? They can prevent loans to their competitiors. They can discriminate against their corporate enemies and favour their corporate friends. Self-dealing is one way of explaining the potential conflict of interest between the financial and non-financia! side of a conglomerate. We in the NDP feel this is wrong. Today we have heard Members of the Liberal Party tell us they also consider this wrong. Of course, they had many years to do something about it but neglected to do so. During their tenure they allowed large conglomerates to be organized in this country. However, I am heartened to hear that members of the Liberal Party are finally saying enough is enough. I am doubly heartened to hear that Members of the Conservative Party are also saying enough is enough. We have to draw the line. We in the NDP have been saying that for quite a number of years but, as with many other things, the Conservative and Liberal Parties are finally catching up with us. I am glad to hear that today is the day those two old line Parties are finally beginning to realize that the rate of economic concentration which is occurring and has occurred in this country has now reached such a level that a line has been drawn.
The political and economic well-being of this country is now in danger. When you have such a concentration of economic power in fewer and fewer hands, not only are those fewer and fewer hands able to dictate the economic well-being of this country, but eventually your political freedom and political independence become endangered. Once you allow so much power to be amassed in so few hands, Governments bend to their will. If they do not like what Governments are doing or
what the people decide in elections when they elect certain types of Government which the conglomerates and those who control them do not agree with politically, they will use their economic power to destroy those Governments.
We hear a lot about the inequities of labour unions going on strike, especially involving vital industries. However, we do not hear very much about capital going on strike. We generally believe in the freedom of capital, although we do not necessarily believe in the freedom of working people to withdraw their services. We pass legislation to send working people back to work but we do not pass legislation to prevent capital from going on strike and leaving certain jurisdictions. That has been done in the past in this country. When they do not like the political climate or the Government of a certain jurisdiction, they have gone on strike and removed their capital. They have closed some plants. They have not reinvested. They have created a milieu of labour unrest and high unemployment, which then forces the Government into political defeat or political subservience to the economic masters. There is a very real danger that if we allow these corporate takeovers to continue, our political and democratic freedom will begin to erode.
It is very difficult to unravel that power once it has been accumulated, very, very difficult. I think every member of the Standing Committee on Finance, Trade and Economic Affairs was tremendously impressed by the Chief Executive Officer and President of Cadillac-Fairview Corporation. Not only was I impressed, I was astounded, to tell you the truth, when Mr. Bernard Ghert made his presentation to our committee. He warned us in a very dramatic and direct way of the political and economic dangers which occur when financial and nonfinancial institutions are married together. I believe he recently sent to every Member of Parliament a copy of his address to the Vancouver Board of Trade at the World Trade Centre in Vancouver, and I would like to quote from that. He said:
Lei me give you just a few examples of how economic power is exercised, even under present conditions.
-It can be used to advance the interests of some customers or suppliers or penalize others who are out of favour.
-It can undermine the position of rivals in ways inconsistent with maximizing the wealth of one's own shareholders.
-It can provide excess rewards, pecuniary or otherwise, to the top management coalition that effectively controls the group.
-Economic power can be used to influence public policy through the political process, that is, lobbying, advocacy advertising, public relations, campaign contributions and directing corporate locational decisions.
These are not just theoretical situations. The public record provides examples of the use of corporate power in ways detrimental to the general good of the Canadian people.
As an example of what is going on, I know of an instance where if the witnesses were required to testify under oath, they would tell about one financial institution which had instructions from senior executives of the parent nonfinancial company to refuse a loan to its competitors.
I will end my remarks with that quotation. It is a warning from surely one of the great captains of capitalism in this country, the President and Executive Director of Cadillac-
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Fairview Corporation, one of the largest real estate developers in this country. He has stuck his neck out and warned Members of Parliament to stop the erosion of economic and political democracy and recommends against the close ownership of financial institutions by non-financial institutions. In fact, he advocates a roll-back. I hope this Government will heed the warnings not only of its own committee but of people like Mr. Bernard Ghert. I hope it will agree with the recommendations of the committee.


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


William Paul Joseph McCrossan: Mr. Speaker, I would like to make one comment and then ask the Hon. Member about his reference to Mr. Ghert's statement. We are now down to our last speaker this afternoon. All Members of all Parties have had ample opportunity to speak today and so far I have not heard one single Member of Parliament from any Party speak in favour of the takeover of Canada Trust by Imasco. With respect to the comments of Mr. Ghert, he suggested that there were four dangers. I would like to deal with each of these separately.
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The first danger, he suggested, was that the non-financial owner could advance the interest of some companies or suppliers by penalizing others. As we know, there is a direct ban on loans between parent and subsidiary companies. Would the Member agree that an example of such a danger might be if a parent company instructed its subsidiary financial company to lend money to a third company so that that third company could buy something from the parent company? That would be a perfect example. Similarly, he has referred explicitly to Mr. Ghert's letter in terms of the second danger, that of undermining the position of rivals. Would he agree that the instructions of a non-financial parent to refuse a loan represents something that should be prohibited by law?
The third danger that Mr. Ghert pointed out was providing excess rewards to the top management officers. It was reported in the Toronto Star this weekend that as a result of this proposed transaction, the Chairman and the President of Genstar are each in a position to earn some $40 million this year. Would he regard those as concrete examples of the dangers that Mr. Ghert was mentioning? In addition, would he regard the selling of real estate by the parent to a subsidiary trust company as another example of a danger that could occur as a result of concentration of ownership?
Finally, would he regard the paying of commissions or finders fees by a financial institution to its non-financial owner as a conflict of interest if the non-financial owner was directing the financial company to perform certain transactions?


Simon Leendert de Jong: Mr. Speaker, I would say yes, yes, yes and yes. They are all excellent examples of some of the detrimental effects that Mr. Ghert brought forward in his presentation, and that my colleague and friend has fleshed out. You could put in regulations that could control all of that. Some of the
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proposals in the Green Paper that the Minister of State for Finance (Mrs. McDougall) introduced suggested that, yes, we can put in a regulatory regime that would prevent self-dealing, discrimination, non-arm's length treatment, and so forth.
When we travelled across the country in the Finance Committee I think we all came to the conclusion that if you are going to control that through regulations, you are going to end up with such a bureaucracy that you will need people working in those companies checking over everybody's shoulder to make certain that it never occurs. I do not think there was one member of the Finance Committee who felt that that was a realistic way to go.
Once you open the door to allowing non-financial and financial institutions to be married and in bed together, you cannot really control their sex ethics by government regulation. It invites such a horrendous policing that it is unrealistic. The Finance Committee came to the conclusion, and I believe rightly so, that the best way not to have that illicit sex was to keep them out of the same bed.


Benno Friesen: Mr. Speaker, I want to say that as a member of the committee on parliamentary reform I have taken particular pleasure in what is happening today. I think this is one of the examples of emancipating the back-bencher and giving him a role that he has, hitherto, not really enjoyed in Canada. It is sending a signal across the country that while we have elected a Government to take the correct initiatives, it is not always right. The Government could be wrong, and human frailty being what it is, the Government is capable of making mistakes. The process we are going through now is one of the checks and balances that operate in the system.
It is with that introductory remark that I want to engage the Member who just spoke with respect to his introductory statements in which he was complimenting the system and the reform that has taken place. I was somewhat surprised, and 1 guess saddened, that he had to conclude that if the Government does not respond correctly to what the committee does then, in effect, the committee has been hung out to dry. I was saddened to hear that kind of imputation of motives behind everything that goes on here in the Chamber as a result of this new reform mood that we have.
Surely, the whole package of reform is designed, first of all, to give freedom to the back-bencher and not to impute motives. As soon as you impute motives you are bringing into the arena all the confrontation we are trying to dilute in the reform package. As we indicated on the night the reform package was accepted in the House, the purpose of all of this is to give meaning to the back-bencher. That is not simply to exercise power politics, as important as that may be sometimes, but to do away with a lot of the confrontation that goes on, the name calling and the power blocks.
I hope that the Member who spoke in the debate wlil recognize that the purpose of the reform is to do away with the confrontation that is going on constantly and to look for solutions rather than, by imputing motives, again stimulate

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controversy and get into the whole area of antipathies rather than reconciliation.


Simon Leendert de Jong: Mr. Speaker, I thought that in my introductory remarks I commented on the fact that the reform and the greater importance of the committee was an opportunity for us to move away from confrontational type politics by allowing men and women to represent their constituents equally by sitting down together around the table and arriving at more common-sense conclusions. 1 felt that that was important. In part what was at stake here in this debate as well was how the Government accepted that process and how real and viable it was to become.
Here in this House today, as has been pointed out, not one Member has stood in his place and suggested that this takeover should occur. We are here as ordinary Members of Parliament, not Government Members, not opposition Members, but just ordinary representatives of the folks back home. It appears to me that all of us who have spoken on this have come to the same conclusion and the same feeling. You would tend to think then that in a democratic parliamentary system it should be our will that should prevail. Every Member of this House who has spoken has come to that conclusion, that this is not a wise transaction to take place. 1 was expressing our hope that our will would prevail in this, and not the will of somebody who makes decisions in the back room or in the financial office towers of the bureaucracy. That, indeed, for us as ordinary Members of Parliament is very important. I certainly was not trying to drag this into a confrontational debate again. 1 was expressing a real, genuine, sincere hope.


Gabriel Fontaine: Mr. Speaker, I welcome this opportunity today to speak to the question raised by the Hon. Member for Kamploops-Shuswap (Mr. Riis). However, before making any specific comments on the subject, I want to say that I agree with the Hon. Member for Surrey-White Rock-North Delta (Mr. Friesen) who said that when all was said and done, today was an historic one in Parliament. The fact that a Member can table a decision by a Standing Committee is the result of the spirit of openess our Government has shown with respect to the role of Members in the House.
Mr. Speaker, when we came to power in 1984, there were fifteen members on each Standing Committee. They were not terribly motivated to sit on a regular basis and give thorough consideration to every Bill and every question that came before the Committee.
As part of our review of the role of Members, we have made it possible for Members to do so, and today, the Standing Committees are far more lively. They now consist of seven members and they are interested in the subject, and this explains why today, a committee, on its own initiative, would raise a question for debate in the House of Commons.
So what it all boils down to is the upgrading of the role of the Member of Parliament under this Government. The only backbenchers left on Parliament Hill will be voluntary backbenchers, Mr. Speaker. The others are free to exercise on their legislative and administrative role for the benefit of this country.
To get back to the subject we are considering today, the Hon. Member recommends that the Government prevent the acquisition of Genstar by Imasco, by which the Directors of Imasco would control Genstar, because Genstar itself controls a major financial institution, namely, Canada Trust.
That is the question. If the previous Liberal Government, Mr. Speaker, had given us the appropriate legislative framework so that we could appreciate the relevance of this question and the Minister could make a decision or make recommendations, we could immediately proceed to analyze the question, but the Liberals never legislated the matter of quasi banks.
The Finance and Economic Affairs Committee spent several weeks listening to quite a number of witnesses. It has produced an excellent report, and at this point, Mr. Speaker, I would like to pay tribute to the members of this Standing Committee who meet at least four times a week, under their Chairman, the Hon. Member for Mississauga South (Mr. Blenkarn). Their Chairman is known as a real workhorse!
I am therefore delighted to emphasize the role played by this Committee and the tremendous amount of work it does each week on Parliament Hill.
The recommendation made by the Hon. Member opposite asks us to look at today's question from a broader perspective. Mr. Speaker, our Government is not going to play the fireman's role in this case, which in fact is something it has never done. We must appreciate all sides of the question and all the problems related to this particular area.
Bearing this in mind, our Minister of State (Finance) (Mrs. McDougall) has already tabled her Green Paper on banks and financial institutions and the evolution of the legislative process. This is something that had never been done under the previous Liberal administration. At the time, the Liberals allowed approximately 70 near banks to be established without bringing in any kind of legislation to regulate the situation.
And we have seen one of the results. It cost Canadian taxpayers $1 billion, and all because of the neglect and improvidence of the previous Liberal Government.
The Minister of State (Finance) also introduced quite a specific piece of legislation as early as November 1985, Bill 103, an Act to amend the Loan Companies Act, the Trust Companies Act, the Bank Act and the Quebec Savings Banks Act in respect of certain regulatory matters. If that Act were to pass, the Minister would be empowered to step in whenever the take-over of a financial institution would not be in the public interest.
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Briefly stated, the major principles that will guide our legislation, Mr. Speaker, are the following: to increase consumer protection; to avoid insider transactions between different companies, in other terms where the owners of small businesses take over those of the other company, and vice versa; to foster competition, innovation and efficiency, to increase opportunities and choices of access to financial markets, to widen available sources of credit for our business corporations, to foster-and this is important-the meshing in of federal and provincial policies.
The Committee on Finance, Trade and Economic Affairs is in tune with many of the comments and recommendations in the green paper put forward by the Hon. McDougall. Because both the green paper and the committee report prohibit transactions between associated persons, they favour the immediate updating of the legislation concerning trust companies, finance companies and near banks.
Once enacted, Bill C-103 in cases where the takeover of companies would give the new owners control over near-banks, the Minister probably can suspend voting rights involved in the purchase, and direct that the shares will be placed in trust in order to be eventually redistributed to a wider base. Bill C-103 will make it possible for the Government to protect the interests of Canadians, while at the same time giving consideration to mergers that are useful and profitable in the long run, since this legislation takes account of the fact that we no longer live in a purely Canadian context. We live in a North American context where big business is the only way to ensure profitability and success. Furthermore, we are living in an increasingly western and, soon, a world context. That is why
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this Bill will have to protect the interests of consumers while striking a fair balance with the interests of business people and investors.
A few minutes ago, Mr. Speaker, I heard the Hon. Member for Regina East (Mr. de Jong) say that he was going to sit down and admire the courage of Conservative Members in relation to the question before the House today. If the Hon. Member for Regina East means what he says, 1 too will have an opportunity to admire his courage and determination, in his enthusiasm for helping along the legislative process with respect to Bill C-103 and the time he will help save the House by activating this legislative process. The same comment is directed today to the Liberals on the other side of the House. There will have to be a measure of continuity in their speeches today and they will have to work together to activate the legislative process with respect to Bill C-103.
So today, we have a wonderful example of co-operation among all parties of the House at the Standing Committee level. If the Members of the Official Opposition and the New Democratic Party were in good faith, let them prove it in the days to come, let them support us and help us get this Bill through the House as soon as possible, so that any charges of abuse they could level at people who are tempted to invest and merge with bigger companies can be quickly analyzed in detail by the Minister.


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


[Stage Direction]
The House adjourned at 6 p.m.
[Stage Direction]

Thursday, April 17, 1986