1986-12-05

STATEMENTS PURSUANT TO S.O. 21


Mr. Jean-Ciaude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, yesterday, the Minister of Employment and Immigration (Mr. Bouchard) tried to make Canadians believe that the Official Opposition was trying to scare the unemployed.
Mr. Speaker, the Official Opposition and the people of Canada are mindful of the fact that not long ago, in 1985, this same Government released a paper and invited Canadians to discuss the reform of Old Age Security pensions and family allowances. The same Government and the same Prime Minister promised the elderly that Old Age Security pensions would not be affected. They promised that the money cut from family allowances would not be used to reduce the deficit.
Mr. Speaker, Canadians will recall that this Government did the exact opposite. Six months later, it cut the indexation of Old Age Security pensions and family allowance payments to help reduce the deficit, leading to the results we saw in the polls in July, namely that 52 per cent of Canadians do not trust the Prime Minister.


AGRICULTURE
Mr. Fred King (Okanagan-Similkameen):: Mr. Speaker, this morning I had the honour on behalf of the Hon. Minister of State for the Canadian Wheat Board (Mr. Mayer) to announce a $400,000 increase in feed freight assistance to British Columbia. This is in addition to the $5.6 million spent in 1986 under the Feed Freight Assistance Program to ship 525,000 tonnes of grain into B.C. The changes announced today are in line with the Government's goal of equalizing feed grain prices in those areas of Canada that are not selfsufficient in feed grain production.
Today's announcement is yet another indication of the commitment of this Government to maintain and enhance the role of the agricultural producer in our Canadian economy.
I pay special tribute to the B.C. Cattleman's Association and the B.C. Federation of Agriculture for bringing to our attention inequities in feed grain freight costs in the province. I am happy and proud that the Government has addressed these inequities.



Mr. Les Benjamin (Regina West):: Mr. Speaker, on October 6, as reported at page 97 of Hansard, in response to questions from my Leader, the Hon. Member for Oshawa (Mr. Broad-bent), about deficiency payments for western grain producers, whether or not it would be new money, and when they would get it, the Prime Minister (Mr. Mulroney) said:
I will tell him this. He is asking whether it is new money or old money. It will be new money and good money in the pockets of the farmers.
On October 7, in response to questions from the Right Hon. Leader of the Opposition (Mr. Turner), the Prime Minister said as reported at page 147 of Hansard:
The program about which we have been talking will put a billion dollars of increased cash flow into the hands of Canadian farmers beyond that which they are now receiving.
He went on to say:
This is new money in the hands of farmers, and I know my right hon. friend will not oppose that.
We and the western grain producers would like to know where that new money in the pockets of the farmers is. When are they going to get it and in what manner?


SYNCRUDE TAR SANDS PROJECT
Mr. Alex Kindy (Calgary East):: Mr. Speaker, security of supply should be the policy of the Government on oil. We cannot rely on imports from the Middle East or elsewhere as the political situation in those countries is volatile and our own

December 5, 1986
conventional oil resources are depleting at an accelerated rate. The only logical solution to this problem is to develop the tar sands.
At this time Syncrude has an expansion scheme, a capacity addition program, which would add around 20,000 barrels a day to its current production of 129,000 barrels a day, and provide 25,000 man-years of construction work and 275 new permanent jobs. I am advised that if the world price is $16 U.S. per barrel or more, Syncrude would be able to finance the expansion on its own. If the world price should fall below that, it would require loan guarantees from the federal and provincial Governments. Our Government should extend all its cooperation to this industry so the program is completed on schedule.
High quality wheat attracted large premiums in 1985-86 because of world-wide shortages. Farmers who grew it had good reason to expect a fair-sized final payment over and above the initial price paid at the time of delivery. Unfortunately, it appears that funds which ought to be available for this have been used by the Wheat Board to cover losses incurred on the lower grades of wheat which sold for less than the initial price. Consequently, many farmers on the southern prairies who grow smaller quantities of high quality wheat are seeing their anticipated final payment diluted to cover losses on lower quality wheats which are grown in much greater volume by farmers in the north. I urge the Minister responsible for the Wheat Board to review this serious matter both for fairness today and policy direction tomorrow.


INDUSTRY
Hon. Andre Ouellet (Papineau):: Mr. Speaker, yesterday in Edmonton a group of concerned citizens from the town of Hinton, Alberta, held a press conference to make one final appeal to the federal Government to save the projected expansion of the Champion Forest Products mill. This project, if completed, would create some 450 jobs in the town of Hinton, as well as stimulate the economy of the entire region. It is no secret that with the downturn in the oil patch and the state of agriculture in the province, Alberta cannot afford to lose a major expansion of its forest industry, and certainly neither can Canada. Yet that Conservative Government refuses to act.
The people of Hinton tried to lobby their Member of Parliament quietly and the Conservative Government hoping that the Conservatives, who had promised so much to western Canada, would listen. They did not. Those people have now organized and taken their case directly to the people of Canada. We urge the Government to listen and act now in order to save an expansion project important for Hinton and for Canada.
* *
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CANADIAN WHEAT BOARD
Mr. Geoff Wilson (Swift Current-Maple Creek):: Mr. Speaker, growers of high quality hard wheat on the Prairies are justifiably upset over the recent statement by Canadian Wheat Board Commissioner Jarvis that they will receive little or no final payment for number 1 and number 2 grades of wheat sold for the 1985-86 crop year.


AIRPORTS
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I would like to congratulate the Government on its innovative solution to the problem which was plaguing Montreal of having two airports 50 kilometres apart. The innovative solution, of course, is to designate them as one airport, calling Mirabel the north terminal and Dorval the west terminal. I expect that airport planners from across the world will flock to Montreal to see this innovative solution.
In order that those planners can see this solution applied elsewhere, we should resolve the problem of no direct flights to Edmonton by opening a new Alberta International Airport so that people can fly to the south terminus in Calgary and take a free bus up to Edmonton. I suggest that the British Columbia International Airport should incorporate the Vancouver terminal and the Victoria terminal, west and east. In Ontario we should have the southern Ontario International Airport, Lester B. Pearson branch, with a west terminal at Malton, an east terminal at Hamilton, and additional terminals at London and Windsor.
This is a very fine concept which will resolve all our problems. We expect that at the new Atlantic International Airport, transportation between the east terminus in St. John's and the west terminus in Halifax will be free, by ferry.


AWARDS AND DECORATIONS
Mr. Alan Redway (York East):: Mr. Speaker, at this very moment at Rideau Hall the Governor General is presenting a
December 5, 1986

bravery award to one of my constituents, firefighter Keith Clifford, and to 33 other Canadians for acts of heroism.
On November 12, 1984, firefighter Keith Clifford arrived at the scene of a fire in the city of Toronto. Informed that two children were trapped inside the building, he and two other firefighters battled blinding smoke and flames and, despite the extreme heat, rushed to the upper floor. Disregarding the danger, he crawled into the blazing front room in search of the children. Despite the hot gases that erupted, sending a ball of flame throughout the second floor, firefighter Clifford and his two companions succeeded in rescuing the young children from the blazing inferno.
Keith Clifford and the other 33 bravery award recipients are role models for all Canadians. They deserve our congratulations, our thanks, and our everlasting admiration.
Oral Questions
when American Barrick announced that its property in the Harker-Holloway area will be put into production with a mine named Holt McDermit. This will entail a cost of $50 million, 1,500 tonnes per day, 100,000 ounces of gold per year, over 200 jobs, and an influx of $20 million into the Kirkland Lake area.
The hard work done by the company, the mayor and council, and the economic development office of Kirkland Lake must be recognized. We must also recognize that the spin-off of this project for the Larder Lake and Black River-Matheson area will be tremendous. The work being done by the Minister of Energy, Mines and Resources (Mr. Masse) and the federal Government must be recognized. Through such work and co-operation among the various levels of government such projects are carried out.


INDUSTRY
[Stage Direction]


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, the federal Government has stated that it will not direct Canadian National to provide a long-term contract for rails to Sydney Steel Corporation. In so doing it is playing directly into the hands of the Government of Nova Scotia which is using the requirement of this agreement as an excuse to close the Sydney Steel Corporation if the agreement is not forthcoming. It will be a tragedy if the federal Government allows this to take place because Sydney Steel has always been the prime supplier of rails to Canadian National.
The situation in industrial Cape Breton is very serious indeed. The unemployment rate is presently approximately 40 per cent. In the city of Sydney, where two-thirds of the tax base is paid by individual homeowners and only one-third by commercial establishments, the loss of Sydney Steel would be devastating.
The federal Government has already done tremendous damage to the economy of Cape Breton by closing the heavy water plants after saying they would not be closed until alternate employment was available, by cancelling the decentralization, and by cancelling the construction of the federal building and other projects. I ask the federal Government to accept this as a request to consider this very carefully.


MINES AND MINING
Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, Christmas came early to the riding of Timiskaming yesterday


REFUGEES
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, my statement is addressed to the Secretary of State for External Affairs (Mr. Clark). Mrs. Mataplan Souksavath and her eight children reside in my riding. Her husband and father of the eight children, Khamphouy Souksavath, has been in prison in Laos since 1975. He is 47 years old, sick with dysentery, malaria and heart problems. In spite of this condition he must go to the jungle every day to cut down trees.
I ask the Government of Laos and the Government of Canada to help. I believe December 12 is National Day in Laos and I ask that Government to show some humanity and release Mr. Souksavath so he can join his wife and eight children in Vancouver.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, my question is directed to the Prime Minister. When we became a country at Confederation the first two duties of the Government were, first, to protect the realm and defend the country, and second, to deliver the mail. The Government cannot even deliver the mail. There have been discussions in the House about a long series of problems about the security of supermailboxes. Now there is a single key that will open every box in the supermailbox. Will the Prime Minister order his Minister responsible for Canada Post to get on with the

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Oral Questions
business, get rid of this farce of supermailboxes, and deliver the mail to Canadians?


Hon. Bernard Valcourt (Minister of State (Small Businesses and Tourism)):: Mr. Speaker, what the Leader of the Opposition is referring to is, of course, a serious matter. The Government received the corporate plan from Canada Post. It accepted the plan and a decision was made to refer it to committee. The committee will make its recommendations to Parliament, which will then decide what will be done about the plan.
As for the allegations that the mail is not being delivered in this country, I may remind the Right Hon. Leader of the Opposition that the situation today is not any worse than it was in 1984. If anything, there has been a substantial improvement in the quality of delivery and the cost to Canadians.


HOME DELIVERY OF MAIL-GOVERNMENT POSITION
John Napier Turner: Mr. Speaker, I have to sympathize with the Minister, because Canada Post's corporate plan was approved by the Prime Minister on October 17 and announced in the House of Commons on November 5. I don't know why the Prime Minister approved the plan, but he did. Again I want to ask the Prime Minister: Will he order the Minister responsible for Canada Post to stop the superbox farce and start delivering the mail to Canadians?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, the Minister just explained to the Leader of the Opposition that this complex and important question, which has been a matter of concern to Canadians for twenty years under the Liberal Government, is being dealt with through a corporate plan that has been duly submitted. Hon. Members, in accordance with parliamentary reform, were advised of the plan, and I am sure there will be suggestions for some major changes. The Government will be advised of specific recommendations by Hon. Members for improving postal services, and we intend to listen to what committee members have to say. Unlike the former Government, we believe that backbenchers have a very real role to play in the House. They are not a bunch of nobodies, as former Government seemed to think.


RIGHT TO MAIL DELIVERY
John Napier Turner: Mr. Speaker, we are all for this new spirit of democracy and parliamentary participation that the Prime Minister expresses. That is all very well. However, the Government announced a plan. Now we have locks that do not stay locked, and keys that will open every box in the supermailbox. Rates are going up and service is deteriorating. Will the Prime Minister take his responsibility and ensure Canadians that one of their fundamental rights, mail delivery service, will be upheld by his
Government? He can go through all the charades he wants, but let us get the mail delivered in this country.


Martin Brian Mulroney: Mr. Speaker, in response to my right hon. friend, the plan which was submitted was a corporate plan submitted by the Postal Corporation. It is charged with trying to conduct this service at reasonable cost in the most efficient way considering the expenditure of taxpayers' money. This plan was submitted, as it ought to be, to a parliamentary committee for consideration. Members of Parliament in their new roles under parliamentary reform are sending strong signals-and I suppose there will be a report-to the House of Commons that this plan is unacceptable in some important areas.
First and foremost must be the interest and welfare of Canadian citizens, particularly, for example, in rural areas. There shall be no second-class citizens in this country as long as this Government remains in office, postal services or otherwise.


CORPORATION'S BUSINESS PLAN-COMMITTEE HEARINGS
Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is directed to the Government House Leader. On November 5, as reported at page 1110 of Hansard, the Minister responsible for Canada Post, speaking for the Government, said:
Canadians at large as well as Members of this Parliament of all Parties have expressed considerable interest in the development of this plan. 1 have accordingly felt that Parliament should have a full opportunity to review the rate increase components which the Corporation has assumed in the forecast included in the plan. 1 am, therefore, proposing to refer this aspect of the plan to an appropriate committee of this House.
Why is the Government agreeing with its members on the parliamentary committee to choke off hearings on this matter without hearing any real testimony on postal rates or any evidence from the public? Why is the Government not carrying out the commitment of the Minister responsible for Canada Post and allowing the public to be heard on this matter? Why is the Government not keeping its promise in this regard?


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I am surprised that the Hon. House Leader of the Liberal Party would suggest that I should interfere with the parliamentary committee process.


Some Hon. Members:: Oh, oh!


Donald Frank Mazankowski: Because that in effect is what he is asking me to do. The committee has destiny of its own House. Whatever the committee decides, the committee does. My understanding is that it is now seized with the task of writing a report which I hope will be presented to the House, and which I hope will have some very positive and beneficial suggestions
December 5, 1986

which perhaps even the Hon. House Leader of the Liberal Party might find acceptable.


Herbert Eser (Herb) Gray: The Minister has given a very unconvincing explanation as to why what the Minister responsible for Canada Post said on behalf of the Government is not turning out to be the case.


LEVEL OF SERVICE-PROPOSED POSTAL RATE INCREASE
Herbert Eser (Herb) Gray: I want to ask the
Minister acting for the Minister responsible for Canada Post this question. His Minister said there would be no increase in postal rates until there was an improvement in service. We now have clear evidence that instead of an improvement there has been a clear deterioration in service, including a deterioration in the security of mail because of these supermailboxes.
Why has the Government again broken its promise with its intention to increase rates for delivering the mail by increasing the rates for postage? It is not keeping its promise not to do this unless service is first improved. Why will the Government not keep its promise?


Donald Frank Mazankowski: Mr. Speaker, my only suggestion to the House Leader of the Liberal Party is that he be a little patient and wait for the report. Perhaps then he can comment on what suggestions or recommendations might be contained in the report. If he is a little patient I think this whole matter will work out very well.


UNITED STATES DUTY ON CANADIAN SOFTWOOD LUMBER
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Prime Minister who talked about the trade talks which are going on with the United States in his press conference this morning. Yesterday the U.S. lumber coalition made it clear to the U.S. Department of Commerce that it would accept nothing less than a 25 per cent tariff on Canadian lumber exports, thus laughing at the whole stance taken by the Canadian Government in these negotiations. Does the Government today seriously expect that after the same group of people announce their decision about the Canadian Government's proposal, having said they wanted 25 per cent yesterday, they are going to go for 15 per cent today?


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, as the Hon. Member knows, that is a matter which is a speculative issue at this point in time. We are dealing with the U.S. Commerce Department and with the U.S. Secretary of Commerce. As I have not heard back from him, there is nothing to be gained by commenting at this time.
Oral Questions


GOVERNMENT'S POSITION ON ALLEGED FURTHER FINAL OFFER
John Edward Broadbent: Mr. Speaker, 1 have a question for the Minister. The Canadian Government has already made two final offers. During his press conference this morning the Prime Minister made it clear that he intends to continue this fight. My question is directed to the Prime Minister or the Minister. Can the Government assure the House that it will not make a third lousy final offer?


Pat Carney: Mr. Speaker, I cannot really add further to my earlier answer, that this matter is under discussion in Washington today, except to say that the Province of Quebec was one of the provinces that supported the position of the Government of Canada.


PRIVATE SECTOR STUDY-IMPACT ON JOBS-CANADIAN SOVEREIGNTY
John Edward Broadbent: Mr. Speaker, I say to the Minister that it will not be the first time that the Premier of the Province of Quebec has been wrong.
In this context I wish to ask the Prime Minister this. Since a private sector study, which I know the Prime Minister would respect, has indicated each percentage point we give away in these tariffs costs us 1,000 jobs on the Canadian side of the border, will the Government now learn its lesson and not make another offer in these negotiations? Will it stick to our legal position which is in the best interests of the Canadian industry and which protects Canadian sovereignty?


Pat Carney: Mr. Speaker, I have already said in the House, as have my colleagues, that the position that we have taken with the support of nine provinces is the position that protects Canada's sovereignty. It is the Opposition's position which is the threat to Canadian sovereignty.


CANADA POST CORPORATION
Mr. George Baker (Gander-Twillingate):: Mr. Speaker, we seem to be getting somewhere with the postal plan. My question is for the Acting Minister responsible for the Post Office. Some 68 post offices have closed down in western Canada. Even two have closed in Newfoundland. Why did the Government approve, and will the Standing Committee now have the authorization to change, the fact that guidelines were set for mail delivery in urban centres within a province and between urban centres between provinces but no guidelines

December 5, 1986
Oral Questions
were set for rural mail-delivery in Canada? There was only the closure of 5,000 post offices and the laying off of 8,700 people?


Bernard Valcourt: Mr. Speaker, anyone who is prepared to face facts and has followed committee proceedings when Canada Post officials gave evidence would realize that the premise of the Hon. Member's question rests on fiction. Committee members scrutinized the Canada Post business plan and questioned postal officials for over two weeks. The committee will report to the House of Commons in due time, and then the Government will be in a position to consider the committee recommendations and decide whether or not the plan ought to be changed.


PROPOSED PRIVATIZATION OF RURAL POST OFFICES
George Baker: Mr. Speaker, the fact of the matter is that rural Canadians face a situation of having their mail handled by either a superbox or the local business merchant. Enough said about superbox.
Let me ask the Acting Minister this question. Does he really believe that a local business merchant can handle the mail, receiving that paltry, tiny sum of profits from the sale of postage stamps, as efficiently as today's postmaster and postmistress in rural Canada? We are being robbed and rooked in rural Canada.


Some Hon. Members:: Hear, hear!


Bernard Valcourt: Mr. Speaker, if the Hon. Member were aware of what is going on he would know that the private sector already handles 25 per cent of Canada Post business. That is a fact. Under the proposed plan, over the next ten years ... They are talking about lay-offs, throwing figures around to scare Canadians. The people who might be affected as a result of such transfers to the private sector should know that, whenever possible, Canada Post will follow a program of attrition. Committee members were made aware of this as well, so perhaps the Hon. Member should have attended the proceedings.


AGRICULTURE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Right Hon. Prime Minister. During his press conference this morning the Prime Minister said something along the lines that he never made a commitment to
western Canadian grain farmers to make a $1 billion payment during this fiscal year. During the Saskatchewan election campaign western Canadian farmers certainly felt that they had a commitment that there would be $ 1 billion either before Christmas or shortly thereafter, but certainly during this fiscal year. Why is the Prime Minister cutting western Canadian grain farmers adrift? Why are they not receiving their money before Christmas or in this fiscal year? Farmers want to know. The campaign is over and they want their money.


Martin Brian Mulroney: Mr. Speaker, what a silly attitude to adopt. The Government of Canada, pursuant to undertakings made in this House, has put together a package designed to assist Canadian farmers which, I believe, and according to the Minister, is the largest assistance package to aid Canadian farmers in history. That is an extremely important measure for western Canada in particular but for all Canadian agricultural communities in general.
The commitment that I made in the House of Commons on behalf of the Government will be honoured in its entirety. That money will find its way, as we indicated-


Leslie Gordon Benjamin: When?


Martin Brian Mulroney: As I indicated at this morning's press conference, the Minister will be indicating no later than next week the timing of this measure. It will be pursuant to my undertakings and it will benefit Canadian farmers to the tune of $1 billion.


Some Hon. Members:: Hear, hear!


TIMING OF PAYMENT
Lorne Edmund Nystrom: Mr. Speaker, in response to a question put by the Leader of the Opposition on October 7, the Prime Minister said that this is new money in the hands of farmers. The impression western farmers had was that they would be getting the money this fiscal year. Why is that money not coming in this fiscal year? If it is not coming in this year, can the Prime Minister tell the farmers when they will be getting that money? They have to plant crops next spring. They need the money now.


Martin Brian Mulroney: Mr. Speaker, the Hon. Member is distorting what I said. What I said is on the record and is very clear-cut. I can go a little further. The Hon. Member went into his riding during the provincial election campaign to which he refers and he gave the electorate a choice: take the NDP position or the government position. As I believe it, every single provincial riding in the Hon. Member's federal riding went Progressive Conservative.


Some Hon. Members:: Hear, hear!
December 5, 1986


NATIONAL SOVEREIGNTY
Russell Gregoire MacLellan: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. On May 6 last three nuclear-powered U.S. submarines surfaced at the North Pole. The only way we would have known if these submarines had travelled through Canadian waters was if the United States Government had asked permission for them to do so. Would the Secretary of State please tell us if these submarines passed through Canadian waters, and if they did so, did the Canadian Government give them permission to do so?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, we have a variety of ways of knowing of the presence in our waters of submarines from the United States or other countries. I do not think the Hon. Member would suggest that it would be in the interest of anyone, and certainly not in the Canadian national interest, to reveal publicly the nature of the means by which we come to that information.
The other thing I should point out is that with regard to our capacity to deal with and assert our sovereignty in northern Canada generally, as a result of 16 years of indifference and neglect by the former Government, when we came into office we were not as well prepared as we intend to become, but we are nonetheless in a position to have that kind of information to which the Hon. Member refers.


PROTECTION OF SOVEREIGNTY
Russell Gregoire MacLellan: Mr. Speaker, 1 am not asking the Minister to disclose any secrets. This occurred last May 6. 1 am not asking about something that will happen tomorrow. Did the federal Government give permission to the United States Government for these U.S. submarines to pass through Arctic waters and, in doing so, do something to protect Canadian sovereignty in Arctic waters?
Oral Questions


AIRPORTS
Michael Morris Cassidy: Mr. Speaker, I don't know whether we should call the new Montreal International Airport "Dorbel" or "Miraval", but I have a question for the Minister of State for Transport about the non-solution he announced yesterday. My question is as follows: Can we expect the Greater Montreal area to continue to suffer economically, compared with the Toronto area, as a result of having two weak airports instead of one strong one?
My question is as follows: is the Greater Montreal area not going to remain economically depressed, compared with the Toronto area, for having two weak airports instead of one strong one?


Hon. Andre Bissonnette (Minister of State (Transport)):: Mr. Speaker, this particular solution was announced yesterday to remove, once and for all, the uncertainty about the future of Dorval and Mirabel, which was keeping back investors and preventing job creation.
If you look at the kind of investment we expect now that the mission of these airports has been clarified, you will see that 1,000 jobs can be created in the short term.


RECOMMENDATIONS OF CONCERNED PARTIES-GOVERNMENT POSITION
Michael Morris Cassidy: Mr. Speaker, could the Minister inform the House how many jobs have been lost in the Montreal area, if we consider that the percentage of Canadian air traffic going through Montreal has dropped from 27 per cent to 14 per cent since Mirabel was opened? Why did the Government choose to ignore the advice of the City of Montreal, local municipalities and all economic sectors that it was necessary to have an airport at Dorval?


André Bissonnette: The real reason why air traffic has dropped on certain routes to Montreal is the inconsistency of the policies of the previous Liberal Government. When the Liberal Government opened Mirabel, after spending half a billion dollars on its construction, it opened six gateways in Canada to intercontinental flights. That is where where the problem started. There, and nowhere else.


Charles Joseph Clark: Mr. Speaker, once again, I do not propose to be drawn into the trap the Hon. Member is setting that would have the consequence of Canada identifying travel patterns of submarines of friendly countries in our waters. That is not in the interest of this country nor in the interest of our obligations. I will say that there are provisions in place that allow us to know the information and to assert and protect our sovereignty, and those provisions are respected.


UNITED STATES DUTY ON CANADIAN SOFTWOOD LUMBER
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister for International Trade. Yesterday the

December 5, 1986
Oral Questions
Chairman of the United States Coalition on Fair Lumber Prices said that he wanted a 25 per cent to 30 per cent duty on Canadian softwood lumber. The Minister also knows that this afternoon at three o'clock the same Coalition will issue a press release indicating that the Canadian offer is not acceptable. Will the Government of Canada capitulate again and raise the Government's final offer from 15 per cent to 25 per cent as has been demanded by the United States Coalition?


Pat Carney: Mr. Speaker, I have already answered similar questions in the House today by saying that we are not negotiating with the lumber producers in the U.S. The Government of Canada is dealing with the U.S. Department of Commerce on this issue and I have not had any information back from the Secretary of Commerce at this time.


MINISTER'S POSITION-CANADIAN PROPOSAL
Maurice Brydon Foster: Mr. Speaker, I wonder why the Government is continuing to negotiate this cowardly agreement to establish an export tax on softwood lumber when already hundreds and hundreds of workers in the softwood lumber industry in northern Ontario are being laid off. Does the Government not simply weaken its case by continuing to negotiate a side deal with the American Coalition, knuckling under with a final offer at 10 per cent, then going to 15 per cent? Will it be 20 per cent or 25 per cent next while the industry is already being shut down?


Pat Carney: Mr. Speaker, as I said previously in the House, our proposal contains a combination of measures which are designed to ensure that any revenues remain in Canada, that the provinces retain flexibility in determining stumpage pricing, that a dangerous precedent in U.S. countervail policy will be avoided, that the ability of the provinces to determine their own natural resource management policies will be unimpaired, and that Canadian sovereignty will not be infringed. Those are the reasons for adopting this approach.


AGRICULTURE
John Edward Broadbent: Mr. Speaker, my question is for the Prime Minister. It follows up an earlier question, and what he had to say about his commitment to western grain producers. On the first day after the Government announced its intention to do this outside the House, I asked the Prime Minister about the timing and urgency of it. The Prime Minister said that the Government intended to act "in the shortest possible time-"
That was clearly sending a message to western grain producers that the action would come, if not before Christmas, certainly in this fiscal year. Will the Prime Minister live up to that commitment, or was it all a big scam simply to win an election in Saskatchewan?


Donald Frank Mazankowski: What have you got against farmers, Ed?


Martin Brian Mulroney: What is it with the NDP always opposed to the interests of farmers? You do something, it's not enough. You do something, it's not fast enough. In point of fact, you are fundamentally opposed to a Government assisting farmers in this measure.


Mr. Speaker:: Order, please. I would ask the Right Hon. Prime Minister to address his response through the Chair.


Martin Brian Mulroney: My apologies, Mr. Speaker.
The Government will act precisely along the lines of the undertaking that was given to the House of Commons.


John Edward Broadbent: When?


Martin Brian Mulroney: The Hon. Member who is shaking his head went into Saskatchewan. He said that the issue in the campaign, at least in his area, was going to be between his integrity and that of the Prime Minister, and look what happened to you.


John Edward Broadbent: And the people of Canada will be saying, look what happened to you, after the next election.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Neither Member will be saying anything if they do not check the language that they are using. I do ask that all Members direct their remarks through the
Chair.


PRIME MINISTER'S STATEMENT
John Edward Broadbent: During the course of the election campaign when the Prime Minister said that the Government planned to act in the shortest possible time, would he not agree that a producer on the Prairies thought that would mean soon, that it would mean before Christmas, that it would certainly mean in this fiscal year? If that is the message that he wanted to send out, will he live up to that commitment and make sure that those hard-pressed producers on the Prairies get that money in this fiscal year? Will he give us that commitment?


Martin Brian Mulroney: Mr. Speaker, I have done it before, and I have done it earlier today. As we indicated we would, we have worked with the farmers, the producers, and the provinces to make sure that this was done, as I had indicated, in the shortest possible time. That was the undertaking. The modalities of it will be announced very shortly, before Christmas, by the Minister of Agriculture.
December 5, 1986


John Edward Broadbent: Will they get the money in this fiscal year?


Martin Brian Mulroney: If Canada Post delivers it.


John Edward Broadbent: Is that a commitment?


Martin Brian Mulroney: Look at the Perry Masons over here. Of course they are going to get their money. We undertook that they would be getting money, and of course they will get it.


John Edward Broadbent: In this fiscal year?


Martin Brian Mulroney: My hon. friend refers to the next election. The NDP are always great when they are staggering from one moral victory to another. You are great until they count the votes. We will wait for you in the next election, particularly in western Canada.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: The Hon. Member for Montreal-Saint-Marie.


Jean-Claude Malépart: Thank you, Mr. Speaker. I will let Conservatives and New Democrats fight over third place in Quebec. We are No. 1.


UNEMPLOYMENT INSURANCE
Jean-Claude Malépart: My
question is for the Minister of Employment and Immigration. Yesterday and the day before the Minister promised he would have good news for the 50,000 early retirees. Today, after Question Period, will the Minister tell us whether he will honour his promise and commitment to announce the good news?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Mr. Speaker, I did promise I would make an announcement today and I intend to do just that. I did not specify it would be ... well, I would not want to make a mistake, but the announcement will come later today.


REQUEST THAT GOVERNMENT TABLE STUDIES AND POLL RESULTS
Jean-Claude Malépart: supplementary, Mr. Speaker. There were a number of inquiries during the Forget Commission study, so would the Minister be prepared to table the annualization concept studies directed by Mr. Paul Dickinson of his Department, as well as the various unemployment insurance public opinion polls taken
Oral Questions
by Decima and other firms since November 1984 which show that most Canadians would rather pay higher premiums than endorse unemployment insurance benefit cut-backs?


Benoît Bouchard: Mr. Speaker, I am not sure which documents the Hon. Members has in mind. The Forget Commission of Inquiry did extensive research and received lots of documents. Generally speaking, documents provided by the Government are official. We will consider the Hon. Member's representations and make these documents public, unless federal legislation should prevent us from doing so.


CANADA MORTGAGE AND HOUSING CORPORATION
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, my question is for the Minister responsible for the Canadian Mortgage and Housing Corporation. The housing units LA CITE, which were supported by the CMHC, were recently sold to a private contractor who dismissed the employees and refused to recognize the union. Why did the Government not ensure that the employees would be protected in this privatization operation?


Hon. Stewart Mclnnes (Minister of Public Works):: Mr. Speaker, a management company employed the employees in question. They have contractual provisions with respect to layoffs. The Government was not involved in that contract, and has no control over that situation.


ESTABLISHMENT OF POLICY TO PROTECT RIGHTS OF UNIONIZED WORKERS WHEN PRIVATIZATION OCCURS-GOVERNMENT POSITION
Lynn McDonald: Mr. Speaker, I have a supplementary. Will the Government develop a policy to protect union rights in privatization operations to avoid a repetition of what happened at LA CITE, HABITAT 67 and Pointe-au-Pic, where the same problems occurred?


Stewart Donald McInnes: Mr. Speaker, the Government will always give the undertaking that it will be sensitive to the rights of employees in every situation. Having said that, all it can do is urge companies to be sensitive to the welfare of the individuals they employ. In this particular situation, this was done.

December 5, 1986
Oral Questions AGRICULTURE


SOLICITATION OF FARMERS OFFERING GRANT GUARANTEE
Mr. Jack Scowen (Mackenzie):: Mr. Speaker, my question is directed to the Minister of Agriculture. Most of the farmers in my constituency, and I understand in other parts of Canada, have received a letter and an application form from an individual in Ontario who guarantees that Canadian farmers will receive an annual grant of between $8,000 and $11,000 from the federal Government, if they fill in the application form and forward $20. How does the Minister advise farmers to respond to this proposition? I have brought it to the attention of the Department.


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I appreciate the Hon. Member's question, and his co-operation in bringing this matter to my attention. I wish to inform the House, and indeed the country, that, thanks to the interest of the Hon. Member and other Members in the House, the officials in my Department are investigating this matter. I would suggest that farmers refrain from filling out the application form and submitting their $20 until this investigation is completed. Information is available on all government programs from any government Department for no charge, and I invite everybody to apply for such information.


MANPOWER
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is for the Minister of Employment and Immigration. In the Forget Report, we find the following under recommendation 50:
A significant reduction should be made in the number of staff at national and regional headquarters.
During the first two years in office of the Conservative Government, 1,000 positions have been abolished. Last October 17, the Minister wrote and said that 1,200 jobs would be abolished this coming year. Yesterday, the Department informed the union representatives that, in 1988-89, 800 jobs will be abolished and that, in 1989-90, another 700 jobs will disappear. This makes nearly 4,000 jobs less. Why did the Government anticipate the Forget Report and eliminate these jobs and how will it be possible to maintain the quality of services provided in manpower offices?


Benoît Bouchard: Mr. Speaker, if we began two years ago, we certainly did not anticipate the Forget Report since the Commission was established a year and a half ago. Therefore, we began before the Commission was created.
Second, what the Hon. Member should say, as he is well aware, is that while positions have been abolished, very few people have lost their jobs. There are only a few dozens. I believe that the Government was very clear two years ago when it announced its employment policy. The President of the Treasury Board was very specific. Such policies are applied in the normal way. I repeat that the procedure used by the Department allows us virtually to eliminate the loss of jobs for the designated positions and to respect generally the classification level of the people now occupying those positions.


QUALITY OF SERVICE
Jean-Robert Gauthier: Mr. Speaker, Forget Recommendation No. 39 reads:
The Unemployment Insurance Commission should do more to inform the public, employers and employees about the program in general; about the requirements of the law, regulations and appeal process; and about the rights and responsibilities of claimants and appellants.
Line-ups are already long at the unemployment insurance offices. We have 1.2 million unemployed in Canada today. Employment counsellors are already working overtime. I talked to a few this morning. How can the Minister argue that the quality of service will remain the same, better, or improve in the years to come when he is cutting 4,000 jobs, which is one-fifth of all employees working in unemployment insurance?


Benoît Bouchard: Mr. Speaker, in my opinion, the Hon. Member is using a recommendation which applies to a much more general context in the report than the Hon. Member has suggested to state that the quality of services at employment centres is directly related to staff reductions.
I repeat that we are going to assess the recommendations contained in the Forget Report. We are not saying that those recommendations are good or bad, but simply that we want to take the time to evaluate them. It is much too early to establish a relationship between service efficiency and staffing reductions. In my opinion, there is absolutely no direct relation between the fact that a position is abolished and the quality of services provided to Canadians.


AGRICULTURE
Leslie Gordon Benjamin: Mr. Speaker, I have a question for the Prime Minister. The tenor of his answers in this House on October 6 and 7, plus his answers today to my

December 5, 1986

colleagues, have led western grain producers, and all of us in this House, to understand and believe that at least a billion dollars "of good money" in the farmers' pockets, to quote the Prime Minister, would be provided for them in this fiscal year. Can we take from the Prime Minister's answer to my Leader a few minutes ago that that new money will be in the farmers' pockets in this fiscal year?


Martin Brian Mulroney: Mr. Speaker, now my hon. friend, as I understand what he said, is not referring to my answers. He is referring to what he describes as the tenor of my answers. The answers were that there would be action on behalf of farmers. There shall be, and the Minister of Agriculture will announce this very beneficial initiative no later than next week.


John Edward Broadbent: He has not said they are going to get the
money.


An Hon. Member:: Quit prompting.


John Edward Broadbent: Go and explain that in the west.


An Hon. Member:: Devine said "this year".


John Edward Broadbent: Remember Pembina and what happened in Edmonton.


Charles Joseph Clark: Send Shirley Carr to Edmonton.


John Edward Broadbent: Go west on the weekend and explain this one.


Jean-Robert Gauthier: Go outside and settle your differences.


An Hon. Member:: He does not like money going to the farmers.


Charles Joseph Clark: Where do you want it to go to if
not the farmers?


Mr. Speaker:: The Hon. Member for Regina West.


TIMING OF PAYMENT
Leslie Gordon Benjamin: Mr. Speaker, just so that our understanding is the understanding we have had since October 6, and we have had lots of announcements in this fiscal year, what I would like to know from the Prime Minister is whether the farmers will actually get the money in this fiscal year.


Lorne Edmund Nystrom: Yes or no.


Martin Brian Mulroney: I have responded to that a number of times. For some reason my hon. friend from Oshawa, with his Quebec lieutenant from Aylmer, gets upset-


Some Hon. Members:: Oh, oh!
Oral Questions


Martin Brian Mulroney: -when we take important initiatives designed to assist western farmers. I am sad and I know that western farmers will be dismayed at the spectacle of the NDP trying to throw red herrings on the floor. We announced an important initiative for western Canada. It will be implemented pursuant to the exact statement that I made in the House of Commons.


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


André Ouellet: Mr. Speaker, the way the Conservatives and the New Democrats are fighting today, it is not only for third place in Quebec, it seems that it is third place across Canada.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


John Napier Turner: Go outside and settle it. Let's get on.


COMBINES
André Ouellet: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. Is the Minister aware that in less than two years seven major airline mergers have already taken place, the last of which- the CP Air takeover by Pacific Western Airlines-no doubt being the most important airline merger in Canadian history? Does the Minister intend to step in or ask the director of investigation to appear before the Canadian Transport Commission to defend consumer interests and hopefully prevent that merger?


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: Mr. Speaker, as the Hon. Member knows, under the new Competition Act passed in June the Director of Investigation and Research has the mandate to look at all mergers to see their impact on competition in the country. I am informed that he and his officials are looking into the questions which the Hon. Member has raised.


CONTROL OF 90 PER CENT OF MARKET BY TWO MAJOR AIRLINES-GOVERNMENT POSITION
André Ouellet: Mr. Speaker, I appreciate the Minister's answer, and I would like to know if he is personally satisfied, as the Minister of Transport seemed to be earlier in this House in answering my question, that only two major airlines in Canada should control something like 90 per cent of our market. Is that situation acceptable to the Minister of Consumer and Corporate Affairs?

December 5, 1986
Oral Questions


Harvie Andre: Mr. Speaker, as the Hon. Member would know, under the new Competition Act it really is not up to the Minister of Consumer and Corporate Affairs. The Director of Investigation and Research has a mandate from Parliament to conduct those investigations and make those conclusions. If he feels that the matter is detrimental to the interests of consumers, then he can refer it to the Competition Tribunal. It is totally within his hands and it would be most inappropriate, indeed, illegal under the law for me to intervene personally.


APARTHEID
Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, my question is for the Secretary of State for External Affairs. The withdrawal of Canadian visa services in South Africa is causing unintended confusion and possible hardship to people of all races, some of them coloured, who want to visit their relatives in Canada. Without injury to our campaign against apartheid, what action can the Minister take to assist people of all races who want to have a chance to visit their families here?


Charles Joseph Clark: Mr. Speaker, that action taken by Canada was a direct and considered consequence of discussions within the Commonwealth. We know that it creates some hardships for South Africans, but we believe that that is one way in which the absolute disapproval of the people of Canada for the regime of apartheid can be made manifest in South Africa. Obviously what we are trying to do is to demonstrate to anyone with influence upon the policies of the Pretoria Government how repugnant those policies are to other countries of the world. This is a measure which makes a small contribution to that end.


ABORIGINAL RIGHTS
Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, my question is for the Prime Minister. There is a situation on Deer Island in which native people are trying to prevent logging of a very sacred area. Would the Prime Minister ask the Minister of Indian and Northern Affairs to intervene immediately in the dispute to see if the Government of Canada will apply what resources are necessary to see that that island is returned to the native people?


Mr. Stan Schellenberger (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, the Kwakiutl Band presently has a comprehensive claim before the Government. The Minister will shortly be making a decision on that claim. The matter is presently before the courts which will be making a decision, hopefully in the near future.


RISK OF IMPRISONMENT FOR INDIAN PEOPLE
Raymond John Skelly: Mr. Speaker, my supplementary is directed to the Prime Minister. He will know there is presently a confrontation taking place in that area. The land the natives are attempting to defend is clearly theirs. It contains aboriginal burial grounds and is very sacred to those people. Will the Prime Minister have the Minister intervene immediately so they do not wind up in jail defending land which properly belongs to them?


Stanley Kenneth Schellenberger: Mr. Speaker, the Minister is very concerned about that situation. Injunctions are being sought by both the logging interests and the native people themselves to see whether a decision can be reached through the courts. We would rather that it be reached through a proper land claims study. That proposal is being actively considered by the Minister.


REFUGEES
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of State for Immigration. It concerns the ongoing struggle of the 25-year old Iranian student who probably faces death when he is deported to Iran. I spoke with that person's lawyer in Washington. He has introduced a new and important element into the case by way of a letter dated December 3 from the UN High Commission on Refugees. It says: "Because of Mr. Moatamedi's long stay in the United States he will be regarded with suspicion by Iranian officials. Moreover and more importantly, he may well be exposed to both harassment and persecution".
How much more evidence do the Minister and his Government require before they act compassionately and allows Canadians in Yarmouth, Nova Scotia, to sponsor this man as a refugee? Why is the Government so against saving one human being's life?


Benoît Bouchard: Mr. Speaker, my hon. colleague has been told on several occasions that before a person can be sponsored as a
December 5, 1986

refugee, that person must be acceptable as a refugee. He has been told on several occasions that the person he is referring to cannot be considered as a refugee under the terms of the Convention. That is something which must be respected. Apparently, the Hon. Member is trying to cast some doubts in the mind of Canadians while knowing very well that this Iranian cannot be accepted in Canada, not being recognized as a refugee.


GOVERNMENT POSITION
Sergio Marchi: Mr. Speaker, Canada played an integral role in saving American hostages in Iran, yet it cannot save the life of one Iranian in the U.S. Time is running out. The U.S. has booked this man's return flight to Tehran for January 7. Therefore, will the Minister either grant refugee status to this man, issue a ministerial permit, or allow Canadians to sponsor him? Or is he prepared to condone a pathetically weak and inhumane Reagan-style refugee policy?


Benoît Bouchard: Mr. Speaker, all the information we have received from the United States both from our own officials and those of the American Government, have convinced and persuaded us that the person he is referring to is not at all in danger presently and therefore cannot be issued a refugee permit, for it is granted only to people who are in danger. I just do not know how I can explain that to him, but that individual cannot enjoy a special status because he will not be in danger if deported by the United States.



ROUTINE PROCEEDINGS

Mr. Speaker:: Tabling of Documents.


Donald Frank Mazankowski: Mr. Speaker, I move, seconded by the Hon. Minister of Justice (Mr. Hnatyshyn):
That the House do now proceed to Orders of the Day.


Mr. Speaker:: The question is on the motion of Mr. Mazankowski, seconded by Mr. Hnatyshyn, that the House do now proceed to Orders of the Day.
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.
Tabling of Documents


Some Hon. Members:: Yea.


Mr. Speaker:: All those in opposed please say nay.


Some Hon. Members:: Nay.


Mr. Speaker:: In my opinion, the yeas have it.
And more than five Members having risen:


Mr. Speaker:: Call in the Members.


The Acting Speaker (Mr. Paproski):: I declare the motion carried.
Motion (Mr. Mazankowski) agreed to.


Mr. Speaker:: All those in favour please say yea.


The Acting Speaker (Mr. Paproski):: Orders of the day.

December 5, 1986
Patent Act



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Tuesday, November 25, consideration of the motion of Mr. Andre that Bill C-22, an Act to amend the Patent Act and to provide for certain matters in relation thereto, be now read a second time and referred to a Legislative committee; and of the amendment of Mrs. Killens (p. 1378).
Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, it is very pleasant to be so wholesomely welcomed by my colleagues for my participation in this debate. Of course, we are now debating Bill C-22 under the constraints of time allocation. As I indicated yesterday, I understand that the Government would want to limit the exposure through debate of the actions contemplated as a result of the passage of this Bill. If I headed a Government under such severe attack from consumer groups, senior citizens, retirees, provincial Governments and women's organizations I, too, would be led to conclude that a preferable course of action to follow would be to limit debate as this Government has done.
If I were in the Government I would be reading headlines on editorials with respect to Bill C-22 such as the following: "Patently Wrong", "Patent Weakness", "Selling Patent Law Changes", "Drug Price Deceit Backfires on Feds", "Truth and Consequences", "Don't Swallow the Tory Drug Bill Line", "Tories' Medical Drug Bill a Big Mistake", "Case Not Been Made for Altering Drug Laws". If I were to read such headlines I would consider that what we have here is a poor prescription.
The Prime Minister (Mr. Mulroney) talked about a drug crisis. The only drug crisis in Canada right now is the drug crisis being experienced by the Government. In looking at the circumstance and reflecting upon the severe pressures under which the Government now works, one wonders what could have impelled it to suggest this legislation in the first place.
We have in place in Canada, through compulsory licensing, an arrangement that has benefited Canadians to a huge extent. It is an inherent part of our general policy with respect to health care in which the emphasis is not on profits, pardon me, but on the welfare of the Canadian people.
One should reflect upon the circumstances which in the first place led to legislation introduced in 1969 which provided amendments to Section 41(4) of the Patent Act. Circumstances previous to 1969 are well documented. The Restrictive Trade Practices Commission and the Hall Royal Commission on Health both looked at the fact that in Canada at that time we had among the highest drug prices in the world. If they
were second to any country they were second only to the United States. So severe were the circumstances that no solution could be seen except to find some means of increasing competition in the prescription drug market. What we want to emphasize here is that not only were the multinationals making huge profits but they were doing so in absolute exploitation of the purchasers of prescription drugs.
Given the arguments of the Minister of Consumer and Corporate Affairs (Mr. Andre), one would expect that there must have been at that stage of the game tremendous investment in research and development in Canada. But the fact is, and the record shows, and shows clearly, that the multinational drug companies, consistent with the pattern of multinationals in Canada, made no investments in research and development, made no contribution to university basic research.
This legislation will eliminate for all intents and purposes the 10 to 17-year compulsory lisencing provisions as compared to the situation which we have now. This is a subject to which I would like to return later.
I would like to review the results of compulsory licensing insofar as they have benefited the consumer and drug plans, be they private or provincial, and how they have made a significant contribution to the health care system. The Eastman Report, which was by far the most thorough examination of the drug industry in Canada, reached the conclusion anticipated by the Harley committee, a special parliamentary committee, that compulsory licensing would benefit the drug consumer, and it did. It resulted in having, instead of the highest, among the lowest drug prices in the world. So effective was this system that it became the model that was looked to by a number of countries in their search for policies which would restrict the huge profits and the high prices experienced elsewhere.
I wish to point out that most of the industrialized countries in the world have some type of restrictions on prices and profiteering. But in most cases they have proved unsatisfactory. It is notable that among those which have looked to Canada as a prospective model was a chairman of a congressional committee, Congressman Henry Waxman, who said that if the industry cannot contain its greed, then perhaps Congress should look to programs in countries such as Canada and Europe that have succeeded in holding down prices.
Let me remind you, Mr. Speaker, that the result of the Congressional study was the enhancement of the competitive position of generic manufacturers in the United States, a matter that has caused multinational members of the Pharmaceutical Manufacturers Association of the United States considerable chagrin. They have seen the handwriting on the wall and have reached the conclusion that the Canadian model is one likely to be copied elsewhere. So the attack is not on the Canadian system as much as it is a defensive action designed to ensure that Canadian legislation will not be brought to other countries in the world and adopted at their cost.
December 5, 1986

I should also point out that the present arrangement in Canada has not led to a decrease in profits. It has not led to a decrease in job creation. In fact, jobs have been created both in the patent pharmaceutical companies as well as in the generic companies. Profits in the drug industry in Canada, for both the generic and major patent drug manufacturers, have remained high. Not only have they remained high but they are higher than the profits of most industries in Canada and comparable to the profits of industry in the United States.
I have reviewed the fact that Eastman indicated in his commission report that there was no real need for change and that the generic drug industry which has grown up under compulsory licensing has benefited Canada. If this is so, why in the world has the Government seen fit to tinker with a piece of legislation in a way that is not supported by anyone but the Government and the Pharmaceutical Manufacturers Association of Canada. Let us not hide the fact that the Pharmaceutical Manufacturers Association of Canada is a mere arm of the Pharmaceutical Manufacturers Association of the United States. It has been backed and backed forcefully by the United States Government.
There can be no doubt that when Ronnie and Brian got together back in 1983, Ronnie said, Brian, we're going to have to do something about this situation if you want to have the fast track for the free trade talks. Brian said, in a typical smooth-


Some Hon. Members:: Order!
Mir. McCurdy: The Prime Minister (Mr. Mulroney) said, with typical smooth talking obsequiousness, Yes, sir, we have to change this because I do not want you to be unhappy. I want to talk. Hey, how about an energy program? How about softwood lumber? How about hogs? How about a few other things? We will give you anything you want. Take the Auto Pact. Oh, but I want this drug Bill changed first, said Ronnie. Well, Mr. President, we will get on to it pretty quick.
The Government was not quite fast enough. Mr. Bush, the Vice-President of the United States, who just happens to be a former Vice-President of Eli Lilly, said, look, you are going to have to hurry up and do something about this because my folks down in the United States are awfully unhappy about the fact that Canadians have policies that benefit Canadian citizens and not Americans.
As a matter of fact, the Chairman of the President's Advisory Committee on Trade, Mr. Pratt, who is also the Chairman of the Board and Chief Executive Officer of Pfizer, had the ear of our ambassador in the United States. He had the ear of the President, and by God, he said, look, we have to have something done about this because we are not making enough money up here. Those folks expect us to modify our hunger for profit in a way that would contribute to the availability of drugs for Canadians. Those generic manufacturers up there are making medicine available to sick people cheap. That is an awful situation.
Patent Act
Then along came Mr. Yeutter in the spring who said, look now, Brian-


Some Hon. Members:: Order!


Howard Douglas McCurdy: I mean Mr. Prime Minister. He probably said, Mr. Speaker, through you to Brian, my patience is wearing thin.


An Hon. Member:: So is ours.


Howard Douglas McCurdy: And, by God, the Government jumped. Now we have before us a Bill that is more appropriate to American interests than to Canadian interests.
The third group of people the Government claims supports this Bill is that of scientists. I talked to some of those scientists who said that this Bill would be good for research. I asked one of them, can you tell me something? Yes, Howie, he said. What is in this Bill that provides for research? Well, I don't know. I said, could you not find anything? He said, no, I looked. I couldn't find anything but the Minister says it is there. I said well, you had better look at the Bill a little more carefully, my dear colleague, because if you look at the Bill very thoroughly and carefully you will find not a word in that Bill that provides for research, or for any investment in research.
It is true that some drug companies have said that they will expend more money on research, but what kind of research will they be doing? Let us look at Parke-Davis. Parke-Davis will study the safety of new drugs and the development of dosage and will do clinical research that will allow Canadian doctors access to drugs at the earliest possible stages. That would happen under the requirements for licensing in Canada in any event.
Similarly, Upjohn Canada expects to renew a multibillion dollar contract with Victoria Hospital in London for clinical research and for quality control and it will also invest in expanded offices. Offices are not where scientists work.


Mrs. Browes:: Mr. Speaker, I rise on a point of order. I would like to bring to the attention of the Hon. Member that Parke-Davis happens to be spending $45 billion and creating 15 jobs in my riding, and I am damned proud of it.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Paproski):: That is not a point of order, it is a point of debate.


Howard Douglas McCurdy: I am not surprised that that poor little Member believes what she has been told.


An Hon. Member:: Chauvinist!


Howard Douglas McCurdy: The fact is that she is expected to believe, and my God she does believe, that these manufacturers that did not spend a penny before 1969 will suddenly start throwing money in. If they do, it is possible that there is a reason for it.

December 5, 1986
Patent Act


The Acting Speaker (Mr. Paproski):: Order. Before I call it one o'clock, I believe the Hon. Member for Ottawa-Vanier (Mr. Gauthier) would like to ask a business question. The Hon. Member for Windsor-Walkerville (Mr. McCurdy) will have two minutes left for debate plus 10 minutes for questions and comments when we return at two o'clock.


BUSINESS OF THE HOUSE
Jean-Robert Gauthier: Mr. Speaker, I should like to ask the House Leader and Deputy Prime Minister (Mr. Mazankowski) what business he intends to call for Monday, Tuesday, and perhaps Wednesday.


Donald Frank Mazankowski: Mr. Speaker, indeed I can. On Monday we will continue with Bill C-25, the privatization of Canadair Bill. That will be followed by Bill C-23, the Income Tax Act and Bill C-18, the national transportation Act. Tuesday will be an allotted day and Wednesday will also be an allotted day.


John Alexander Frances MacDougall: Mr. Speaker, I wonder if I could have agreement from all three Parties to introduce our Standing Committee's report to the House at this time.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Paproski):: It being one o'clock, I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Andre that Bill C-22, an Act to amend the Patent Act and to provide for certain matters in relation thereto, be now read a second time and referred to a legislative committee; and the amendment of Mrs. Killens (p. 1378).
The Acting Speaker (Mr. Paproski):: When the House rose at one o'clock the Hon. Member for Windsor-Walkerville (Mr. McCurdy) had the floor. Since he is no longer in the Chamber, I recognize the Hon. Leader of Her Majesty's Loyal Opposition.


John Napier Turner: Thank you very much, Mr. Speaker. The procedure has got a little accelerated, and we understand and appreciate that. As a matter of fact, I am glad Stanley Knowles is here to listen to my speech.
I rise to speak on this legislation because we believe it is bad legislation. It does not do what the Government says it will do in terms of increased research and development. It does not create more jobs, it does not give Canada a new and larger variety of drugs, and it will not give us better drugs. It definitely will give the country higher drug prices. Despite what the Minister has stated, prices will go up. They will not go down.
The Minister is fond of saying in one breath that prices will not go up, "not one cent", he said. Then in the next breath he announces additional support of some $100 million for the provinces over a period of four years to accommodate higher drug prices. The Scottish have a great phrase for that, and only you, Mr. Speaker, would understand it, "You can't blow hot and cold". This is what this Minister has attempted to do.
Some estimates put the cost to Canadians of removing generic competition, as this Bill will do, at upwards of $4.73 billion over the next 10 years. Dr. Eastman states in his report that in the year 1983 alone Canadians saved $211 million as a result of generic competition. Dr. Eastman has said repeatedly that there is no doubt that prices will rise as a result of this Bill. It is simple logic. If the presence of generic drugs is what has kept drug prices down over the last 15 years, then if you remove the bite of that generic competition, it is inevitable that drug prices will rise. They will rise as a result of the withdrawal of that immediate competition. Everybody in the House understands that. I believe that most people in the country understand it. The only person who does not understand it is the Minister of Consumer and Corporate Affairs (Mr. Andre), who keeps on insisting that it will not be the case.
When we challenged him with Dr. Eastman's statements that indeed prices would rise, the Minister referred us to that famous interview that he and Dr. Eastman had conceded to CBC's As it Happens on November 19, in which he and Dr. Eastman agreed, according to the Minister, that prices would not rise. To a certain extent, I sympathize with the Minister's position. He got flustered here in the House and he stated that the CBC had fabricated the interview. He was worried that perhaps the tapes had been interfered with. We tried to put the conversation together, the direct question from the journalist and the direct response from Dr. Eastman. Perhaps when the issue gets into committee we can call a few witnesses and find out exactly what happened to that great conversation.
I would like to quote what Dr. Eastman said in the interview:

December 5, 1986

The entry of generics which pushed down prices would be somewhat delayed, and therefore the average prices would be higher than they would be under the present legislation.
That is found at page 5 of the transcript of that delicious interview involving the Minister and Dr. Eastman.
Who was the Minister trying to kid? Does he think that Canadians cannot add. Does he think that the country does not understand the forces of competition, and the forces that are being diluted under this particular Bill? Does he think that he can fool people into believing that the legislation will not have the effect of raising the cost of medication for the sick, the elderly, the handicapped, those confined to nursing homes, and those in need of chronic care? Who really does he think still believes him?

Mr. Speaker, in 1969 I had the privilege of introducing amendments to the Patent Act. I was Minister of Justice at the time, and I had the privilege of being Canada's first Minister of Consumer and Corporate Affairs. Mr. Pearson, Prime Minister of our country at the time, had been persuaded to establish a department to protect the Canadian consumer. One of the first pieces of legislation introduced by the new department was the Bill aimed at putting certain restrictions on patent protection in order to stimulate competition in our country. We introduced this legislation because at the time, the price of drugs in Canada was exorbitant. In fact, Canadians were paying the highest prices in the world for their drugs.


Harvie Andre: You were wrong then and you're wrong now! [English]
You were wrong then, and you are wrong now.


John Napier Turner: Mr. Speaker, the Minister says I was wrong then and that I am wrong now, but I had the advantage of being far better briefed and better prepared than the present Minister, that is obvious. Mr. Speaker, I mean no offence to the officials in his department, but I have the impression that although his officials are on top of their subject, they are incapable of briefing the Minister on the facts and national policy. That is the problem. I am sure his officials are experts, but the Minister's answers are patently amateurish. Our present system is the envy of countries throughout the world. The U.S. Department of Health is making enquiries here in Canada, to find out why our drug prices are among the lowest and the most reasonable in the world. The U.S. Department is looking at our Canadian legislation, at the same time this Minister is changing that legislation and about to risk the consequences. It is incredible. Why is he doing this?
Mr. Speaker, the percentage of funds spent on research and development in relation to sales figures since 1969 did not drop as a result of the 1969 changes in the legislation. In fact, it increased 3.6 per cent. In fifteen years it had risen to 3.9 per cent, by 1983. In fact, before 1969, before those amendments, no one was in a hurry to increase research and development in Canada.
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What makes the Canadian Government believe there will be more research from here on in? The Government seems to think that somehow people who speak up against this Bill are opposed to medical research. That statement is nonsense because, in the 40 years before 1969 when the present law was passed and foreign companies were covered by the kind of protection advocated in this Bill, no new drugs were produced in this country. The pure and simple fact is that those companies will go on doing research in their own countries, as they have always done, and this Bill will only help them make more profits by restricting competition.
I notice that the Minister has left the Chamber-


Harvie Andre: I am here.


John Napier Turner: I am glad he is listening, Mr. Speaker. He is taking some valium back there, I think. The Minister's own private medical needs will be accelerated as a result of this situation. I do not know whether he is going out for a smoke or whether he has had a long day, but I am delighted that he is listening. He is behind the curtain, which is the kind of government we have.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


John Napier Turner: The Government of the silent curtains. The Minister is back there and I am glad he can hear us.
Dr. Eastman pointed out that research and development in Canada is not likely ever to be at high levels because we have a relatively small domestic market. I might say, and I want to be quite clear, that members of our caucus-and this was endorsed by a Party resolution last weekend-support the recommendations of Dr. Eastman. We believe there should be a balance between protection of intellectual property and cost to consumers, and we believe that Dr. Eastman achieved that in his report. He analyzed the effect on research and jobs on the one hand and on the price and cost to Canadian consumers on the other. We thought at one time that the Government was going to accept the report, but it has abandoned the report's recommendations. During the course of this debate in the House and in committee we will be proposing and advancing amendments that will reflect Dr. Eastman's recommendations.
The Minister argues that higher drug prices for the multinationals will create 3,000 new research jobs in Canada. But there is no commitment in the legislation. Indeed, it is not mentioned anywhere. It is a secret deal the Minister says that he has with the multinationals.


Maurice Brydon Foster: Gullible.

December 5, 1986
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John Napier Turner: Yes, I think the Minister may be gullible. He has it in his pocket. He has those secret deals. We are going to have that research. It is another behind the curtain deal or wherever those deals are made.


Mr. McCain:: You know, you have been there.


John Napier Turner: We suspect that most of the deals for this legislation were made in Washington. They were certainly not made here in Ottawa, Toronto or Montreal. He says that the multinationals will put $1.4 billion into research in Canada over the next 10 years. On the other hand, Mr. Speaker, it will cost Canadians an additional $4.7 billion in higher costs over the same period. We have estimates that indicate that that will cost the country 9,000 jobs. In other words if we put the Minister's 3,000 jobs against the 9,000, we will have a net loss of 6,000 jobs. In any event, I have enjoyed watching the Minister of Consumer and Corporate Affairs in the House. He has been handling hot coals, trying to bounce them around hoping he will not get burned. But from where did the pressure come, particularly the change in the legislation from June until-


Alan Redway: Did you check it out with George Shultz?


John Napier Turner: As I said to my friend, I am a good friend of George Shultz, but he is not my boss as he is to the Members over there. Not only have we checked it, we have had the American multinationals on television saying that they knew the law before Canadian companies and Canadian consumers did.	^


Alan Redway: What about Keith Davey?


John Napier Turner: Keith Davey is an amateur compared to Dalton Camp.


Some Hon. Members:: Oh, oh!


John Napier Turner: The Hon. Member ought to concentrate on his own particular purview and ambitions. See what you can do in that great caucus of yours on capital punishment. Stick to that and we will talk about some of the wider issues.
The Minister and the Government have capitulated completely to an American lobby. The American Pharmaceutical Manufacturers Association had an indication of what was in this Bill before Parliament, before Canadian industry and before the Canadian Consumers Association did. They knew because it was a priority. The chairman of that Association in the United States also sits on the U.S. advisory committee on free trade.
Mr. Yeutter, the U.S. trade representative, listed among his five priorities in these free trade negotiations a better deal for American pharmaceutical companies in Canada. We now know the reason the law was changed between June and today and why this legislation has the priority it does for the current Government. The elderly, the sick, the handicapped, those who
are not protected by plans and are vulnerable to any rise in prices have been sacrificed and made hostages to the free trade negotiations with the United States.
The story continues. It began on softwood lumber. There was a final offer of 10 per cent, then another final offer of 15 per cent. The American lumber coalition is now wanting 25 per cent. But our Government, weak-kneed, with no guts and no sense of principle yielded before it ever sat down with the United States on the National Energy Program. It diluted the Foreign Investment Review Act, it gave way on lumber, on publishing and it has now given away on drug prices.
As I say, the hostages to that negotiation with the United States are those who are least able to protect themselves, the aged, the sick, the handicapped, those in nursing homes and those needing medical care. When Uncle Sam says "jump", the Prime Minister (Mr. Mulroney) and his colleagues ask "how high and how far". There is no doubt in anybody's mind that the only reason the Government is prepared to sell out with this Bill is to keep the Americans happy and the Prime Minister's personal free trade agenda on track.
I do not know whether that close relationship between the President and the Prime Minister still obtains. I do not know whether the President's current travails in Washington will cause our Prime Minister to look for ways to put some distance between himself and that special relationship. Only time will tell. However, I suggest it is time for our Government to show some backbone in its negotiations with the U.S. on trade.
We on this side of the House feel one of the sacrifices made to keep those negotiations going was this legislation. When the Bill gets into committee we look forward to putting the kind of questions to the Minister that we have been putting to him in the House. We hope he is able to buttress the contentions he has been making in this House with some solid evidence.
As well, and the Minister may consider this irrelevant and a distraction, but I think it might be useful to get some of the tapes of the famous interviews he has had and have them played for the committee. We could have CBC representatives describe how those tapes were fabricated. We would like to get some solid evidence of the very close personal relationship which must now exist between Dr. Eastman and the Minister. We could ask Dr. Eastman how he intends to be the head of the Drug Prices Review Board when he is so solidly backed and reinforced by the Minister.
We do not have the numbers in this Chamber to back up our very strong views on this legislation. However, we do enjoy a free Parliament and unfettered public opinion. We can hardly wait for the Minister to have his opportunity to defend this legislation before the committee and before the forum of public opinion.


Harvie Andre: Point of order.
December 5, 1986


Alan Redway: Point of order. Mr. Speaker, perhaps the Right Hon. Member, his party, and the House, will unanimously agree to allowing me to put a question to him.


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Harvie Andre: I wonder if the Right Hon. Leader of the Opposition (Mr. Turner) would consent to one short question?


Some Hon. Members:: No.


Harvie Andre: I was just asking if the-


The Acting Speaker (Mr. Paproski):: Is the Minister asking a question or standing on a point of order?


Harvie Andre: Yes, just one short question.


The Acting Speaker (Mr. Paproski):: Before the Hon. Minister asks the question I must have unanimous consent.


John Napier Turner: If you want some advice I will be glad to give it to you privately, Andre.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Harvie Andre: Then debate.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Ottawa West (Mr. Daubney).


Harvie Andre: On debate.


The Acting Speaker (Mr. Paproski):: On debate?


Harvie Andre: Yes.


The Acting Speaker (Mr. Paproski):: The Hon. Minister of Consumer and Corporate Affairs (Mr. Andre) on debate.
Hon. Harvie Andre (Minister of Consumer and Corporate
Affairs): Mr. Speaker, the question I was going to ask-


André Ouellet: Point of order. He has already spoken.


The Acting Speaker (Mr. Paproski):: Order, please.


Harvie Andre: This is on the amendment, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: Before anyone else rises on a point of order, the Hon. Minister spoke on the main motion but not on the amendment. He is entitled to speak on the amendment. I recognize the Hon. Minister on debate.


Harvie Andre: Mr. Speaker, in 1968, when the Right Hon. Leader of the Opposition (Mr. Turner) was proud to bring in
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changes to the Patent Act, he said that drug prices in Canada were the highest in the world.


John Napier Turner: Among the highest, I said.


Sergio Marchi: Next to the States.


Harvie Andre: Next to the States. Actual expenditures in 1968 in Canada on drugs were 84 per cent of the estimated cost of those drugs in the U.S. That comes from the Eastman report.


John Napier Turner: I said they were among the highest.


Harvie Andre: In fact I have a paper prepared by Dr. George Platt, an employee of the Government at the time the Right Hon. Leader of the Opposition was Minister of Consumer and Corporate Affairs. That paper points out that the investigation carried on by the Department and the various commissions and committees that looked into drug prices was based on false data. That data was supplied by the then Restrictive Trade Practices Commission which claimed that prices in Canada were higher than they were in the U.S. Based on that false data people worked themselves up into a lather, including the then Minister of Consumer and Corporate Affairs, now Right Hon. Leader of the Opposition, and he removed patent protection.
Canada was the second country to do that, the first being Mussolini's Italy which changed back in 1955. The fact is that prices in Canada at that time were 84 per cent of what they were in the U.S., or about the same ratio that exists today. Very little happened, except we removed patent rights.
The Right Hon. Leader of the Opposition talked about the savings Eastman identified. He said in 1983 there were savings of $211 million. That is in Table 7.7 at page 315 of the Eastman Report. There were 32 generic drugs in Canada at that time which generated this $211 million. I asked my Department what would happen if Bill C-22 were in place in 1983, what would be the savings? The savings would be between $230 million and $366 million. The savings would have been greater because of Bill C-22 in 1983 than under the existing system.


Some Hon. Members:: Oh, come on.


Harvie Andre: I will explain why. If the gentlemen who have so much to say and who have not read the Eastman report, upon which they are apparently basing their position, would look at Table 9.3 which lists those 32 drugs, they will find that every one of those drugs except one would be past the ten-year market exclusivity period. There would be generic competition under Bill C-22 for 31 of those 32 drugs. Only one drug would not have a generic competitor in 1983. However, there would have been in lace a Drug Prices Review Board to hold down the price of the 80 per cent of drugs where there was no generic competitor, single source drugs, to the cost of living.

December 5, 1986
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The savings there would far more than compensate for any loss of savings because of that one single drug.
Let us talk about that one single drug because it is an important drug. Cimetidine, its brand name being Tagamet, was discovered by Smith Kline & French. It has been very useful in treating peptic ulcers. Introductin of that drug saved $130 million a year in hospitalization costs because people with peptic ulcers are not required to go to hospital as frequently, not to mention lost time and comfort and so on. SKF made a lot of money on that drug, no question, but it saved Canadians a lot of money. The generic competitor came along and drove SKF out of business, basically. They were the third or fourth largest drug manufacturer in Canada and now they are way down the list. They shut down their facilities and laid off I do not know how many people. They shut down their research activities. That cost has not been factored in here anywhere.
Before the Right Hon. Leader of the Opposition rants on about his billions in costs he ought to look at the facts. He ought to pick up the Eastman Report and read it. He would find that those 32 drugs would be generic competitors under our scheme as well. He ought to ask the people of Montreal if they said "bye, bye, and good riddance" to Smith Kline and French when they shut down their plant and laid off those people.
Let us talk about what Dr. Eastman said or did not say. Dr. Eastman wrote a letter to The Globe and Mail which reads as follows:
Mr. Andre says that the changes will not cause the prices of the new branded drugs to rise above the levels at which they are introduced in the market. I agree.
Those are Dr. Eastman's words. He agreed. He goes on to point out a fact that no one has mentioned here. He says:
I would emphasize the importance of the Drug Prices Review Board. I would not have agreed to the chairman of the Board if I had thought that it would be ineffective.
Why has no one mentioned that? What about that research?
The Leader of the Opposition seems to think that it does not matter that generic competition will cause a few jobs in research to be lost because it will save so much money which will create other opportunities. Let us suppose we allowed generic book publishing in Canada, that anyone could publish any author they wanted to, provided they paid a 4 per cent royalty. Undoubtedly we would save hundreds of millions of dollars. Using the arithmetic of the Leader of the Opposition, those hundreds of millions of dollars would be generating jobs and there would be a tremendous boom. There would be no Canadian authors, but I suppose some would say that most of our authors are foreign anyway. We would be saving hundreds of millions of dollars, but we would be stealing the creations of our authors and that would be wrong.
It is just as wrong to tell people who have discovered cures for peptic ulcers, treatments for arthritis, or heart drugs which will save thousands of lives, that we are going to encourage
people to copy their discoveries and prevent them from earning substantial amounts of money because, although we are grateful to have the drugs, we think it is horrible that they want to make a profit on their discovery and we will not allow them to do that. I defy anyone in the House to say that that is a stand of strong moral principle. That is a corrupt stand.
I do not know how many people involved in the medical field I have talked or written to. However, I know that they wonder about a country which is grateful for research done on cancer, Alzheimer's disease, or heart disease, but will not give them the same legal protection given someone who develops a new camera or a better mouse trap, who writes a book, or puts a trademark on a product. They wonder about a country which will not do the same for someone who has discovered a lifesaving drug as it does for those who make other discoveries. How can we in all honesty deny scientists patent protection?
I visited UBC where the Terry Fox Foundation and the Welcome Foundation have jointly set up Pacific Pharmaceuticals. That is in the constituency of the Leader of the Opposition. That business has been established at UBC to do research into cancer. They believe it is essential to have patent protection to justify that expenditure. They have hired some staff and are getting letters from Canadian scientists living in California, Massachusetts, France and Britain who are delighted to hear that this research will be undertaken in Canada. They want to return to Canada to do research in this facility because they want to do research in these important areas and would like to do it in Canada.
That is an example of the exciting things which are happening as a result of the Patent Act changes we are proposing. On his next trip to Vancouver the Leader of the Opposition should go to UBC and talk to the scientists at Pacific Pharmaceutical who are actually looking for the cure for cancer. He should tell them what he just told the House and watch their reaction. He should tell them that he does not value their work and that their work does not deserve the patent protection which is given to the inventor of a mechanical device. I challenge the Leader of the Opposition to do that.
Someone just handed me a letter from H.B. Knuchel, Ciba-Geigy Canada Ltd., Mississauga, Ontario, which says in part:
I wish you continued courage in your fight against a "two-faced" opposition; considering that the leader of the opposition, Mr. John Turner, not so long ago was Chairman of another Swiss pharmaceutical company (when he was a partner at McMillan, Binch) and declared on many occasions his opposition to the present compulsory licence legislation.
That company wouldn't be Sandoz, would it? However, I guess we are entitled to change our minds given the exigencies. I do not know whether resolutions were passed to this effect at the last convention. I am not sure whether this is one of the issues on which the Liberal caucus is united. I do not want to betray confidential information, but I suspect that some people, not too many seats away laterally from the Leader of the Opposition, would privately admit we are doing the right thing.


Lorne Edmund Nystrom: Never.
December 5, 1986


Harvie Andre: I think the Leader of the Opposition knows of whom I speak.


Lorne Edmund Nystrom: Not Nelson and not me.


Harvie Andre: Deep down I am not even sure about Nelson. He never struck me as the kind of guy who would want to legalize piracy. I would hate to have my mind changed. I understand that he has certain responsibilities to the hoard behind him.


Mr. Young:: I'm a hoard? Some hoard.


Harvie Andre: I am sure that deep in his sou! he understands the fundamental immorality of piracy and would not defend that position.
There are four reasons for what we are doing. We must respect the principle of intellectual property. It does not matter whether we are dealing with a book, a poem, a song or a drug. We must respect that and any country which does not must be ashamed. Second, we cannot deal ourselves out of research and development in this important area and particularly in biotechnology. That is just too important an area to deal ourselves out as we are doing without this Bill. Third, there is no question that we have international obligations which must be honoured. If we want to be treated as a first-class nation, as a member of G-7, we must respect the rules of that group, one of which is that you do not pirate each other's inventions. Fourth, and this is important for the health care of Canadians, we cannot tell Canadians that we will not do research into cystic fibrosis, multiple sclerosis, muscular dystrophy, Alzheimer's, AIDS and cancer because we are concerned that the generic companies will not be able to come on as quickly. We cannot responsibly tell Canadians that that research is unimportant. We need to have those 3,000 scientists working for the health and well-being of Canadians. We are doing this in a way that protects the consumers.
The Right Hon. Leader of the Opposition says that this will be on the backs of the elderly, the sick, the lame and those in nursing homes. He described everyone who is covered by a drug plan. So how will it affect them? If he is worried about the funding of the drug plan, I have pointed out and am willing to show him in committee that his cost projections are nonsense. If he had done in 1969 what we are doing now, Canadians would be saving more money today than they are under this scheme.
I am pleased that we are finally getting past this stage so that we can study the legislation clause by clause in committee as opposed to Question Period, which is not really an appropriate or intelligent forum, with everyone gesticulating for the benefit of the television cameras, to communicate information.
Let us get the Bill to committee and, while it may be too late, 1 ask the Opposition to try to keep an open mind and realize that this is a good Bill that is good for Canada. If they do they will support it.
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Mr. Riis:: Mr. Speaker, the Minister of Consumer and Corporate Affairs (Mr. Andre) has outlined his points of view on this important piece of legislation. As well, he commented on the views expressed by others, most recently, the Leader of the Official Opposition (Mr. Turner).
This is obviously a controversial piece of legislation, about which there are conflicting views and conflicting evidence. Yet the Minister says that it is good for Canada and good for Canadians and that everyone will enthusiastically agree with the Bill once the facts are on the table.
This whole matter will soon be referred to the appropriate committee that will hear witnesses in its clause-by-clause examination of the Bill. Given his confidence in this Bill, will the Minister consider giving the appropriate committee permission to hold hearings in some places other than Ottawa so that it will be easier for Canadian individuals or groups to have access as witnesses to present their views to the committee? Will he be open-minded to that proposal?


Harvie Andre: Mr. Speaker, I did not participate in the negotiations but my understanding is that offers were made to travel to four cities; one in the east, one in the west, and two in the centre. Offers were made to provide ample time for all of those committee hearings in exchange for some commitment that the New Democratic Party would not use dilatory tactics at report stage and third reading stage. Those very reasonable offers were turned down by the New Democratic Party. Now they are coming back and trying to negotiate in another forum. They had their chance and should have been reasonable at that point in time.


Nelson Andrew Riis: Mr. Speaker, I have a short supplementary question. I do not imagine that the Minister wishes to inadvertently mislead the House and the people of Canada. According to my recollection, I believe that the proposal was indeed to travel to some communities on the understanding that there would be an agreement that members of the Opposition would have a limited opportunity to speak and that the Government would be in a position to predict the exact hour that the Bill would be terminated. That was the arrangement. To suggest that the New Democrats were not prepared to co-operate enthusiastically at all stages of this Bill is inappropriate and incorrect. I just wanted to clarify that for the Minister's sake.


Harvie Andre: Mr. Speaker, I am pleased that he did so. In case the Hon. Member has forgotten, I want to clarify that on November 6 when I extended the courtesy to the opposition Parties of saying that I would be introducing the Bill at first reading that day, they used the opportunity to filibuster and for the first time in Canadian history tried to deny first reading of the Bill. They did that for two days, setting a dreadful parliamentary precedent of trying to prevent the introduction of a Bill. For the House Leader of the New Democratic Party to turn around and say that they were being reasonable flies in the face of the facts.
1838

December 5, 1986
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Mrs. Collins:: Mr. Speaker, I hoped to have the opportunity to pose a question to the Right Hon. Leader of the Opposition (Mr. Turner) following his speech, but that was not allowed. I thought that perhaps during debate we were all equal in the House.
However, I am pleased to have an opportunity to address a question to the Minister of Consumer and Corporate Affairs (Mr. Andre). I will be a member of the Legislative Committee dealing with this Bill and I am looking forward to studying it in more depth.
I was particularly pleased that the Minister raised the issue of the Terry Fox Foundation and the Welcome Foundation which are based in the riding of the Leader of the Opposition. Ironically, the first opportunity I had to talk to those people was on Cancer Day last spring. I was selling daffodils on behalf of the Canadian Cancer Society and the leader of the Terry Fox Foundation recognized me. The issue he wanted to address to me was the importance of this legislation which was pending at that time, and the kinds of activities that would be generated as a result of the legislation. This includes not only the kinds of scientific research jobs that will be created in British Columbia, which I thought the Leader of the Opposition would be concerned about, but more importantly for Canadians, the possibility of finding cures for cancer and other diseases that will help senior citizens and all people.
I am continually amazed by the comments we hear from the Opposition. I believe the opposition Parties have frequently made what I believe are terribly misleading comments that try to imply that drug prices in Canada today are low because of generic competition. It is my understanding that only 7 per cent of drugs now on the market in Canada have generic competition and that in fact since 1979 only one of the 145 new drugs that have entered the market has a generic competitor. I believe that the reason we enjoy the relatively reasonable drug prices is more likely because of the health care system which enables the provinces to bulk buy and negotiate prices for these drugs with the drug companies. Perhaps the Minister could enlighten me on this issue.


The Acting Speaker (Mr. Paproski):: Before the Hon. Minister answers the question, I want to advise the Hon. Member for Capilano (Mrs. Collins) that we are all equal in the House. According to the provisional rules, Standing Order 55(2), the Prime Minister (Mr. Mulroney) and the Right Hon. Leader of the Opposition (Mr. Turner) have unlimited time for debate. However, they do not have a period for questions or comments. I do not want the Hon. Member to feel that she is not equal in the House.


Harvie Andre: Mr. Speaker, the Hon. Member or Capilano (Mrs. Collins) was absolutely right. The fact is that 7 per cent of the drugs in Canada have generic competition. Of course, these are the major drugs, so that on a dollar value it represents approximately 20 per cent. However, the prices of the 80 per cent of drugs in Canada that have no generic competition are still about 80 per cent of the price they are in the United
States. The main reason for this is that provincial Governments purchase 60 per cent of the drugs and, from a sales point of view, it is cheaper for the drug companies to sell to ten buyers than to 10,000 physicians. Of course, the buyer can make bulk purchases, receive volume discounts and so on. The market in Canada is different from that in the United States, and that is why the prices of drugs where there is no generic competition is 80 per cent of the price in the United States.
I should also point out that the drug prices review board will also review that 80 per cent of drugs and keep their prices to the cost of living. That will provide additional consumer savings, such that the head of the pharmacare program in Saskatchewan said that he believes Bill C-22 will make it cheaper for Saskatchewan in the future than under the current regime. I would ask the Member for Yorkton-Melville (Mr. Nystrom) to talk to the head of the pharmacare program before he gets caught up in some of these wild numbers his colleagues are talking about.


John Alexander Frances MacDougall: Mr. Speaker, will the Minister bring me up to date on how many announcements have been made in regard to the proposed legislation?


Harvie Andre: Mr. Speaker, I forget the exact number of announcements, but so far it comes to $550 million of new incremental additional research and development in Canada.
If the Opposition, using dilatory tactics, are somehow able to prevent this, then of course the $550 million will probably not be there. That is the real price tag members of the New Democratic Party should bear in mind if they carry on the way they are.


Lorne Edmund Nystrom: Mr. Speaker, I have known the Minister for many years. I know he considers himself to be a very open and generous man. In the tradition of the Conservative Party when it was in opposition with respect to more freedom of information and being open and so on, I wonder if he now would agree to make public the cost impact studies of this legislation? I understand there have been some studies done. Will he make these studies public so that the Canadian people, not just Members of Parliament, will have a chance to see what the assessment has been of some of these officials?


Harvie Andre: Mr. Speaker, as I indicated many, many, many times in the House, if we get this thing to committee, which I suppose we are now going to do, we will indeed look at the cost studies and examine all the alternatives. I am looking forward to that with great anticipation. That is what I have been trying to encourage the NDP to do for some days now.


Alan Redway: Mr. Speaker, the Minister indicated in his remarks that one of the purposes of this legislation is to enhance the health of Canadians. I must say I was surprised to learn that Dr. Gagne, the Dean of Pharmacy at the University of Montreal, had indicated that Canadians, as a result of the present legislation, were being denied the use of certain drugs
December 5, 1986

because the companies which develop those drugs were not prepared to bring them into Canada and allow them to be copied by the generic drug companies. Dr. Gagne gave an example of a new powerful heart drug called "Milrinone" as one drug which was not available in Canada because the company which developed it did not want it to be copied. Dr. Philip Seeman of the University of Toronto as well indicated that another drug in-


The Acting Speaker (Mr. Paproski):: I would appreciate it if the Hon. Minister would reply to this particular question because the time is more than-


Alan Redway: May I just ask the Minister if there are any other drugs which Canadians are being denied at the present time as a result of the existing legislation which will become available with the amendments the Minister is putting forward?


Harvie Andre: Yes, indeed, there are. I cannot give the Hon. Member a list. I do not know if a list exists. However, I am in receipt of representations, not just from Dr. Gagne but from a lot of physicians. I read into the record the other day a representation from a physician at the University of Ottawa who pointed out that as a clinical paediatrician he could not get access to certain drugs which would be helpful to, in his words, the paediatric world, in other words, children, as a result of our Patent Act. Hopefully, when we make these changes, that paediatrician who is treating the sick children of eastern Ontario will now have access to the full range of drugs in which to treat those children.


The Acting Speaker (Mr. Paproski):: The time allotted for questions and comments has now terminated. Debate. I would say that this is the last 20-minute speech. The rest of the speeches will be 10 minutes.
[ Translation\


André Ouellet: Mr. Speaker, I am pleased to take part in this debate which, in my opinion, not only is important and educational but also shows just how different are the positions taken by the three political Parties in this House on this matter.
On one hand we see that the New Democratic Party does not want to change existing regulations, on the other hand the Government or the Progressive Conservative Party advocates too many changes, in our opinion. As usual, the Liberal Party, the Official Opposition, favours striking a proper balance by taking a moderate approach which, I think, is surely more acceptable.
The only way Canadians can really appreciate this debate is to view the matter in its historical context and perspective. The history of drugs in Canada reveals that 20 years ago ours was the country where drugs cost the most. Today, Canada is one of the countries where drugs are the least expensive. And why did we make major decisions many years ago, in the late
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sixties, to change the legislation and reduce the price of drugs? It is because, as pointed out by the Leader of the Opposition who himself introduced a Bill in this regard in the late sixties, three studies had shown that our health services and drug prices were among the most expensive in the world. The Restrictive Trade Practices Commission, the Royal Commission on Health Services and, finally, the Special Committee of the House of Commons had all come to the conclusion that consumer prices for drugs were much higher in Canada than in all Western countries except the United States.
Why had the Government introduced Bill C-90 at that time? Obviously, it was not the ideal solution to amend the Patent Act and to use a method virtually without any equivalent in the rest of the world to regulate drug prices. The ideal solution would have been to come to an agreement throughout the country to control prices. In fact, this is the method used in France and many other European countries where the central Government has the authority to control prices.
When Government Members tell us that, in those countries, patents are protected for many years, much longer than in Canada, they forget to say that while pharmaceutical companies have patents which guarantee exclusivity for over ten, twelve, fifteen or eighteen years in certain cases, these companies agree with the Governments not to charge abusive prices to the sick and the consumers. There is therefore a negotiated agreement between the pharmaceutical companies and the state for an appropriate price control.
At the time, in Canada, the provinces did not want to abandon their authority over internal trade and retail sales. Consequently, the Government felt the need to amend the Patent Act to make it possible to copy the patents for certain pharmaceutical products and allow generic companies to market similar drugs at a lower price. And no doubt that action by the then Liberal Government bore fruit. Why did the drug companies not react at first? Quite simply because during the first years they suffered no impact, no damage from generic competition, since initially it took a number of years for generic companies to market comparable drugs. But with the passage of time, generic companies became more efficient-they could introduce drugs faster and compete with the major pharmaceutical companies.
It is certain that in the late 1970s and the early 1980s generic drug companies became more and more efficient, and whereas initially they needed seven or eight years, later they only needed three and a half, or four years to get to compete with products of the major multinational companies with drugs of equal quality and lower prices.
Then the large multinationals came to the Government and asked for amendments to the Patents Act. I can tell you that, as Minister of Consumer and Corporate Affairs, I accepted at that time the arguments that were submitted by the drug companies, and no one here in this House is denying that people who invest vast sums of money into research and are the leaders in innovative pharmaceuticals certainly deserve some sort of protection to recoup their costs and make decent

December 5, 1986
Patent Act
profits. This is the reason why, when we announced a first round of discussions with drug companies to agree on how to amend the Patents Act, I personally hired the Hon. Martin O'Connell, who was quite familiar with the pharmaceutical field and had had contacts with those companies, in order to negotiate with them a compromise that would both satisfy the industry and provide guarantees as to job creation, investments and above all the maintenance of an acceptable price level for drugs in Canada.
But now, a few years later, we have a new government, a Tory Government that has completely waived its responsibilities. I do not hesitate to say, Mr. Speaker, that the agreement which could have been reached with the drug companies by a Liberal government would have been more balanced, more accommodating and more secure for Canadian drug consumers than the one now proposed by this Government. There is no doubt that the big companies felt it was easier to deal with a Conservative Government than with a Liberal Government and this surely explains why they were given concessions first by the Government and then by the Minister who has just been appointed and who really sold off to the drug companies. The 10-year guarantee which the government is ready to allow the drug companies is exactly twice what the Liberals would have allowed the drug companies and would have agreed to if a Liberal Government had been in power.
Secondly, in the investment area, I can say that the drug companies have already within a few months reduced the investments they were to have made because, if we refer to statements made in the newspapers in July 1986, mention was made in Le Devoir of some $3 billion investments and I quote:
From now until 1995, states Mr. Beauchemin-
-from the Canadian Drug Manufacturers' Association-
-investments made each year in research and development will substantially increase. The funds intended for research are now representing 4.5 per cent of sales made by the industry. They will soon be up to 10 per cent of that amount.
Then, a few months later, when the new Minister of Consumer and Corporate Affairs suddenly introduced his Bill, we could read in a December issue of the Montreal La Presse daily the following comment, and I quote:
"The Montreal region will get half of the $1.4 billion which the pharmaceutical industry has agreed to add to its investment projects in research and development in Canada by 1995", Mr. Harvie Andre, Minister of Consumer and Corporate Affairs and Member for Alberta-Centre in the House of Commons, said to La Presse yesterday.
However, in a few months, the drug companies have reduced by more than half the amounts they had agreed to invest in Canada if the Government amended its Patent Act. Moreover, this alleged commitment by the Canadian Drug Manufacturing Association to invest in research and development, say, 10 per cent of their turnover does not even appear anymore in Bill C-22 which the Minister has introduced. The question is: Why does this Tory Government not table in the House the formal commitments which the pharmaceutical industry has made to convince them to amend this legislation? And why do we not find in Bill C-22 this 10 per cent ratio which to us, as the previous Government, seemed absolutely essential?
I do not hesitate to say that this Bill is a total abdication of the Government's responsibilities toward the sick and the medicine users. The most shocking part in this whole affair, Mr. Speaker, is that the Government had obtained a report from consultants who had met all the parties involved, not only the provincial authorities who buy most of the drugs sold in this country, but also the other users, the various groups of senior citizens which probably represent the category of people in our society who are the greatest users of medicine in this country, the manufacturing companies themselves, and also the makers of generic drugs and all other interested parties.
And when these consultants had tabled their report, commonly known as the Eastman Report, we discovered a number of things. We discovered for instance that imported drugs represented 30.3 per cent of total deliveries in 1982, that is, approximately 13 per cent more than in 1967.
Those, therefore, who claim, as the Government would like Canadians to believe, that the legislation which greatly changed the Patent Act and made it possible for generic companies to copy the best and most popular drugs in Canada is detrimental to the sick in this country and may deprive them of good medicine, are absolutely wrong, because as Carole Thibaudeau wrote in the September 20 issue of La Presse:
In any good drugstore, one can Find a table listing the main patented drugs and their generic counterparts: the average price differential is twofold. But the regulating effect on prices is well illustrated by an extreme case, that of Valium, an anti-depressant of which the patent held in the United States by Hoffmann-Laroche expired in 1985.
According to This Magazine, from Toronto, the same quality of Valium sells for $345 in the United States as against $80 in Canada, because in this country we have the equivalent Diazepam generic.
Now, it is clear that the previous Act, as mentioned in the Eastman Report, did not have the adverse effects this Government would like us to believe.
The Eastman Commission made a number of important comments. According to its report, an overall summary of the compared growth and development of the pharmaceutical industry in Canada and the United States had led to the direct conclusion that growth has been greater in Canada than in the United States since 1967.
As far as employment was concerned, the Canadian generic drug industry has experienced rapid growth. While virtually no Canadian was working in that industry in 1968, there were 1,200 employees in 1982. Jobs in the pharmaceutical industry increased 24 per cent between 1969 and 1984, while growth in all other manufacturing sectors was 11 per cent.
Profitability did not decrease after introducing the 1969 amendements to the Patents Act. Profitability in the pharmaceutical industry clearly outperformed that in all other manufacturing industries. Also, profits in the pharmaceutical sector do not fluctuate as they do in other sectors.
Concerning prices in Canada in 1983, the weighted average selling price of generic drugs was 51.4 per cent lower than the weighted average selling price of products manufactured by

December 5, 1986

patentees. During the year 1983 only, Canadian consumers saved $211 million by buying generic drugs equivalent to patent medicines.
As far as research is concerned, a high proportion of pharmaceuticals or drugs resulting from research and development work had no greater therapeutic value than products already on the market.
More than 70 per cent of new drugs are produced by firms which already manufacture pharmaceuticals in the same therapeutic category.
No matter what the Government says, the fact is that the major drug companies of the world, which have an opportunity to set up shop in Porto Rico and gain access to the American open market or in Ireland where they are on the doorstep of the European Economic Community, will always choose Porto Rico or Ireland over Canada as the site of their drug manufacturing facilities.
Government incentives for research and development have been among the best and most generous in the world for quite a number of years, yet drug companies have shown no interest.
The most absurd aspect of it all is that the Government is bent on pushing through this Bill which totally ignores the absolutely essential guarantee which the previous administration wanted to secure from the companies, namely that they would manufacture their products in this country. We Liberals are prepared to agree that the major drug companies doing research should indeed be adequately protected. We were quite willing to give them the kind of protection recommended in the Eastman report. We were prepared to raise the royalty limit because the 4 per cent they are getting now has probably become too low with the passage of time.
But we are not prepared to endorse the amendment they want unless they agree to make specific and much higher investments than those the Government has been able to obtain from them.
And second, the guarantee that they will make drugs in Canada, is absolutely not in the present legislation, and invest in research in Canada at least 10 per cent of their gross income in Canada is not mentioned in the legislation either; therefore, I must regretfully say that our party is duty bound to fight this legislation which, as the Leader of the Opposition said, has become not an issue to be ruled on its merit, but an item of free trade negotiation with the United States, which, in our view, confuses the issue and forces the Government to cave in before both the American Government and the major pharmaceutical multinationals.


Alan Redway: Mr. Speaker, I listened with great interest to the Hon. Member and to the Leader of the Hon. Member's Party who spoke in connection with the position of their Party
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on these amendments to the Patent Act. I took from the comments of both the Hon. Member and his Leader the fact that while the Liberal Party might not be supportive of the Bill in its entirety, it would perhaps be supportive of some sort of change to the Patent Act. In fact, if I understood them correctly, they support the recommedations made by Dr. Eastman in his report that there should be some further protection in the Patent Act than there is now. As I recollect, Dr. Eastman said that there should be patent protection of some four years in the Patent Act.
I would be interested to know if in fact it is the position of the Liberal Party that there should be an amendment to the Patent Act providing for at least four years of protection. I would be interested to know if that is the official policy of the Hon. Member, of his Leader and of his Party or if there is some confusion in the ranks. Perhaps there is confusion such as there is with the Liberal Party's policy on trade negotiations with the United States. Is there some confusion such as there is with the Liberal Party's position on NATO and NORAD? In fact, is it possible that the Liberal Party may have a "mugwump" policy with respect to the Patent Act, a policy which has its mug on one side of the fence and its wump on the other?


André Ouellet: Mr. Speaker, I am pleased to reply to the Hon. Member. The position of the Liberal Party has always been quite clear on this matter. We recognize that Section 41 of the Patent Act should be amended. I indicated this in May, 1983 when, as Minister of Consumer and Corporate Affairs, I stated the following:
The Liberal Government is seeking ways to stimulate the growth of the pharmaceutical industry in Canada while reaffirming its objective of maintaining prices at a reasonable level. Some amendments to the Patent Act might help achieve this double goal. In this context, three proposals have been put forward which are to be discussed with the provinces, the pharmaceutical companies, as well as those who are involved in the administration of health care and all other interested parties.
These discussions did take place, but the Government changed and what we regret is that the three solutions which we were recommending, namely a variable rate for royalties... As I said at the time, we could continue to grant licenses, but the rate of the royalties could be based on the research and development carried out by the patent holder in Canada.
Second, after a drug is introduced on the market, there could be an exclusive market for a specific number of years before a manufacturer could use the compulsory import licensing system.
Patent holders would have an assured marketing period, which would allow them to plan for the future. The Government was thinking of a period of about five years, and I have every reason to believe that, at the time, the pharmaceutical

December 5, 1986
Statements by Ministers
companies themselves would have agreed. After his study, Dr. Eastman recommended a four-year period, and now, the Conservative Government has come up with a ten-year period, which we find quite excessive.
Finally, we had talked about a more or less selective protection against compulsory licensing. For instance, we were saying that the companies which promised to achieve a specific performance and to respect certain principles in setting their prices could be protected against import licenses, but if they did not respect their commitments, they would lose this protection for one or more drug for which they hold the patent. I find that the three solutions which we had proposed were examined very lightly by this Government, and rather than negotiating a proposal which would be acceptable to the pharmaceutical companies, the provinces, which are the major purchasers of drugs, and the consumers, the Government is now proposing a solution which is exclusively to the advantage of the large multinationals, and I find this quite regrettable.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated.
I believe that there have been discussions among House Leaders, and agreement to revert to Statements by Ministers.


Donald Frank Mazankowski: Mr. Speaker, may I seek unanimous consent of the House for the purpose of allowing the Hon. Minister of Employment and Immigration (Mr. Bouchard) to make a statement, which I understand the opposition Parties are expecting at this particular time, further to an undertaking that the Minister made in the House yesterday?


Nelson Andrew Riis: It is our intention to co-operate with the Government to facilitate the Minister delivering his statement. I wish to indicate that there was an appropriate time for statements earlier in the day. If my memory serves me correctly, it was a government decision to jump that period into Government Orders of the Day. In an effort to co-operate and facilitate the business of the House, we would be pleased to hear the Minister now.


Russell Gregoire MacLellan: We are agreed and look forward very much to the Minister's statement.


The Acting Speaker (Mr. Paproski):: Is it also agreed that the time will not be added to this evening's sitting?


Some Hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Benoît Bouchard: Mr. Speaker, as promised on Wednesday, December 3, I am pleased to announce today that the unemployment insurance rules dealing with pension earnings will be changed. These changes will allow workers who take other employment after their retirement and then work long enough to requalify for unemployment insurance benefits to receive those benefits without any deduction of previous pension income.

This change will put more than $230 million of unemployment insurance funds back in the pockets of the people affected.
On November 8, 1984, in the agenda for economic renewal the Minister of Finance (Mr. Wilson) announced the Government's intention to treat pension income as earnings for the purpose of determination of unemployment insurance benefits. We were guided by the principle that persons who have retired should not look to the unemployment insurance fund as a supplementary source of income. It is designed to provide wage replacement to those who are temporarily out of work.
The important change in policy announced in November, 1984, did not adequately distinguish between those who had retired and left the labour market, and those who had retired to begin subsequent careers. Military and RCMP personnel who are required to retire earlier in life best illustrate the point.
The changes announced today will ensure that this group is treated fairly and equitably as active members of the labour force.

Workers who have started subsequent careers and contribute to unemployment insurance and subsequently become unemployed will be entitled to full unemployment insurance benefits based on their post retirement employment income, regardless of their previous pension income.
Mr. Speaker, there is one additional issue which I would like to deal with today. Some retirees who were receiving benefits on January 5, 1986 when the former policy came into effect were disqualified and because they had left the labour market will not be able to requalify.
Notwithstanding the fact that Ministers made repeated announcements of the policy change in the November 1984 Economic Statement and subsequently, some of these people allege that they made their retirement decisions on the basis of inaccurate information from federal government sources.
December 5, 1986



To deal with this situation, I am today directing the commission to re-examine any such case and restore benefits, if the allegation is proven. The commission's normal adjudication process will apply. This is entirely consistent with the Government's action in similar cases in other benefit programs.

To bring these measures into force, I will be introducing legislation in the House and I will be seeking the co-operation of the Opposition parties to facilitate passage of this legislation.
Mr. Speaker, in conclusion, I wish to thank all members of this House for their advice on this matter. I wish to stress in particular the role played by the previous Minister of Employment and Immigration who is now Minister of Communications (Miss MacDonald). In a period that was particularly difficult, she devoted a lot of attention to this issue and thus contributed much to bring it to its conclusion today.


Jean-Claude Malépart: Mr. Speaker, today is another great day for our senior citizens. Another victory, although to get this far, they had to sign petitions and come to Parliament Hill to make this Government admit that it was wrong, that it had made a mistake and that it was being unfair. Unfortunately, today's decision comes too late for the people who lost their homes. It comes too late for the person who committed suicide and asked for the ashes to be put on the desk of the Minister of Communications (Miss MacDonald).
Mr. Speaker, I think the Government should learn a lesson from decisions that were taken lightly and taken only to defend the interests of the rich. When the banks collapsed, depositors with up to $60,000 in their accounts did not have to sign petitions and come to Parliament Hill to make themselves heard and be reimbursed. However, I do want to congratulate the present Minister for reacting quickly to requests, following the Forget report's recommendations, and for having dealt with this problem. I must say, however, that unless he has additional information, some of the news is disappointing. First of all, I agree with him where he talks about our people in the military and in the RCMP, but the fact remains that in many cases, the situation arises as a result of factory shutdowns, when the employee is entitled to draw his pension benefits. Although this person would be entitled to unemployment insurance benefits if he were to find a job, I wonder what someone who is 57, 58 or 60 years old is supposed to do between the time he loses his job as a result of a factory shutdown and the day he finds another job.
And I am thinking of the region where the Minister has his riding and the remote areas of this country. You know, when a factory closes down, as in Trois-Rivieres for instance, the 50 or 60 people affected cannot find other employment right away. I think we will have to find a way to deal with this.
Statements by Ministers
There is another point on which I would like more information. I am proud of the Government's decision, but I am disappointed about how it applies to people who retired in 1985. These people appealed the original decision, they had to make representations and spend money, and either positive or negative rulings were handed down. Do they have to go through that again to make sure they get what they are entitled to retroactively?
The Minister says he is going to provide criteria, and I would like to say to the Minister that I congratulate the people who are listening, the people of the Quebec coalition, the people from Quebec City and Montreal, the people of the AQDR who co-ordinated the coalition. I want to congratulate Mrs. Lalande from Quebec City and the Comite d'action-chomeurs, Mr. Marcoux, Mr. Cloutier, Mr. Plamondon, Mr. Fortin, all from Montreal, all these people who worked together to make the Government aware of the problem and force its hand. I think the people listening to us today may have reason to celebrate, but their work is not finished. They cannot stop their campaign because they have to be out there helping their colleagues and filling out forms, to make sure these people get what they are entitled to.
Mr. Speaker, you are indicating that time is limited. I conclude by saying to the Minister that we will co-operate so that this Bill will pass quickly. Perhaps he might be able to go a step further to correct a few things and see to it that the 1985 retirees do not face more delays caused by administrative red tape or communications problems and get their money before Chrtistmas. I would point out to the Minister that this is the third time the Government has had to backtrack, so in the future he ought to be more careful when making decisions, particularly in the case of unemployment insurance. Make sure to consult people from now on, and you will avoid this kind of situation.


Neil Young: Mr. Speaker, let me say to the Minister that his initiative is welcomed by myself and on behalf of my New Democratic Party caucus members. I can assure the Minister that we will do nothing to delay the implementation of this change in policy. However, that policy created a tremendous amount of frustration and anger among a large segment of the Canadian population, but I am sure the Minister is well aware of that. Nevertheless, it also raises a number of questions. The Minister's statement appears to be in response to the commission of inquiry into unemployment insurance, namely, the Forget Commission. Recommendation No. 26, as the Minister now knows, says:
The current treatment of pension income should be rescinded with an effective date of January 5, 1986.
It goes on to say:
The new policy should be announced and an implementation date of January 1, 1989 set.

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Patent Act
The report then goes on to enumerate what that new policy should be.
I would like to give the Minister an opportunity this afternoon to assure the Elouse and Canadian seniors that the policy he just announced will be the Government's policy from here on in, and that come 1989 we will not be faced with the same restatement of policy. I would like to have that assurance from the Minister and I am quite sure others would.
At the end of the Minister's remarks he said that he would be introducing legislation in the Elouse. It is my recollection that there was no legislation introduced in the House when the Government changed the policy; it was done by an Order in Council. Perhaps the Minister could respond to my remarks after I have concluded, Mr. Speaker. It seems to me that that was a large part of the grievance that we in the Opposition had about that policy change and the fact that the representatives of this country were not allowed an opportunity to debate the policy. In fact, people directly affected by it, superannuates and those retiring from the Armed Forces, had absolutely no input. If the Government feels that legislation must be introduced in the House to effect the change the Minister has just announced, then I can assure him that our Party will give him all the assistance it can to make sure the legislation is adopted as speedily as possible so that the people who were denied benefits who were properly entitled to them can receive them.
The Minister in his remarks said that some retirees receiving benefits on January 5, 1986 when the policy came into effect were disqualified. The Minister seems to be suggesting that he is asking the Unemployment Insurance Commission to review those cases with a view to restoring the benefits if the allegations are proven. It has been my experience with the Unemployment Insurance Commission that when an individual is disqualified from receiving benefits, for whatever reason, that information is recorded. I would not like to see a large number of people whom the Minister seems to be attempting to assist in this matter being forced to file appeals before boards of referees in order to get benefits that they should have continued to receive following January 5 when this new policy came into effect.
It seems to me, Mr. Speaker, that in the last months those individuals have led a rather frustrating life and should not be subjected to any more anxiety. Perhaps the Minister could ensure that the Unemployment Insurance Commission will take a look at the disentitlement served on individuals and if an individual was disqualified because of the new policy, then it seems to me the commission should be instructed immediately to reinstate benefits from that time without necessitating people having to go through the whole appeal process which, as we all know, can take a very long period of time.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Andre that Bill C-22, an Act to amend the Patent Act and to provide for certain matters in relation thereto, be now read a second time and referred to a legislative committee; and the amendment of Mrs. Killens (p. 1378).
Mr. David Daubney (Ottawa West):: Mr. Speaker, as a member of the Standing Committee on Research, Science and Technology, I am pleased to take part in this important debate this afternoon on a Bill which can do a great deal to redress the current high technology imbalance in our balance of payments which our country has faced in the high technology area for some years. We all agree that there is much less pharmaceutical research and development being done in Canada than our Government and the Canadian research and development community would like. This is because Canada has been regarded, as the Minister of Consumer and Corporate Affairs (Mr. Andre) pointed out so well this afternoon and for the last several weeks, as a country with a hostile climate toward investment in this area. The innovative drug companies doing basic research do not want to invest here because Canada has refused to reward them for their efforts.
Drug research in Canada is now almost totally oriented toward the clinical research and trials necessary to obtain permission from Health and Welfare Canada to market a drug in this country. The basic research that should provide employment for our university science graduates is being done in other countries at a loss to Canada. Bill C-22 will provide the means to correct this inequity for Canadian pharmaceutical research, and will lay the groundwork for employment in Canada for Canadian university science graduates. I believe that the steps being taken in this Bill and the new investment in research and development that will result are a major step forward in support of a truly significant pharmaceutical industry.
It is expected that as much as 30 per cent or $420 million of the estimated $1.4 billion of new research and development expenditures will go directly to Canadian universities, hospitals and other private research groups. Medical schools and research institutes will all benefit from the increase in basic and clinical research and development that will occur as a result of this Bill.
I would like to bring to the attention of the House a report by the Medical Research Council of Canada. It is a draft report on this legislation provided to me by the council. It points out that until the late 1960s the international pharmaceutical manufacturing community regarded Canada as a desirable country in which to expand research facilities. Good
December 5, 1986

universities and technology and good incentives contributed to this situation. As a result, in addition to several Canadian research installations, some 14 foreign companies had established R and D facilities in Canada by the mid-1960s. Between 1963 and 1969 the pharmaceutical industry in Canada increased its R and D expenditures at an average rate of 18 per cent per year.
However, after the Patent Act was amended in 1969 to provide for compulsory licensing, the growth rate of innovative pharmaceutical companies in R and D declined drastically. This decline in growth rate was more than twice as severe as that of the industry world-wide, and twice as severe as that of other industries in Canada. The draft report goes on to say that the proposed new legislation should have a profound effect on the research investment of the pharmaceutical industry in Canada, both indigenous and foreign. It concludes by saying that the direction which the patent legislation will take if and when the new Act is passed cannot but be favourable to the expansion of medical research funding in Canada.
As a member of the Standing Committee on Research, Science and Technology I have for some months been questioning witnesses appearing before us on a number of matters, including this issue. I would like to bring to the attention of the House some of the responses I have received from various important witnesses in that committee. On April 18 we had before us officers of the National Research Council of Canada. I asked Dr. Larkin Kerwin, Chairman of the NRC, to comment on the current controversy related to R and D and the generic drug industry. I asked if he viewed any changes in the present regime as it relates to that industry, were they to be introduced, as beneficial to R and D in that sector. Dr. Kerwin said we have been fussing around for quite a few years now in this area in general. It is quite clear that one of the results has been the complete drying up of most industrial R and D in this field in Canada so we are simply not in the game anymore. We are not carrying out the R and D, so we are not going to get the patents and we will not therefore capture the market. It is a field we have effectively almost abandoned and the only way to get back into it is to provide the incentive to the industries in question. He went on to say that this is going to become even more important in the field of agriculture where biotechnology is going to be producing new grains and new plants and new cereals. If these cannot be protected, then we cannot expect the Canadian industry to put very many resources into it. He said that the whole future of the Canadian biotechnology industry is largely tied up with whether or not they can get a satisfactory patent law. That came from the Liberal-appointed Chairman of the NRC.
We also had before us Dr. Stuart Smith, another Liberal appointee to the Science Council of Canada. I asked him the same question on April 24. His response in part was that his own feeling about it, just from talking to people in the industry, was that it is possible that some of the big firms will locate research here in exchange for a change in Section 41 of the Patent Act. He said, "Sure, a $1 billion shot in the arm for
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pharmaceutical research would be wonderful. The Science Council, I am sure, would welcome such a thing". We know we have a commitment of much more than that, some $1.4 billion so far. As the Minister pointed out this afternoon, almost $700 million in new R and D investment in this area has already been announced.
On May 28 I asked the Chairman of the National Consortium of Scientific and Educational Societies, Dr. Gauthier, the same question. He responded, also on behalf of the Canadian Federation of Biological Societies-
[ Translation]
Indeed the Canadian Federation of Biological Studies fully supports this kind of measure. Therefore I would urge the Government to take appropriate action and encourage the drug industry to do more research in Canada.

My time is running out, but there have been many other indications of support referred to in this House in Question Period and in the debate so far. We can refer to the many telegrams and letters of support from a great number of leading scientists. In my view the Bill is important. It is a reasonable compromise of important principles, protections and objectives. I think all fair-minded Canadians will view it in that light.
I have been discouraged by what I consider to be a low level, base, and non-intellectual attack, particularly by the NDP, in using scare-mongering tactics among the old and sick. We know all Canadians are covered by good health care and drug plans. Almost all senior citizens, certainly those on social assistance and in need of help, are protected.
I think it is unfortunate that the NDP in particular-and it is very hypocritical of the Liberals as well-is attacking at this low level some legislation which will once again bring Canada into the civilized community of nations as it concerns the protection of intellectual property. It will give us a strong biotechnology industry and will at the same time provide important consumer protection for all Canadians.


Mr. Simon de Jong (Regina East):: Mr. Speaker, I wish to participate in this very important debate because not only are we debating the question of whether we should extend patent rights to the pharmaceutical companies for up to 10 years, we are debating some important philosophical questions as well. The questions concern public good versus private interest.
It is always appalling to me to find a situation or situations where people make large profits because of other people's illnesses, weaknesses and misfortunes. I have listened to the debate and the justification by government Members for following the instructions of the multinationals. They have said Canada has and will be punished. We have not had research done here because those companies deem Canada not to be a good place because we have enacted some legislation in the past. I find that objectionable. Indeed, it is out and out blackmail. Yet government Members do not blush at all when

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Patent Act
they say that this is the case and we should succumb to this blackmail.
The previous speaker pointed out that many Canadians are covered by drug plans. Indeed they are. That is the result of legislation which was often pioneered by the CCF and the NDP over the opposition of Conservative Governments and the Conservative Party. They have always maintained that this is creeping socialism. People should be able to stand on their own feet and pay their own drug bills. Things like medicare and drug plans are creeping socialism. Traditionally, on the one hand, members of the Conservative Party have always opposed those progressive measures. They now stand in the House and say that most Canadians are covered by drug plans. We see Conservative Governments, both provincial and federal, attacking those very social programs. The Government attempted to deindex old age security. Just this afternoon the Government attacked the UIC benefits of those who retire.
The philosophy of the Conservative Party has been to attack government spending. However, the Government proposes cutbacks in social programs such as the drug plan. The Government proposes to force Canadians against the wall. It will force up the cost of drugs while removing the protection which Canadians have by cutting and attacking social programs across the country. Every Conservative provincial Government has attacked social programs. In attempting to cut government spending they attack the social programs.
The Government is putting the old and the sick into a vice. It is proposing legislation which will increase the cost of drugs while reducing the protection which Canadians have. That is the catch-22 situation into which the Tories inviariably put the Canadian public. This is all done in the name of protecting private property, meaning patents for certain discoveries, intellectual property.
The Minister has often made comparisons to artists, writers, or inventors working in basements. He says that it is wrong for those inventions to be pirated. Philosophically I would agree with him. It is too bad that the Minister has ignored writers, authors and artists. We do not see any patent protection for them. However, he rushes to the aid of the multinationals. I have never considered companies and multinationals to be like individuals. They are not individuals working in basements and, at their own initiative, with imagination and diligence making discoveries.
Multinationals are very sophisticated and large international corporations have tremendous resources created through public policy and public expenditure. Many of the multinational corporations which will benefit from this legislation have become large through public programs. Our educational facilities, which trained the scientists, are publicly funded. To say that a pharmaceutical company has totally paid for its discoveries is false. It has been subsidized by a public education system which trained the scientists and researchers. Therefore, there is some public interest to be taken into
account. The multinational pharmaceutical corporations have not made these discoveries all on their own. The public has already subsidized them through the university system.
One wonders as well about the tax deductions which the corporations receive.


Leslie Gordon Benjamin: Did they ever get their money back!


Simon Leendert de Jong: The Government proudly proclaims that these companies will invest more in the country. I am sure they will invest more, particularly with the tax regime which we have. They will have most of their research expenditures refunded through the tax system. Through lost tax revenues the public will be paying again.


Leslie Gordon Benjamin: It didn't cost them a nickel.


Simon Leendert de Jong: The Minister has unabashedly said that we will have all this increased research and development. We may very well have it, but that depends on whether it is in the economic interest of multinationals to do the research here or elsewhere. I suspect that that will depend mainly upon the tax regime in place. If the tax regime will refund to multinationals the money spent on research and development, of course they will do the R and D here. Why would they do it in a country where they may not have their investment refunded through tax exemptions?
Since the cost of these discoveries is often borne by the public through the education and tax system, I maintain that the public has an interest in how the discoveries are used. I do not begrudge any organization or individiual benefiting from a discovery. However, when is enough enough? If I discover a cure for cancer, should I be able to hold everyone in the world for ransom? I maintain that I should not and that no organization should be. I would expect a fair return for my effort, but it is morally wrong for an individual or a corporation to hold everyone for ransom for ten years.
The Government is introducing legislation which is not in the public interest but in the interest of a few large multinational corporations. We are being asked to swallow a bitter pill. It has been sweetened somewhat on the outside by the promise of increased research and more jobs in the country which, I hasten to add, will most probably be subsidized through our tax system. There are no written guarantees in this package. We are only offered some promise for sometime in the future.
This is a bad Bill. It is no wonder the Government wants to force it through Parliament as quickly as possible. I predict the Canadian people will not like this and that they will send the Government a very strong message that they will not accept it.


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


Fred Alward McCain: Mr. Speaker, I support this Bill as I opposed the legislation of 1969 which created the situation in which Canada now finds itself. My
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family has had the misfortune of experiencing medical difficulties including burns, blood clots, cancer, heart attacks and surgery requirements as a result of broken bones. I am quite prepared to recommend to my family and all Canadians that if medicine can be improved, let us do it. If this is the kind of legislation that is required, let us support it.
I am dead set against the presentations which have been made by both opposition Parties. I find particularly contemptible the speech made by the Leader of the Opposition (Mr. Turner) today. If Canada heard that speech, he made no gain in the polls. If there was ever an explanation for his status in the polls, he gave it for 25 minutes in this House today. I object to it because its single thrust was against the United States. This Government is not subservient to anyone in the United States. However, we do not want to generate a situation in which we cannot deal with the United States as friends or in which they are depicted as the worst enemy of this nation. It is depicted in that fashion by both opposition Parties, both of which have members from British Columbia and Ontario which are provinces that require a lumber market in the United States. It is unjustifiable for Members of this Legislature or members of any other Legislature to focus a total attack on the United States of America, because there are drug manufacturers of note and quality in Switzerland, France, Germany, the United Kingdom and a multitude of other countries. All of them have multinational research capabilities whose inventions and improvements in the medical structure have contributed to the better health of the world.
This is a scurrilous, unjustified and improper basis for an attack. If there is a matter of principle involved, it should be used to the best possible advantage, but I have not had one letter of complaint about this legislation from a senior citizen of this land in spite of all the threats by the Opposition that medicine might cost them more. I believe that senior citizens in this country are looking for the maximum opportunity-


Leslie Gordon Benjamin: You are afraid to see them.


Fred Alward McCain: Incited no doubt by yourself and others of comparable nature. My senior citizens are looking for the best possible medicine for all the difficulties of geriatric life in this country. That is what they want.
I believe that any senior citizen who is given a true and proper picture of what this may mean for medications that he or she requires-


Leslie Gordon Benjamin: Your truth is not their truth.


Fred Alward McCain: -and the improvements that this legislation offers, will see that they have had very poor leadership from both opposition Parties. They have conducted a scare program and used a political opportunity without concern for the health of the nation.
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Canada has generated programs which have probably given this nation the best level of social medicine anywhere in the world.


Leslie Gordon Benjamin: Which the Tories opposed.


Fred Alward McCain: Both those programs were put into effect in the Province of New Brunswick by Tories.


Leslie Gordon Benjamin: You opposed it. You opposed medicare. Don't give us the gears.


Fred Alward McCain: I protest that statement. That is not an accurate statement but a false statement. I submit that the Member should retract it now. If he wants to document-


Leslie Gordon Benjamin: I have the evidence.


Fred Alward McCain: If he can in any way document that statement, I will be the first in the House to humbly retract and apologize.


Leslie Gordon Benjamin: I will be glad to give it to you.


Fred Alward McCain: I challenge you. Excuse me for not addressing the Chair, Mr. Speaker. The world of medicine can be peculiar. Occasionally, innovations are rejected by the medical world and subsequently may be rejected by citizens or religious groups. However, I want to give an example of two friends who were given a prognosis of a very short life span. They went to Tijuana, Mexico to receive cancer treatment that was available there. In spite of that medical prognosis, those two gentlemen received that treatment and returned to perform their normal daily activities. The point is that we cannot afford to put all medicine in the same category and restrict the opportunity for treatment in Canada because certain medicines which may be beneficial will not be made available here.
The Government has subsidized some public and academic research in the sphere of biochemistry and medicine.


Leslie Gordon Benjamin: We have to do more of it.


Fred Alward McCain: If my good friend from Saskatchewan were to remember how much international research had contributed to agriculture, the stubble jumper, as he sometimes calls himself, would realize that he would be quite hungry without that research. Now we are talking about the kind of research that preserves health and increases the life span. I admit that it may cost some money, but I also submit that generic drugs are not the answer.
Let me give two illustrations. Last week, a gentleman who is required to take medicine for the rest of his life visited me at my house. This medicine is a foreign drug which costs him more than if it were made in Canada. He decided to try a generic substitute, but in one week had to return to bed. As soon as he returned to the original drug he recovered. It may be possible to manufacture another drug with the same elements and molecular arrangements, but if there is a degree of differential in temperature in the manufacturing process of

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that drug, it can make it absolutely ineffective. I suggest that those Members in the Opposition should study chemistry.


Leslie Gordon Benjamin: Balderdash.


Fred Alward McCain: It is not balderdash. It is scientifically correct and accurate.


Leslie Gordon Benjamin: National Health and Welfare approves generic drugs.


Fred Alward McCain: My wife was advised not to use generic drugs in her medication program. Her physician said that he had tried it with his patients and was dissatisfied because it caused them discomfort. While this does not condemn all generic drugs, I suggest unequivocally that the exactitude required for making drugs is not always duplicated by another manufacturer, generic or otherwise.


Leslie Gordon Benjamin: Mr. Speaker, I rise on a point of order. I am sorry to interrupt my hon. friend, but would he permit one short question?


The Acting Speaker (Mr. Paproski):: The Hon. Member's time has expired. Debate.


Maurice Brydon Foster: Mr. Speaker, I am pleased to speak to Bill C-22, an Act to amend the Patent Act, which the Government is trying to ram through the House of Commons without adequate debate or opportunity for Canadians to see what is really happening in this regard.
Until 1969 we had the second highest drug prices in the world. Since 1969 we have had the lowest drug prices in the world and, in fact, the pricing regime in this country has been so good that the United States Congress and American authorities have examined the Canadian system to see if it could be implemented in the United States.
This legislation is designed to increase the cost of drugs in this country and see the profits siphoned off to the United States.
Let us consider the level of investment in research before the present legislation came into effect in 1967-68. We see that 3.5 per cent of funds from the drug industry were reinvested in research. We see that 3.9 per cent of the funds were reinvested in research in 1982.
The Minister of Consumer and Corporate Affairs (Mr. Andre) argues that we will have increased research and development in this country. Clearly, research and development is greater under the existing legislation by which there is no rip-off than it was before it was put in place.
It is quite obvious that this legislation is part of the "Irish eyes are smiling" syndrome that was conceived in Quebec City in March, 1985. The President of the United States, looking at his financial backers in the multinational drug companies, told the Prime Minister (Mr. Mulroney) that he had to make a deal and increase the price of drugs for Canadians so that billions of dollars could be siphoned off to the American
multinationals. No one in their right mind believes we are going to have massive research and development in the drug industry in this country compared to the United States. The song which was sung in Quebec City in March, 1985 was When Irish Eyes are Smiling. If the Tories have their way they will be putting this legislation through by March 1987. At that time most of the multinational drug companies in the United States will be laughing all the way to the bank. The poor, the sick and those families who have to live with the high drug prices will be crying every year that this legislation is in effect.
There is no guarantee in the legislation that there will be further investment in research and development. The Minister knows that. There is nothing in the legislation to indicate it. He portrays himself as having some great agreement, but he clearly does not.
Our Party supports the Eastman Report which suggested that there be an exclusive four-year period for the designer-developer of patents and that there be an adequate royalty after that. There would be a royalty fund which would provide assistance and appreciation for further research and development. However, this legislation just gives a carte blanche to the drug companies for a 10-year period. If there is anything which really upsets me about this legislation it is the fact that our biotechnology industry which is just developing will be wiped out. It is going to be wiped out because the Minister in this legislation provides that not only the process be patented but that the product be patented also.
I would like to read a letter from Eric James, who is the President and Chief Executive Officer of Cangene Corporation, which is a genetic engineering company in Mississauga. I had an opportunity to meet with Mr. James and with some of the other officials in his company. It is a small company with $5 million or $6 million of Canadian investment, employing some 30 people. He states in his letter of October 30, which he sent to all Hon. Members:
As a result of intense pressure from U.S. and foreign based multinational drug companies, changes to the Patent Act that will kill the infant Canadian biotechnology industry are being contemplated. As one of a very few Canadian companies that is on the forefront of this exciting new science, we must warn you that the immediate introduction of these proposed changes will only serve to impede the growth of this industry in our country.
He goes on at length, and on page 2 he states:
The question you must ask yourself is this: do you want a viable Canadian owned non-government biotechnological industry within three years? If the answer is yes, you must reconsider the currently proposed changes to the Patent Act, and a policy that is in the national interest must be devised and implemented.
These companies will be wiped out by the legislation because not only is the patent to be on the process but on the drug itself, and as well there is going to be a 10-year period of exclusivity for the patent. It is estimated that in the next five years alone, $10 billion worth of protein-based pharmaceutical products will be introduced into the world market-place, $250
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million in Canada alone. I have a whole list of protein-based pharmaceutical products produced organically, including herpes vaccine, malaria vaccine, AIDS vaccine, hepatitis B vaccine and insulin. This Canadian company will be destroyed by the Government and this legislation.
If the Government had taken Dr. Eastman's recommendations and provided a four-year exclusive law, this kind of Canadian company would have been able to survive. Not only is this legislation extremely harmful to Canadians in that we are going to have to pay tens of millions of dollars over the next 10 years in higher drug prices, but we are going to see small Canadian companies wiped out. One of the estimates of the number of jobs which will be lost is of the order of 6,000 net. There will be 3,000 jobs created and 9,000 lost, which is 90,000 man-years.
I certainly hope the Government in committee, after hearing the wishes of citizens, especially those of the million of Canadians who are not covered by drug plans, will back down and amend this legislation and not give it all away to the American multinationals, because Canadians should come first and I hope they will with this Government.


Mr. A. H. Harry Brightwell (Perth):: Mr. Speaker, I am delighted to enter into this debate today. During my business life, which I share with my hon. colleague, the Hon. Member for Algoma (Mr. Foster), I have had the pleasure of using dozens of drugs in treating animals and I have experienced more recently than my hon. friend the great changes and advantages which have occurred in the drug field. I have great respect for the manufacturing companies which bring in the drugs. I am delighted that we are now taking a step toward protecting the work these companies do.
We have heard good debate today and it is a pleasure to be at this stage of the legislation. It is unfortunate that Hon. Members opposite have used all sorts of tactics to try to delay debate. Out of the 16 hours we have been involved with this legislation we have only debated for about nine hours.


Ian Gardiner Waddell: You should have been here before when the Tories were in opposition.


A.H. Harry Brightwell: The Hon. Member for Vancouver- Kingsway (Mr. Waddell) came in here with 60 petitions in his hand, abusing that privilege and talking far too much for the worth of those petitions. The Hon. Member for Beaches (Mr. Young) misconstrued my motives. I brought in a petition from some of my constituents who had been receiving information which was not totally right and so they do not understand the situation. I did my duty and turned it in to the House. Not so Hon. Members opposite. They collect stacks of petitions and bring them in at an opportune time just to delay the business of the House. What a shame that is.


Leslie Gordon Benjamin: I have some more.


A.H. Harry Brightwell: We heard the Hon. Member for Windsor- Walkerville (Mr. McCurdy) reading into the record selected
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headlines. What a fine memory the man has, except that he forgets the other headline. A headline in the Toronto Sun on December 3 reads: "Feds Right To Stop Legalized Drug Piracy". In the Gazette on December 3, the headline read: "Drug Bill Foes Mislead Seniors, Specialists Say". I have other headlines: "Don't Back Down From Drug Change Law" and "Researchers Say New Patent Drug Laws Will Help Canada Get Better Medicines".
The reason I rise today is that I have great concern for the health of Canadians and I wish to see this Bill pushed ahead so that Canadians can have those drugs. I wonder whom I am helping.


Ian Gardiner Waddell: You are helping your American friends.


A.H. Harry Brightwell: In all probability I am helping the people sitting opposite. I am helping everyone in the House. I am helping all Canadians who are going to get sick in the future and will otherwise be deprived of drugs which will not come on to our market because of our present law.
What do our changes do to the law? We say there will be 10 years' protection, but drugs must go through a long stage of proof before release into the Canadian market. They are presented to the Canadian Government and they receive an order of compliance. Thereafter they have to be proven in a period of up to three years. So, virtually from the stage that the drug is protected, it may take three years to reach the market. Then, there is a period of four years in which that drug would have the market to itself. But at the end of the three years of preparation for introduction to market and the four years on the market, if a Canadian company chooses to make the chemical here in Canada, it can copy the material.
I believe there has been a program of misinformation going on across the country. I wish to speak a bit about the type of misinformation which is occurring. My constituents are reading that generic companies will go out of business. We know that this is not true because every generic drug that is on the market right now will persist, and persist at the same price. Members of the Opposition say that the prices will increase. We know that 50 per cent of the drugs produced by generic companies are drugs that have lost their total protection, that they have gone beyond the 17 years. Tetracycline, a drug I have used for some 25 years, is one of these, contained in over 50 per cent of the generic companies' drugs. We know that the generic companies copy only those drugs that are special, those drugs which sell a great deal, those drugs which are perhaps easier to make, I am not sure. Since 1979, out of all the drugs introduced to this market only one drug has been copied.
Who could say that through the laws that we have now we are withholding from the market many copies that would come in the future? What about the number of drugs that are copied? We know that in the Canadian market only 7 per cent of the drugs have copies. We know that that figure comprises 20 per cent of the total sales volume; but the other 93 per cent

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are on the market with nothing more than natural competition and nothing more than the ability of the provinces to buy those drugs to maintain their lower prices. So who would say that any of the new drugs that are coming in the future would in fact be copied and would in fact have the generic price competition?
Is it not great to think that now we have a reason for generic companies in Canada to manufacture fine chemicals here? It is not necessary for those companies to go to Hong Kong, Taiwan or Italy to buy the chemicals. They have a reason now to jump in and set up a chemical manufacturing industry in Canada. Think of the research and technical jobs that will result. Think of the regular jobs that will occur from this type of fine chemical production.
Our friends opposite say there will not be more research workers. They say there will be a net loss of jobs. A professor from the Department of Pharmacology at the University of Toronto has said that many of his trainees, many of the people whom he has put through the PhD program, are now working in the United States in major drug companies and the products are coming back to Canada. What a shame that they cannot work here in this environment. The Hon. Member for Papi-neau (Mr. Ouellet), who spoke earlier this afternoon, said that drug companies tend to locate in countries such as Ireland, and he named another country. He said that drug companies do not want to come to Canada because the market is so small. Instead of debating Bill C-22 I thought the Hon. Member was talking about the trade talks. He was demonstrating the need for Canadian business and manufacturers to have a much bigger market that they can penetrate, a market that will make them efficient so that they can go out and make a long run at a lower price.
There has been talk about the effect on seniors. We know that they are protected, mostly under drug plans. However, they are not totally protected by the drug plans. No one commented on the fact that drug plans protect only drugs selected for them. There are many drugs out there right now that are not covered under drug plans and which do not have any purchasing power. Under our plan, with the price control scheme being put in place, it will apply not only to the new drugs, not only to those 93 per cent that are purchased by the drug plans and are not copied, but to those other drugs that are not on the selected list.
When Members opposite talk about the cost of drugs in the future they do not build in the fact that 40 new generic drugs will come on the market in the next five years. That will reduce the plan. They do not build in the fact that the cost of hospitalization and medical costs of other kinds will be reduced. So the number of dollars we are talking about ten years from now appear to be based simply on false calculations.
I am pleased to give to this Bill my strong personal support from my background in my business. I am very pleased that the Government is moving to protect intellectual property. I
am especially pleased that the Government is moving to protect the health of Canadians in the future.


Nelson Andrew Riis: Mr. Speaker, I listened with interest to a number of my colleagues throughout the day. A question which comes to my mind is the following. If the Government is so certain that this legislation will result in all of these jobs and all of this research being done in Canada, then why is it so hesitant to build in some type of guarantee or even to obtain some type of guarantee from the various companies involved? We notice that it is accepting on blind faith that the international drug companies are saying: "Yes, we are prepared to invest heavily in Canada".
I ask any serious-minded person to give this proposition some thought. Let us consider a large multinational drug company, say with its head office in New York, which now plans to open a branch in Canada. If it plans to conduct serious long-term pure scientific research into new drugs would it do it in its small branch plant in Canada or at its parent head office in New York? What if we were to ask ourselves that question seriously, do we honestly think people would believe that major research and development will take place in branch plants? There are many examples across Canada of our branch plant economy. When we consider where the research is being done along with the development right through to production, we see that it is seldom done in branch plants. That is not the purpose of the branch plant. The branch plant is simply in place to provide a distribution and sales outlet for the multinational network.


An Hon. Member:: Is that your vision of Canada?


Nelson Andrew Riis: The Hon. Member opposite asks me if that is my vision of Canada. No. It is obviously his vision of Canada, since that is the reality of Canada. It is his type of Government, both provincially and federally, which has allowed this to take place. We have more foreign ownership and control than any country in the world.
If anyone thinks that having important financial, research and economic decisions made in foreign countries is good for Canada, then that is where we part company I am afraid. That is not my image of what Canada should be. That is not my image of an independent sovereign nation. The best example we have seen in this regard in the last few days is with regard to the Bank of British Columbia which was bought out by the Hongkong Bank. Again, critical decisions about western Canadian enterprise will not be made in Vancouver, or not even in Toronto where they are usually made, but they will be made in the Far East. Quite frankly, I do not think that this is good for Canada. I do not think it is good for British Columbia, good for Canadians or for British Columbians. But that is getting somewhat off the topic.
There has been a great deal of contradictory evidence presented here in the last little while. Rather than simply reflect the views of the Hon. Member for Kamloops-Shuswap I will simply use other sources. Again, they will not be my
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views, they will be the views of others. They are legitimate views held by people who I think are all respected in this Chamber. This morning I got up and simply went through a pile of newspapers that I had and I would like to refer to some of the points that have been made.
First, I refer to an editorial in the Vancouver Sun entitled "Patently wrong" which states:
The stubbornness with which the Mulroney government seems determined to bull ahead with its ill-advised prescription drug bill and foist it on to Canadian consumers against almost universal opposition is something to behold.
Even though Consumer and Corporate Affairs Minister Harvie Andre now admits the obvious-that giving the multinationals a 10-year monopoly on the sale of new drugs is bound to increase the cost to consumers-the Government is clinging doggedly to its plan.
The Tories have been mesmerized by a promise from the brand-name drug companies, unsupported by any guarantees, that if they get the extended patent protection they will invest $1.4 billion in the development of new pharmaceuticals in Canada over the next 10 years and create 3,000 jobs.
The government continues to ignore the other side of the equation, which is the loss of countless jobs in the industry that produces generic copies of brand-name drugs-at considerable savings to Canadians in lower prescription bills and medicare costs.
A study last year by Toronto economist Harry Eastman, who enjoys sufficient government confidence to be nominated as head of a prices review board that the Tories plan to establish, concluded that the production of generic copies saved Canadian consumers $211 million in 1983 alone. Multiply that by 10 and the total, in 1983 dollars,-
That total comes to $2.1 billion. That is $2.1 billion that could be in the pockets, wallets and purses of Canadians so that they could spend it in local communities right across Canada.
I think we have to make it very clear that if any research and development jobs come out of this change to the Patent Act, those jobs will be almost exclusively in central Canada. Those jobs will be in Toronto and Montreal. While that is wonderful for Toronto and Montreal, the point is that there will be very little benefit flowing out of this legislation for the regions of Canada.
The article in the Vancouver Sun goes on to say:
The opposition parties and organizations concerned about the drug bill must keep applying pressure until the Tories can see the light.
According to an article in The Toronto Sun:
Ontario taxpayers will have to fork out an extra $35 million a year for drugs under a proposed federal amendment to the patent act, Health Minister Murray Elston said yesterday.
The article goes on:
"The amendment will have severe implications on drug prices," Elston said.
He said it would add at least $35 million to the $1 billion Ontarians now pay for drugs.
Some $400 million of that figure is paid by the government through its Ontario Drug Benefit program for seniors and people on special assistance.
I might add that even though government programs will pay for much of these increased drug costs, the money still comes from taxpayers of the province or of Canada. Again, the
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people of Canada are the ones who are providing those additional funds. The article goes on to say:
The remaining $600 million comes from cash-paying customers and private insurance plans-
A health ministry spokesman said the $35-million figure "is a conservative one"-
The Territorial Government of the Yukon passed a resolution which reads as follows:
Whereas it is fundamental to the health and welfare of all Yukon people that safe and affordable therapeutic pharmaceuticals be available, and
Whereas Section 41(4) of the Canada Patent Act (1969) has created a situation where Canadian licensees can produce low-priced generic substitutions of brand-name pharmaceuticals to be marketed in Canada, and
Whereas generic substitutions have saved Canadians approx. $200 million a year, and
Whereas these generic substitutes have resulted in lower Yukon hospital, pharmacare and prescription costs, and
Whereas the proposed changes to the Act will result in higher costs for publicly-funded health and hospital programs and higher prescription costs for individual Yukoners while providing no benefits to Yukoners, and
Whereas the federal Government in the face of constant pressure from the multi-national drug companies and the U.S. Administration has tabled a bill to amend the Patent Act,
Therefore be it resolved that this House urges the federal Government to abandon amendments to the Patent Act which would result in higher costs for all Yukoners.
Interestingly enough, all the Conservative Members of the Legislature voted against that motion. The New Democrats and one Liberal voted in favour of it.
Turning to the Province of Nova Scotia, the Consumer Affairs Minister, Laird Stirling, said:
The federal Government should drop proposed changes to drug patent laws because the costs outweigh the benefits-
"Even with that promise of $30 million in new money for research (in Atlantic Canada), it would be crumbs,"-
"Why is it we're supposed to be the guinea pigs in this program?
If my memory serves me correctly, the Nova Scotia Government is still a Conservative Government.
I turn now to an article in The Toronto Star. That article quotes Joyce King of The United Senior Citizens of Ontario as saying:
"I have seniors coming to me and saying they don't want to be part of the 51st state," she said. "They're scared and they think they're going to be sold out."


The Acting Speaker (Mr. Paproski):: I regret but the Hon. Member's time has expired. I will give him another minute to close off his debate.


Nelson Andrew Riis: Mr. Speaker, that went awfully quickly. Let me summarize.
I have another dozen comments that I just picked out of the news this morning from different individuals, scientists, consumers' associations, newspaper editorials and people like Don McGillivray of Southam News all commenting on the fact that the Government is on a suicidal path to try to introduce legislation that will jam hundreds of millions of dollars of increased drug prices down the throats of Canadians,

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and primarily seniors, the ill and the disabled. We feel that this is an immoral piece of legislation that must be opposed at all costs.


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, again it is Friday. It is always a pleasure to speak in the House of Commons on a Friday. I think it is a particular pleasure to speak on a piece of legislation which is so clearly related to the commitment this Government made in the last election campaign.
We won the last general election because it finally became clear to Canadians that the NDP-Liberal alliance was producing public policy that was penalizing millions of Canadians with unemployment and little hope for the future. It became clear that we needed a massive change in public policy if we were to be able to employ Canadians and allow them to participate fully in society.
One of the areas in which Canada is not well served is its commitment to research and development. If we want to be real world traders, we must be in the forefront of research, of the development of that research and of the manufacturing of the products that are developed.
It is indeed interesting to remember that in 1969, the Liberal Government brought in changes to the Patent Act that enabled non-inventors to steal the inventions of inventors. Here we are 17 years later with a million and a half or a million and quarter unemployed Canadians because the world community and Canadians generally began to lose faith in this country. Canadians began to lose faith that they had the means, the wherewithal, the talent and the drive to invent and to create.
Canadians have been inventing and creating, but they have been doing so in the United States, in Europe and in Australia. Why have they been doing it there? One of the root causes for that is the badly designed and inappropriate Patent Act.
It is particularly embarrassing for me to stand in a Chamber, which is supposedly full of wise people selected by the voters of Canada, and have to listen to the drivel and the inane childishness of the Opposition in reaction to a fundamental piece of legislation designed to restore Canada to economic health. Members of the Opposition seek re-election on false premises and on the backs of a million and a half unemployed Canadians. Every time we bring in a piece of legislation designed to create jobs and a future for the young people of Canada, we are exposed to childish tactics, opposition and inane arguments. It has happened again. In 1979, the NDP and the Liberals threw a Government out of office for bringing in the fairest Budget to the poor people in a decade. They threw the Government out of the House for being fair to poor people.


An Hon. Member:: We didn't throw them out. The people threw them out.


Frederick James (Jim) Hawkes: They threw a Government out of office that was creating jobs at the rate of 33,000 a month. Why did they do this? Because they want public policy that keeps people in bondage. They want to hand out the cheque to the unemployed at their local meeting. We do not seek to hand out unemployment cheques at local meetings. We seek an opportunity to meet eyeball to eyeball with those people who are fully employed, fully participating, and can look you in the eye and shake your hand, not hold out their hand for a hand-out. We need public policy that creates growth in this country. The heart of those types of policies relates to getting rid of obstacles like FIRA, and getting out in the community and trying to seek trade arrangements that enhance growth and jobs.
We have not even seen in this Chamber any proposal for arrangements that the Americans and the Canadians have agreed to. Yet the funding mechanism for the NDP Party is putting ads in local newspapers that state we should be afraid of it. Nobody has seen it, but we should be afraid of it. "Do not look at it as an opportunity system to create jobs and opportunities. Just be afraid because we tell you to."
There was a report in the House on Wednesday which was a thick, 500-page report. One or two hours after it was received, and nobody could have read it, it was being condemned by the Opposition as having no value and no opportunity system within it for the really poor of this country, the people who really need the help to get back on their feet and become productive and employed. Condemn it without reading it. Condemn the trade arrangements without reading them. Condemn patent protection, which lies at the heart of the development of this nation. It is a tragedy when somebody living in this country invents a drug or a new product and in the dark of the night they have to sneak across the border to patent it to avoid having it stolen. The jobs which flow from that invention flow into the American economy, the French economy, and the British economy.
It is absolutely insane and opposition Members have some gall to stand up and say that it is going to cost you more money. Generic competition, and competition of any type, tends to produce lower prices. That happens in Canada. For seven drugs out of one hundred it happens, the price goes down. But for 93 drugs out of 100 there is no generic equivalent.


Leslie Gordon Benjamin: The four years haven't run out yet.


Frederick James (Jim) Hawkes: Can anybody in good conscience on that side of the House stand up in the House and tell us on which of those 93 out of 100 drugs we are being ripped off? They do not know, because we do not have a price review mechanism today. They do not trust the drug companies, yet they defend a system which allows 93 out of 100 drugs to be put in the market-place without competition and without price review.


Leslie Gordon Benjamin: Hogwash!

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Frederick James (Jim) Hawkes: They want those drug companies. They talk about profits. They want them to be able to charge what they like.
This Government wants a price review board not to look at 7 drugs out of 100, but to look at 100 out of 100 to make sure that there is not a single drug on the market on which Canadians are being ripped off. We want drugs that work, save lives, and save pain and anguish. We need this patent protection so we can get first quality medical service and jobs.


The Acting Speaker (Mr. Paproski):: It being 4.45 o'clock p.m. pursuant to Order made Thursday, December 4, 1986, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the second reading stage of the Bill now before the House.
Before I put the question, however, I have a statement to make.


BUSINESS OF THE HOUSE
The Acting Speaker (Mr. Paproski):: I have received written notice from the Hon. Member for Peterborough (Mr. Domm) that he is unable to be present in the House on Monday, December 8, 1986, to move his motion during the hour for Private Members' Business. Accordingly, I am directing the Table to drop that item of business to the bottom of the order of precedence. Since notice will thereby be removed, the hour for Private Members' Business will be suspended, and pursuant to Standing Order 39(2) the House will continue with the business before it prior to that hour until the ordinary hour of daily adjournment.
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Patent Act PATENT ACT


MEASURE TO AMEND
[Stage Direction]
The House resumed consideration of the motion of Mr. Andre that Bill C-22, an Act to amend the Patent Act and to provide for certain matters in relation thereto, be now read a second time and referred to a legislative committee; and the amendment of Mrs. Killens (p. 1378).
The Acting Speaker (Mr. Paproski):: The question is on the amendment. Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 13(5), the recorded division on the amendment stands deferred until six o'clock p.m. Monday, December 8, 1986.
Having deferred the amendment we will take the second vote on the main motion on Monday.
It being five o'clock this House stands adjourned until Monday, next at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 4.48 p.m.
[Stage Direction]

Monday, December 8, 1986