1986-03-10

Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, today is Commonwealth Day and it gives me great pleasure to salute this remarkable institution. We are all familiar with the spirit of friendship and tolerance which so distinguishes this association of 49 states comprising fully one-quarter of the world's population. Its specific achievements are many, and we quite naturally think of the Commonwealth as an association where peoples from around the world reach across the great divides of religion, race, and economic and political philosphies to establish a commonality of purpose which draws on our diversity and is nourished by it.
Canada needs the Commonwealth and Canadians, by temperament, are well suited to playing a leadership role there. A nation's foreign policy is grounded in the needs, interests, aspirations, and talents of its people. We in Canada are fortunate to have two official languages and many different cultural and ethnic traditions. We have, against great odds, built a country which is second to none in its respect for the rights of others and, most especially, for the right to a life of dignity regardless of race, religion, or creed.

It is no accident that the Commonwealth so accurately reflects these fundamental values of our country. We were present when the organization was established, and from the very outset, Canadians have been active and energetic participants. More than any other multilateral institution, the Commonwealth has been shaped by Canadian values and reflects the driving forces behind our foreign policy.
Mr. Speaker, this country abhors the system of apartheid. It was John Diefenbaker who spearheaded the movement to expel South Africa from the Commonwealth, a spectacular act that sharply focussed the attention of the world, more than ever before, on this shameful situation. Last year in Nassau, it was again the Prime Minister of Canada (Mr. Mulroney) who decisively influenced the Commonwealth Agreement on South Africa.

Going into Nassau there were many who feared that the South Africa question could damage the meeting, could perhaps damage the Commonwealth itself, beyond all repair. We did not share this pessimism. We have confidence in our traditional foreign policy skills and the ways in which those skills have served Canada and the Commonwealth so well over the years.
In Nassau we set a timetable for the dismantling of apartheid and the initiation of reforms. We established a group of eminent persons to facilitate dialogue and work for powersharing arrangements that might avert a catastrophe in South Africa. That group is now in South Africa and Canada is ably represented by Archbishop Edward Scott in its deliberations.
The Commonwealth has been important to the pursuit of other Canadian foreign policy objectives: The transformation of Rhodesia to the new Zimbabwe, the growing acceptance of women as equal partners in economic and political life, and the efforts to move forward on north-south economic issues. In these and similar areas the Commonwealth has made significant contributions. Indeed, the success of the Commonwealth inspired much of the thinking which went into the hosting of the first ever Summit of Francophone Nations last month in Paris. We have great hopes that this francophone forum, too, will become an instrument for international understanding and human progress.

Canada's foreign policy is conducted through a complex series of bilateral and multilateral associations and institutions. To better understand this country and its position in the world, we should identify the means by which we pursue our national objectives in agreement with our allies and friends the world over. Our foreign policy is distinct because we have a unique network of international relations. Outside the Commonwealth, no other institution reflects so profoundly the way we feel about ourselves.

Canada has invited Commonwealth leaders to convene in Vancouver in 1987 for their next meeting. The invitation demonstrates our commitment to the Commonwealth, and the Vancouver meeting will demonstrate to Canadians the Commonwealth's attachment to and respect for Canada and the principles which guide this country in our activities around the world.


Some Hon. Members:: Hear, hear!


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, on behalf of my own caucus 1 would like to share with the

March 10, 1986
Statements by Ministers
Secretary of State for External Affairs (Mr. Clark) the tribute to what is, indeed, a remarkable and fascinating institution which was born in colonialism and dependency and has now emerged into full blown maturity as an association of free and independent countries able to share common concerns across a wide variety of different points of view.
Our commitment and dedication to the Commonwealth is important at this time in the history of the world because there are increasing signs of a retreat of commitment to the concept of multilateralism and internationalism. Various countries are retreating into forms of regional blocks, alliances, and continental associations. There is a diminishing support for the necessity of bringing the world closer together, not only in pure economic terms but in terms of communication. We see threats of terrorism. We see threats of the antagonisms which have grown up. We see retreat into the forms of preferred trading arrangements which do not allow for the entire scope of world activities to take place.
We all know, Mr. Speaker, that the key issue facing the Commonwealth in the weeks ahead will be South Africa. The Secretary of State properly referred to the statements made by himself and by the Prime Minister (Mr. Muironey) at Nassau and the United Nations. Opposition Members supported the intent and objectives of those statements. However, the clock is ticking. The six-month timetable which was set by the Government comes to an end in early April. At that time some very difficult decisions will have to be made. We will have to decide what kinds of very clear decisions we will make on sanctions and diplomatic representation. Thus far, Mr. Speaker, I have not seen the contingency planning which would allow us to meet those commitments and timetables.
The Minister speaks of leadership and that is a very important quality which Canada has and should exercise in the Commonwealth. It means we should be bringing various countries together to look at what could result from the mass movement of refugees in the front line states around South Africa. We should be looking at the representations and responses which would have to be taken, not just in the Commonwealth but in the UN and other world bodies. In other words, the clock is ticking and the time draws near.
This Government should be preparing itself for a number of serious steps which will have to be taken. We know for a fact there has been no improvement in South Africa. There has been no change in the position of the South African Government regarding apartheid. There has been no substantial progress made. Therefore, when the deadline is reached, and it is in the offing, then we in this House will be forced to make a difficult but important decision to take the final step and tell South Africa we will not accept apartheid any longer, that this Government will take every action necessary to make sure it does not continue. We will provide the necessary leadership in the Commonwealth and elsewhere. There will be a time to stand up for principle, and action will certainly be more important than words.
I want to comment on one further aspect of Commonwealth affairs. It is prompted by the release on February 17 of the new proposals for economic co-operation in the Caribbean. We all recognize that the Caribbean is one area where Canada can provide the most positive kind of leadership and support for an important group of Commonwealth nations. The statement of February 17 falls substantially short of that. The exclusion of a number of important areas from the agreement does not represent the kind of commitment we would like to see this Government make. I hope that in next week's meeting between the Prime Minister and the President of the U.S., the Government of Canada will be very forthright and strong in its approach to promoting a much broader and more effective economic program for that part of the world and that part of the Commonwealth.


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, I need all the help I can get today.


Some Hon. Members:: Hear, hear!


Ian Deans: I cannot even get started for the applause. I want to join with both the Minister and the Liberal Party critic in recognizing today as Commonwealth Day. As I prepared to say a few words on this subject I could not help but think that every year we rise and extol the virtues of the Commonwealth. Then 12 months pass and we rise again and extol the virtues of the Commonwealth. That may be a little unfair, but we do not pay as much attention to the Commonwealth as we pay lip service to our concern for the Commonwealth. It is time for Canada to evaluate very carefully the role it can and ought to play as leader in the Commonwealth. We have 49 states with a common bond. The bond takes on many different dimensions but it is exemplified in the movement of people around the world. There is within that movement a very close relationship between Commonwealth countries. In my own case, coming to Canada from Britain, the choices were quite narrow; you went to Australia or Canada. That was because of the Commonwealth tie. It was a sense that we belonged to the same family of nations. We had many similar if not identical standards in our daily lives.
In looking at the shifts which have taken place in the world, the one constant factor has been, at every international conference I have attended, that the persons who came most quickly and most closely together in seeking solutions to difficult problems were those of the Commonwealth. They always seemed to be able to find common ground. They came together in a group not to bully others but to look for solutions to international problems. As you travel around the world you find that in Commonwealth countries there is a tremendous amount of respect for Canada. If you were to ask people in the Commonwealth countries who they look to for leadership and guidance, almost without exception the name Canada comes up early, if not first, in the responses. We have to constantly bear that in mind because with that recognition goes tremendous responsibility. We have to be prepared not only to be a voice among many but to be a leading voice in seeking solutions to the very difficult problems which exist both within
March 10, 1986

and without the Commonwealth. In South Africa, for example, I cannot help but feel that although we have played a role, it is difficult to measure at this stage what progress, if any, has been made as a result. It is hard to see the kind of response from the Government of South Africa which we had hoped to see; the kind of human understanding of the inappropriateness and total unacceptability of the system they have established, that of a division on the basis of colour. We in this country have to be even more strongly represented in the argument against that system. Not on a once in a while basis but on an every day of the week basis. If need be, we would have to take the appropriate additional steps which may turn out to be necessary, which in fact may even now be necessary, in order to try and bring to that regime's attention that, as a leader in the Commonwealth of Nations, we will not sit idly by and allow to continue the kind of activity that they perpetrate on their own people.
Beyond that, there are other conflicts in the Commonwealth, some economic and some social. Canada has to free the necessary capital resources to offer to those countries the base from which they can develop a position of equality within our group of nations, indeed in the world. I say to the Minister that the celebration of Commonwealth Day should be a new beginning. It is not enough to say that we will just continue with what we have been doing. We have to chart a new beginning starting now and clearly establish an independent role for Canada, to show the rest of the world that we are not going to be idle bystanders. We are going to be there when circumstances require it, whether it be a financial cost or whether it be in rallying the rest of the world around the appropriate measures which must be taken.
On this day the message has to be that we in Canada are going out now to establish a new relationship. We are going to ask the rest of the Commonwealth nations to join with us in fighting those things which we all agree are inappropriate. I ask the Minister to consider once again sending a message to South Africa on Commonwealth Day, drawing to their attention what we have in common and what we find unacceptable about the regime's behaviour. Do it as a commonwealth message and ask the rest of the Commonwealth to join us.
Order Paper Questions PROPOSED DEVELOPMENT OF NCC PARKLAND


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, I am sending a message to the National Capital Commission from 104 residents of the national capital region who express their continued strong opposition to the proposal to utilize the green space north of Sandridge Road into an embassy enclave.


ARCTIC WATERS POLLUTION PREVENTION ACT
Ian Deans: for leave to introduce Bill C-279, an Act to amend the Arctic Water Pollution Prevention Act.


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to. Bill read the first time and ordered to be printed.

Ian Deans: for leave to introduce Bill C-280, an Act to amend the Canada Shipping Act (twin screws and double hulls on all vessels carrying oil in Canadian waters).


Mr. Speaker:: Is it the pleasure of the House that the Hon. Member shall have leave to introduce the Bill.


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Jim Caldwell (Essex-Kent):: 1 have the privilege of presenting a petition from the residents of Kent Bridge in the riding of Essex-Kent. The petitioners humbly pray and call upon the Government to require the Government of the Province of Ontario to remove any restrictions which may have been placed on the police force of Metropolitan Toronto in regard to laying charges under Section 251 of the Criminal Code against the operations of the premises known as the Morgentaler Clinic.


Mr. Doug Lewis (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, question No. 519 will be answered today.


Ms. McDonald: Did the Minister of Employment and Immigration change the regulations of the unemployment insurance program to cover performing artists, regardless of their status for taxation purposes, as recommended by the sub-committee on the

March 10, 1986
Canadian Arsenals Limited
taxation of artists and writers and (a) if so, on what date (b) if not, for what reason?


Hon. Flora MacDonald (Minister of Employment and Immigration):: No, the UI legislation has not been changed.
(b) Coverage under the UI program is based on an employ-er/employee relationship, with the general requirement being the person must be under a contract of service in order to be considered in insurable employment. Where the artist is employed under a contract of service, i.e., where the employer/ employee relationship exists, the artist is covered under the UI program. However, for the most part, performing artists do not fall under this category but rather, are self-employed.
The UI program is being studied by the Forget Commission; no change will be forthcoming to the UI legislation until its recommendations are made known. Representations have been made by performing artists to the Forget Commission, and their case will be given consideration in conjunction with the over-all review of the UI program.


Philip Derek Lewis: 1 ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Speaker:: The question enumerated by the Parliamentary Secretary has been answered. Shall the remaining questions stand?


Some Hon. Members:: Agreed.


Mr. Speaker:: May I inform the House that because of the ministerial statement Government Orders will be extended by 18 minutes beginning at one o'clock p.m.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Tuesday, February 25, consideration of the motion of Mr. Mclnnes that Bill C-87, an Act to authorize the divestiture of Canadian Arsenals Limited and to amend other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Mr. Speaker:: Resuming debate, the Hon. Member for Brant (Mr. Blackburn).


Mr. Derek Blackburn (Brant):: Mr. Speaker, 1 rise this morning to address Bill C-87, an Act really to privatize Canadian Arsenals Limited, a Government Crown corporation 1 believe since 1945.
The first point 1 want to make is that it seems to me that when we talk about the privatization of Crown corporations this Government, and indeed the previous one, seemed to think that the more successful the corporation the faster the Government should divest itself of that corporation. Certainly Canadian Arsenals Limited is one shining example. Frankly, 1 do not know why the Government wants to get rid of Canadian Arsenals Limited of Montreal. It employs some 800 workers in Quebec at two different factories. It supplies a great amount of ammunition to the Canadian Department of National Defence at a very good price. Last year, for example, it registered a profit of $11.3 million. In The Financial Post survey of the top 500 firms in Canada it came in at number 470. It is not exactly the top, but it is within the top 500. In terms of five-year profit growth it was number three. Again 1 ask, why does the Government wish to divest itself of this very profitable well run, well organized job producing Canadian industry?
One could almost link this with the sale of de Havilland and the proposed sale of Canadair, even though both of those corporations at the present time are not in a profit-making situation. Nonetheless the taxpayers over the years have poured hundreds of millions of dollars into the development of a Canadian Aerospace Industry. Now we see that after that effort has been made, and the financial input has been made from taxpayer's money, both of these companies are also going to go to the private sector. We do not seem to be in any great hurry, however, to divest ourselves of the losers. Those Crown corporations, which unquestionably will continue to be losers, the taxpayers of Canada are being called upon to continue to infuse with capital simply to keep their heads above water. Not so with Canadian Arsenals Limited of Montreal, a successful profitable job creating corporation that in my opinion, and that of my Party, should be kept as a Crown corporation and, indeed, as an example of how a Crown corporation should be managed, organized and run, and to prove to the doubters that Crown corporations can work, can make profits. That is the key point here as far as we are concerned.
As far as the specific deal is concerned with respect to Bill C-87, there is an upside as well as a downside. 1 am very happy to see that even though we have to divest ourselves of this Crown corporation the purchaser must be at least 75 per cent Canadian and resident in Canada. The Board of Directors must also of course be resident in Canada. This clause, as far as I can understand it, cannot be altered in the future. It must remain a Canadian corporation, if not a Crown corporation.
Second, the purchaser, SNC Group of Montreal, which is a very reputable private company in engineering, construction and manufacturing-I suppose in the scheme of things one could not expect to find a better corporation in Canada which is Canadian for the purposes of taking over Canadian Arsenals-is owned I understand by approximately 500 of its own employees, and world-wide, including its Canadian operations employs approximately 4,000 employees.
The downside, however, is quite serious. In addition to what I have already said in principle about divesting ourselves of
March 10, 1986

Crown corporations that are profitable, well managed and well organized, we have here, first of all, the loss of a prosperous Crown corporation which sells 90 per cent of its ammunition to DND. When one considers that our own Department of National Defence, which obviously is an adjunct of the Crown-it is a portfolio, a ministry, and by its very nature must remain within the public domain-has its own publicly owned and controlled source of ammunition supply at a very reasonable price, I am told, why would we now choose to privatize Canadian Arsenals, particularly when it has been doing a very, very good job of supplying our own military with relatively inexpensive ammunition since 1945. I believe it is fair to say that from now on the cost of that ammunition will increase now that the company will be privatized. This may not take place over night, but I am prepared to argue that the cost of that ammunition to Department of National Defence will begin to increase.
There is also no guarantee of job security, job creation or expansion as a result of this deal. Of course, this is cause for concern to employees of Canadian Arsenals Limited. As far as we can determine, the new corporation can be allowed to stop producing the kind of ammunition or product that it presently produces for the Department of National Defence.
There is no guarantee of employee benefits. For example, Canadian Arsenals Limited is represented by the Public Service Alliance of Canada but the employees of SNC are represented by the CNTU in their collective agreement. There are two major unions involved in this transaction and, while 1 am not familiar with labour law, it would appear to me that there may be a conflict requiring the collective agreement to be rewritten. Who will represent the employees? Will it be the PS AC or CNTU? I believe this situation will create some labour unrest in the Province of Quebec certainly over the next several months because these are two sizeable bargaining units.
The Public Service Alliance of Canada and its membership was never notified of the Government's intention to privatize Canadian Arsenals Limited. The first information they received was what they read in the newspaper. It is most regretable that an employer would inform its employees of a change of ownership through the media. It is demoralizing and creates widespread apprehension among the workers and the bargaining unit. It does not lead to a peaceful and easy transition from one owner to another, and I suggest the Government has made a major blunder in this process. In addition, the PSAC registered its very grave reservations and apprehensions to Canadian Arsenals Limited and the Government as early as October 7, 1985, with respect to the possibility of the company becoming privatized.
We have other serious questions regarding the process used by the Department of Supply and Services in selling Canadian Arsenals Limited. Dozens of companies expressed interest in CAL but only six were asked to submit final money offers by November 19, 1985. We have no way of determining why only
Canadian Arsenals Limited
six and none of the other companies were asked to submit final money offers by November 19, 1985. furthermore, the final bidders were forced to submit three revised bids between July and November 19 because the Department of Supply and Services kept changing its story, according to a newspaper article. In other words, we do not know whether the Department was changing the rules during the game, or why only three of those six firms were asked to submit three revised bids between July and November 19, 1985.
Moreover, a senior official at the Department of Supply and Services, Stan Kerr, Director General of Aerospace and Armaments, left DSS on November 1 to work for CFN Consultants which was lobbying DSS on behalf of SNC for the purchase of Canadian Arsenals Limited. Mr. Kerr signed an affidavit swearing that he would not be dealing with any aspect of the Canadian Arsenals Limited deal. 1 am not questioning the man's integrity or honesty, but I am suggesting that in the public domain, in the media and in our minds there is always that lingering element of the appearance of conflict of interest. There is the appearance of a possibility of conflict of interest, and I am in no way calling into question this gentleman's honesty and integrity. I simply suggest that it was a poor move at that time because it does raise some eyebrows.
I will not comment on it any further.
All of these points may be attributed to the fact that the Department of Supply and Services was treading on new ground in its role as a privatizer, because it traditionally acquired rather than divested of Government assets.
The conditions of sale which SNC has agreed to for the purchase of Canadian Arsenals Limited are not yet known to the public. In a press release dated December 2, 1985, the Department of Supply and Services refers to employee pension rights being protected in the conditions of sale. However, a conversation with Jean Bergeron of the PSAC on February 21, 1986, confirmed that they were still worried about the workers' pension plan.
This is an area of vital concern not only with respect to this change of ownership but with respect to such sales in general. There are situations throughout the country where individual workers who have given five to thirty of their best working years to a company, see that company change hands or go bankrupt and most if not all of their pension plan go down the drain. This is fundamentally and morally wrong. We can no longer tolerate this type of situation in this country where men and women retire with a pension of only $200 or $300 a month rather than the $1,000 they anticipated at age 65 because the company changed hands along the way.
When we address the issue of pensions in general at the federal and provincial levels throughout the country, I hope this type of situation can be brought to an end. As far as my Party, and I am sure most Members of Parliament are concerned, this practice cannot continue. We must bring this type of handling of what used to be called in the 19th Century "operatives in the workplace" to an end.
I urge the Government to make every effort to ensure that
as a new company takes over Canadian Arsenals Limited the

March 10, 1986
Canadian Arsenals Limited
pensions are totally guaranteed and will continue in place for those workers who are presently working at Canadian Arsenals and have paid into them over the years. In that way they will be guaranteed the kind of dignity and security which they anticipate and expect in their retirement as a result of the present collective agreement.
On December 14, 1985, the Financial Post referred to significant numbers of contract clauses built in to ensure greatly expanded facilities for the manufacture of munitions and the modernization of plants. I said a few moments ago that Canadian Arsenals, a publicly owned corporation, was a first-class producer and ammunition for the Canadian DND. I just wonder whether we should be expanding the role of this munitions manufacturer into a global market-place. I wonder whether it is wise for a country like Canada to become even more deeply involved with those known as the "purveyors of death", the international arms merchants. Granted, bullets are a very small component of any military organization. However, in principle, should we consider allowing a Canadian company, now that it is going to be privatized, to be expanded into the world market-place where weapons, components of weapons, bullets, shells and so on, are sold?
I do not believe Canada has to create jobs in that way, now should it be involved in the international arms trade. We are not morally obligated in any way to become part of that very questionable and murky world beyond the factory gate. Where do the guns, the bullets and shells end up, and I am not referring to SNC? Where do the other weapons of death end up? Through whose hands do they go and where do they eventually end up? We have laws in this country to prevent Canadian manufacturers, whether publicly or privately owned, to sell weapons to the world's hot spots, to where there is insurrection, civil war, international conflict, and so on. It is very interesting that some of the bullets or shells of CAL ended up in the hands of the Contras in Honduras and in the northern sections of Nicaragua. No matter what side one is on in Nicaragua, I think it is unconscionable-if it is correct, and I am going by newspaper reports-that Canadian made bullets would be involved in conflicts, not only between the Contras but, more importantly, now between the United States and the Sandinistas, because that is really what the civil strife down there is all about. It is that Nicaragua posed a major military threat to the United States. But I am not going to get involved in that subject because it is not on topic.
I think we should be very careful. Perhaps we should think about tightening up on these export controls. There have been some notable exceptions over the years, but so far Canada has a pretty good record in this field, and I would hope that by privatizing Canadian Arsenals Limited, by selling it to SNC, we will not be providing yet another company to produce armaments in the world for the purpose of these very questionable territorial or regional military disputes, insurrection or civil wars.
The Government is determined to sell off a winner, a profit-making Crown corporation, which 1 do not believe it should do. It is a corporation which could have been an example of how a Crown corporation should be run successfully. Nonetheless, with its massive majority, the Government is going to force the sale through. But I hope it will make certain that there are restrictions on the sale abroad of the products produced by the new owners.


Mr. Boudria:: Mr. Speaker, I have a question and a short observation first. The Hon. Member will no doubt be aware that the Government in its attempt to sell this Crown corporation decided to hire the firm of Arthur Andersen Limited from Montreal in order to assess the value of its assets and business for the purposes of arriving at some sort of price for its disposal. The Minister of Supply and Services (Mr. Mclnnes) sent me a letter on January 20 in which he said:
Further to my Legislative Assistant's discussion with you last week. I must once again advise you that 1 cannot provide you with a copy of the Arthur Andersen Report. However, I can confirm that the Arthur Andersen Company carried out a valuation study of CAL prior to commencement of the bidding and negotiation process and estimated that the value range for CAL was $80 million to $98 million.
The Hon. Member will know that the company is proposed to be sold for an amount of $92,224,941, in other words, considerably less than the maximum indicated in the Arthur Andersen report. Does the Hon. Member agree with me that the Arthur Andersen report should be tabled in this House so that all Members of Parliament could in fact determine whether or not the Canadian taxpayers are receiving their money's worth, notwithstanding the fact, as he said, that perhaps we should not even consider selling the company at all? However, recognizing the majority the Government has, I think the least we should do is ensure that the taxpayers of Canada are well compensated for their belongings, and of course this company belongs to the taxpayers of Canada. Does the Hon. Member think, as I do, that this process should be made public, that the Arthur Andersen report should be tabled in the House so that all Hon. Members can know the value of the company?
I give an example to the Hon. Member. Is the company worth $98 million if it has a guaranteed Government contract? Is it worth slightly less if it does not? In other words, why can we not get the details of this process in order to be able to fully determine whether or not the taxpayers of Canada are reaping all of the benefits from this sale, notwithstanding the fact that we may not even want it sold, to start with?


Derek Nigel Ernest Blackburn: Mr. Speaker, I want to thank the Hon. Member for putting that question to me. I made reference in my remarks to the fact that we did not have all of the details of the transaction. I think it goes without saying that whenever a Crown corporation is sold-regrettably, a profitmaking one like this-all of the details of that transaction should be tabled in the House so that we know exactly what happened. After all, we are the custodians here, not of private stockholders but of public funds which are given to us by the taxpayers of Canada by law. They are the owners, as the Hon. Member pointed out. The taxpayers should be apprised of all
March 10, 1986

of the aspects of any transaction when a Crown corporation is sold to the private sector.
It is rather interesting that there is a difference between the Andersen upward figure of some $98 million, and the proposed sale price of $92.3 million, roughly.


Mr. Bradley:: Mr. Speaker, I appreciate the Hon. Member's concerns pertaining to the pensions and benefits of the employees. I know of the interest the Hon. Member has in this area. I can assure the Hon. Member that this is also a concern of ours, and I look forward to working with the Hon. Member in committee on this matter.
The Hon. Member also expressed some interest as to how the bids came about and how the decision was made. I should possibly clarify for him that on May 23, the Government's intention to privatize Canadian Arsenals was announced. In response to the announcement, numerous expressions of interests were received. In fact, nine corporations submitted the $100,000 deposit required to obtain confidential information and accesss to CALs facilities. Eight of these nine corporations submitted serious offers on August 9, 1985. Immediately thereafter the Government commenced competitive negotiations with these companies to ensure the best deal for the taxpayers of Canada. This is why the come-backs to the bids took place. The process has resulted in a selection of the SNC group as a preferred bidder. As the Hon. Member has stated, we feel that SNC is a very competent Canadian company, the majority of whose shareholders are Canadian. We are very proud to do business with them.


Derek Nigel Ernest Blackburn: Mr. Speaker, I would like to respond to the Hon. Member for Haldimand-Norfolk (Mr. Bradley). I would be happy to participate in any way I can to make certain the deal goes through, even though I am opposed to it. If it has to go through I wish to ensure that it will go through with as much public understanding and knowledge as is possible.
In my remarks I made reference to the final bidders being forced to submit three revised bids between July and November 19, 1985, because the Department of Supply and Services kept changing its story. Again, that information comes to me from a newspaper report. Nonetheless, I am not suspicious that anything wrong has been done. I am certainly not suspicious that anything illegal has been done. I am simply wondering why these companies would have to submit bids three times. Was this to obtain, for example, a higher price? That would make sense to me if all the bids which came in were too low, or well below the Andersen figure, or below the upper figure, or, in this case, the lower figure. Thus there are still some questions in my mind with respect to this matter. I am not for a moment suggesting that anything illegal has taken place at all, or anything unconscionable for that matter. I am basically opposed to this sale. It is too bad we have to divest ourselves of a healthy corporation. I can think of one or two others which we might let go for a buck.
Canadian Arsenals Limited


Mr. Cassidy:: Mr. Speaker, I would like to draw to my hon. friend's attention the fact that Canadian Arsenals Limited showed a profit of $3 million in 1981 and a profit of $181,000 in 1979, which rose to $11.3 million in 1985. Back in 1980 Canadian Arsenals had sales of $30 million, which sales tripled to more than $100 million in 1985. It appears to me that Government wants to get rid of Canadian Arsenals because it maintains it has been badly managed. Does the Hon. Member think there is evidence to show that the company has been badly managed and that it is some type of a dog, or in fact is this not a company whose profit increase was the third or fourth largest of any company according to The Financial Post 500? Why get rid of it if in fact it is so profitable?


Derek Nigel Ernest Blackburn: Mr. Speaker, I wish to thank the Hon. Member for his question. 1 answered in it in part in my remarks this morning. I mentioned that it was within the top 500 companies according to The Financial Post. I mentioned it was number three in Canada in terms of its five-year profit growth. I asked: Why sell? The taxpayers of Canada do not even know if we are receiving a good price for it. 1 think it is a shame that we are getting rid of this type of Crown Corporation which has a ready market. Some 90 per cent of its product goes to the Department of National Defence. It is a company which has shown increasing profitability. It is a company which has been improving in the market-place. Obviously, it is not a company which was poorly managed. It seems that the Government automatically assumes that all Crown corporations are badly managed, when in fact here is a shinning example of one among many which is not badly managed and which, indeed, is very efficiently run.


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, in recalling the Budget prior to the last Budget, and I would love to have been able to speak on the last Budget but unfortunately the Tory majority cut our tongues out on that particular issue on Friday-


Some Hon. Members:: Oh, oh!


Sheila Maureen Copps: I recall in the Budget prior to the most recent Budget the Minister of Finance (Mr. Wilson) stated that he would like to reward success. The new credo of conservatism was: "Reward success". Yet those in the public who do not know a great deal about Canadian Arsenals Limited might not realize that this particular action on the part of the Government, the sell-out of Canadian Arsenals, is in direct contradiction to the promise of the Minister of Finance that he will reward success.
I would like to walk through some of the recent history of Canadian Arsenals which clearly shows that this company was not only making money but that it had the third highest increase in profitability of any company on The Financial Post 500. One would think that under those circumstances the Government would at the very least be prepared to come clean with respect to the total value of the company. However, we quite clearly see another example of the secrecy of the Govern-

March 10, 1986
Canadian Arsenals Limited
ment. It is not prepared to tell the taxpayers the value of the company which we are now about to divest ourselves of as a result of its credo of privatization. It has so blinkered its eyes to the benefits of some Crown corporations that it is not prepared to even submit to public scrutiny the Arthur Andersen report which assessed the value of the over-all picture of Canadian Arsenals Limited. In fact, if one were to look at the most recent annual report of Canadian Arsenals dated March 31, 1985, one would see that during the tenure of the Conservative Government-so it cannot be said that this is a sneaky Liberal document-this Crown corporation had embarked upon a plan which was succeeding. This was a plan which was not only buttressing our development of high technology in Canada, but which was looking at the whole notion of increasing exports.
We know that when the Prime Minister (Mr. Mulroney) heads off to the "ShanT'rock summit in about a week from now he will be talking about increasing our exports. [Translation]
For the first time in its history, Mr. Speaker, if we take the time to read the Annual Report for Canadian Arsenals Limited, for the first time in its history, this corporation has exceeded $100 million in sales and $10 million in net profits.
Going back to the year 1977, we know that at the time, the corporation was not in good financial health. A decision was made to set up a project which in fact was ordered by the previous Liberal government. They decided to revamp a plan in order to make the corporation a profitable concern.
In 1977-78, there was a net deficit of $1.2 million. The corporation's sales in that year totalled $8 million, and it was expected the deficit would be a problem.
But if we look at the last seven years, Mr. Speaker, the results of the corporation's plan for 1984-85 show that the mandate given in 1977 to make Canadian Arsenals a viable and financially independent enterprise, capable of attracting private sector investment, has been met in all respects, according to the highest private sector criteria-which is the goal of this Conservative Government.
This Government was expecting to pay a supplement to ensure the security of supply of military equipment in Canada. In fact, according to the Minister responsible for Supply and Services, the decision represents a saving, not including the economic spin-offs for the country in terms of the creation of hundreds of high-paying jobs in an advanced technology sector.
Mr. Speaker, finally, the corporation has made tremendous progress during the last seven financial periods. Today, according to the Financial Post 500, the corporation ranks 470th on sales and third on growth of net profits over the last five years.
If we look at advanced technology, for instance, we know that during the election campaign, the Government promised to double the funding for advanced technology research.
We see that in this corporation, of which the Government is now divesting itself, advanced technology within the corporation represents $86.6 million of a $103 million turnover, and we can better appreciate this when we see that this breaks down as $28 million for new products, $2 million for new filling processes and methods, $25 million for products for which technology was acquired under licence, and $1.6 million for technology sales.
Mr. Speaker, increased inventory has made it possible to increase productivity by 11 per cent, compared with a drop of 2 per cent for the previous year.
We also know that the CAL staff has increased and there is talk about jobs, jobs in the Province of Quebec. They hired 159 new employees last year and the Crown corporation had 827 people on the payroll on March 31, 1985.
The Parliamentary Secretary stated there would be no problems with the employees, their jobs will be protected and so on. Mr. Speaker, the facts show that it is not so. When the Government decided to unload the corporation it did not even have the courage or basic courtesy to contact the union, the Public Service Alliance of Canada. The Government made and announced the decision and the employees found out the corporation would be up for sale when they read about it in the newspapers.
Mr. Speaker, how can we take the word of a Government that promises to protect the former Crown employees who are now working for the CAL when we can see the same Government did not even have the courage to contact them before deciding to sell the corporation which now has about 800 employees in the Montreal region?
Obviously, Mr. Speaker, the Government showed its total lack of courage in this whole matter. They decided to give a mandate to the Minister of privatization-that is the Minister of Regional Industrial Expansion (Mr. Stevens) who struck the first blow when he sold de Havilland-and then the Minister of Supply and Services (Mr. Mclnnes) came on the scene right after the Minister of privatization and decided to sell this corporation which is now operating profitably.
Mr. Speaker, why are the Conservatives so keen on privatization? They are quite prepared to sell the corporation, but they did not have the courage to table in the House the documents listing its assets.

What are the Conservatives afraid of? Why are they so bent on the privatization of this company which has clearly demonstrated that it has followed the Wilson rubric, "reward success"? In the last seven years, it has made a spectacular recovery, finding itself number three on the Financial Post's list of 500 for increasing profitability of a company. Yet the first thing the Government does, in its Pontius Pilate approach to the public sector, is to wash its hands of the entire company.
March 10, 1986

The Government is selling off the assets of the company and the Canadian Government's only access to munitions without even having the decency to table in the House the corresponding documents.
It could be argued that there is some question of national security involved. Heaven knows, the Government invokes national security at will when it suits its purposes. If that is the case, however, why did the Minister, in a letter to the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria), who has been questioning the Government on this issue since the announcement of it, tell the Hon. Member that he could see the Arthur Anderson report privately in the Minister's office but that the Minister was not prepared to make its contents public? What is there in this particular document that makes the Government so fearful that it cannot make it public? Is it another example of a de Havilland Giveaway? Is it in fact because the Anderson report shows that the profitability of this company is not only increasing but that the notion of having a Crown-owned manufacturer of munitions is in the interests of Canadian security?
The Government has indicated that it will have the supply question dealt with by making sure that SNC is a 75 per cent Canadian-owned company, and that is wonderful. However, we saw with Mitel that when the Government gives up its interest or in fact is prepared to sell out, there is never any guarantee in the long term that the company will remain in Canadian hands. On the other hand, there is certainly no guarantee that even a Canadian-owned company would always act in the best interests of the people of Canada. Presumably the Canadian Government would act in the best interests of the people of Canada, and that is why a company like Canadian Arsenals was launched as a Government Crown corporation.
The biggest buyer of Canadian Arsenals products is the group known as the taxpayers of Canada. On the one hand, we are the biggest buyer of the company's products. We are selling out our interest and turning it over to SNC, which in fact is now going to be in a position of having a major monopoly on the issue of munitions for Canada. The company is being sold and we are not even prepared to come clean in the House of Commons about the actual value of this company which has shown a remarkable and, indeed, one might even say a miraculous economic growth in the last seven years.
The Government had been prone on a number of occasions to pointing to the fact that the so-called non-profit-making Crown corporations are adding to the deficit. We heard the President of the Treasury Board (Mr. de Cotret) jumping from one figure to another trying to justify the giveaway of the de Havilland Corporation. When the figures were finally tabled in the House, they belied every statement made by the Government on the sale of de Havilland. We will not be able to have the same scrutiny of this particular sale to SNC because we do not even have access to the documents.
It is unfortunate that most members of the public do not understand the function of Canadian Arsenals. They do not know that it has been a profit-making company. They do not know that its prime user happens to be the Government of
Canadian Arsenals Limited
Canada for the people of Canada. These munitions are made by a Crown corporation which employs people through the Government of Canada. Ninety per cent of its products are sold to the Canadian Government for the people of Canada. Now the Canadian Government is divesting itself of that company without even having the courage to come to the House with the documentation that shows that we have to get rid of this boondoggle. But it is not a boondoggle, it is in fact a very profitable company which has responded to the Conservative mandate by recognizing the bottom line.
Since the establishment of Canadian Arsenals in 1949, we have seen an incredible increase in its move toward profitability, particularly in the seven-year plan that was established in 1977-78. We also see the future for Canadian Arsenals. The selling price is $92.2 million, $87.5 million for the shares and $4.7 million for the debt owed by Canadian Arsenals to the federal Government. Sales in this particular company are projected to double in the next five years. There are currently $200 million in backlogged orders with the company. If my mathematics are correct, with $200 million in backlogged orders and a selling price of $92.2 million, SNC has just gained over $100 million in guaranteed orders without even having to table its fiscal plan for the company in the House of Commons.
This is a giveaway. It is another indication to the Canadian people that the credo of privatization espoused by the Minister of Regional Industrial Expansion (Mr. Stevens) and followed by every other Conservative Minister does not always work. There are times when there is a role for the public sector to play in the economy. Surely the sole source of munitions supply for the Government is quite clearly one area where there is a public interest in having this company remain in public hands.
It was the decision of the Minister of Supply and Services some three years ago to analyse the situation. He said that in light of the security implications of the particular company it was important that it not only be Canadian owned but that there be a direct government interest, that it be a Crown corporation. The Government has washed its hands of that particular analysis without being prepared to say in the House of Commons just why, or for how much or for what reason it is selling the company.

Unbelievable as it is, Mr. Speaker, the corporation has a back-log of $200 million in orders, yet SNC is offering only $92 million, which means that in excess of $100 million are there for the corporation.
The Government keeps talking about the deficit and, among other things, it is urging young families to accept cut-backs in family allowances and wants average Canadians to pay 3 per cent more in federal sales taxes, and that might work out to over $1,000 a year per family. We can see the difficulties created by this Budget and previous Budgets as well. The

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Government is asking Canadian men and women to make sacrifices and then gives away these corporations which are making profits on behalf of Canadian taxpayers.
Mr. Speaker, we can see here that the corporation ranked third among companies that have recorded rising profits since 1982-83, so why should the Government be so anxious to sell without telling the House of Commons what is the real value of the corporation?
For instance, we know that a number of additional facilities are planned for the corporation.

In 1976, when the Government took a look at how it could improve the status and the situation of Canadian Arsenals, a $3.6 million modernization program had been embarked upon and there was another $3.7 million for the recovery of operating deficits. That total of $7.3 million was to be spent between 1977 and 1982. The corporation showed a profit in 1978. The recovery had taken less time than even anticipated by the Government. Therefore, CAL only used $4.3 million of the $7.3 million allocated. Part of the subsidy was refundable. That brings the total cost to the Canadian Treasury down to $3.1 million, for a company which in the 1984-85 operating year showed a profit of $11.3 million. An investment of $3 million for an $11 million return, a projected $200 million in sales and a doubling of the sales projections over the next five years, is money well spent. y
Unfortunately, since the Government is so committed to privatization at all cost-it sold out or gave away de Havil-land-it is now in the process of giving away Canadian Arsenals. At the same time it is not prepared to tell Canadians the ultimate cost of the sale to the taxpayers, the costs in terms of lack of security, in terms of actual profitability and in terms of lost jobs. There are no job guarantees. When the company is turned over to the private sector it might keep employees on for a year or two, but there is no guarantee. There is no guarantee built into the take-over by the company from Montreal.
There are numerous questions on the particular sale which have not been answered. I urge the Government to reconsider its decision. In its quest to privatize it has forgotten the credo espoused by the Minister of Finance, reward success. Canadian Arsenals has been a successful company, and it is now being rewarded by being sold off to the lowest bidder.


Mr. Hovdebo:: Mr. Speaker, I noted with interest that the Hon. Member for Hamilton East (Ms. Copps) dealt with the corporate plan of the corporation which suggested a 100 per cent increase in profits over the next five years. Does the Hon. Member have any idea of the actual amount of possible purchases by the Department of National Defence over the same period of time? Is there a larger possibility of profits by Canadian Arsenals if it works more closely with the Department of National Defence than it did in the past?


Sheila Maureen Copps: Mr. Speaker, the Canadian Government is
responsible for about 90 per cent of the products sold by
Canadian Arsenals. The export projections in the year 1984-85 were about 7.9 per cent of the company's business. Obviously the projections will come in great part from the added contributions by the Canadian Government.
When the Hon. Minister of Supply and Services (Mr. Mclnnes) stated that the SNC group had been determined to be the preferred bidder, the Government made quite clear that it was not prepared to give preference to the particular company in terms of its own purchasing requirements through the Department of National Defence. As I understand it the only competitor-and I may not be correct in my assessment-to Canadian Arsenals in certain areas of munitions was the SNC group. By selling to that group quite clearly a private sector monopoly will be created. The Government does not like public sector monopolies, but it appears from what it is doing with the sell-out of this company that it not only embraces the notion of a private sector monopoly but it is creating it.
In that regard, the projections for profitability launched in the annual report of Canadian Arsenals will clearly be paid by Canadian taxpayers. It will be taxpayers' money. We are losing on both ends. We are losing because we are selling the company for less than it is worth. In fact we are losing because it is being sold at all. We are also losing because we will be creating a monopoly which will force Canadian taxpayers to pay more for the purchases made through the Department of National Defence. I do not know who is winning in the deal. I think the only group which is winning is SNC. Since it had the gumption to come in with the bid, more power to SNC. However, Canadian taxpayers are certainly the losers in this particular fiasco.


Philip Derek Lewis: Mr. Speaker, could the Hon. Member explain to the House the difference between the federal Government sale of Canadian Arsenals and the Ontario Government sale of UTDC?


Sheila Maureen Copps: Mr. Speaker, obviously the Hon. Member has not done his homework. He certainly does not recognize the fact that the Urban Transit Development Corporation was originally a boondoggle creation of Conservatism.


Some Hon. Members:: Oh, oh!


Sheila Maureen Copps: It was so poorly viewed by the citizens of Hamilton, for example, that when they were offered a free aerial expressway they turned it down.
Certainly the Ontario Government is doing the best it can to make the best out of the situation. If we look at the replacement of Hawker Siddeley in Thunder Bay by UTDC, obviously Hawker Siddeley has been a very effective and profitable company. Unfortunately UTDC drove Hawker Siddeley out of business and then proceeded to take over all contracts into which Hawker Siddeley had entered in the past.
The former Chairman of UTDC was another one of those Tory patronage appointments. He had at his disposal a villa and a number of limousines, including a Mercedes, which were paid for by the taxpayers when he was out flogging the LRT
March 10, 1986

for the City of Vancouver. He was not paying a cent of rent. He was living in luxurious accommodations at the expense of Ontario taxpayers.
Clearly the Ontario Government has taken its responsibility, has conducted an assessment of the situation and has recognized that as long as some involvement by the Ontario Government could be guaranteed-and that is being guaranteed by this particular initiative-it would be the best under the circumstances.
The fiscal plan of the UTDC is a far cry from the fiscal plan of Canadian Arsenals which has increased its profitability to the point where it is third on The Financial Post list of 500. I do not think we would see the same profitability margin with UTDC.


Philip Derek Lewis: Mr. Speaker, does the Hon. Member care to comment on the creation, by the Quebec Liberal Government, of a Cabinet post for privatization?


Sheila Maureen Copps: Mr. Speaker, the Hon. Parliamentary Secretary has probably spent the morning justifying why he called for an adjournment last week, because I do not think he was listening to my speech. There are 40-odd items of business on the books, including pension plans, and the Conservatives could not think of anything to do. They called for an adjournment and then had to eat their own words. They swallowed themselves whole, and the Member is obviously totally inside out today because of that swallowing experience.
That being said, Mr. Speaker, 1 do not think he was in the House to hear my speech. Had he been, he would have heard my reference to the words of the Minister of Finance who said: "We reward success". This happens to be one of the Crown corporations which has shown that it can be profitable and can show the private sector how to do a few things.
My Party and the Liberal Party in Quebec are not so tied to the notion of privatization that it would sell a company which is making a profit and has the Canadian Government as its largest purchaser. The Quebec Government has said that it will move toward privatization in certain areas where it can divest itself of a boondoggle. However, Canadian Arsenals was clearly not a boondoggle. If the Member has any information to show otherwise, would he please table it in the House? We have been begging the Minister of Supply and Services to put the Arthur Andersen report on the table. He will not do that because it is a money-making operation and he is ashamed of the fact that he is selling it for a song. The biggest loser in this operation will again be the Canadian taxpayers.


T.A. Bud Bradley: Mr. Speaker, I am sure the Government of Ontario provided the legislature will all the information pertaining to the sale of its Crown corporation. 1 guess the answer to the question of my colleague from Simcoe North (Mr. Lewis) was that it is all right for the provincial Liberals in Ontario to sell Crown corporations, but it is not all right for the federal Conservatives to do the same.
Canadian Arsenals Limited
I rose because I have a concern about the Hon. Member's speech. I have concerns about many of her speeches. She indicated that Canadian Arsenals was the sole source of supply for the Government of Canada. She mentioned that we have sold off the Canadian Government's only access to ammunition. I know the Hon. Member is very concerned about statistics and always attempts to be correct. I know she would not want to mislead the House purposely. However, I am sure the Hon. Member is aware, and if she is not I will inform her, that there are many ammunition suppliers in Canada. The Government of Canada does not rely solely on Canadian Arsenals Limited for ammunition. The difference between CAL and the other suppliers of ammunition in Canada is that the others are privately owned.
The Member expressed concern that we should sell our "sole supply" of ammunition. It is a major supplier of ammunition, but not the sole supplier. The Government of Canada probably buys more paper clips than any other organization in Canada. Perhaps the Member feels, therefore, that we should publicize the paper clip manufacturing industry in Canada. As long as a Crown corporation carries out valid public policy mandates it will maintain its status as a Crown corporation. When it is no longer a valid public policy vehicle, we feel it should be returned to the private sector. It is not an issue of whether it is making a profit.
The concern with regard to de Havilland was that we were selling it to non-Canadians. The Opposition said that they would approve the sale if it was to a Canadian company. In this case we are selling to a Canadian company and the argument is that the corporation was making a profit. Maybe the Opposition should get its act together.


Sheila Maureen Copps: Mr. Speaker, I wish the Hon. Parliamentary Secretary had the time to read organs like The Financial Post. If he did, ,he might realize that the statement he made in the House is misleading. The fact is that Montreal-based IVI Inc. provides the forces with small calibre ammunition, up to 30 milimeters, and CAL makes the heavier stuff, up to 155 milimeters. Between them, CAL and IVI account for almost all of Canada's domestic ammunition and both are now owned by SNC. The fact that there is no competition between the two firms is no accident. IVI was a part of Canadian Arsenals until the mid-60s when it was sold by the Government as part of a strategy to privatize as much of CAL's assets as possible. These two companies account for almost the total expenditure by the Government of Canada for munitions and, as a result of this particular venture, they are both owned by SNC.
I am sorry that the Parliamentary Secretary has not better researched who is in in fact behind the companies which are selling munitions to the Government. I suspect, Mr. Speaker, that Arthur Andersen's report may have made this quite clear. If the Parliamentary Secretary were really interested in learning why we are selling this company he should table the Arthur Andersen report. He says that profit is not an issue. The Government will sell corporations left, right, and centre regardless of profitability. If a munitions industry has no reason for remaining a Crown corporation, obviously there is

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no Crown corporation which has a reason for being attached to the Government. I expect that the philosophy of the Hon. member means that every single Crown corporation will be sold, regardless of whether it is making money for the taxpayers. 1 think that is a sad statement of the Conservative credo of privatization.


Michael Morris Cassidy: Mr. Speaker, I want to speak at some length about this particular Bill and express my regret that the Government has not learned from the sale of de Havilland with regard to its handling of the sale of Canadian Arsenals Limited.
During December and January members of my Party were lobbied on a number of occasions by representatives of SNC, a reputable and very successful Montreal-based engineering company which is now moving into the area of manufacturing. They were frustrated that the sale had taken seven or eight months and asked if we would be prepared to expedite the passage of this through the House of Commons. If the Government was desirous of co-operating with the purchaser of Canadian Arsenals, it certainly did not show it in this House.
The Bill was brought before the House for debate on February 25, only one week ago. While the Government had time at its disposal it could have acted to resolve some very serious questions which were raised by representatives of the workers involved, which we had raised, and which I believe SNC was aware of as well. Rather than doing that, the Government has left those problems in limbo and they are now being debated here in the House of Commons, three months after the deal was originally proposed.
At the time the sale of CAL was announced we, quite naturally, began by focusing on the de Havilland sale. One of the reasons was that we knew that under the terms of the Financial Administration Act this sale would come before Parliament for approval and we would be guaranteed the opportunity to debate it. Members will recall the difficulties we had in getting the Government to agree to release information and allow a parliamentary committee to study the sale of de Havilland. Initially, the Government wanted the sale to proceed without any parliamentary scrutiny at all. I am afraid that we are facing a similar situation with respect to the sale of Canadian Arsenals. We do not have the information we need right now.
Efforts by the union and Opposition Parties to get the valuation in the Arthur Andersen report on Canadian Arsenals, and to get actuarial material which may have been prepared with respect to the pension plan and how the workers at Canadian Arsenals will be affected, have run into a stone wall. I appeal to the Parliamentary Secretary to talk to his young, attractive Minister, this newcomer into the Conservative Cabinet, who came in with a fresh broom to sweep out some of the problems which have occurred in the Government's first year in power. I ask him to appeal to his Minister to do things differently than the Minister of Regional Industrial Expansion (Mr. Stevens) and the Government did with respect to the sale of de Havilland.
When the Vice-President for Corporate Planning of SNC, Madame Celene Hervieux-Payette, a person who is well-known to a number of Members of this House, came here to press for early action she was simply doing her job. When I spoke with her I urged in the strongest possible way that SNC sit down and talk to the workers representatives in order to resolve their very legitimate questions about what was going to happen to them as a consequence of this sale. I have to record with regret that that was not done. There were one or two get-acquainted meetings with the president of the local, but nothing more serious than that. A meeting is being held this Friday, but only because of the request from the union. It was not initiated by SNC.
With respect to Teleglobe Canada, whose privatization has not yet been proceeded with, it is just this week that the union learned that actuarial assessments concerning the pension plan and the impact on the workers of privatization have been prepared. The union understands that a similar report was prepared by Sobeco with respect to Canadian Arsenals Limited. When they met on January 2 with the assistant secretary of the Treasury Board, Mr. Jean-Pierre Kingsley, specifically to talk about the implications for workers' pensions, no reference was made to the fact that study had either been commissioned or received. That was not fair and above-board dealing with the representatives of the 800 workers involved. That information should have been provided at that time. The Government should be straightforward now in making copies of that report available to the union.
There are a number of questions which have to be answered. The Minister stated on February 24 at page 10865 of Hansard:
Arrangements have been made with the present employees ... for the portability and transfer of their pension plans. There will be no prejudice resulting to the employees in this regard.
While I welcome an assurance like that given in the House of Commons, it has not been matched with concrete action. I am afraid the Minister must be misinformed, because no such arrangements have been made. Up until now the employees have not seen what is in the agreement for sale between the Government of Canada and SNC. When they met on January 2 with Mr. Kingsley he outlined a number of options concerning the determination of the Government of Canada pension plan which has covered the employees of Canadian Arsenals Limited. They could cash in their plan. They could make an arrangement to transfer their rights. Or, they could take their benefits and cash them in if they were over 55, take a pension and then, if they wished, continue to work with SNC. However, that did not respond to such questions as what happens to workers approaching 55 who have a substantial number of years of service and who intended or expected to have the option of retiring at 55. Will that right continue or will it not? The union has not had an answer to that or the question of whether the indexing of their pensions, to which they have been paying in many cases of up to 15 years, will be delivered, or whether they will lose that right under the successor plan. I
March 10, 1986

am told that the Treasury Board representative told the union that the pension plan they would receive is being adjusted to the industry norm. That would indicate no indexing and there may well not be early retirement at 55. The workers who already have 30 or 40 years of service will be expected to continue to work until 60 or 65, or lose entirely, or suffer a very substantial reduction in their benefits.
On January 2 the Treasury Board was asked for information about the SNC pension plan. One would have thought that could have been provided within a couple of days or perhaps a week. However, as of today, March 10, that information has yet to be provided to the union. That is far from fair and above-board dealing, and certainly far from the arrangements which the Minister indicated had been made. We need those details. When we come to committee stage I suggest the Government get about its business and make sure that information is provided so that the workers do not find they have bought a pig in a poke because of mishandling of this sale by the Government of Canada!
Concerning job security, there was no indication at the time the sale was announced that jobs were on the line. However, we had the first indication of that in the Minister's speech. He said:
The undertaking and indication of the company is that it will continue to employ the great majority if not all of the employees.
If I was a worker at Canadian Arsenals I would be damned scared about that because I do not know what it means. Does it mean that management employees are going to be made redundant because their jobs will be taken by people from IVI, the other subsidiary of SNC? Does that mean production line workers are going to be laid off despite the anticipated doubling of the output of this company over the next five years? That kind of slipshod statement should not be permitted. It should have been sorted out.
This Bill goes to such pains to ensure that the Government has control over any subsequent sale of CAL to another owner. It contains safeguards in order to retain 75 per cent Canadian ownership of this company. Given that, the Bill could also have ensured that there would be job security for the workers affected; if not forever, then at least for four or five years. It would be expected as well that SNC would manage the company in order to maintain the jobs of the affected workers. However, this was not done.
SNC is said to have guaranteed it will honour the existing contract. The union has not seen exactly what that clause is and whether it is a bankable kind of contract. Can they go to court if SNC chooses to back away? Is there some means by which the Government will monitor the agreement to make sure that clause is respected?
There is a difficult problem here because these workers are passing from the jurisdiction of the Canada Labour Code to the Quebec Labour Code. There are no successor rights when you transfer a contract from federal to provincial legislation. I am sure the Parliamentary Secretary and his Minister either knew or were informed of that by the strategic planning people who handled the sale. Under those circumstances information
Canadian Arsenals Limited
should have been given to this House that the Government sat down with officials of the Quebec Minister of Labour in order to ensure a workable and effective means of ensuring that successor rights are handed on. If it cannot be done by way of a co-operative agreement, then the necessary legislation should be brought forward at both levels of Government. However, that has not been done.
The privatization policy of the Government as enunciated by the Minister of Finance (Mr. Wilson) in the November, 1984 economic statement was that the Government will be sensitive to the concerns of management and employees of corporations which may be considered candidates for sale; while recognizing that negotiations must be conducted confidentially, every effort will be made to keep these groups informed of significant developments and ensure that their legitimate interests are not jeopardized. Up until now that has not been done with respect to the workers of Canadian arsenals. They have been treated like mushrooms; kept in the dark and fed a diet of horse manure. That is not good enough.
If you have a policy, even if it is inadequate, you should stick to it. However, we found in the case of de Havilland that the workers were the last people to be told what was happening concerning privatization. That appears to be happening again in this case. I suggest that is the policy the Government is now following consistently. It does not give a damn about the interests of the workers involved. When workers have worked faithfully for the Government of Canada for 10, 20 or 30 years, they deserve to be treated in a better way than the Government is doing in this case.
That brings me to the final point, which, is where the devil is this whole privatization thing taking us? In the one case the Government sold off de Havilland because it said it was losing money. Now it is selling off Canadian Arsenals because it says it is making money. We have seen the financial record over the course of the last few years for Canadian Arsenals. As parliamentarians we deserve to know whether this has been achieved because of damn good management on behalf of the people, the public service managers running Canadian Arsenals. Have they cut their costs and therefore increased their profit, or have then perhaps simply gotten a better price from the Government of Canada? We should know why it is that the Government is now spending three times as much for ammunition as it was spending through Canadian Arsenals in 1980. Is this a matter of policy? Are they deliberately firing ammunition out into the ocean in order to use up the guns and ammunition to increase the profitability of this company in order to make it a candidate for privatization? Who knows?
I was given to understand that as far as the Navy was concerned, they can no longer get their ships out to sea. How they are using any more ammunition is certainly beyond me.
If an acquisition is taking place in the private sector good management says that, in addition to talking to senior management to let them know what your plans are, you also try to bring the workforce into your confidence. You try to give them

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Canadian Arsenals Limited
as much information as possible to quiet their fears about the acquisition. You try to ensure, and demonstrate to them, that means have been worked out in order to protect job security. Unless it is your intention to try and ditch the union, you try to co-operate with the union in order to ensure that its interests and the interests of its members are going to be protected. If that is good practice in the private sector it is equally good practice when privatization is taking place.
As the Hon. Parliamentary Secretary knows, we in this Party have grave questions about this whole process of privatization. We think that what is at work is an ideological commitment which says that the public sector is bad and the private sector is good. When you have a public sector which delivers medicare, old age pensions, hospital insurance, Air Canada, and one of the most efficient and successful railways in the world going from coast to coast in Canadian National; when we have all of those things in the public sector I, for one, cannot believe that the public sector is uniformly bad as the Government seems to feel and the private sector is unformly good.
When we have a private sector that poisons the waters up in Grassy Narrows and White Dog Reserve in northwestern Ontario; a private sector which sends chemical blobs into the St. Clair River; a private sector which has permanently contaminated the chemical dumps in the region of Niagara Falls with dioxin; a private sector which continues to support dictatorships in Chile and places like that I, for one, cannot believe that the private sector is uniformly good.
I want to suggest that the Government get away from this black and white ideology in which it suggests that everything that the private sector does is to be praised and everything that the public sector does is to be denigrated.
I want to suggest in terms of any policy about privatization that we should look at each case on its merit. If Canadian Arsenals was going to double its sales in the next five years, if it had shown the competence to increase its sales by three times in the last few years, to begin to enter into legitimate export markets, and that kind of thing, then I want to suggest that maybe it is worthwhile keeping it in the public sector for a few more years.
Canadian Arsenals was not a company which was short in terms of finance. 1 am just looking at the figures here. It had $52 million in equity and only $16 million in long-term loans and lease obligations. The company had ample room, if the Government did not want to provide it with long-term capital financing, to borrow in the private market.
I want to suggest that if Canadian Arsenals was held back in public ownership from doing the job in terms of expansion or finding new markets in the United States or another NATO country, the reason was because it was deliberately held back by this new Government, and not that of any failure as far as the management of that particular company is concerned.
1 suggest we should let public enterprise do the job, grow
and flourish, in addition to allowing private enterprise to
continue to operate in this particular field. You do not hold
back public enterprise, tie both arms behind its back and then turn around and say. See, we told you that private enterprise can do the job and can grow and expand and public enterprise cannot do the job. That is a phoney comparison the Government is making in this particular case.

In concluding, Mr. Speaker, I would like to say that when the co-operation of the New Democratic Party was sought in connection with the privatization of Canadian Arsenals Limited, I suggested to SNC in Montreal that the matter be discussed with the union and the necessary arrangements made, so that employees would have the assurance their interests would be protected. We have now had three months to make these necessary arrangements, and nothing has been done, either by the company or by the Government.
Despite the Government's policy on privatization, a policy that was announced by the Minister of Finance in November 1984, and which says that the Government will make every effort to ensure that the groups involved, that is, employee and management of companies that are to be privatized, are informed of all developments and are given the assurance that legitimate interests will not be threatened.
Despite this statement of the Government's policy on privatization, employee interests have not been protected. They did not receive the requisite information ensuring that their interests would be protected.
Mr. Speaker, in the circumstances, the Members of our party cannot support this Bill to privatize Canadian Arsenals Limited. In committee, we intend to ask for disclosure of all necessary information, and this includes publishing the evaluation study by Arthur Andersen, and the study by Surbeco, a study of the employee pension system, and also that the necessary discussions take place before, not after the matter has been dealt with in Parliament.
I believe the Government failed to learn its lesson when it privatized de Havilland. Furthermore, Mr. Speaker, instead of acting as though this was just Conrad Black selling off one of his companies-

Instead of acting as though this was just Conrad Black selling off one of his holdings, it seems to me that the Government of Canada should be handling privatization in a different way. We are not talking about Canada incorporating a vast private sector concern which is free to wheel and deal. We are talking about the Government of Canada which, while it has legislative and political authority to privatize if that is the policy of the Government of the day, has certain obligations to deal in a way which should be a model to the private sector, and which should be assigned to the people of Canada. When it comes to protecting our interests as shareholders, and when it comes to protecting the interests of workers who worked faithfully and devotedly for a Crown corporation for many years the Government of Canada, whatever its ideologi-
March 10, 1986

cal stripe, should deal fairly, and be seen to be dealing fairly with those interests, rather than simply going hell-bent, helter-skelter to privatization, and damn the consequences for we as sharesholders, and damn the consequences of our employees.


Mr. Kilgour:: Mr. Speaker, could the Hon. Member for Ottawa-Centre (Mr. Cassidy) inform the House which Crown corporations will be earmarked for privatization under a New Democratic Party government?
And at the same time, can he-

Can he tell us the names of the industries already in the private sector which his Party is committed to nationalize, if the day ever arrives, which I sincerely hope it does not, that his Government were to be elected?


Michael Morris Cassidy: I want to tel! the Hon. Member that 1 was in Edmonton just last week and had an extremely positive reception. It seems to me that things are opening up for the New Democratic Party, not just in the Province of Quebec, not just in the Atlantic Provinces, but even in the Province of Alberta. In fact the Province of Alberta was one of the founding building blocks of the Co-operative Commonwealth Federation in 1932 when, in fact, we founded our Party in the Province of Alberta. We are going to return to those roots. I remind my hon. friend that in the latest opinion polls the New Democratic Party was up at 28 per cent, and that is the highest we have ever been in our history. We are only 8 per cent below the Progessive Conservative Government, despite the disparity in seats between his Party and our Party. That suggests to me that when we talk about going slow on privatization, when we talk about the fact that the Government of Canada still has a role in economic development, a lot of Canadians respond to that and say that we are talking a lot more sense than people on the Government side.


Mr. Keeper:: Mr. Speaker, if it is Tory policy to privatize Crown corporations that lose money as well as those which make money, what would the Tory policy be with respect to Petro-Canada? Why would they not use Petro-Canada to lower gas prices as they could, instead of dreaming about privatizing it? Will my colleague indicate which policy makes more sense to Canadians, the Tory policy to sell off every Crown corporation and productive industry that is owned by the public, or is there a more reasonable approach to Crown corporations?


Michael Morris Cassidy: Mr. Speaker, when 1 was growing up milk was still being delivered by a horse drawn wagon. The horses that pulled the milk wagons up and down my street in Toronto wore large blinkers so they could not look to one side or the other. That very accurately describes how the Conservatives try to run a public sector corporation in a creative fashion. They are blinkered and cannot see that Petro-Canada is now so large that it could bring gasoline prices down by 5 cents or
Canadian Arsenals Limited
10 cents a litre. Instead, they say that even though it is in the public sector it has to operate like Texaco, Shell or Esso.
The Conservatives do not understand that there is a creative role in the private market for public sector corporations. 1 am sorry about that. They just do not learn.


Mr. Blenkarn:: Mr. Speaker, I am most pleased that the New Democratic Party is high in the polls. Perhaps they will find that the higher one is, the farther one falls.
Will the Hon. Member tell us why his Party is filibustering this Bill rather than bringing the matter to committee where his questions could be answered as he examines officials who have made the transaction.? He could examine the deal to determine whether it is good or bad. He could properly make comment there instead of holding up the House and this necessary legislation. Why not let it go to committee so that their questions can be answered, rather than talking about it here? It is Government policy to sell the corporation. The details of the sale could perhaps be changed if it went to committee. I suggest that the intelligent step for his Party to take is to allow the Bill to pass.


Michael Morris Cassidy: Mr. Speaker, let me remind my hon. friend that this sale was announced on December 2 and the House sat until December 20. We resumed on January 13 and have been sitting since then. Yet this Bill, which the Hon. Member says is so vital and important, was not brought up for debate in the House of Commons until February 25. It is impossible for the New Democratic Party to filibuster a Bill that is not before the House for debate. Members of my Party did not comment in the House about this Bill for two and a half months. We had no opportunity to do so because the Bill was not before us for debate.
If my hon. friend is taking part in the legislative committee dealing with this Bill, will he assure us that we will not be subjected to the kind of deadlines that closed off discussion on the Bill dealing with de Havilland? If he could give us that assurance I am sure it would enable us to expedite the determination of this Bill.
Discussion on this Bill has consisted of a morning, an afternoon and a morning of debate. 1 suggest that does not amount to a filibuster when we are discussing a $90 million Bill. Furthermore, let me state for the record that I believe I am the fourth member of my Party to speak on this Bill, and I suggest that is far from a filibuster.


Mr. Rodriguez:: Mr. Speaker, it is my understanding from the debate that Canadian Arsenals Limited sells its products to the Canadian Armed Forces and its NATO allies. 1 also understand from answers by the Secretary of State for External Affairs (Mr. Clark) that some of the products of Canadian Arsenals Limited have found their way to Chile, that escutcheon in South America. It has been able to purchase some of the products of Canadian Arsenals even though that company is owned by the Canadian Government. Some of its products have found their way into Chile, that bastion of democracy

March 10, 1986
Canadian Arsenals Limited
and great friend of the United States who may have to rescue another dictator.
If Canadian Arsenals Limited is turned into a monopoly in the private sector, is there not a great danger of our becoming one of the purveyors of destruction in the world by selling arms to places like Chile, as a result of the desire to multiply profits rapidly through the sale of very dangerous munitions?


Michael Morris Cassidy: Mr. Speaker, there should be enforceable terms in the agreement of purchase and sale to ensure that Canadian Arsenals Limited does not sell to any of the developing countries of the world where these brutal and vicious wars are taking place, with tinpot dictators being supported by the United States and their henchmen in these affairs which, I am afraid, is the Canadian Government in many cases. Furthermore, Canada should take the lead and make it a general policy that we will not sell defence equipment to countries like Chile and other repressive regimes like South Korea and South Africa, but will use our moral influence throughout the world to make sure that all arms manufacturing countries support our view and will not encourage and support those acts of repression by dictatorial Governments. That is the type of lead Canada should be taking in the world.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I welcome this opportunity to say a few words about Bill C-87, an Act to authorize the divestiture of Canadian Arsenals Limited. This Bill to dispose of the Crown corporation is required as a result of the Crown corporations Bill which was passed in the last Parliament. According to that legislation, Crown corporations that were established by an Act of Parliament must be formally wound up by an Act of Parliament. Furthermore, that legislation requires the provision of a five-year corporate plan.
As we consider the annual report of this Crown corporation and its five-year corporate plan, it is very interesting to see that this is a Crown corporation that is making a lot of money and has good < prospects for success and profits in the future. Therefore, it brings into question the Government's policy on privatization of Crown corporations.
The Government's policy seems to be to dispose of all Crown corporations. However, let us consider Petro-Canada. When the Government was in opposition it forcefully opposed the formation of Petro-Canada in every way. The Conservatives opposed the legislation forming Petro-Canada and they opposed the take over of Petrofina and BP. However, last fall Petro-Canada provided an additional contingent liability to the federal Government of almost $1 billion when it took over some 1,800 gas stations in Ontario and western Canada. Many people, especially Tories, were very upset about that. Certainly, I believe Hon. Members from Calgary and Alberta could not understand what the Government was doing with regard to its privatization policy when a Crown corporation like Petro-Can expands its operations by over $1 billion.
Our caucus can only ask the question: What is the Government's policy? Is it to sell companies which are making a
profit and to keep the companies which are losing money? Many Canadians, especially those of Conservative persuasion, wrote to the Prime Minister (Mr. Mulroney) last fall and asked why the Government was expanding Petro-Canada by 1,800 gasoline stations across Ontario and western Canada, adding an additional liability of $1 billion. The Prime Minister's response was that Petro-Can operates pretty much in the private sector and the Government does not really have any say over its corporate policy. It is very interesting to contrast the policy of the Government in relation to Petro-Canada and its policy with regard to selling off Crown corporations. The policy seems to be to sell off Crown corporations willy-nilly, but in some cases, as in the case of Petro-Can, to expand them. If so, the logical question is, therefore, are only the companies which are making money going to be sold? That seems to be the case with the SNC purchase of Canadian Arsenals.
Canadian Arsenals has been in business as a Crown corporation since 1945. It has two plants, one in Montreal and one in Quebec City. It employs some 800 people. Its sales have doubled in the last five years to some $200 million a year. It looks like a very profitable company. It has sales orders for some $200 million over the next year or so. Yet, there are other Crown corporations such as Eldorado Nuclear, which are losing money at the present time, and in the case of Eldorado Nuclear this is partly due to Government policy of not further upgrading the uranium industry in this country. What are the prospects of selling those kinds of companies? It does not seem very good at all.
What really concerns our caucus with the sale of Canadian Arsenals for some $92 million is that we would like to be able to assess whether or not that is a reasonable price. The Government has that information. The Prime Minister made an outstanding speech in 1983 and 1984 when he was the Leader of the Opposition. He spoke about freedom of information and how the Government was going to be open with Parliament and with the Canadian people. Yet, in the case of this major disposal of a Canadian Crown corporation, it is secretively hiding the information on which this House can make a decision. Our Party would like to see the report of the Arthur Andersen Company, a reputable company, which has estimated the value of the company at some $80 million to $98 million, a range of $18 million, to see whether the price of $92 million is reasonable. For the life of me, I cannot understand why the Government would not be prepared to give this report to the House of Commons, and to the Canadian people, at this time. The Minister of Supply and Services (Mr. Mclnnes) offered to show the report to a Member of our caucus in the privacy of his office but is not willing to make the report open and freely available to the House itself. I believe the report should be made available to the House before we pass second reading of this Bill because it is fundamental to the value of the company and to what the opportunities are for the Canadian people. We want to know whether an adequate price is being offered for this company.
The next point I would like to make is that it seems to me
that in selling a Crown corporation of this nature we should
March 10, 1986

look at the profit potential for the years ahead. The profits of Canadian Arsenals in 1980-81 were some $3 million. In 198485, the profits were $11.3 million. In 1983-84 the profits were $8.5 million. In 1982-83, the profits were $6.9 million. And in 1981-82 the profits were $5.3 million. So the equity of the company has risen dramatically. The assets have risen from $42 million in 1980-81 and $126 million in 1984-85. That kind of profit picture and increase in assets should only make us more cautious about receiving a better price for this company.
Those are some of the questions we would like to see answered. I think there is also great concern about the way in which the Department of Supply and Services has handled the bidding process. Apparently it was done by word of mouth. There was no proper tendering procedure with respect to calling for bids across the country. Half way through the process of getting the bids, which was done in a very amateurish way, the company indicated that the sole criterion for selling the company would be the price paid. Surely, there are other considerations which we should take into account; whether the employees are going to be treated fairly with respect to pension rights and so on, whether the company is going to expand, and whether it is going to maintain its Canadian ownership. There are a lot of other things besides just the price which need to be considered.
The Public Service Alliance has certainly expressed its concern with the sale of this Crown corporation. The Department of Supply and Services has never consulted the Public Service Alliance as to what arrangements would prevail with regard to the 800 employees. Surely, that is an important matter. We require minimum consideration for private corporations. Surely, consultation with the union would have been appropriate. I do not think that would have been an insurmountable problem. At any rate it would have been an important courtesy to extend.
The whole rationale behind the Government selling Crown corporations should have been brought into play in the sale of this company. There are a number of points which need to be considered with respect to it.
The Government seems to be moving in a disjointed fashion, as I indicated before, with respect to the sale of all Crown corporations. For example, we have heard that the Government is moving privately and quietly to sell off a small Crown corporation in Montreal. I refer to a small fumigation company. This company has amazing importance in regard to the export and import of Canadian wood and food products. Yet when one makes inquiries with respect to this company one can see nothing but mist and fog clouding the position of the Government. I am sure sometime later this year we will hear that the Government has decided to sell off this corporation in Montreal without the calling of tenders. We will learn that it has worked out a private deal with some purchaser without any public announcement being made. This will cause us to end up with a very unsatisfactory arrangement regarding the certificates required for the import and export of food and
Canadian Arsenals Limited
wood commodities, amounting to some $50 million to $100 million a year. We will learn that the company has been sold for a bargain-basement sale price as well.
The price of $92 million for Canadian Arsenals Limited may well be a fair price. According to the information given by the Minister of Supply and Services the price is within the range set out in the Arthur Andersen report. However, we have not seen the report. If we were to see the report then perhaps we would not be questioning the price. I cannot see why the Government is not prepared to make the report available to Members of the House at second reading stage. It is at this stage that we enter into the whole question of government policy.
With respect to the de Havilland sale, we saw the Government sell off an $800 million corporation for just $95 million. That is essentially the price of one 747 jet airliner rolling off the production line of the Boeing Corporation in Seattle, Washington. It seems to be an incredible bargain. Yet the profit potential is tremendous, especially when one considers the sales force of the Boeing Corporation around the world.
It seems that all Crown corporations which have any potential for making a great deal of profit are being sold off atbargain-basement prices. It would seen to me that if we must sell Crown corporations we should try to make some real profit on the sales. Obviously, those Crown corporations which are not making a profit will have to be knocked down in price. We see companies, such as Canadian Arsenals which is making a real profit, being sold off at modest prices, or perhaps even bargain-basement prices. However, we do not really know because we have not had access to the Anderson report. Certainly with respect to the sale of de Havilland to Boeing, and now with respect to Canadian Arsenals Limited and other comparable Crown corporations with good potential for profitability, we see them being sold off at bargain-basement prices.
As the debate continues on this issue I hope the Government will make the report available to us. It is essential for us to have the report in order to see just how much the Government expects to make. We should see whether or not this is an adequate price. The report should be made available to us.
In the letter from the Minister of Supply and Services to the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) the Minister gives some information about the Anderson report. The Minister also indicates in his letter that he is willing to show the Hon. Member the report privately, but is not willing to make it available to all Members of the House. I wonder why such a decision would be taken by the Minister. Perhaps the Parliamentary Secretary to the Minister of Supply and Services (Mr. Bradley) can clarify why the Minister is willing to make the report available to some Hon. Members on a private basis but not to all Hon. Members for consideration at second reading.
The information which is available seems to indicate that this corporation with 800 employees, which has a guaranteed market in that some 90 per cent of its products are sold to the Department of National Defence, and which has a back-log of $200 million in orders, and whose sales are projected to double

March 10, 1986
in the next five years, is being sold off at a bargain-basement price. If that is not true, then the report should be made available to Members of the House before we refer this matter to the committee.


Mr. Deputy Speaker:: Order. It being 1.18 p.m., I do now leave the Chair until two o'clock this afternoon.
At 1.18 p.m., the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I call upon the Government to reverse its horrific slide in assistance to inshore fishermen. These people are the object of terrible discrimination at the hands of the Progressive Conservative Government.
While the corporate sector gets its fiscal kickbacks, assistance to inshore fishermen is savagely cut. Money allocated to dredging and other improvements for small craft harbours has been virtually eliminated. It had gone from SI40 million in 1983-84 to $13.2 million for this fiscal year. This is a cut of 94.5 per cent to the inshore fishermen.
Why is the Government doing this to the fishermen in Atlantic Canada, in places like Gabarus, L'Ardoise, South Bar, Port Morien, Glace Bay, Main-A-Dieu, Little Lorraine, and thousands of other small communities throughout the country? This cut, on top of the cancellation of the vessel replacement program, can only lead to one conclusion: The Department's and the Minister of Fisheries and Oceans' (Mr. Siddon) policy for the inshore fishery is to make the inshore fisherman an extinct species.



INDUSTRY


Michael Morris Cassidy: Mr. Speaker, I should
like to draw the attention of the House to the situation in the
village of Desbiens near Chicoutimi where the St. Raymond pulp and paper mill has been closed for four years.
Eighteen of the 125 workers laid off as a result of the shutdown are now occupying the mill to draw the attention of the Governments of Quebec and Canada to the situation at the mill and particularly to the promise made by the Prime Minister (Mr. Mulroney) during the election campaign.
The Prime Minister, then Leader of the Progressive Conservative Party, promised financial assistance to re-open the St. Raymond pulp and paper mill, if he and his Party would form the Government. Mr. Speaker, almost 20 months have passed since that promise was made, but the Government has not done anything yet. Promises were made, but no action-


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



ALBERTA RINK WINS MEN'S CURLING CHAMPIONSHIP

Mr. Bob Hicks (Scarborough East):: Mr. Speaker, I realize that congratulatory messages are not permitted under the rules of the House. I would like, however, to draw to the attention of my colleagues and of all Canadians the fact that yesterday the Province of Alberta won the Brier, emblematic of men's curling supremacy in Canada. I would also like to stress that 1 am a native of Ontario. That is the province that came "oh so close" to winning the Brier. It did not, however, because Alberta was best.
Alberta had the best rink. I feel, therefore, that it is extremely important to announce that all Canadians are proud of Alberta and the Ed Lukowich rink, and all Canadians are looking forward to being so ably represented in the upcoming world championships to be held, by the way, Mr. Speaker, in Toronto.



ETHNIC AFFAIRS


Mr. Alan Redway (York East):: Mr. Speaker, last Saturday night in Toronto, Members from all sides of the House, including four Progressive Conservative Members, attended the extremely successful annual Harry Jerome Awards dinner sponsored by the Black Business and Professional Association.
Established to honour the memory of one of Canada's world-class athletes, to pay tribute to black Canadian achievers, and to inspire young black Canadians and all Canadians to strive for excellence, the awards this year went to Bridgette Arrindell and David Lowe for academics, Lorelei Eccleston for arts, and Darren Lowe, Kyle McDuffie, and Donna Smellie for athletics, as well as to role models Carrie Best, an 83-year-old human rights activist from new Glasgow, Nova Scotia, and
March 10, 1986

Alton Parker from Windsor, Ontario, the first black detective in Canada.
The accomplishments of these black achievers are in keeping with the determination of the Government to ensure that blacks and all minorities can participate fully


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



NATIVE ECONOMIC DEVELOPMENT PROGRAM


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, early last week 1 questioned the Minister of State for Small Business (Mr. Bissonnette) on the health of the Native Economic Development Program and the fate of the application of the Yukon Indian Development Corporation. On Friday the Minister rejected the Yukon proposal. It was a good proposal, one which had been highly recommended. The Minister did not reject it for lack of money, because we know he withheld $90 million for the program this fiscal year.
Was it rejected because the Hon. Member for Yukon (Mr. Nielsen) did not want it approved? Who is responsible for the Native Economic Development Program?
The Yukon Indian Development Corporation has been treated unfairly. Stalling, foot dragging, and then rejecting good proposals are sure ways to kill a much needed program, one designed to help native people move from dependency to self-sufficiency.



ENVIRONMENTAL AFFAIRS


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, a new incinerator of huge capacity and lacking adequate pollution controls is to be built in Detroit. It will spew particulates, dioxins, acids and other contaminants on the citizens of that city in quantities which will significantly increase the incidence of cancer, and it will do so with the blessing of the Governor of the State of Michigan.
This would be a matter of lesser interest were it not that Windsor, which, for the information of the Government, is located just south of Detroit, will also suffer the health hazard that rains upon its neighbour. This must not be tolerated. The Government must provide its support to Ontario in fostering the resolve of the U.S. authorities to impose stringent pollution controls of this facility to protect their citizens as well as to live up to their responsibilities to those of Canada.



THE ECONOMY


Mr. Fernand Ladouceur (Labelle):: Mr. Speaker, 1 would like to report on the efforts made by our Government with respect to measures announced in the last Budget to increase our support for small businesses. Small- and medium-sized businesses are still one of the major sources of new jobs, and that is why we must support their creativity, their sense of initiative and leadership. Budget measures such as the repeal, as of January 1987, of the special 12.5 per cent tax on dividends paid by small businesses, the higher limit on loans to small businesses, from $1.5 to $2.5 billion, and the broadening of existing tax regulations under which business investment losses are deductible constitute the positive response to the message given to us by Canadians in September 1984, namely to create jobs and strengthen the economy. Our performance speaks for itself: 580,000 new jobs, the unemployment rate has dropped below 10 per cent, and 81 per cent of the new jobs are on a permanent basis.
That, Mr. Speaker, spells performance.



THE COMMONWEALTH


Mr. Bill Attewell (Don Valley East):: Mr. Speaker, today we are celebrating Commonwealth Day in Canada and throughout the Commonwealth, for the tenth consecutive year. Twenty-six countries are represented here in Ottawa by their High Commissioners.
The Commonwealth is a unique association, embracing 49 countries of varying races, religions, and cultures, representing 25 per cent of the world's population. The members share a common working language, the heritage of common law and parliamentary traditions.
The Commonwealth has provided leadership in many ways, such as international leadership in the movement against the apartheid in South Africa. It is also playing a major role in maintaining North-South dialogue, and in focusing world attention on the economic and debt problems of the world's poorest nations.
We must also applaud the Commonwealth Parliamentary Association for emphasizing the need to integrate women as full partners in the world-wide economic development process.
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March 10, 1986



CONSUMER AND CORPORATE AFFAIRS


Mr. Bill Gottselig (Moose Jaw):: Mr. Speaker, the price of fuel in western Canada is too high. I call upon the Minister of Consumer and Corporate Affairs (Mr. Cote) to investigate this immediately. The rapid decline in the price of crude oil has not been passed on to the consumers-only two cents per litre to date. We in Saskatchewan do not have a provincial sales tax. We have the lowest refining charge in Canada, yet fuel prices to farmers have increased in 1986.
Recently the Government of Saskatchewan introduced a royalty rebate of 4.6 cents per litre effective January 1, 1986. Nevertheless, major oil companies, including Petro-Canada and the local co-operatives, recently raised their prices by five cents per litre. I, as well as thousands of consumers in Saskatchewan, do not believe this was just a coincidence. The provincial rebate program was for primary producers, not the oil companies.



FISHERIES


Mr. George Henderson (Egmont):: Mr. Speaker, crab fishermen in Atlantic Canada will be setting their first traps of the season next month, but they are still in the dark about this year's management plan. There is still no decision about the number of permanent licences to be granted this year. Fishermen are waiting to hear how many designated crab zones there will be, but they have heard nothing from the Minister of Fisheries and Oceans (Mr. Siddon).
The Minister's silence on this matter is inconveniencing the fishermen. Fishermen in Quebec, New Brunswick, Prince Edward Island, and Nova Scotia are now in the process of preparing their boats and gear for the coming season. They need to know who will be fishing where, and they need that information now. The Minister must decide immediately. Crab fishermen in Atlantic Canada are waiting for an answer.



THE PRIME MINISTER

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, more and more Canadians are becoming very disappointed with the Government which sits across the way. For example, Brian Gilbert from Calgary said of the Prime Minister (Mr. Mul-roney): "I wouldn't vote for him again, not him personally". An anonymous Conservative MP was quoted the other day as saying: "We're in trouble with the public because of him. Many see him as too easy, too glib, too stagey". Mr. McRae from Etobicoke was reported in a newspaper recently as saying: "Then the horror stories started; the tuna business, the
family patronage, the indexation for senior citizens, the bank bail-outs. When is smiling Brian going to show some leadership?"
Finally, a backbencher from Montreal said recently: "Last election workers here voted for change, but they never got it. If they don't get it soon, this Government will go the way of the last one." As you can see, Mr. Speaker, more and more Canadians, including Conservative Members of Parliament, are very, very disappointed with the performance of their Government.



FOOD AND DRUGS


Mr. A. H. Harry Brightwell (Perth):: Mr. Speaker, I bring to your attention the millions of Canadians who suffer from allergies to food and additives. Allergic reactions include rashes, headaches, severe illness, and, in some cases, death.
This surely demonstrates the need for listing ingredients of foods produced by fast-food establishments. Manufacturers of prepackaged foods are required by law to list ingredients, and the Consumers Association of Canada and the Allergy Information Centre have appealed to fast-food restaurants to provide this information. Most companies provide it upon request to the head offices, but others refuse. They cite a lack of public interest and the need for confidentiality.
How can the possibility of anaphylactic shock and death within 30 minutes be ignored? The fast-food chains must be willing to see the importance of this matter, as almost two million Canadian citizens suffer in some way from the effects of allergies.



EMPLOYMENT


Mr. Geoff Wilson (Swift Current-Maple Creek):: Mr. Speaker, the February Budget continues to assist small business in the assault on unemployment, a thrust which began with the economic statement of November, 1984. At that time the Opposition said we gave Canadians tax increases and cut-backs which would destroy hundreds of thousands of jobs.
The fact is, Mr. Speaker, that since November, 1984, some 90,000 jobs have been created in the Prairie Provinces alone through a stronger private sector. Unemployment on the Prairies varies from 8 per cent in Saskatchewan to 8.5 per cent in Alberta.
On a national basis over 580,000 new jobs have been created, and the national employment rate is under 10 per cent for the first time in years.
Now the Opposition seek to claim credit for all of this as
somehow being due to their old bankrupt policies. What
March 10, 1986

hypocrisy! And yet what else can they do in the face of this PC record of solid achievement, a record unmatched in Canadian history?



REDUCTION IN UNEMPLOYMENT

Mrs. Pauline Browes (Scarborough Centre):: Mr. Speaker, young people in Canada welcome the positive policies the Government has introduced over the past 18 months. Young Canadians welcome the fact that youth unemployment has fallen 2 percentage points since 1984, and that 50,000 more young people are working today because of the sound economic strategy the Government has followed. Young Canadians also welcome the fact that the Government is reducing the burden of debt that they will be forced to bear as they grow older.
Finally, Mr. Speaker, young Canadians welcome the practical job training programs, such as Challenge '86, which the Government has developed. Challenge '86 is already proving to be a huge success in my riding of Scarborough Centre as businesses flood the employment centres with project applications. Economic growth, job creation, and social justice are what young people expect from their Government, and those are what the Government is delivering.



ORAL QUESTION PERIOD


Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is for the Deputy Prime Minister. I have just learned that the indifference of the Government to the plight of young Canadians has led one of Canada's most distinguished humanitarians, Senator Jacques Hebert, to undertake the extraordinary step of holding a hunger strike outside the Senate as a protest against the Government's indifference. Therefore, will the Government not recognize what its inaction is doing to a whole generation of young Canadians, and immediately institute adequate funds and programs to address in a real way the problems of young Canadians all across the country?


Hon. Erik Nielsen (Deputy Prime Minister and Minister of National Defence):: Mr. Speaker, the Government's record in the over-all increase of jobs for young people from September, 1984, to January, 1986, is 75,000 jobs. That is a monthly increase of approximately 5,000 jobs. This is quite a contrast
Oral Questions
with the net loss of jobs which occurred in the previous four years during the Government of which the Opposition House Leader was a member.


LEVEL OF GOVERNMENT SPENDING
Herbert Eser (Herb) Gray: Mr. Speaker, the Minister forgets that youth unemployment rose substantially last month and it is still too high. How can he say his Government is doing enough to deal with the problems of our youth when the Minister of State for Youth, in her infamous secret letter to a colleague, said: "There has been a significant diminution in youth-related spending, close to $100 million since the election"?
Is that not the truth? You cut spending and programs for young people. Why don't you do something about it?


Erik Nielsen: No, Sir, it is not a new version of the truth; it is a new version of the twist. The truth is that the Liberal record from April, 1980, to September, 1984, was an over-all decrease of 285,000 jobs for young people. We turned that around to an increase of 75,000 jobs. The actual truth is that under the previous Liberal Government there was a net monthly loss of 5,200 jobs. We turned that around to 5,000 newly created jobs a month for young people.


REQUEST THAT MINISTER BE DISMISSED
Herbert Eser (Herb) Gray: Mr. Speaker, the Deputy Prime Minister is suggesting that it is not the truth when the Minister responsible for youth says there has been a significant diminution in youth-related spending, close to $100 million since the election. Will he then do the meaningful thing, and get rid of this Minister of State for Youth and get one who will really do the job, because she is not doing it? The Deputy Prime Minister proved that in what he said criticizing the truth of what she said in that infamous letter.


Erik Nielsen: The Official Opposition House Leader should know better, given his background, than to make such a charge. He obviously has not read Part 111 of the Estimates which indicate that, in agriculture, some $7,486 million is being spent on youth-related employment. In E1C itself he has heard the Minister say that some $700 million is going toward direct youth employment. From C1DA there is $10.5 million going to scholarships for studies and international development assistance. In DIAND there is $533,037 for scholarships. In DND there is $2,271 million for the Air Cadet League, the Army Cadet League, and the Navy Cadet League. From Health and Welfare there is $6,687 million. In Justice-


Mr. Speaker:: Order, please.


Some Hon. Members:: Hear, hear!

March 10, 1986
Oral Questions
[ Translation]


SITUATION OF YOUTH-GOVERNMENT POSITION
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is directed to the Deputy Prime Minister. In the realisation that the situation is critical, the Chairman of the Senate Committee on Youth, Senator Jacques Hebert, having observed the astonishing inertia of the Government, started a hunger strike today, and the Deputy Prime Minister will know that he is prepared to discuss the matter with the Government and would like to see the Government produce some new initiatives.
Could the Deputy Prime Minister inform the House whether his Government intends to announce any major initiatives very shortly, as the Prime Minister promised some time ago?


Erik Nielsen: Mr. Speaker, when the Government has announcements to make it will make them in the traditional fashion, at an appropriate time, and in an appropriate place. In the meantime I would suggest, with great respect, that the Hon. Senator could be spending that time reading Part III of the Estimates in order to acquaint himself with the millions of dollars being spent on youth.


REQUEST THAT GOVERNMENT UNDERTAKE MAJOR INITIATIVES IMMEDIATELY
Jean-C. Lapierre: Mr. Speaker, I think the cynical laughter of our friends opposite with respect to the youth situation is entirely inappropriate. 1 hope the Deputy Prime Minister will be able to inform the House whether the Government intends to announce very shortly, as promised by the Minister of State (Youth) and the Prime Minister himself, a number of major new iniatiatives that will benefit the youth of this country. His own Government promised to make these announcements. Is it going to do so very shortly?


Erik Nielsen: It is the same question, and the answer is the same. I should like to add that the hon. gentleman himself should spend some time reading Part III of the Estimates and inquire where $700 million is going from CEIC toward direct youth employment-related programs.


MINISTER OF STATE (YOUTH) RECRUITMENT OF YOUNG CONSERVATIVES-MINISTER S LETTER
Howard Douglas McCurdy: Mr. Speaker, my question is directed to the Minister of State (Youth). Has the Minister of State (Youth) managed to remember the name of the person whom she sent a letter mentioning the use of taxpayers' money to recruit young people for the Conservative Party?


Hon. Andree Champagne (Minister of State (Youth)):: Mr. Speaker, I said Friday that a mistake was made in the way the letter was phrased. It was never the intention of this Minister or this Department or the Government to use public funds for partisan purposes. Like any minister or government, I think we all want to do as much as possible for as many young Canadians as possible, and if it has a beneficial impact, I will be delighted. I repeat it was never anyone's intention to use public funds for partisan purposes.


RECIPIENTS OF MINISTER'S LETTER-FUNDING OF YOUTH PROGRAMS
Howard Douglas McCurdy: Mr. Speaker, let me repeat the question. Has the Minister of State for Youth remembered to whom she sent the letter, and perhaps she could tell us also whether there was a response to her allegation that $100 million was cut from youth programs, and whether there has been any correction of that error in policy to which she called attention and about which she expressed concern?


Andrée  Champagne: The
one thing that is being changed is that some money has been reprofiled, and in this Budget we have as much as $11,732 billion being spent on young people in Canada. This is what is being done. That $100 million was reprofiled and it was added to reach that total, which now comes to $1 1,732 billion this year for young people.


STATISTICS CANADA
Don Boudria: Mr. Speaker, my question is directed to the Minister for Statistics Canada. For the third time in five days Canadians have learned of blatant political patronage and abuse of power by the Government. Can the Minister of Supply and Services tell this House why he bowed to pressure from his caucus colleagues and appointed unqualified Tories, who failed a test with result as low as 9 per cent, to be appointed census commissioners for Statistics Canada for the 1986 census?
March 10, 1986


Hon. Stewart Mclnnes (Minister of Supply and Services):: Mr. Speaker, this Government, for the very first time, has called upon all Members of this House to volunteer names of persons who would help participate in the census. All Members have volunteered names, and a good number of those have been selected with the assistance of friends on that side and friends on this side. Statistics Canada advised that only competent people are being selected.


Don Boudria: Mr. Speaker, I am not interested in the people who passed the test. I am interested in those who failed.


RATINGS USED
Don Boudria: Mr. Speaker, could the Minister inform the House, since a memorandum drafted by his department indicated that 60 per cent was the passing mark, why it only takes 9 per cent for Conservatives, when 60 per cent is the passing mark for all other Canadians who want to work for Statistics Canada?


Stewart Donald McInnes: Mr. Speaker, I asked Statistics Canada to follow two rules, number one, that the integrity of the system be maintained, and number two, that only qualified people be involved in the census.


MINISTER OF STATE (YOUTH) RECIPIENTS OF LETTER-INQUIRY OF THE MINISTER
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister of State (Youth).
She admitted Friday that she sent the letter that was inappropriate.
My question is quite simple: To which Minister?


Andrée  Champagne: Mr. Speaker, last Friday 1 offered the apologies appropriate in the circumstances. I consider the matter closed.


RESPONSES TO LETTER
John Edward Broadbent: Mr. Speaker, there are many people in the parliamentary system who believe that a simple apology for such an error is not enough. Did she send that letter to other members in the Cabinet, including the Prime Minister, and, if so, what was the response?
Oral Questions


Andrée  Champagne: Mr. Speaker, I think my answer will be the same as for the first question.
Last Friday, 1 made the appropriate apologies, and 1 am certainly not going to hand in my resignation at the request of the Leader of the New Democratic Party.


INQUIRY CONCERNING RECIPIENTS AND RESPONSES
John Edward Broadbent: Mr. Speaker, it certainly is not sufficient. Considering that the Minister apologized last Friday for something that she clearly believes was wrong, it is very relevant to ask her if she sent that letter to the Prime Minister or other members of the Cabinet and, if so, what was the response? The Minister has an obligation to reply to that question and not simply repeat an apology.


Andrée  Champagne: Mr. Speaker, 1 apologized because there seemed to be an understanding by some people that there was an intent to use taxpayers' money for partisan purposes. Such was not the intent, and the letter was misinterpreted.
I also admitted that the writing of the letter was a mistake and 1 have apologized for that. There was never any such intent, so I think that this is all there is to it.


STATISTICS CANADA
B. Keith Penner: Mr. Speaker, my question is directed to the Minister of Supply and Services. In the constituency of Cochrane-Superior in northern Ontario the wife of the former President of the Progressive Conservative Riding Association was nominated as a census commissioner. That is no problem, but it is reported to me that she failed the test and performed very poorly in the interview. Nevertheless, orders came down to officials that, despite her performance, she should be hired.


Mr. Speaker:: Order, please. It is time for a question.


B. Keith Penner: Why did the Minister cause such an order to go down, that this woman be hired despite the results of her exam?


Stewart Donald McInnes: Mr. Speaker, perhaps the Hon. Member did not hear my earlier response that two orders were given to Statistics Canada; one, to maintain the integrity of the system; and two, to hire qualified people.

March 10, 1986
Oral Questions IMPACT ON CENSUS RESULTS


B. Keith Penner: Mr. Speaker, because this happened in Cochrane-Superior, is the Minister not concerned that unqualified persons will in the process of taking this census invalidate the results?


Stewart Donald McInnes: Mr. Speaker, I have been given assurances by Statistics Canada that it is absolutely confident that the results will be bona fide and that the competency of the people who have been hired is appropriate to the job that has been imposed upon them.


RECIPIENTS OF MINISTER'S LETTER
Ian Deans: Mr. Speaker, my question is directed to the Deputy Prime Minister. Is the Deputy Prime Minister aware of whether he or the Prime Minister received copies of the letter sent by the Minister of State for Youth at the time they were first sent out?


Erik Nielsen: Mr. Speaker, I am sure that the hon. gentleman, indeed any Hon. Member opposite, would not expect me to disclose to them the nature of my correspondence. I would no more think of asking the hon. gentleman to disclose his correspondence. In this case, that is the response to him. Surely it is none of his business.


Ian Deans: It is public business. It is public business when a Minister suggests the expenditure of public funds on private matters.


MINISTER'S CONDUCT
Ian Deans: Mr. Speaker, now that the Deputy Prime Minister knows the content of the letter, does he deem it appropriate that the Minister of State for Youth should have sent out such a letter to colleagues in the Cabinet, advocating the expenditure of hard pressed taxpayers' public money on the building of the youth wing of the Conservative Party?


Lorne Edmund Nystrom: Yes or no.


Erik Nielsen: Mr. Speaker, that twist and double twist are totally unworthy of the hon. gentleman.


John Edward Broadbent: It's unworthy of a cabinet Minister.


Erik Nielsen: I read that which is in the public domain, and
the way in which I read it was that it was a letter from a
Minister spelling out her program requirements. The Opposition has latched on to one aspect of the letter for which the Minister has apologized. It should ruddy well be satisfied with that-


John Edward Broadbent: Why?


Erik Nielsen: -instead of trying to put a murky cast on the entire letter.


Derek Nigel Ernest Blackburn: Look who's talking.


Erik Nielsen: The Minister has apologized for the mistake. She has admitted it, and its authorship. Surely that should be satisfactory to any hon. gentleman in this House.


John Edward Broadbent: No, it's not. It's not sufficient.


ALLEGED SECRET MEETING
Sheila Maureen Copps: Mr. Speaker, my question is directed to the Minister of State for Youth. She said today on at least two occasions that she would never see public funds being used for partisan purposes. Can she explain why a secret meeting took place on February 27 at the Progressive Conservative Party headquarters office in Montreal for the express aim of securing government summer jobs for people on condition they be active members of the Progressive Conservative Party? Is this blatant abuse of and insult to young people a new part of the Minister's youth strategy?


Andrée  Champagne: Mr. Speaker, I have no knowledge of such a meeting.


Maurice Brydon Foster: That's what you said last Thursday.


Andrée  Champagne: I certainly was not involved in it.


MINISTER S POSITION
Sheila Maureen Copps: Mr. Speaker, would the Minister not agree that this meeting, combined with her own cabinet strategy, which we released two weeks ago, and combined with the letter which was released in the House last week, are enough to demand her resignation from the portfolio of the Minister of Youth?


Andrée  Champagne: No,
sir.


STATISTICS CANADA
John R. Rodriguez: Mr. Speaker, my question is directed to the Minister of Supply and Services. It has to do with his personal role in the whole question of hiring Tory hacks as census commissioners.


Some Hon. Members:: Oh, oh!
March 10, 1986


John R. Rodriguez: Does the Minister deny that he personally intervened to ensure that Tory hacks who failed were hired, in spite of the fact that they had not passed the competition for census commissioners?


Lorne Edmund Nystrom: Yes or no?


Stewart Donald McInnes: No.


Lorne Edmund Nystrom: Therefore, he confirmed it.


FUNDING TO HIRE YOUNG PEOPLE AS CENSUS TAKERS
John R. Rodriguez: Mr. Speaker, could the Minister tell the House what the relationship is between the $30 million of youth employment funds to hire census takers, and the Minister of Youth's letter to recruit young people for the Tory Party with federal money? What is the connection? Come clean.


Stewart Donald McInnes: do not know about being clean, Mr. Speaker, but the facts are that 25,000 youth are going to be involved in the census, and anyone who wants to get a job should go down to an unemployment insurance centre-


Sheila Maureen Copps: PC Party headquarters.


Stewart Donald McInnes: -and their eligibility will be determined.


MINISTER'S LETTER-REFERENCE TO YOUTH-RELATED SPENDING
Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is also directed to the Minister of Youth. She has apologized for part of the letter but the Deputy Prime Minister has defended the rest of it. Let me ask the Minister about the rest of the letter. Was she being truthful with her colleagues when she told them that there had been a diminution of $100 million in youth-related spending since the election? Is that an accurate statement as far as she is concerned?


Andrée  Champagne: Mr. Speaker, there were some funds-there were some programs, as you know, Mr. Speaker, which were about to be moved from other places and 1 wanted to make sure-and this was my job-that there would be money available for young people in the Main Estimates as produced by my colleague.


Robert Phillip Kaplan: We gather those efforts were unsuccessful. They were made, but they were unsuccessful.


MINISTER'S REFERENCE TO SPENDING LEVEL
Robert Phillip Kaplan: Let me come back to the question. Was the Minister really telling her colleagues, and
Oral Questions
was it a fact, that since the last election, as she put it, youth-related spending has been reduced by the Government by $100 million?


Andrée  Champagne: Mr. Speaker, the fact is that later we can see that in the Budget funds have been added for the youth of Canada-


Sheila Maureen Copps: Left-overs for youth.


Andrée  Champagne: -and we now have the total, which I have given before, for programs directed to for youth-


Howard Douglas McCurdy: Eleven billion dollars.


Andrée  Champagne: -or which primarily designate youth as a target. There are programs accessible to students-


Sheila Maureen Copps: P.C. youth.


Andrée  Champagne: -provincial transfers of interest to youth, and other programs for which youth qualify. The total is the number which I have given before.


INVESTMENT CANADA
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, my question is directed to the Minister responsible for Investment Canada. Even though Gulf and Western face deep opposition to its takeover of Prentice Hall, the United States giant has forged on and is buying out another Canadian subsidiary, GLC Publishing in Agincourt. Will the Minister immediately tell this U.S. conglomerate that there can be no exceptions for it in this latest case, and that the rules against foreign control in publishing will be completely enforced?


Hon. Sinclair Stevens (Minister of Regional Industrial Expansion):: Mr. Speaker, the Hon. Member and other Hon. Members of the House will be pleased to know that that word has already been conveyed to Gulf and Western.


PRENTICE-HALL TAKEOVER
Steven W. Langdon: Mr. Speaker, in view of the fact that the Minister has taken this position with respect to GLC, will be also take a similarly tough position with respect to Prentice-Hall, Ginn Brothers Ltd., and with respect to this attempt by Gulf and Western to build an empire for text books in our country?


Sinclair McKnight Stevens: Mr. Speaker, I do not think it is a question of taking a tough position or not taking it. The fact is that Gulf and Western is well aware of the July policy which was enunciated by my colleague, the Minister of Communications. It is well aware that any purchase which is made now must abide by that policy. As far as transactions are concerned prior

March 10, 1986
Oral Questions
to that policy, it is well aware that we will look at them under the precedents and regulations which applied at that time under the old Foreign Investment Review Agency legislation.


THE ECONOMY
Mr. W. Paul McCrossan (York-Scarborough):: Mr. Speaker, my question is directed to the Minister of State for Finance. At the end of last week the Central Banks of West Germany, Japan, and the United States all reduced their discount rates. What steps has she or the Minister or the Minister of Finance personally taken to ensure that the Bank of Canada follows the lead of those banks this week and lowers interest rates to protect the interests both of mortgage holders and other commercial borrowers in Canada?


Hon. Barbara McDougall (Minister of State (Finance)):: Mr. Speaker, I thank the Hon. Member for his question because we are, obviously, very pleased to see the general decline in interest rates. I can tell the House that our dollar, of course, continues to strengthen, and that Treasury bills are trading well below their tender level of last week. And the Toronto Star is predicting that interest rates this week will be down.


Some Hon. Members:: Oh, oh!


AGRICULTURE
Lloyd Axworthy: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. The Minister will know, as a western Member of Parliament, of the deep concern which is now being expressed about the impact the U.S. farm Bill will have upon the western grain economy. In the Minister's discussions with the Secretary of State for the United States, Mr. Shultz, on Friday, did he raise this matter of concern, of great priority? And can the Minister tell us if the Prime Minister intends to put this on the agenda when he meets with President Reagan next week, and to ask the President to curtail the application of the Bill until such time as the impact of it can be discussed with Canada and other grain exporting nations?


Charles Joseph Clark: Mr. Speaker, the Government of Canada is concerned about the implications for Canada of U.S. farm legislation. It has made that clear on several occasions. I have raised it with Mr. Shultz.
Let me take this opportunity to congratulate the Hon.
Member for Winnipeg-Fort Garry on his designation as the
External Affairs critic for his Party.


Lloyd Axworthy: Mr. Speaker, I thank the Minister for the honour, but I am simply raising the question as a matter of deep interest to western Canada.


MEETING OF GRAIN EXPORTING COUNTRIES PROPOSED
Lloyd Axworthy: In response to the Minister's answer, as we know, the whole purpose of the U.S. farm Bill, in large part, is to launch a trade war with the European Community on agricultural matters. Will the Prime Minister raise with the President of the United States whether or not he will support the convening of a meeting of all grain exporting nations so that we can offset, or curtail, any proposed trade war before it very deeply hurts Canada, as predicted?


Charles Joseph Clark: Mr. Speaker, there have been a number of initiatives taken by the Minister of State for the Canadian Wheat Board with regard to the problem which has been raised by the Hon. Member. Certainly the discussions between the Prime Minister and President Reagan will touch upon, among other things, the importance of a very strong approach regarding agricultural questions in any multilateral trade negotiations.


MINISTER'S LETTER-RECIPIENTS-INQUIRY OF THE MINISTER
Mr. Neil Young (Beaches):: Mr. Speaker, my question is for the Minister of State for Youth. Since the Minister apologized last Friday, and reiterated her apology today, and since the letter is now public knowledge, would she not agree to advise the House exactly to whom she sent the letter? Would she also not agree that we are entitled to that information?


Mr. Speaker:: Order, please. I will allow the question. However, I must remind Hon. Members that this is now the fifth or sixth time which it has been asked. Therefore, I would ask that the supplementary not be on the same question.


Andrée  Champagne: Mr. Speaker, no.


REQUEST THAT PARLIAMENT BE INFORMED
Neil Young: Mr. Speaker, running the risk that I may be ruled out of order, I would like to ask the Deputy Prime Minister whether or not he would agree that the House is entitled to share in this information.


Erik Nielsen: Mr. Speaker, of course I would not. Surely it is utterly ridiculous for the hon. gentleman, or any Member opposite, to expect to be included on the distribution list of letters which Ministers write. That is what he is suggesting-
March 10, 1986


John Edward Broadbent: We want to know what the Cabinet did with it when it got it.


Erik Nielsen: -by suggesting that he should be the recipient of correspondence from cabinet Ministers to whomever they write. That is surely patently ridiculous.


CAPITAL PUNISHMENT
Robert Nelson David Hicks: Mr. Speaker, my question is directed to the Minister of Justice. It regards the timing of an open debate and free vote on capital punishment. Would it seem reasonable to the Minister, in light of the promises made by the Government, to hold this debate and free vote prior to the forthcoming summer recess?


Hon. John C. Crosbie (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I think it has been made clear on a number of occasions, and made clear again by the Prime Minister recently, in fact on his very successful tour to western Canada-


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Derek Nigel Ernest Blackburn: Have you seen the polls?


John Carnell Crosbie: He still found it very difficult to find a live-


Mr. Speaker:: Order, please. Will the Hon. Minister please conclude?


John Carnell Crosbie: As the Prime Minister said on that very successful trip to western Canada, before the end of this session of Parliament is reached adequate time will be provided for a full debate and a vote on the issue of capital punishment. I cannot tell the Hon. Member whether or not it will be during this year. That is a matter for the Prime Minister to decide. He will doubtless consult me and the rest of the Cabinet when he comes back from his successful trip to western Canada.


Some Hon. Members:: Hear, hear!


AGRICULTURE
Maurice Brydon Foster: Mr. Speaker, in the absence of the Minister of Agriculture and the Minister of State for the Canadian Wheat Board, I will direct my question to the Deputy Prime Minister. A recent study by Chase Econometrics states that the U.S. farm bill will cut net Canadian farm incomes by 20 per cent from 1984 levels. It will have a
Oral Questions
disastrous effect on western grain producers. What action is the Government planning to take to protect our farmers from the impact of this United States farm bill which, at the same time, is increasing incomes for American farmers?


Mr. Pierre Blais (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, first of all, I would like to inform my hon. colleague that in the agricultural sector alone, our Government has taken more action in eighteen months than his Government took in the twenty years it was in power.
Regarding his concerns about the U.S. Farm Bill, I can inform the Hon. Member that the initial prices will be announced at the end of March or early April. The Minister, Mr. Mayer, is now in Japan to negotiate other contracts.
Perhaps I may remind my hon. friend of the two latest sales to the USSR and Brazil, which were advantageous for all Canadian farmers. This is a real Government that looks after its business.


REQUEST THAT PRIME MINISTER MAKE REPRESENTATIONS TO UNITED STATES PRESIDENT
Maurice Brydon Foster: Mr. Speaker, my supplementary question is for the Deputy Prime Minister. In the Prime Minister's meeting with President Reagan this weekend is he willing to try to get a commitment that the SI.5 billion grain export subsidy program will not be used against Canada's traditional grain customers?


Charles Joseph Clark: Mr. Speaker, this Government has demonstrated on a number of fronts in the agricultural field, and in others, that, despite the fact that the actions of the Government of which the Hon. Member was a supporter led the Americans to believe that they could roll over Canadian interests, whether it was with respect to the sovereignty of Canada or the interests of Canadian farmers, it has taken a decidedly different approach. The Prime Minister will speak for the interests of Canada in the summit with the President, as he has in the past.


Some Hon. Members:: Hear, hear!


DELIVERY DIFFICULTIES OF WESTERN FARMERS
Stanley J. Hovdebo: Mr. Speaker, my question is for the Minister of Transport. The Minister will know that in many places in western Canada farmers are unable to deliver their grain because of congestion in their elevators. This is congestion caused by the inability of the railways to supply enough cars for them to ship their grian.

March 10, 1986
Oral Questions
Will the Minister tell the farmers of western Canada what he is doing to rectify this situation?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, I am not sure that there is a shortage of rolling stock. My understanding is that there is congestion at the terminals and elevators because of insufficient capacity for drying, cleaning, and processing of grain. Nonetheless, I will look into the Hon. Members' s allegation and get back to him.


PROVISION OF RAILWAY CARS
Stanley J. Hovdebo: Mr. Speaker, will the Minister assure grain producers in these areas where congestion is a problem that he will either have sufficient cars by March 29 or that he will call upon his colleagues to extend the quota period?


Donald Frank Mazankowski: Mr. Speaker, in no way accepting the premise of the question, I repeat that if there is a shortage of rolling stock we will certainly take every initiative possible to ensure that the cars are provided. I repeat again, I doubt very much whether that is the real problem.


CONSUMER AND CORPORATE AFFAIRS
Alan Redway: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. In light of the fact that the death of a 15-year-old girl from Reye's syndrome has been linked to the drug ASA, why has the Government not ordered the pharmaceutical industry to place a warning on its labels since that link has been suspected by the industry for the past three years?


Hon. Michel Cote (Minister of Consumer and Corporate Affairs and Canada Post):: Mr. Speaker, I wish to thank my colleague for his question. As he knows, the Government has been very efficient in dealing with the concerns of consumers. I am informed that the Department of National Health and Welfare works very closely with the industry in order that warnings will be placed on its labels. So far I can say that 30 per cent of the industry has already agreed to comply with our requirements.


REGIONAL INDUSTRIAL EXPANSION
David Charles Dingwall: Mr. Speaker, my question is directed to the Minister of Regional Industrial Expansion. Will the Minister explain to the House why he has abdicated the role of the federal Government as the catalyst for economic growth in the poor regions of the
country and substituted for it the Atlantic Enterprise Program, which he knows is a program administered by the central Canadian bankers, who, as history tells us, have never demonstrated any concern or compassion for the well-being of citizens in that area?


Sinclair McKnight Stevens: Mr. Speaker, I think it must be obvious to most Members of the House that the Hon. Member's preamble is absolutely false. The facts are that, as far as Atlantic Canada is concerned, my Department and the Government of Canada have many programs in place. We have supplemented these programs by the new Atlantic Eneterprise Program which will ensure relatively low-cost money for those who want to open up and expand factories. This will give more jobs to Atlantic Canadians, something of which I assume all Members of this House, including the Hon. Member who asked the question, should be supportive.


Some Hon. Members:: Hear, hear!


REQUEST THAT PROGRAM BE AMENDED
David Charles Dingwall: Mr. Speaker, my supplementary question is directed to the same Minister. Will he listen to the cries of businessmen in those regions, and lower the threshold of $250,000 down to $50,000? We he also provide grants and assistance with regard to working capital? Finally, will he amend the Altantic Enterprise Program so that the maximum of 6 per cent in the interest buy-down will become a minimum for all businessmen? Will he listen to the Canadian small-businessmen from Atlantic Canada?


John Carnell Crosbie: Why didn't you listen, you turkey?


Sheila Maureen Copps: You just laid and egg, Crosbie.


John Edward Broadbent: That's unparliamentary, John.


Mr. Speaker:: Order, please. Order. I must ask the Minister of Justice to rise in his place and withdraw that.


John Carnell Crosbie: Mr. Speaker, I withdraw that comment about the turkey.


Some Hon. Members:: Oh, oh!


Derek Nigel Ernest Blackburn: You can insult Liberals but not turkeys.


Mr. Nunziata:: That's garbage.


Sinclair McKnight Stevens: Mr. Speaker, if all turkeys are all settled and on their roosts-


Some Hon. Members:: Name him.


Mr. Speaker:: Next questioner.


John V. Nunziata: Where's the discipline?
March 10, 1986


Mr. Speaker:: Order. Order, please. The Hon. Minister will simply rise and withdraw that comment.


Sinclair McKnight Stevens: Mr. Speaker, of course I will withdraw that comment.


Sheila Maureen Copps: Thank you.


Mr. Speaker:: Order, please. Thank you.


Sinclair McKnight Stevens: But, Mr. Speaker, I would simply-


Mr. Speaker:: Order, please. Next question. The Hon. Member for Yorkton-Melville.


MINISTER'S LETTER-RECIPIENTS' REPLIES
Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Minister of State for Youth and is in regard to the letter she sent to a Minister, or Ministers, that was revealed in the House last Thursday. Can the Minister tell the House whether or not she received a reply from the Minister to whom she sent a letter or indeed from any Minister to whom she may have sent a letter, or do we have to wait until that is leaked as well?


Andrée  Champagne: Mr. Speaker, my correspondence is usually not made public.


Mr. Speaker:: Different question, supplementary question.


INQUIRY WHETHER MINISTER RECEIVED REPLY
Lorne Edmund Nystrom: Mr. Speaker, since the Minister has said that her correspondence is usually not made public, will she make another exception this time and tell us whether or not she received a reply from the Minister to whom the letter was addressed-


Mr. Speaker:: Order. Order, please. That is the same question. Next question.


PETRO-CANADA EAST COAST DRILLING PLANS
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Deputy Prime Minister. Will the Deputy Prime Minister confirm that Petro-Canada is abandoning five wells off the East Coast of Canada and is backing away from new drilling programs?
Hon. Erik Nielsen (Deputy Prime Minister and Minister of
National Defence): Mr. Speaker, I will take the question as
notice in the absence of the Minister.
Oral Questions PUBLIC SERVICE


INDEXATION OF PENSIONS
John Barry Turner: Mr. Speaker, my question is directed to the President of the Treasury Board. I would like to know when we are going to hear an announcement on the issue of the indexation of Public Service pensions. Does the Minister feel that retirees from the Canadian Armed Forces and the RCMP have had adequate representation during the discussions on pension issues?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, as 1 have said on a number of occasions, we have consulted widely on this issue. The Government is committed to pension reform, but it is also willing to make a very clear statement that we will live by the commitments we made during the election campaign of the summer of 1984 and throughout our term of office. I think the Hon. Member can expect to see a proposal put before the House in the very near future.


MINISTER OF STATE (YOUTH) MINISTER'S LETTER
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is directed to the Minister of State (Youth), and it concerns the letter of January 6. Since the last paragraph contains clear instructions, and 1 shall read them in English: [English]
The letter indicated that she seeks at this time an indication of the 86-87 fiscal parameters vis-a-vis her Ministry. Did she indeed write this letter to the President of the Treasury Board, and did he acknowledged receipt of that letter?


Mr. Speaker:: The Hon. Member knows that I have said that questions should not simply repeat themselves. Therefore, I suggest that if he has a question that is different from the one that has already been asked, I will allow it.


REQUEST FOR EXPLANATION CONCERNING DEPARTMENT
Jean-Robert Gauthier: Mr. Speaker, my question is directed to the President of the Treasury Board.
Did he receive the letter? Did he give it special attention? Was he sufficiently attentive to his colleague's, the Minister's, request to explain to the House today what the parameters of this department are? And where do we find those $100 million in the Estimates?


Robert René de Cotret: Mr. Speaker, I have no comments to make whatsoever about
the correspondence I receive from my Cabinet colleagues.

March 10, 1986
Oral Questions


NATIONAL DEFENCE
Derek Nigel Ernest Blackburn: Mr. Speaker, my question is for the Minister of National Defence. There has been a lot of confusion about whether or not we are going to receive a White Paper on defence. Can we expect a White Paper on defence some time in the late winter or spring?


Erik Nielsen: Mr. Speaker, I have not yet decided upon a date for the White Paper. When I have done so, I will advise the hon. gentleman, and indeed all Members of the House.


REQUEST FOR STATEMENT BY MINISTER
Derek Nigel Ernest Blackburn: Mr. Speaker, in light of the fact that no White Paper is forthcoming and we have been waiting almost a year for a White Paper, would the Minister be prepared to make a statement on any fundamental policy changes in DND, in lieu of a White Paper?


Erik Nielsen: Mr. Speaker, I can give that very helpful suggestion every consideration. In the meantime, we have not been waiting for a year; we have been waiting closer to 14 years.


STATISTICS CANADA
John V. Nunziata: Mr. Speaker, my question is directed to the Minister of Supply and Services. Earlier he said that only qualified and competent census commissioners were hired. In view of the fact that incompetent and unqualified Tory hacks and flacks were hired, will the Minister immediately instruct the dismissal of all those who failed to achieve 60 per cent on the test in order to qualify to be commissioners?


Stewart Donald McInnes: Mr. Speaker, there are two tests. One is written and one is oral, and the examiner takes both tests into account. If I ordered the dismissal of all of those who failed one of the tests, a great number of the nominees from over there would fail.


REQUEST FOR DISMISSALS
John V. Nunziata: Mr. Speaker, it is obvious that this Minister does not care about the integrity of the census. Again, in order to maintain the integrity of the census that is about to be taken, will the Minister recognize that unqualified persons, mostly Conservatives, were hired, and will he immediately dismiss those individuals who did not pass the written test, the only test?


Stewart Donald McInnes: 
ST. LAWRENCE SEAWAY INCREASED PILOTAGE FEES
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is for the Minister of Transport. The Minister will be aware of a decision handed down regarding the increased pilotage fees. Will the Minister use his powers to overrule this decision and provide the pilotage authority with the necessary funds to operate?


Donald Frank Mazankowski: Mr. Speaker, I think the Hon. Member is aware that, under the provisions of the ruling handed down, there is a period of time during which a decision can be appealed, and it would be inappropriate for me to comment until that time has expired.


EFFECT ON SURVIVAL OF SEAWAY
Iain Francis Angus: Mr. Speaker, my supplementary question is directed to the Minister of Transport. Does the Minister not agree that any increase in any costs related to the marine industry on the Seaway will be detrimental to its survival?


Donald Frank Mazankowski: Mr. Speaker, my response would be the same. I would be prepared to express an opinion, perhaps in another context, but I think in light of the responsibility that I have, I would want to refrain from making any suggestions at this time.


FISHERIES
George Roland Henderson: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. The Prime Minister will be meeting with the President of the United States on Monday of next week. I wonder if the Secretary of State for External Affairs could tell the House if the issue of countervailing duties on salt codfish and fresh fish going into the United States will be on that agenda.


Charles Joseph Clark: Mr. Speaker, that depends upon the developments in the United States regulatory procedures with which the Hon. Member will be well acquainted. I should take the opportunity to tell him that I raised that particular matter in very strong terms when I met with Secretary Shultz on Friday.
March 10, 1986


George Roland Henderson: Mr. Speaker, 1 have a supplementary question.


Mr. Speaker:: Order, please. The time has expired.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mclnnes that Bill C-87, an Act to authorize the divestiture of Canadian Arsenals Limited and to amend other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Mr. Speaker:: I believe the Hon. Member for Algoma (Mr. Foster) had completed his speech. The Table advises me that his time had expired.


An Hon. Member:: What about the period for questions and comments?


Mr. Speaker:: I appreciate that. I was about to call questions and comments. Does the Hon. Member for Algoma believe that he has some time left?


Maurice Brydon Foster: I wanted to complete my speech, Mr. Speaker.


Mr. Speaker:: My dilemma is that the Table advises me that the Hon. Member had used his 20 minutes. Questions and comments.


Stanley J. Hovdebo: Mr. Speaker, I have a question for the Hon. Member. Since the corporate plan of Canadian Arsenals Limited indicates more than a 100 per cent increase in profits during the next five years, does the Hon. Member have any comments to make on the advisability of going from a situation where we supply most of our armaments for national defence from the Crown corporation to one where we will have to bid against other corporations?


Maurice Brydon Foster: Mr. Speaker, the Hon. Member for Prince Albert (Mr. Hovdebo) has raised a very good question. It outlines the dilemma of the Government in privatizing the corporation. Some 90 per cent of what the corporation produces is sold to the federal Government; some 10 per cent is sold abroad.
Its corporate plan outlines that profits will increase over the next several years. In fact, it now has orders of some $200 million which are ready to go. These profits will now accrue to SNC rather than to Canadian Arsenals Limited or to the benefit of the federal Government.
Canadian Arsenals Limited
What is the value in selling off a corporation which essentially sells its production to the federal Government and, in the process, delivering the SNC massive profits over the next several years? In fact, the production and the sales over the next five years are expected to double. Essentially the federal Government, through the auspices of a Crown corporation, is now manufacturing ammunition and armaments which it seels to itself. Obviously it is making reasonable profits which accrue to the Crown corporation or to the Crown, in the end, itself.
Another factor comes into play when it is sold to SNC. SNC will then have the vast majority of armaments and ammunition production capacity in Canada and, of course, can raise the price willy-nilly to the federal Government, its major customer for at least 90 per cent of its production.
The Hon. Member has raised a valid point. It does not seem to be sensible to sell off a Crown corporation which is projected to make large profits. It experienced a loss at one time, but it has been making profits for the last four or five years. These profits are projected to be even larger in the future.
The Parliamentary Secretary to the President of the Privy Council (Mr. Lewis) seems to want to be co-operative. Perhaps we could have access to the Arthur Andersen company report to know whether the price is a reasonable one. Also we would like to know whether the corporation taxes will be a reasonable amount so that the Government will not suffer larger losses in that regard. As I said, the Hon. Member has raised a very good question. It is the kind of question we have asked in the House since the debate on Bill C-87 commenced a couple of weeks ago.


Mr.   de Corneille@: Mr. Speaker, I listened with interest to the Hon. Member for Algoma (Mr. Foster). I know he has spent a considerable amount of time studying this matter and what might be the repercussions. If the Conservative Party were really serious about saving taxpayers' money and reducing the deficit, it would not figure out ways to pass a profit-making mechanism off the backs of taxpayers and on to the back of a private organization. I would like to ask the Hon. Member what might be some of the ramifications of this.


Maurice Brydon Foster: Mr. Speaker, I think the question of the Hon. Member for Eglinton-Lawrence (Mr. de Corneille) really begs a question of why the Government is selling off this Crown corporation which will have massive profits in the future, as profits have been building up.
During the five-year period from 1980 to 1985, it is interesting that the corporation's profits have risen from $3 million to $11 million. The projections indicate that its sales will double in the next five years. It is reasonable to expect that profits within the next five years will approach at least $22 million. If we keep the Crown corporation, those profits would accrue to the Government directly. If it is sold off, as is proposed by the Government, the Government will recoup some of the profits in corporation taxes. However, if we had access to the Arthur Andersen report on this matter, we as Members of the House of Commons would be able to judge whether or not the price is

March 10, 1986
Canadian Arsenals Limited
a fair one. Obviously, if it is a profit-making corporation, we should charge more for it.
However, we still have the whole question of whether it is wise to be selling a Crown corporation which sells practically all of its production to the Government of Canada. The same situation applies to provincial Crown corporations such as Ontario Hydro. It services, or the services of its subsidiaries are mainly sold to the people of Ontario. We must ask ourselves whether it is wise to privatize Canadian Arsenals Limited whose main customer is the Department of National Defence.


Stanley J. Hovdebo: Mr. Speaker, I would like the Hon. Member to comment on the dilemma in which the Government finds itself in this particular Bill, the dilemma of encouraging and increasing the profits on armament sales. This has been traditionally against the policy of the Government of Canada which has assiduously stayed away from the selling of Canadian arms for profit; it has managed to stay away from the designation of merchants of death. Now the Government is encouraging this by selling to the private sector the industry for the manufacture of arms. The Government has not convinced me that it has changed its policy. It is just proceeding on the ideology of privatization without considering the reasons it should not do so.


Maurice Brydon Foster: Mr. Speaker, that is one of the problems with the privatizing of corporations such as Canadian Arsenals Limited. At this time the Government has the authority to direct the policy of the corporation. Obviously, when it becomes a private corporation it can sell to the Middle East and other countries throughout the world which are political hot spots, and the Government will have to work through a mechanism other than the direct mechanism it had when the company was a Crown corporation.
We have seen in recent press reports that the Cabinet is bitterly split on this issue. We understand that the Minister of Regional Industrial Expansion (Mr. Stevens) is determined to have a German company set up an armaments manufacturing plant in Nova Scotia, whereas the Secretary of State for External Affairs (Mr. Clark) is violently opposed to that. That kind of battle is going on within the Cabinet all the time, so we never know until the Prime Minister (Mr. Mulroney) makes his final decision exactly what the Government policy will be.
I agree with the Member for Prince Albert (Mr. Hovdebo) that this will indeed be a problem in a private sector company.
It will be able to wheel and deal and sell munitions and armaments throughout the world. A great deal of its business will always be done with the Government of Canada, as it is now. Rather than those profits accruing to the Government of Canada, they will accrue to this company, which is probably being sold at a bargain basement price. We do not know that, although we suspect it. We suspect that this is why the Minister of Supply and Services (Mr. Mclnnes) is not making that information available to Members. It would be very
embarrassing to him, and he does not want to make it public at this time.


Cyril Keeper: Mr. Speaker, this is an important Bill because it raises very fundamental questions about the policy of the Government. We must begin by asking why the Government chooses to privatize this particular Crown corporation. Why does the Government choose to sell this corporation? The Government may have reason for selling corporations which are not making a profit. From the Government's perspective it can be indicated that those corporations are costing taxpayers money, and there is good reason for turning those corporations over to the private sector. However, those arguments do not hold in the case of Canadian Arsenals Limited which last year made a profit of $11.3 million. Why sell a profitable corporation to the private sector?
I must conclude that the Government is doing this because of an ideological commitment to the motion of privatization. The Conservatives must believe that there is no legitimate purpose for having a profitable corporation in the public sector, that if a Crown corporation is making a profit, the logical thing to do is to sell it. They can see no justification for having a Crown corporation making a profit and remaining in the public sector.


John Barry Turner: That's not true.


Cyril Keeper: My colleague on the far right indicates that that is not true. I ask him to join in this debate and-


John Barry Turner: I am on your left.


Cyril Keeper: You may be sitting on my left, but you are on the far right. If the Hon. Member feels that what I am saying is not true, let him join this debate and explain why the Government is selling a profitable corporation to the private sector and depriving the Canadian Treasury of $1 1.3 million. Why deprive the hard-pressed Canadian taxpayer of $11.3 million? I would like to have the Conservatives explain that to ordinary Canadians.
I can only guess the Government is doing this because it is committed to the notion of privatization. It is committed to the notion that a Crown corporation, which is making a profit, cannot exist in the public sector. This indicates to me that the Conservatives are totally committed to their ideology that the economy should be nothing more than a series of private sector corporations. They are totally committed to a notion of a free enterprise economy with no role for Government or the public sector. Through this move the Conservatives are abandoning the notion of a mixed economy in the country. They choose, instead, to leave all the economic activity to the private sector and to private profit-making corporations.
The problem with that is that it reduces our capacity for an industrial strategy in the country. It reduces our capacity to give the economy some direction. Therefore, in the final analysis, it reduces the capacity of the Canadian Government
March 10, 1986

to make a serious effort to provide full employment in the country.
1 have another question about the sale of this corporation. Ninety per cent of the sales of Canadian Arsenals are made to the Department of National Defence. Through selling this corporation the Government is creating a monopoly in the private sector in the munitions industry in the country. It is, therefore, putting the Canadian taxpayer in a very vulnerable position. That private sector, profit-making monopoly can then set its price for munitions. We will be in a position of having to pay whatever price that monopoly chooses to charge the taxpayer. The Government is giving up an $11.3 million profit for the public Treasury and replacing it with a private sector monopoly which will be able to demand whatever price it chooses from the Canadian Government for munitions. The Canadian taxpayer will pay for that, Mr. Speaker.
I would like to know why the Conservative Government chooses to sell Canadian Arsenals Limited to the private sector. I hope Conservative Members get up and explain this to us. Does it have it anything to do with the fact that the company buying Canadian Arsenals made campaign donations to the Minister responsible for industry?


John Barry Turner: Careful.


Cyril Keeper: The Member says I should be careful. I wish he would stand up and explain to the Canadian people why the Government is selling a profitable corporation to the private sector. Why give it to a company which gave campaign donations to the Conservative Party and the Minister responsible for industry? They make comments from their seat but they do not get up in debate and answer those fundamental questions. Is it because they are following their patronage policy, a policy which they condemned when they were in opposition? They condemned the Liberal Party and the Leader of the Opposition. Now they are in office, they continue a policy of patronage, patronage, patronage. Whether it has to do with census takers or the sale of profitable Crown corporations, that is what they are doing. I would like to see Conservative Members stand up and answer those questions.
There is another question surrounding the sale of this corporation, having to do with conflict of interest. We are aware that the former Director General of Aerospace and Armaments with the Department of Supply and Services took a job with CFN Consultants. He was originally in charge of privatizing Canadian Arsenals. He left the public sector and went to work with the consulting firm which was working for the company buying Canadian Arsenals. On the face of it there is a conflict of interest. The Government has not adequately explained this. Why has the Government allowed this to happen? These questions demand answers. If we do not get adequate answers, then we have to believe that this Government is not keeping an adequate eye on the question of conflict of interest.
Canadian Arsenals Limited
Another question has to do with the fact that 10 per cent of the sales of Canadian Arsenals are to the international market. The Government press release dealing with this sale said it would make the ammunition industry in Canada more internationally competitive. Does this mean that the Government is encouraging Canada to get into the arms race? This is an important question because we know that military equipment produced in Canada has ended up in places like Chile, Nicaragua and El Salvador. Surely the average Canadian does not want to build an economy which is based upon profits from debt in international conflicts. I am concerned about this Government's policy regarding the international sale of arms and what the movement of this corporation from the public sector to the private sector means in those terms.

We have a number of questions about the Bill now before the House. One of them is what security has the Government given to the employees of the corporation? According to the press the Government did not consult the union about the sale.
Mr. Speaker, the corporation employs 750 people in Saint-Augustin near Quebec City and in Ville Le Gardeur and they want to have job security and firm commitments concerning their pension rights.
Mr. Speaker, the sale of that Crown corporation has not been adequately explained. Why did the Government sell a profit-making company? Could it be that the buyer of the corporation made financial contributions to the Progressive Conservative Party during the last election campaign? Is patronage involved? I want Conservative Members to respond to that allegation.
As a result of the sale, Mr. Speaker, the Government will create a private sector monopoly and Canadians will have to pay even more for national defence. This is a rather strange policy because this Crown corporation has been putting its profits in Government coffers.
Mr. Speaker, I want the Conservative Members who misled me on a few occasions to take this opportunity to reply to my questions. Why is the Government selling a profit-making Crown corporation? Is it because of the contributions the Party received from their private sector pals during the last election campaign?


Mr. Deputy Speaker:: Questions and comments.


Stanley J. Hovdebo: Mr. Speaker, a number of organizations are very concerned about the sale of arms by Canadian corporations in any form. They are concerned about Canada becoming a merchant of death. Charges have been levelled against Canada by church groups who are alarmed by the increase in the export of military equipment from Canada. Would the Hon. Member comment on that very great concern over Canada becoming a producer of military equipment which contributes to the possibility of war around the world?

Canadian Arsenals Limited


Cyril Keeper: Mr. Speaker, I welcome the question because it is an important question about public policy in this country. When we look at countries like Chile, which has a very brutal dictatorship which as Amnesty Internatioal has indicated, has not only tortured but also killed people who have opposed it, when we look at those situations, we naturally condemn those kinds of regimes and we wish to see a return to democracy in countries such as Chile, countries which have a long history of democracy. When we find out that Canadian arms or Canadian equipment that can be used by the military end up in Chile and are used to repress the population there and to maintain a dictatorship, then we are naturally distrubed and outraged. Church groups across the country have documented the movement of Canadian equipment to countries such as Chile, and they have protested this sale of Canadian military equipment to dictatorial regimes. The difficulty with the law before us today when the Government moves this corporation from the public sector to the private sector is that it invites an increase in Canada's participation in international arms trade, it invites a situation in which Canadians will be living off the profits of conflict around the world. This is not a policy that we should be floowing and it is one that outrages most Canadians.
Rather than creating a circumstance by the sale of this corporation which encourages us to be involved in international arms trade, we should be going in the opposite direction. Not only that, we should be following the advice of church leaders who indicate to us that we can create more employment by being involved in non-military production than we could be by being involved in destructive military production.
It is important for the Government to listen to these kinds of concerns that Canadian people have been expressing, and particularly Canadian church leaders.


Mr. Deputy Speaker:: The Right Hon. the Secretary of State for External Affairs (Mr. Clark) on a question or comment.


Charles Joseph Clark: Mr. Speaker, I am greatly interested in the issue just raised by the Hon. Member.

I am particularly interested in his references to the export of Canadian equipment to Chile or to other countries. He may recall that nine months ago in the House his colleague, the Hon. Member for Kamloops-Shuswap (Mr. Riis) asked a series of questions relating to the Canadian export controls policy. I answered those questions indicating there was a review of that policy. I invited the Hon. Member for Kamloops-Shuswap to participate in the review and on behalf of the New Democratic Party to outline for us specifically the changes that the New Democratic Party would like to see in the export controls policy. In other words, I invited the New Democratic Party, the Hon. Member's colleagues and others, to move beyond making speeches in the House of Commons and to participate with us directly in helping to clarify the policy. That was nine months ago. I have yet to receive a
March 10. 1986
response from the Member for Kamloops-Shuswap or the New Democratic Party.
I know they would not want to be accused of simply making statements in the House that they are not prepared to back up with their actions. Will they tell me why they have not replied to my invitation to make specific proposals as to the ways we could put in place an export controls regime that would be more effective? Can he tell me whether they intend to reply, and if not, why not?


Cyril Keeper: Mr. Speaker, I will not speak on behalf of my colleague from Kamloops-Shuswap; I will leave it to him to respond to the Minister. I would like to know why the Minister does not respond to the concerns that Canadians have expressed about Canada being involved in arms sales and equipment that end up in places like Chile, and why we do not move to convert those industries to civilian purposes that would produce more employment and that would pull us out of the situation of supporting regimes such as the one in Chile.
Most Canadians are familiar with the fact that there are reports in the press on a regular basis of Canada's participation in arms sales that affect countries like Chile, that affect countries like El Salvador in which we therefore end up supporting dictatorial regimes through our material efforts. 1 would like to see the Minister stop a number of things. One is to stop using the Export Development Corporation to subsidize these kinds of arms sales and to stop issuing permits for these sales which end up in the hands of military dictators. 1 would call upon the Minister to answer the concerns that Canadians are expressing about Canada profiting from arms sales that go to countries and simply maintain repressive regimes, such as the Chilean regime which, as Amnesty International has documented, has used torture and killed people who have been in opposition to that regime.


Charles Joseph Clark: Mr. Speaker, I am quite happy to respond to those concerns, and indeed, I have been doing so. In the spirit of this Government of trying to involve citizen participation and trying to give the NDP an opportunity to put its work where its rhetoric is, I have invited, very seriously, the representatives of the New Democratic Party who raised this question to join with us in the hard work of defining the rules that Canada should follow. It is easy to stand up in the House of Commons and make speeches. It is a little more difficult to write out precisely the changes in law and practice which should be followed.
We believe in participatory democracy. We believe that New Democrats, who are prepared to get up and make speeches, should be given the opportunity also to respond with their particular proposals. What I have received is nine months of silence from the New Democratic Party.
It is a very serious matter. The Hon. Member will recall, with regard to Chile and the issue raised by his Party, that the question in issue was not arms but, rather, was whether or not we should be exporting equipment that is used by police, in effect, apparel used by police to stop riots. Is he suggesting that all Canadians who produce that kind of equipment should
March 10, 1986

stop producing it? Is he suggesting that all Canadians who have jobs in the production of that equipment should lose those jobs? If he is not suggesting that, what new rules is he proposing? Why will he and his Party, who have asked for new rules, not accept my invitation to come forward and help us draw up those new rules? Why, when we are working to bring in a new export controls policy, have we received only nine months of silence from members of the New Democratic Party? Are they interested only in making speeches in the House of Commons or are they prepared to respond positively to invitations to help formulate Canadian policy?
It is a very important matter that relates very directly to the question under debate here, because it is the easiest thing in the world merely to express opinions. All of us have been sent here with a much higher responsibility than just the expression of opinion. We are asked to bring about changes in the country. I have invited members of the New Democratic Party to participate in those changes. So far I have had only silence. When are they going to move away from the easy work of offering criticism and respond to the invitation to join in the hard work of actually defining new approaches that might be followed?


Cyril Keeper: Mr. Speaker, we are talking about export permits. It should be clear to the Hon. Minister that Canadians oppose the approval of export permits that allow equipment to go to a country like Chile to be used by the police forces for the repression of the efforts to return that country to democracy, that have been documented by Amnesty International as having involved torture and the deaths of citizens. The Minister talks about words, well, he has been using a lot of words here today. While he is using a lot of words, the Government, through export development grants, continues to subsidize sales that end up in countries like Chile. Why does the Minister not bring a stop to that?


Mr. Deputy Speaker:: Resuming debate.


David Charles Dingwall: Mr. Speaker, I rise to speak to this Bill because I and other members of my Party wish to raise a number of concerns. Hopefully, the Minister or other members of the Government will be forthcoming with some answers, perhaps during the question and comment period.
The concept of the divestiture of Canadian Crown corporations is not one to which I or my Party are opposed. However, there is a legitimate concern about the way in which that process operates. For instance, we must consider the buyer, Canadian versus non-Canadian, the price and the assets. We must consider the effect it may have on the workforce, and whether the pension plans of that workforce will be transferable. We must consider whether Parliament and Canadians have all of the facts surrounding a particular sale.
That is what is disturbing about the Government's refusal to
place the Arthur Andersen Report before Parliament. It has
been misleading, even if unintentional. This report on this
Canadian Arsenals Limited
particular sale was financed through Government expenditures and we believe that Parliament and Canadians ought to know the contents of that report.
I am not suggesting that the successful bidder, SNC, is a bad company, because we know that it is a good Canadian company with an international reputation. However, let me refer to a letter dated January 20, 1986 written to the Minister of Supply and Services (Mr. Mclnnes) from my colleague, the Member for Glengarry-Prescott-Russell (Mr. Boudria). The Minister responded by saying: "I cannot provide you with a copy of the Arthur Andersen Report". However, he does say in the letter, in a postscript: "I can show you a copy of the report in my office if you so wish". That is signed by the Minister.
Is this an example of the sort of tactics and practices of clandestine meetings that we saw some months ago, or was it a real attempt to provide legitimate information? If the information is confidential and of such a nature that it is of great embarrassment or detrimental to the security of the nation, perhaps that should be said. However, the Minister simply states: "I can show you a copy of the report in my office if you so wish". I suggest that Parliament has been prohibited from seeing the real information with regard to this particular Crown corporation.
Perhaps that SNC offer was the best possible selling price the Government could have received for this Crown corporation at that time. However, I have serious doubts about that based on information I have about another bidder in the process. These are facts which I have in my possession and I would be happy to respond to Ministers on the floor or in private if they have any questions.
This company, International Defence Products Limited, is as reputable as SNC, to my knowledge. It provided a bid to the divestiture project office in Ottawa. I have a letter dated September 1 1, 1985, in which it submitted its proposal.
While perhaps only the Minister of Supply and Services can comment, the transactions and communications which took place subsequent to its bid was very limiting, at best. 1 find that very surprising because this is an Ontario corporation, Canadian controlled and over 75 per cent Canadian owned. I believe it is a good corporate citizen.
Let me highlight some of the benefits that would flow had this company's bid been accepted. International Defence Products Limited is controlled and managed by Canadians. The initial value of the offer and the undertaking is far in excess of the selling price as referred to by the Government with regard to selling to SNC. Other benefits would include increased exports, increased employment in certain areas of the country, transfer of leading edge technology to Canada, major new investment and manpower training, an increase in continuing research and development expenditures, a world product mandate, three new industrial facilities, and increased corporate and personal tax revenue from new products.
Although many benefits would be provided to Canada, the
germane question is what the company offered financially. We
know that SNC paid $87 million for the purchase of the shares

March 10, 1986
Canadian Arsenals Limited
and approximately $4 million for the debt owed to the Government. International Defence Products Limited, in its bid, was prepared to pay $40 million to the Government of Canada for the discharge of the debt. In addition, as it stated in writing before the divestiture committee, it would add an additional $38 million for refurbishment and expansion of the Canadian Arsenals Limited plant. Furthermore, if this bidder had been successful, it would have invested an additional $100 million in new plant and facilities outside the Quebec-Ontario region, into a less fortunate region of the country.
The total purchase price and investment plans amounted to $178 million, providing direct, permanent, durable jobs for more than 210 individuals.
Perhaps that bid was significantly flawed, but I am not privy to the information which the Government has with regard to the sale of Canadian Arsenals Limited. That is why my colleague, the official critic for Supply and Services, has demanded that the Government and the Ministers who have been in attendance provide a copy of the Arthur Andersen Report forthwith.
The questions and concerns that we have with regard to this particular sale could be answered. When we do not have information except for mere references by the Government, the sum of $178 million and 210 additional jobs, compared to approximately $95 million, suggest a major discrepancy. One must ask, as an opposition Member, for the purpose of argument, whether that would not have been a better deal for Canada, particularly considering the region in which this company would relocate. I cannot honestly make that comparison, but from the information I have it seems that something is obviously missing.
I would have hoped that the Government would explain to Canadians the details surrounding this deal. May I suggest that Government Members, who campaigned on the basis of openness and civility during the election, should produce the Arthur Andersen Report so that all Canadians will know about this particular deal. My colleague, the official critic for Supply and Services, has raised this matter both publicly and in the House of Commons. He has the taken advantage of writing to the Minister responsible. He has had meetings with members of the Minister's staff to try to elicit the report which he believes, as I do, is germane to the entire argument.
I want to be perfectly clear that conceptually I am not opposed to the Government selling off Crown corporations, not at all. But I think that before these sales are consummated- and I repeat, before they are consummated-it is appropriate that all Members of Parliament have available all of the information in order to make their decisions and their opinions known. If we do not have the information, I could get into a shouting match, if you will, with the Minister of Supply and Services, make all kinds of accusations and allegations that he is abandoning his region, that he has forgotten the economic impact on Atlantic Canada, a whole host of things, but I do not want to do that. I would like to assist but, by assisting, I
hope that the Government will be candid enough to place that information before us.
In rising today to speak in this debate I had hoped to get those few things on the record and that the Parliamentary Secretary or someone else could provide the answers to some of my questions which have not been answered to date.


Cyril Keeper: Mr. Speaker, I would like to ask my colleague a question with regard to the policy of his Party. We are talking about a corporation which is involved in the sale of armaments. I wonder about the policy of the Hon. Member's Party with regard to the sale of these armaments when they end up in places like Chile and El Salvador. There has been a history over the last while of arms ending up in hot spots around the world. What is the policy of the Hon. Member's Party in this regard?
I was not clear whether or not the Hon. Member was in favour of this corporation being sold. Does he think that the sale of this corporation will add to the international arms trade in which Canada is involved in places where human rights are involved such as Chile? Given the fact that there is a history of Canada being involved in arms in places that are abusing human rights which goes back for a number of years, including when the Hon. Member's Party was in Government, could he explain to us the policy of his Party in this area?


David Charles Dingwall: Very briefly, Mr. Speaker, with regard to our policy of selling armaments, it was my Party which brought in the present restrictions under which we are operating at present. We believe in those restrictions with regard to the export of armaments in the international market. That has been said very clearly by my Leader and by our official critic for External Affairs as well as by other Hon. Members of our Party in terms of exporting armaments to countries where war is imminent. I do not have the legislation before me but that is basically the thrust and policy of our Party.
With regard to whether I am in favour or against this particular sale of a Crown corporation, let me say that conceptually we have no difficulty with selling off Crown corporations. However, I have great difficulty with a Government which wishes to sell a Crown corporation and in that process fails to provide all of the written documentation which predicated the sale. I have given to the Hon. Member and to Hon. Members of the House information regarding a bid by a second bidder. From my perspective-and I say this to the Parliamentary Secretary in a very constructive way-the second bidder looks much more significant with respect to benefits for Canada. But when my arms are tied behind my back because of the Government's refusal, as it so often does, to give me documentation such as the Andersen Report, it is very difficult to say whether it is a good or a bad deal. Perhaps the information I have, I say to the Hon. Member respectfully, is not accurate information. I do not know. I raised the matter of the bid sincerely. But the Government has not provided the information to date. Perhaps the Hon. Member has more information than I have, and I would be prepared to accept his information and read it.
March 10, 1986

Mir. Keeper: Mr. Speaker, 1 wonder if the Hon. Member is aware of an article in the Whig Standard of July 2, 1985 which states:
Of course it's not the first time that countries such as Chile have received the benefit of Canadian military technology. In 1981, for instance, Crown-owned de Havilland Aircraft sold helicopters to the Chilean air force, with the help of a $6.1 million credit from the Export Development Corporation.
The Hon. Member said he supports the policies which were in place. The article indicates that under the previous Government public funds were used to support the sale of military equipment to a regime such as Chile which is abusing human rights. Is that the policy the Hon. Member supports?


David Charles Dingwall: Mr. Speaker, I am not certain 1 understand the question in terms of relevancy of the particular Bill which is being debated. However, that is a debate on another subject matter: is it or is it not taking place? The Hon. Member seems to suggest that it is. I have said to him quite candidly that I am not fully aware of all the details as to where the products produced by Canadian Arsenals have gone. To my knowledge, they have not gone there. If the Hon. Member has information which is in direct contradiction to that, I suggest he place it before Parliament. I am not aware of it.
With regard to the sale, I underline again the thrust of the policy of the Government of the day. I was prepared to table for the Parliamentary Secretary the letter to the divestiture committee on September 1 1, 1985, signed by the Chief Executive Officer of International Defence Products Limited. So it is not a hokus-pokus, it is a legitimate document. Based on that information, I would have to say that this particular bid looked more promising for Canadians and I would have preferred it because of its regional impact and guarantees and so on. However, 1 do not have all the facts.


Cyril Keeper: Mr. Speaker, the Hon. Member said he does not know that Canadian military equipment is going to countries like Chile which is abusing human rights. Yet he supports the policies which are in place. His primary point seems to be that he favours the second bidder over the first. Does he not realize that the sale of the corporation to the private sector will increase Canadian trade in arms? How does he explain that, along with the fact that the Liberal Party is trying to portray itself as a Party concerned about peace and human rights?


David Charles Dingwall: Mr. Speaker, you can readily see the utter stupidity of the New Democratic Party. It is bent on a philosophy that anyone wearing a green military uniform is against peace. I want to tell the Hon. Member that there are precisely 12,450 direct and related jobs in the military world in my Province of Nova Scotia, which I support. I support companies that are in the military sector providing armaments.


Cyril Keeper: What about Chile?


David Charles Dingwall: I do not support countries that are in breach
of international treaties, international commitments-longstanding traditions if you will-with regard to human rights.
Canadian Arsenals Limited


Cyril Keeper: Your Government did.


David Charles Dingwall: If the Hon. Member, with his warped mind, suggests that I do, then not only is he misleading the House but, I would suggest frankly and sincerely, he might be intentionally misleading the House.


Cyril Keeper: I rise on a point of order, Mr. Speaker. The Hon. Member for Cape Breton-East Richmond (Mr. Dingwall) has accused me of intentionally misleading the House. What 1 point out, and what the Hon. Member may not be aware of, is the fact that when his Party was in office it supported the sale of military equipment to the regime in Chile to the tune of $6.1 million through the Export Development Corporation. This regime is one which abuses human rights. 1 would like the Hon. Member to acknowledge that.


Mr. Deputy Speaker:: As far as the first point raised by the Hon. Member for Winnipeg North Centre (Mr. Keeper) is concerned, I believe the Hon. Member for Cape Breton-East Richmond (Mr. Dingwall) did not accuse the Hon. Member for Winnipeg North Centre of misleading the House.


Cyril Keeper: He sure did.


Mr. Deputy Speaker:: I believe he used the words "might be". However, if the Hon. Member for Winnipeg North Centre wishes, I will read the "blues" in this regard.
The Hon. Member for Cape Breton-East Richmond.


David Charles Dingwall: Mr. Speaker, just so the Hon. Member will be able to leave the Chamber at six o'clock to go home and sleep I will withdraw any reference to his intentionally misleading the House. I wish to have it clearly understood that the Hon. Member and his Party-the rump of this House-are unequivocally against anyone in this country who wears a uniform and who defends and protects our country. I want it to be underlined that the Member of Parliament for Cape Breton-East Richmond-


Cyril Keeper: That is a distortion.


David Charles Dingwall: -is certainly not against the Canadian Armed Forces, as is being suggested by the New Democratic Party.


Mr. Deputy Speaker:: Resuming debate with the Hon. Member for York Centre (Mr. Kaplan).


Robert Phillip Kaplan: Mr. Speaker, 1 am happy to have the opportunity to speak on Bill C-87. I was under the impression that the Secretary of State for External Affairs (Mr. Clark) would be participating or would be present in the House during this debate.


Donald Alex Blenkarn: He was here. Where were you?


Robert Phillip Kaplan: He was here? I was down on the list of speakers for my Party. However, I did not make a decision with respect to that list or with respect to the order of speaking. In any event, I have some remarks to make which 1

March 10, 1986
Canadian Arsenals Limited
know the Hon. Member for Mississauga South (Mr. Blenkarn) will find of interest. I am sure he will have a great many questions which he will want to ask me when I conclude.
I come to the subject of debate with considerable interest in the policy of the Government with respect to privatization. 1 followed carefully the criteria of the Government with respect to the sale of de Havilland, which was the first major sale made pursuant to its privatization policy. One interesting point with respect to the privatization policy of the Conservative Government is that it gives Canadians an opportunity to see how the three political Parties represented in the House of Commons stand on an issue in which differences among the Parties are highlighted, perhaps more than on any other single issue.
I would first like to deal with the approach of the Liberal Party to privatization. We were not opposed to it. We were not convinced that the Government ought or ought not to remain and carry on particular businesses. We were taking a pragmatic approach to the effect that if there was justification for the sale of a corporation, then it was perfectly proper for the Government to sell it. We were of the view that the Government has the same capacity as the private sector has, in almost every respect, with regard to the undertaking of business. There is certainly no shortage of public-spirited Canadians who are willing to come forward in order to bring private sector discipline into a corporation in the public sector. As far as the rank and file staffing of a company is concerned, if one considers Canadair and de Havilland one will find that the types of people who come to work for these companies at all levels are certainly equivalent to the people who work for similar corporations such as McDonnell Douglas, Pratt & Whitney, or Spar Aerospace in the private sector. Person-for-person it is as easy for the Government to be involved in a business as it is for the private sector.
On balance, the Liberals have said that if the Government is to remain in a business then there should be some public sector justification for it. In other words, were all other things are equal, a corporation which is running an industrial business, for example, should be in the private sector.
The Conservatives have a different approach to this matter. It is the firm belief of members of the Conservative Party that Governments should not be in industrial enterprises of any basis at all. It is a very ideological position which they take. They simply think it is wrong for taxpayers to be backing such an enterprise and that the sooner we can get out of it, virtually at any price, the better. The attitude is that it is better to give it away, as was seen in the case of de Havilland. It is their firm belief that private sector ownership will always perform a better job than government ownership.
Just to make the proposition is to illustrate some of the considerable weaknesses with respect to it. There are badly managed businesses in the private sector, just as there are well managed ones in the public sector. As a Liberal I think it is wrong that the Conservatives have so little faith in the Government being able to do things well. One has to admit that the private sector imposes a type of discipline on an industrial
operation which is a very healthy thing when the company is doing nothing more than providing a type of product or service which can be provided in the private sector.
For our part in the Liberal Party-and I think I can say this for my colleagues and for my Party nationally-when all other things are equal and there is not a good, strong reason for a company to be owned by Government, then it is better to turn it over to the private sector. This should not be done at any price or on any basis but at a reasonable price and on a sensible basis. I contrast the pragmatism of the Liberal Party with respect to this question of privatization with the ideological bias which the Conservatives have. This bias sometimes distorts reality and makes it hard for them to appreciate when a company is better off and performing well in the public sector as opposed to how it will perform in the private sector.
Even in light of the remarks made by some members of the New Democratic Party with respect to this sale I can turn to the Party as a whole and say that before us is a profitable company, why turn it over to the private sector? As a Liberal, it does not trouble me at all that a corporation is turned over to the private sector from the public sector when it is profitable or because it is profitable. Indeed, it is hard to see why the private sector would want to take over a company which was either not profitable or did not have the prospect of becoming profitable.
Members of the New Democratic Party look at the situation from a socialist point of view. That is to say, if it is making money then why should that money not go to all taxpayers? Members of the New Democratic Party ask: Why should it go just to those who invest in the company? This point of view shows a lack of appreciation of the important, positive role which capitalism has played in developing the prosperity which we know in our country and that which is known in other capitalist countries. Members of the New Democratic Party missed that point, something which members of the Liberal Party could not miss. We certainly recognize that turning something over to the private sector when it is making a profit can be a good reason for turning it over. However, if a profitable company is to be turned over to the private sector then the taxpayers should receive a fair return for the stock in the company which they are turning over. With the way this deal has been presented to Parliament, even members of the Conservative Party have to admit there is no way that any non-Government Party can make a judgment about it. The Government is not giving us the facts that we need to determine whether or not a fair price is being paid for the company.
I have here a letter from the Minister of Supply and Services (Mr. Mclnnes) written to my colleague, the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria), on January 20, 1986. The letter states categorically that the Minister cannot provide the Member with a copy of the Arthur Andersen Report. It is the Arthur Andersen Report on which the Government has made the judgment that the purchase price being paid for the company is fair.
March 10, 1986

I will not go for the NDP line that there is no way that a profitable publicly owned company should be sold, but I do have to know, before I can put my seal of approval on a sale, that the taxpayers are getting a fair value for it. When a Minister of the Crown is refusing to give us a copy of the valuation of the company, what conclusion can be drawn, particularly with the track record of this Government?
This is a Government that has shown us much reason to be suspicious of the things it does. We know it works with its friends. We heard examples of that during today's Question Period. Tories are insiders and get the benefits. The example of how Tories choose the citizens who are going to be hired to work the census was brought to our attention today. We all know how important it is that the census have credibility.
When the Liberals were in Government, we established a written test for census workers. These people had to take the test and if they did not pass it, they did not proceed to the interview and they did not get the job.


Mr. Skelly:: Liberal Party cards, Liberal donations.


Robert Phillip Kaplan: The Conservatives still use the test, but people who have failed the test miserably but have the advantage of being the wife of the President of the Conservative Association in Cochrane-Superior-


Raymond John Skelly: Sit down. The only thing is they are worse.


Robert Phillip Kaplan: I am not speculating here. 1 am putting forward a documented case for which we have proof. My friends in the NDP are wanting to suggest that there is no difference between the Liberals and the Conservatives.


Raymond John Skelly: Mr. Speaker, I rise on a point of order. I wonder if the House is in fact being given correct information in the sense that the Hon. Member is suggesting that the Tories are not doing something that the Liberals did when they were in power.


Mr. Deputy Speaker:: I think that this is a point of order. I would ask the Hon. Member who has the floor to speak on the Bill.


Robert Phillip Kaplan: I know, Mr. Speaker, that you are not objecting to what 1 am saying on the grounds of relevance. I want to show why the House is entitled to be suspicious when the Government tells us that this is a fair price but will not show us the facts on which it makes that judgment. I am suspicious because of the census issue and I have to say a few more things about it. When we were in Government, the Liberal Party established the test. When I was a Minister and when I was a back-bencher, I was asked to put forward names, as were other people, but if those people we recommended did not pass the test, they did not get the job. Now the Conservatives want to coast on the integrity of the Liberal procedure for hiring people for those jobs. Yet when well established Tories fail the test, they still get the job.


T.A. Bud Bradley: Mr. Speaker, 1 rise on a point of order.
Canadian Arsenals Limited


Mr. Deputy Speaker:: I believe we are going to hear a point of order on relevance, which I think is a well founded point of order. I would ask the Hon. Member to get back to Bill C-87.


T.A. Bud Bradley: Mr. Speaker, I do not know if it is a point of debate or if this is the subject we are debating today, but the Hon. Member is totally off base. He is well aware that the test is changed each year by Statistics Canada. He is well aware that-


Mr. Deputy Speaker:: Order, please. The Hon. Member for York Centre (Mr. Kaplan) has the floor on debate on Bill C-87.


Robert Phillip Kaplan: I know that the Member who just spoke is an honourable Member and I certainly trust him. However, I want to explain why the Canadian people, to an increasing degree, do not believe this Government and do not trust it. I just wish that that very trustworthy Hon. Member were a Minister. If he were a Minister, we might see more integrity in that Cabinet. We might have a more honourable Government than we do. When we hear how the Minister of Supply and Services condones a situation in which Tory hacks who have failed the qualifying test end up getting the jobs, we have to be suspicious.


Donald Alex Blenkarn: Mr. Speaker, I rise on a point of order. First, it is a rather indecent suggestion to make that someone has failed a test when the Hon. Member has no evidence whatsoever to produce to the House. Why should he impugn the competence of private individuals in an attempt to make points on a specious matter in debate? This is not proper. You have warned him twice, Mr. Speaker. It is not fair.


Mr. Deputy Speaker:: Order, please. That is a point of debate.


Robert Phillip Kaplan: I would like to turn to the other reason which arose just this week and last week to justify our suspicion of the Government when it says the price is a fair one. The matter to which I wish to refer is the letter, now retracted, written by the Hon. Member for Quebec East (Mr. Tremblay) dealing with the awarding of contracts of a value of less than $30,000. When I tell you the way the Government has handled this issue, Mr. Speaker, I think even you will want to agree with me that we are entitled to be suspicious about the price paid. In connection with the awarding of contracts of a value of less than $30,000, a letter was written by the Hon. Member-


Mr. Deputy Speaker:: I am sorry. I really do not believe that that is relevant. I understand what the Hon. Member is doing but I do not believe that this is relevant to Bill C-87. I could understand the Hon. Member making reference to it. However, I would not like him to go on with that matter in his speech.


Robert Phillip Kaplan: I appreciate your observation that you can
understand my referring to it. 1 had a lot I wanted to say about
it but I will not do so because I appreciate your desire to see

March 10, 1986
Canadian Arsenals Limited
the debate proceed on the sale of Canadian Arsenals Limited. I will not say more about it. I simply put it forward as another reason why the Canadian people do not believe the Government and why the Government's privatization policy to which I wish to return now is viewed with suspicion and alarm.
In the case of de Havilland, the first substantial company to be privatized, my own position was made well known in the House and in the country. We did not think that that company should have been sold to non-Canadians. I am glad to see that Canadian Arsenals is being sold to Canadians. With the de Havilland situation, we were able to force the Government to make much information public by the simple fact that some of it was leaked, and when I made it public, the Government was obliged to make the rest of it public to try to tell the whole story. In this case-
[ Translation]
In this case, the file is slimmer and I have not yet had a copy of the Andersen Report and I doubt that one has been available to allow the public to make a judgment on the selling price.
To come back to the issue of privatization as such, everyone knows now, I believe, that the Liberal Government had developed a policy of selling a few Crown Corporations. We had created the Canada Development Investment Corporation and put it in charge of some of the Crown Corporations which were to be sold, but they would not have been sacrificed in some kind of fire sale.
When the Canada Development Investment Corporation was established by the former Government, it was done in a clear way of recognizing that there were companies owned by the Government which ought to be privatized. A strategy was developed and was in the process of being worked out which would have led to companies being sold, de Havilland and Canadair were in that portfolio. The Hon. Member for Mississauga South does not question at all my assertion that the Liberals also had an eventual plan to sell the companies owned by the Canada Development Investment Corporation. It was a questiuon of wanting to establish a basis for selling them. In the case of de Havilland, I feel that the sale should not have been made to non-Canadian buyers. A lot more preparation of groundwork should have been done to make it clear that the company had a bright future, that it was a company which would have found Canadians who were interested in buying shares. The employees and management at the plant, some of the suppliers and customers of that company and the public at large could have been brought forward as a group or individually in an effort to find a home for that company in Canadian hands.
Canadian Arsenals Limited or Arsenals Canada was not a company on the Liberal list to be sold. I think it is important to indicate the view of the Liberals. Although it was a private company, although it was doing something the private sector
could do with the discipline of the bottom line, perhaps marginally better or a lot better than a publicly owned company could do, it was a company which was too close to national procurement to be sold. This was a company whose future, even if it were privately owned, depended totally or almost totally upon Government policy to be successful. When a company which is that close to the Government is put on the market and has private owners, it becomes a very difficult situation for the Government to live with, especially when the Government is the vendor of shares to the private sector. However much one might want to get away from it, the Government is underwriting the future of the company, so far as procurement is concerned, in the hands of the private owners.
There is another problem as well. This is a company which would not be allowed to go out and find other customers around the world. Obviously we would not want it selling to any of the enemies of Canada. For example, non-NATO countries or East Block countries might be willing to pay a lot for the products of the company, but Government policy would prohibit them from being sold. That type of limitation does not apply to normal companies in the private sector which have many opportunities to develop and sell their products. The activities of this company are just too close to Government policy and to Government procurement for the state and the taxpayers to feel comfortable with it being in private hands. What is the proper profit level? How much should the Government buy from it? Who should the other customers be? These are things which are not decided at head office as much as they will be decided in the Government. That was the Liberal reason for not wanting a company such as this one to be put on the auction block. I challenge the Government to show good reason for those considerations being wrong and why those considerations should not have been the ones brought to bear on a decision about the future of Arsenals Canada.
I see that my time has run out. I will certainly be glad to deal, as much as I can, with the questions of the Hon. Member for Mississauga South. I know that I cannot ever answer his questions to his satisfaction, but I will certainly entertain them.


Donald Alex Blenkarn: Mr. Speaker, the Hon. Member spoke about the pragmatism of the Liberal Party and about how it had every intention to privatize companies. In the entire history of the Liberal Party, I do not think there was a single instance of privatization. It was a very pragmatic argument-when the companies were doing well, they were doing too well to be privatized; when they were not doing well, they could not be privatized unless they did better. The pragmatist's approach was never to privatize.
Also the Hon. Member suggested that if the company depended to a large extent on Government procurement or Government policy, the company ought to be in the hands of the state. On that basis, then, we should put in the hands of the state companies like Spar Aerospace and perhaps others which might be involved in producing ships for the navy and the like. The fact of the matter is that the state represents a
March 10, 1986

major purchaser in our society. Government policy clearly declares how profitable a company will be, but there is no indication that the company should not operate in the private sector. After all, the state controls the effectiveness of that company. It controls whether the state will buy from that company or from some other place in the world. It controls to some extent where that company can sell, but not completely. It can sell its products to other people in the world, provided they are not banned by procurement arrangements or by Orders in Council.
The Hon. Member really said nothing to indicate why the company should not be sold. If he is a pragmatic Liberal, as he claims to be, then the company ought to be sold. The only question then would be whether it is a fair price. That is a question he will be able to determine as he determined on the de Havilland matter when it was before the committee. The House will recall that the Hon. Member said that de Havilland was being sold for less than the fair market value and that Canadians would pay more. When the witnesses appeared before the committee, they said that they were fortunate to get Boeing to buy de Havilland and that they could not have done better. Now the Hon. Member says that it was because it was a foreigner. The fact of the matter is that pragmatic Liberals are the same as the pragmatic or less than pragmatic socialists; indeed they are all the same.


Robert Phillip Kaplan: Mr. Speaker, I strained to hear a question in those remarks, but I want to respond to them.


An Hon. Member:: It was a comment.


Robert Phillip Kaplan: It was a comment; it was very well taken. Indeed the Liberals did sell corporations. If de Havilland was not sold, it was because the sale of de Havilland was premature. 1 feel that it was premature.


Donald Alex Blenkarn: What companies were sold?


Robert Phillip Kaplan: The Northern Transportation Company and Nordair.


Lloyd Axworthy: We put them on the block.


Robert Phillip Kaplan: Perhaps it was a matter of signing the closing documents; that was done by the Conservatives. I will certainly say that the Conservatives have been much more aggressive about selling than the Liberals ever were. However, 1 think that aggressiveness is not healthy in the case of privatization. That aggressiveness in the case of de Havilland has resulted in a great loss to our country, however well de Havilland does.
I want to say to my friend, because I hope the opposite impression is not created, that I think Boeing is a wonderful corporation. Surveys conducted in the United States show that it is the sixth most popular employer in that country. I would not have wanted the company to be sold to the McDonald hamburger company, which I suppose is more popular. It is in the line of work, but I just felt, for all the reasons raised at that time, that the sale to a foreigner should have been the last resort of a desperate Government with a company with no
Canadian Arsenals Limited
prospects. None of those circumstances were justified. The Government was desperate, but it should not have been.


Mr. Darling:: In whose riding is it?


Robert Phillip Kaplan: de Havilland?


Stan Darling: Yes.


Robert Phillip Kaplan: It is in my riding.


Raymond John Skelly: Mr. Speaker, 1 think that when the Hon. Member (Mr. Kaplan) spoke on this Bill, there was a great oxygen shortage.

If the Member recalls correctly, it was his Government which sold the other part of this organization to SNC. I believe Les Industries Valcartiers Inc., which produces small calibre ammunition, was sold by the Liberal Government with no protection for jobs or pensions and no basic concerns about employees. It is ironic to hear him stand in the House and criticize his bedmates on the other side of the House.
I was somewhat surprised, and realized at what a low level the oxygen in this place must be, when I hear him talk about patronage. When the Liberals left office they were probably the most accomplished dispensers of patronage in the free world. They moved out of the way to allow the Conservatives to start where they left off and to continue, until it has reached a disgusting level which is beyond belief. To hear the Liberals criticize patronage is astounding.
It is also a bit of a surprise that they do not recognize that in the mid-sixties they sold the other part of this ammunition supplying operation to the private sector with no controls whatsoever. I know that was attributable to a momentary lack of oxygen in this place and that the Member is now back to form and will try to explain that to the House.


Robert Phillip Kaplan: Mr. Speaker, the one point which the Member made which is worth dealing with is the issue of job guarantees. I think the NDP may be using that as a device to prevent privatization from ever taking place. What does a "job guarantee" mean? How can you ask a private purchaser to promise that every person will keep his or her job forever? It is impossible to ask a private purchaser to make such a promise.
If such a promise were made, when the collective agreement expired the employees, knowing that they could not be fired under this arrangement, could ask for any increase in salary that they wanted. It would not have to be reasonable or justified by profitability. When one pursues the logic of what the members of the NDP want, you see that they have come up with a seemingly logical way of trying to block privatization, but when one examines it, it falls to the ground. You cannot ask an employer to guarantee that every employee will keep his or her job forever.

March 10, 1986
Canadian Arsenals Limited
However, you can ask the purchaser to do things in the future which, if they work out, will ensure that the company will have a future. That was my grave regret with regard to de Havilland. We could not expect Boeing to promise that every person would be retained in that company forever. How could it do that if the products did not sell, or if there was a recession? That is unreasonable. However, the Government did not ask Boeing to promise anything. It did not ask Boeing to promise to do research or development in Downsview. The Government asked for nothing other than a negative promise not to assemble de Havilland products anywhere else in the world. There were a hundred ways in which a Seattle lawyer could bypass that promise without Boeing having to do anything. There is a good Liberal ground for a sensible privitiza-tion policy between the NDP's request for guarantees of everything, which is unrealistic, and the Government's requirement of nothing at all in the way of commitment from the purchasers, but this is not it.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 46, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Ottawa-Carleton (Mr. Turner)-National Capital Commission-Location of new United States Embassy; the Hon. Member for York Centre (Mr. Kaplan)-The disabled and the handicapped-Effect of Budget measures, b) Situation of the Handicapped-Government position; the Hon. Member for Don Valley East (Mr. Attewell)-Multi-culturalism-Preservation of immigrants' heritage.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mclnnes that Bill C-87, an Act to authorize the divestiture of Canadian Arsenals Limited and to amend other Acts in consequence thereof, be read the second time and referred to a legislative committee.
Raymond John Skelly: Mr. Speaker, it is a great pleasure to have an opportunity to speak today on Bill C-87. Since the format for a debate on second reading is that of the principle and context in which a Bill is developed, I am sure the Chair and my colleagues in the House will allow me a little latitude to develop the context in which this legislation appears in the House, in order to understand it better.
The comments of the previous speaker were important. He spoke at length about the philosophy of the Liberal Party with regard to privatization and nationalization, and criticized the New Democratic Party and our colleagues in the Conservative Party. The Liberal position, in all the time that that Party has existed, has been schizophrenic. If one were to label it, that is what it would be. I am sure my colleagues in the Conservative Party will agree with that. They stole a good idea from the NDP and, with absolute incompetence, implemented it and wound up with absolutely nothing that anyone could appreciate, except for the Liberal Party. PetroCan is one of many very good examples in the country.
I suggest that that is a real problem. In handling public sector operations the Liberals tried to perform like the Conservatives with ideas developed by the New Democratic Party. No one denies that there is a very important and relevant role for the private sector in the country. For a cabinet Minister from the previous Liberal Government to criticize others is astounding. Their period of penance is not finished. It is amazing that the leaders of that organization would allow any of the front-benchers of the previous Government even to speak in the House at this time. The reputation of that Government was so bad when it was hurled from power by the Canadian people that there can be no credibility in what it promoted in the last Parliament. I see that the previous speaker is hanging his head in shame and leaving, to the comfort of all other Members at the present time. He will be back in due course to make his contribution.
There is a definite solid role for the private sector in the country, which it does perform, sometimes harmed by the Government and sometimes aided by it. Let us make no mistake that when someone in that Party attempts to criticize the NDP for its support of the private sector it is complete nonsense and is known across the country as such. We will see in a short time that that is the case in Manitoba.
Canadian Arsenals has been sold to the private sector for $91 million. It was sold to the firm which bought the small calibre operation flogged by the Liberals in the 1960s. It now has an effective monopoly on the provision of ammunition in Canada. That is unfortunate because it creates an interesting position for the Government of Canada. If something goes wrong with the firm, where will the Government acquire the material? If the firm is not able to negotiate a successful contract with the Government of Canada and decides to close its doors, where will the Government go? Would the Government simply have to buy it back, or would it simply make a cost-plus arrangement as was done so often in wartime? We know what happened in the United States with that kind of formula. There was absolute rank privatizing by many corpo-
March 10, 1986

rations, which was the subject of many investigations and criticisms after the war.
I agreed with the previous speaker when he said that this firm is too close to the national interest. It is too close to public procurement to be sold to the private sector. After all, the Government produced its artillery shells and small calibre ammunition for its own Armed Forces. Then it suddenly decided that this single-customer operation should be in the private sector. It is absolute nonsense that the Canadian Government should be buying from that firm at cost. That is the first principle. This company is not a private sector operation. If it is in fact selling ammunition to the Canadian Government for the Armed Forces, it should remain in the public sector and should not be handed off, in whatever fashion, to the private sector.
The other important point is that this is a monopoly situation. This company sells to the Canadian Government as its exclusive customer. I presume that in the future that exclusive customer will have to pay an interesting price for ammunition. It will certainly have to pay the cost of production, which includes wages, pensions, research and development and raw material. In addition, the price of artillery shells for the Canadian Government is going to go up. It is simple mathematics, because the company will add its acquisition cost to the price of its goods. We are going to pay the cost of production and the cost of acquisition. Then we have an additional cost, that of the company's profit. Why should we pay a private sector company a profit on top of all this in order to acquire artillery shells for which we are the only market? That is absolutely irrational.
If the Government sells these products to our NATO allies-and 1 presume we are not going to sell to Khadafy, but I am never quite sure with this group sitting across the way- what kind of conditions are we going to extract from them? Or, is the Government just going to have some loose policy that it hopes the company will follow? What kind of control will we have over resales of this equipment by our NATO allies?
A very disturbing fact is that some of our ammunition has been found in the hands of the Nicaraguan Contras. That means this company must in some way have transactions with agencies which provide ammunition to the Contras to shoot at Nicaraguans. Is that government policy? Here is a group fighting against the elected Government of Nicaragua, actively involved in what I would say is despicable terrorism, using Canadian ammunition, and the Conservative Government has not done anything about it, to my knowledge. However, it may be that we are simply selling to our NATO ally, the U.S., which is trying to supply $100 million worth of aid to be used against the democratically-elected Government of Nicaragua. They know what kind of activity is going on there by the Contras and they would rather have Canadian ammunition and maybe European weapons found in their hands when they are taken by the Nicaraguan authorities.
Canadian Arsenals Limited
That brings us back to the question of where the Government is going. Is the ammunition to be sold only to the Government of Canada? If that is so, we should own it. If it is not so and the company is going to be encouraged to market its products around the world, what is the limit? Certainly with the private sector mentality which is present in some sectors of the Government, I am sure an intermediary selling to Libya might be an acceptable operation as well. There has to be very tight control in this legislation over who the recipients of the production will be. Without that tight control there should be only one customer, the Government of Canada. It is my hope that when the committee studies this legislation it will come forward with recommendations to tighten up the Bill.
The previous speaker talked about a sort of mixed-bag approach to moving different Crown corporations into the private sector. He was very concerned about employment guarantees. He did not feel it was possible to guarantee employment. What he might have been saying is that it is entirely possible that SNC is unable to strike a bargain with the Government on the price and may shut the operation down and everybody will be out. Or it may suggest that if the Government cannot open up the market, then SNC does not want to continue producing because it is not worthwhile. It could say that if it cannot get a cost plus agreement, it is not worthwhile. There are many possible ways in which the existing jobs could be lost.
It is my understanding as well that there are serious concerns about maintaining existing pension plans for these workers. Perhaps some government members could stand up and tell us their understanding of how this would work. Will these employees continue to have their pension rghts? What information are we going to get on that?
This Bill does not provide any benefit to these workers or the people of Canada. There is no single benefit which will come to the people of Canada because of this particular action. Instead, we are watching the Government fulfil an ideological fixation. Members opposite have two basic beliefs which 1 think are rapidly becoming apparent to the people of Canada. The first is that Government is bad and somehow you have to get rid of as much of it as you possibly can. The selling of de Havilland was a mistake but it did fulfil an ideological commitment to a very narrow group in Canadian society which this Government appeals to. A member across the way is shaking his head. He is upset about that. Certainly there was a great desire to get rid of the Liberal Government. That resulted in 211 Conservative Members of Parliament, the largest mandate in our history. To see it running through their fingers at an enormous rate is indeed sad to see. The Conservatives are at 36 per cent or 37 per cent in the Gallup polls. In Quebec the loss has been enormous. Since September of 1984 it has been a tragic disaster. There were many people in this country who had very high hopes that this Government would make a fundamental change in direction in a constructive way for the Canadian people. This is not a constructive direction. The people of Canada are giving a very clear message in

March 10, 1986
Canadian Arsenals Limited
repeated polls that it is not going to sit well when the Government comes to appeal for a second mandate.
The Ottawa Citizen recently listed many of the sins of this Government. Today was a beautiful example in the House of Commons. The Opposition was absolutely stymied. We would generally like to deal with one faux pas a day, but when you start getting two faux pas and three faux pas a day that are at the level of national issues it is astounding.
What is before us today is a faux pas. Canadian Arsenals should not be going to the private sector. If the House, in fact, were to hoist this legislation, or if it were simply to drop it, it would be doing a constructive thing for the people of Canada. There may be Crown corporations that can be sold off, that can be constructively put into the public sector, but this is not one of them. A large cross-section of people would support the concept that we should retain our principal source of artillery shells.
The second thing is that in no way should we be creating a private monopoly on the production of artillery shells and ammunition for our Armed Forces. Neither should we be forced to go outside the country to purchase that material. It is an extremely important consideration. It is not beyond understanding that this outfit could close down and we would be forced to organize another one in the public sector, so that is a mistake. The other aspect of it is that those jobs are important. We have no guarantees about pensions or benefits, and certainly we have no guarantees that the jobs will continue. This absolute carte blanche in putting this particular company into the private sector is absolutely wrong. It is my hope that Members on the Government side and Members on the Liberal side, certainly supported by the NDP, will not pass this Bill, or, hopefully, it will be dropped or hoisted.


Mr. Deputy Speaker:: Questions and comments. The Hon. Member for Saint-Denis (Mr. Prud'homme).


Mr. Prud'homme:: Mr. Speaker, before we vote on this Bill, I would like to ask my friend and colleague whether he can provide a bit more information on the protection given to the employees who will be directly affected if the proposal to sell goes through. I shall probably be voting against it, but I would like to ask him whether he can tell the House about the protection given to the employees.
Has he received from the Government or in his Party information saying that, whatever happens to this Bill providing for the disposal of Canadian Arsenals Limited, the employees will be or would be protected? Will the pension fund be protected?


Raymond John Skelly: My colleague, the Hon. Member for Saint-
Denis (Mr. Prud'homme), one of the very bright lights in the
Liberal Party for a long time who has given it a solid sense of
direction, and I think come to its support many times when the Government was running contrary to what many people felt was the commonsense approach, has zeroed in on a critical issue. Within the legislation we are concerned that there are not guarantees that will protect employment and pension plans-an extremely important question. If it had remained within the public sector there certainly would have been an opportunity for the Government to have a direct influence on levels of production and the nature of technological improvements. It could have guaranteed decent wages and working conditions, and it would have guaranteed pensions and benefits.
I suggest again that my colleague has zeroed in on a critical point, and I would have been certain that he would be supporting as well the position that we are putting forward on this matter.


Jean-Robert Gauthier: On the last comment of the Member dealing with the pensions, the problem of course is the cross-over from public ownership to a private sector company. I am wondering if he would agree with us that indeed we have not had the information we requested. The Government has failed to come across with information dealing with the pension benefits that will be paid, and the indexing of pensions. I wonder if he would elaborate more on that and give us his view or his Party's view on this whole question.


Raymond John Skelly: In terms of the sales of Crown corporations, this has been one of the very serious problems. The Government is not giving information on these sales. We do not know the value of this corporation in real terms. We do not know the conditions that will be imposed or removed from employees, and we certainly do not know what the future is going to bring for that group of people as they are cast out in a great deal of uncertainty. Where it does not make sense with this particular sale is that the client or the customer of this corporation is the Government of Canada.
Unfortunately, to reiterate some of the extremely important points, this Government is not only not providing Parliament with the information it needs to do its job, this Government talks of parliamentary reform and at the same time refuses to give to Members of Parliament the information they need to do the job. My hon. colleague from the Liberal Party has just mentioned the absolute travesty made by this Government in dealing with the de Havilland project. It refused to provide the background for Members of Parliament to do the job, in absolute contradiction of parliamentary reform. It is doing exactly the same thing with this proposal. In fact, this proposal is worse. I suggest to my colleagues over there that there are some serious steps that have to be taken by a Government that wants parliamentary reform, and the first important step is that Members of Parliament be given complete information, access to all government studies done, and a good briefing on its interpretation and what it anticipates will happen in terms of its actions.
So the information has to be given as well as the Government's position and intention, and those are not forthcoming in
March 10, 1986

this particular incident. They were not forthcoming in an adequate and timely way on the de Havilland incident. One aspect beyond that is that in the previous Government-and I would suggest this as a very positive note about the Liberal party when it was in power-it was possible to obtain information from the Public Service in a rather open and fair way. The bunker mentality of the present Government is something to behold. It is virtually a matter of parliamentary privilege for Members of Parliament to secure information now that Members have been cut off from information. The information which comes to them is limited. We have a very, very serious problem on our hands that one day very soon will become the subject of a debate in this House. 1 am extremely pleased that the two previous speakers have raised this issue.


Cyril Keeper: I have a question for my colleague. I am sure that my colleague is aware that this corporation which is being given to the private sector for a token, earned a profit last year of SI 1.3 million. It is puzzling why this corporation is being sold to the private sector and why the public Treasury is losing $11.3 million a year as a result of this sale. 1 wonder if the Member sees any connection between the sale of this corporation to the private sector and the fact that thousands of dollars in campaign donations were given by the company that is buying this corporation to the Conservative Party and to the Minister of Industry.


Raymond John Skelly: Mr. Speaker, if I were to believe the letter put forward by the Minister of State for Youth (Mrs. Champagne) in which she advocated going out and recruiting people for the Conservative Party using public dollars, then this is an example of that type of mentality. She did not of course deny it; she simply said she made a mistake. My time is up. Thank you for the opportunity to speak, Mr. Speaker.
[ Translation]


Jean-Robert Gauthier: On a point of order, Mr. Speaker. I would like to ask the Parliamentary Secretary if he can tell the House whether we shall continue the debate on this Bill tomorrow morning at 11 o'clock or whether we shall be going on to something else?

Let me repeat the question. I want to know if the Government will call the same Bill at eleven o'clock tomorrow. As you know, there is much interest in the Bill and we would like to proceed with this discussion. Will we be proceeding with this Bill or will it be something else?


T.A. Bud Bradley: Mr. Speaker, as far as I am aware, we will be calling this Bill at eleven o'clock tomorrow.


Mr. Deputy Speaker:: It being five o'clock, the House will
now proceed to the consideration of Private Members' Business as listed on today's Order Paper.
Income Tax


PRIVATE MEMBERS' BUSINESS-MOTIONS   INCOME TAX PROVISION OF FUNDING FOR PEACE
Mr. Simon de Jong (Regina East) moved:: That in the opinion of this House, the Government should consider the advisability of introducing legislation whereby the income tax form would provide a specific section enabling taxpayes, who so indicate, to have that percentage of total annual federal expenditures dedicated to national defence transferred to a peace tax trust which would provide funding for peace and disarmament research and education.
He said: Mr. Speaker, I rise today on a timely issue of concern to us all, the survival of the human species. We live in a world where the two major powers have built up an arsenal of nuclear, chemical and biological destruction. In terms of the nuclear dimension alone, each superpower has the capacity to kill every man, woman and child 14 times over. It is totally unthinkable to even contemplate a global nuclear war. The lucky ones will be those who are killed immediately in such a confrontation.
Recently we have heard about the effects of a nuclear winter. Noteworthy scientists from both superpowers have predicted that a nuclear war would set off a nuclear winter that would destroy our weather patterns totally and make it impossible to grow crops and feed the remaining population. Nuclear war would destroy totally the social and physical connections within our country. Communication, electricity and gas lines would be totally disrupted along with our social network of hospitals and policing.
Of course, there are the long-term effects of nuclear war, including genetic mutations. In our age of increased nuclear testing above ground we saw dramatic increases in leukemia throughout the world.
There are generals from both major powers who suggest that a nuclear war is plausible and that a limited nuclear war can be won. Such a suggestion is unthinkable.
Let me quote from Lord Mountbatten who was actively involved in the two great wars as a commander. He stated on May 11, 1979:
As a military man who has given half a century of active service I say in all sincerity that the nuclear arms race has no military purpose. Wars cannot be fought with nuclear weapons. Their existence only adds to our perils because of the illusions which they have generated.
There are powerful voices around the world who still give credence of the old Roman precept-if you desire peace, prepare for war. This is absolute nuclear nonsense and I repeat-it is a disastrous misconception to believe that by increasing the total uncertainty one increases one's own certainty.
Despite the warnings of people like Lord Mountbatten, the arms race continues unabated. What makes rational human beings become involved in an arms race from which no one can emerge a winner? Surely it must be a sense of paranoia that

March 10, 1986
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exists both in the United States and the Soviet Union. In many ways, this paranoia is understandable.
Let us put ourselves in the position of the Soviet Union which has historically been surrounded by opposing forces. The Soviet Union is totally surrounded with nuclear warheads, missiles and submarines and is a country that lost many of its citizens in the last war. From that perspective, the origin of its paranoia is quite understandable.
When we put ourselves in the position of the United States, as most of us in the western world do, we certainly have a basis for fearing the might of the Soviet Union. We have seen how the Soviets have expanded their borders into Afghanistan, Poland and Czechoslovakia. While the origin of our paranoia may be understandable, we have reached the point where the paranoia of one nation feeds on the paranoia of the other, like two images reflecting in a mirror. The Soviets become paranoid as they seee Cruise missiles and stronger weapons being situated around their borders. Therefore, they take what they consider to be protective steps, through increased defences, which is perceived by the western world as an offensive build-up. Therefore, we increase our defence expenditures which leads to increased Soviet defence expenditures, and the spiral continues.
Surely we have reached the point today when the very survival of the human race stands at the brink, when enough armaments have been built up on both sides that a mistake, a misconception or a mad act can offset a chain of events that will totally destroy the human race as we know it.
Therefore, as parliamentarians, wherever we may live, there is no greater issue than the survival of our human race.
Let me introduce another dimension into this debate. It is the economic dimension. Conservative estimates indicate that the total cost of the arms race is close to three-quarters of a trillion dollars. It is not possible to remove a trillion dollars from the economy of the world without everyone paying for it.
We pay for it in terms of higher interest rates. For example, the American deficit is almost a trillion dollars, largely due to the arms race. It is so great that total U.S. savings hardly meet the interest on that deficit. Therefore, the United States must maintain a strong American dollar in order to attract capital from other parts of the world and service their debt. In order for Canada to keep some of that capital we must also raise our interest rates.
Interest rates are normally 2 per cent to 3 per cent above the inflation rate. Therefore, with inflation currently at 4 per cent, interest rates should be approximately 7 per cent. At 7 per cent, a lot of farms will be able to survive along with a lot of small businesses. A lot of people will be able to afford to buy a new car or a new home. All this economic activity could occur if it were not for the high interest rates. [DOT]
I maintain that every Canadian on a day-to-day basis pays
for the arms race through higher interest rates, unemployment
and farm bankruptcies. We cannot take a $1 trillion dollars
out of the world economy without the result of lower standards of living for all people throughout the world, Canadians, Americans, Russians and Europeans. It is a reduction of $1 trillion to all of our standards of living. That is the price we pay for this madness which any reasonable person must admit does not work. If these weapons are ever actually used it will mean our mutual destruction. What my motion is asking today is that those conscientious objectors, any Canadian who feels that our participation in this madness is not a very fruitful exercise, those people who feel, because if their religious beliefs and moral principles, that their tax dollars should not help to contribute to this dance of death, be allowed to have their money put in a peace trust.
The history of conscientious objectors is an honourable one stretching through the history of the human race. There are groups of people who believe that participating in wars and in the arms race is not the solution to the problems which create war. Some of us might disagree with that, but no reasonable person can object to allowing those members of our society to object in a conscientious way to the machinery of killing. It would enrich our civilization and make us as a more civilized society if we allowed those men and women, because of their consciences, to object to participating in this madness. I am asking for this for those enlightened Canadians who believe that more can be obtained to satisfy the security needs of Canada if we spend more money on peace research and find out how we can resolve the human conflicts which create war. Such things as checking up on compliance, what is the proper technology for that? It needs money, research, investment to develop educational programs so that people can stop thinking in terms of the "good guy-bad guy" scenario but will think, rather, in terms of co-operating. Those are the models which are needed if we are going to resolve the conflicts which create this potential for war.
There is a tremendous need for peace research. The only way we can save our civilization and our way of life is through peace. Yet that hardly receives any funding at all. I believe it is close to $300,000 per year. Of course, our military budget is much closer to $9 billion per year. As a country, we spend over $9 billion doing things which I would tend to think most Members of Parliament in their heart of hearts really believe is a futile effort. There is no defence in a nuclear age, only madness. But we continue to pour over $9 billion into this make-believe.
But there is an area in which we can have some effect, an area which can really help to preserve and save our way of life, that is, peace research, to which we now only give a token amount. I am asking for the support of my colleagues. I ask them to look favourably upon my motion and to pass it.
The Conscious Canada organization is not unique. There are some 17 countries with similar organizations. In fact, they have achieved some success in various jurisdictions. In Italy, some 17 taxpayers who had been charged with not paying their taxes because of conscientious objections, have been found by the Italian courts to be not quilty. Under the Italian Constitution, they are guaranteed the right of conscience. In the United
March 10, 1986

Kingdom, Some 20,000 individuals, including 60 Members of Parliament, have a signed a document urging the Government to change its legislation to allow the people to not pay that proportion of their taxes which would go to military spending, and instead have it redirected to peace research. In the United States, the peace tax fund Bill is supported by 42 Members of Congress and four Senators. So the story goes through some 17 countries where there are organized groups of individuals who are attempting to redirect their tax money towards peace research.
1 urge the Government to play a leadership role and Canada can play this very vital role. But here we stand between the two superpowers, the Soviet Union and the United States. Our very survival is dependent upon peace. It is dependent on the hope that those powers do not use their weapons of destruction, because if they do, it will happen over our heads. It is in our immediate national interest to maintain peace so, therefore, it must be in our national interest to do everything possible to work towards peace and disarmament, to make certain that those two superpowers remain at peace with each other.
I ask my hon. colleagues to support me in my motion so that Canada can take its rightful place and play its rightful role as a peacemaker in this world and to do that not only in our national interests but in the interests of the whole human race.
Humanity cries for a country and a group of people to rise up and take that leadership role. I urge my colleagues to dare to be different. I urge them to state that the king is wearing no clothes, that the arms race is a make-believe world filled with tremendous fear and danger. 1 challenge my colleagues to stand up and dare to be different in this world and to help preserve the human race.


Mrs. Monique Landry (Parliamentary Secretary to Minister for International Trade):: Mr. Speaker, this is further to the proposal of the Hon. Member for Regina Est (Mr. de Jong) for allocating income tax revenues to funding for peace and disarmament research and education. The Hon. Member is no doubt aware that according to one of the fundamental principles of our society, Canadians elect Members to speak on their behalf when decisions are made on matters such as the allocation of financial resources that are supposed to benefit all members of our society. In its present form, the Income Tax Act contains no provision that allows taxpayers to determine areas to which their taxes are to be allocated.
Any change in the allocation of personal income tax revenues, such as the proposal contains, requires an amendment to the Income Tax Act by an Act of Parliament.
The Minister of Finance (Mr. Wilson) is responsible both for proposing and amending tax legislation and will deal with the tax questions raised by this motion.
In any case, today, Canadians can actually obtain tax deductions by making donations to non-profit Canadian peace
Income Tax
organizations appearing in directories such as "A Directory of Canadian Peace Organizations with International Concerns", published by the Mennonite Central Committee.
The Government believes that defence and peace activities are not mutually exclusive, and that an amendment to the Income tax Act is unnecessary, since Government expenditures can be balanced so as to safeguard the security of Canada and the Alliance, while at the same time taking advantage of every reasonable opportunity to advance the cause of arms control and disarmament and of world peace and security.
Mr. Speaker, perhaps I may explain how Canada is now advancing the cause of peace and security without having to de-allocate tax revenues earmarked for defence in order to subsidize organizations for peace research and education.
For 35 years, our security policy has been based on three complementary principles: Deterrence, within the context of the collective security provisions of the North Atlantic Treaty Organization and the North American Air Defense Command; seeking fair and genuine agreements on arms control; and finally, a commitment to peaceful resolution of disputes, including participation in collective efforts to deal with the underlying social, economic and political causes of international tension.
Canada recognizes the need for collective action to discourage acts of aggression against North America and Europe. It endorses and financially supports NATO's defence efforts, particularly those policies under which the Alliance must have as few as possible of the weapons required for effective deterrence, while at the same time seeking to establish a dialogue and reach fair, balanced and verifiable arms control agreements. In that respect, stability and security for all are the objectives.
We belong to an Alliance whose deterrence strategy rests on both conventional and nuclear forces. Deterrence must guarantee enough stability to enable us to negotiate international agreements on arms control. Each member of the Alliance must share the burden of collective defence while benefiting from its protection. Our direct contribution to deterrence and defence is to provide efficient conventional forces. Rather than a question of ethics, it is a matter of knowing how we can best contribute to our own security, taking our limited resources into account.
The Government has clearly indicated its intention of honouring its commitments to our allies in terms of contributing to the stability of East-West relations with respect to security, and this stability flows from a credible and effective deterrence position. We have decided to provide a defence budget which is big enough to guarantee the effectiveness of our contribution and reduce the vulnerability of our troops in the field. In short, Mr. Speaker, an effective defence paves the way to peace.

March 10, 1986
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It must be said however that defence funds are used to finance various nonmilitary measures which directly benefit all Canadians and contribute to restoring peace. This brings to mind the planning activities of Emergency Canada. As to our armed forces, they perform a great many nonmilitary roles such as the evacuation of critically flood-striken communities, search and rescue operations, fishing patrols, air transport of supplies and medical assistance to countries hit by natural disasters like earthquakes, as well as many other emergency services.
As a sovereign nation, Canada must dedicate part of its resources to develop and maintain its defence capability. At the same time, it is second to none among nations for its efforts in promoting disarmament and arms control, as well as international peace and security.
Mr. Speaker, I should like to deal now with the six Canadian goals in arms control and disarmament, as spelled out on October 31 by the Prime Minister (Mr. Mulroney) before the Consultative Group on Disarmament and Arms Control Affairs, and more recently by the Secretary of State for External Affairs (Mr. Clark) in his speech before the House on January 23. They are: First, negotiated radical reductions in nuclear forces and the enhancement of strategic stability. Second, maintenance and strengthening of the nuclear non proliferation regime. Third, negotiation of global chemical weapons ban. Fourth, support for a comprehensive test ban treaty. Fifth, prevention of an arms race in outer space. Sixth, the building of confidence sufficient to facilitate the reduction of military forces in Europe and elsewhere.
Concerning the first objective, the Canadian Government welcomes the progress made in the bilateral negotiations held in Geneva between the United States and the Soviet Union. We fully support the goals agreed upon and deem as encouraging the detailed proposals made last fall by both parties. These proposals have certain points in common, Mr. Speaker, but like all Canadians, we fervently hope that negotiations will bring about fair and verifiable reductions of nuclear weapons.
In his statement of January 23, the Secretary of State for External Affairs welcomed with satisfaction the latest proposal of Secretary General Gorbatchev, who reaffirmed the commitment of the Soviet Union to nuclear disarmament. While this new proposal is silent on certain issues, such as the SS-20 missiles now deployed in Asia, it does provide some encouragement.
The second objective mentioned by the Secretary of State is the maintenance and consolidation of the non-proliferation regime. Last year, Canada took part in the Third Nuclear Weapons Non-proliferation Treaty Review Conference, which was a great success for all the countries. Indeed, the countries present at the Conference reaffirmed by consensus the viability of the Non-proliferation Treaty as an essential tool in maintaining world security. The success of this review process shows that multilateral diplomacy can have results when all
the parties involved decide to cooperate instead of confronting each other. Canada confirms this success since two major objectives have been reached, namely the maintenance of the NPT as the main foundation of the non-proliferation regime and confirmation of the objective and provisions of the NPT.
The complete ban of chemical weapons is our third objective. We believe that this can be achieved at the Conference on Disarmament in Geneva. To support the ongoing negotiations, Canada has shared the knowledge it acquired following investigation of the use of chemical weapons and presented last year to the Secretary General of the United Nations a manual on how to carry out this type of investigation.
The fourth item on which Canada is working is the bringing about of a total ban on testing. Support for such a ban is a basic goal of Canada's foreign policy. However, it is our belief that the question of inspection is the major obstacle to be overcome. The Secretary of State for External Affairs has announced in September, 1985, at the meeting of the United Nations' General Assembly, that Canada would update its analytical capacity in the area of seismic research. To that end, we intend to enhance our major facilities in Yellowknife in order to be in a position to better discriminate between low-amplitude earthquakes from disturbances caused by underground nuclear testing.
In addition to that, Canada took part with 26 other countries in the international exchange of seismological data. That technical experiment has been a major step on the road towards the verifiability of a total ban of tests.
The fifth goal, that is the prevention of the arms race in outer space, is now on the agenda of bilateral talks in Geneva. In the multilateral context, Canada took the lead at the 1985 session of the Disarmament Conference held in Geneva by circulating a discussion paper on the International Law Aspects of Outer Space, thereby contributing to the substance of the discussion.
As a final goal, this Government feels it is critical to develop the measures of confidence required to bring about a reduction of armed forces in Europe and elsewhere. Confidence is fostered by political actions conducive to increased East-West co-operation, and strengthening the dialogue is one of Canada's major goals.
Peacekeeping is another key component of the efforts to establish international peace and security. One of the goals of Canada's foreign policy has always been to help strengthen the powers of the United Nations Organization, especially its capacity to control conflicts and act as mediator. This goal, which has been part of our general aim to work for peace and security, remains a valid one. In fact, it is in our own interests to stop regional conflicts before they can escalate and jeopardize our security or vital interests. Our military role in international peacekeeping operations helps prevent hostilities from
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spreading or breaking out, so that the underlying political problems can be dealt with through negotiations and the threat of direct involvement by the super powers kept to a minimum. Elowever, Canada has never considered peacekeeping as a goal unto itself. Peacekeeping is aimed not only at preventing conflicts but also at creating a climate conducive to seeking solutions to the underlying problems. That is why Canada has always held the view that there should be considerable emphasis on the link between peacekeeping and the efforts deployed by all parties concerned to achieve peace.
Since 1947, Canada has participated in 15 UN peacekeeping operations. Outside the UN context, we have taken part in three similar missions, namely, the control commissions of 1954 and 1973 in Indochina and the international observers group in Nigeria. These initiatives were mostly financed from the Defence budget. During the past financial year, the Government of Canada has contributed over $41 million towards military salaries paid by the United Nations. These operations reflect the profound commitment and continuing contribution of generations of Canadians and successive governments to the peace objective.
Mr. Speaker, through various UN agencies, the Government has made a continuing contribution towards maintaining peace in all the countries of this world.
Not long ago, the Government demonstrated its commitment to peacekeeping. On April 11 last year, the Prime Minister (Mr. Mulroney) announced that Canada agreed in principle to take part in the multinational force and observers group based in the Sinai peninsula. The departments concerned are now considering how Canada can best contribute to the operations of the force, to replace the Australian helicopter unit of 100 men which is due to be withdrawn in April 1986.
Mr. Speaker, 1 would now like to consider the means available to the Government to give direct support to organizations involved in peace research and education, and thus provide an argument against setting up the peace tax trust proposed by the Hon. Member for Regina-Est (Mr. de Jong).
During the current fiscal year, over $700,000 from the External Affairs Canada's Disarmament Fund will be made available to groups and individuals from all parts of Canada. Since its creation in 1980-81, the Fund has made it possible for over 149 groups, organizations and individuals to support and encourage the debate, research and supply of information on all issues related to disarmament and arms control.
The Department of External Affairs subsidizes also other research and public information activities in this area. The Verification Section of the Arms Control and Disarmament Division is responsible for the analysis of the verification process and developing techniques and approaches for verifi-cating the enforcement of current and future arms control and disarmament agreements. In addition to research on seismic technology and means to investigate alleged uses of chemical weapons, this service is looking into the feasibility of a satellite
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monitoring system to ensure compliance with arms control agreements. As I have already mentioned, it recently presented to the Conference on Disarmament in Geneva a working paper on the nature of the judicial system that might apply to space beyond the atmosphere.
The Department of External Affairs also gives a permanent $100,000 annual grant to the Canadian Centre for Arms Control and Disarmament. The Centre was established in 1983 and given the responsibility of organizing conferences and study groups on these questions.
The New Canadian Institute for International Peace and Security was created by Parliament in 1984 when all Parties supported the Bill shepherded by the Secretary of State for External Affairs. The Institute is directly funded by Parliament. Its budget in 1985-86 was $2.5 million and will increase to $5 million between now and 1988-89. It will seek to improve the knowledge and understanding of questions related to international peace and security within a Canadian context, and it will promote, finance and conduct research in those fields.
In 1983, 1984 and 1985 Canada gave a $100,000 grant to the World Disarmament Campaign. Our contributions will directly support world-wide public information and research activities. Our 1985 contribution was used to publish the Disarmament Yearbook, to finance the United Nations Institute for Disarmament, and to replenish the Voluntary Fund for the U.N. Decade for Women which we are celebrating this year.
In conclusion, Mr. Speaker, I would say that the Government is actively engaged in promoting peace and has earmarked sizeable funds to that end. In our opinion, the current Income Tax Act enables us to look after all matters concerning peace and security without the need to resort to the kind of measure proposed in the motion now before the House.


Lloyd Axworthy: Mr. Speaker, on behalf of our caucus I should like to respond to the very heartfelt, informative, interesting and innovative proposal put forward by the Hon. Member for Regina East (Mr. de Jong). I believe that he captured in his remarks and in the intent of his motion a sense of concern or anxiety among Canadians far more than did the statement of the Government spokesperson who, in a somewhat self-satisfying way, said that enough was being done. The Hon. Member for Regina East properly captured the real feelings of people who say that not enough is being done, that far more must be done.
During the past year I had the opportunity to participate in the work of the Special Joint Committee on International Relations. We had the rare experience of visiting across the country and listening to literally thousands of Canadians present their concerns before the committee. It was instructive that the first person from whom we heard was a young school teacher in Halifax. He gave a very eloquent and moving

March 10, 1986
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address on star wars. Afterward I asked him what prompted him to make a presentation. He said that he was a school teacher and that his students had asked him about star wars. He was embarrassed at the time not to know anything about it and started meeting around the kitchen table with his friends. The more he examined the matter, the more he learned and the more he became concerned. Every Wednesday night they met around the kitchen table and began developing a series of ideas, analyses and information. Finally he appeared before the committee last July when it was on the East Coast. He talked about what they as a small community in Pictou county felt about star wars. That was not an isolated incident. It happened in many communities across the country. People would appear before the committee and say that more must be done.
The Hon. Member for Regina East properly expressed the imbalance in our commitments. People look around and see enormous sums being spent on armaments and in the nuclear arms race. They see the United States and the Soviet Union about to launch a new generation of the arms race with the proliferation and pollution of our outer space and the star wars program. They ask whether Canada can do more, whether we can find a way to turn the corner in a more meaningful way.
I am not saying that many of the efforts described by the Parliamentary Secretary are not useful. Of course they are useful, but they do not touch the deep undercurrent of unease and anxiety or that of hope and aspirations. Canadians believe that their country should be a peacemaker. As well, many people are asking what they can do to make a contribution, to do more.
I was partly dismayed at the committee hearing when we heard from the educators for nuclear responsibility, a group of school teachers from across the country. They said something which was very disturbing to me. They pointed out how difficult it was in the curricula of our high schools to get courses on arms control or on peace because they are considered by the school boards to be too controversial. Perhaps they represent too much of one side of the argument. When 1 visit the high schools in my riding every two or three weeks, 1 find that the students want to talk about one issue only. They do not want to talk about jobs. They do not want to talk about the environment, although they are concerned about it. They want to talk about the nuclear issue. Last Friday I visited Miles Macdonell Collegiate in my riding which was having a five-day teach-in on the issue of peace. They invited Members of Parliament to talk to them about what we thought was happening or where we could go. I was struck by the deep level of concern and by the willingness on the part of these young people to commit themselves. It is felt by thousands of Canadians that more must be done.
Does the legislative proposal of the Hon. Member for Regina East properly give form and substance to what must be done? In part I am attracted to the idea, but I have reservations on one ground-I think it would let the Government off the hook. If we resort to a form of populism or participatory democracy in the classical Greek sense where individuals make
up their own minds-and I do not object to that-it means that the Government of Canada loses its obligation to make a choice for Canadians. That is what Parliament is all about. I want the Government to make different choices. I want Members on both sides to make different choices. I believe we are not making the right choices any longer. We should have the opportunity to debate the Estimates of the Department of National Defence. The defence Minister and the Secretary of State for External Affairs (Mr. Clark) should appear before the committee to explain their actions because they can easily forgo, evade or avoid their sense of responsibility.
I should like to refer to an example. Recently we received a report of the committee of NORAD which recommended that we sign up for another five years. To my unhappiness they indicated that there was not sufficient evidence to register a concern about the shifting sense of strategic thinking in the United States, moving from a sense of deterrence toward an active defence system. There was a multitude of testimony to show that this is what in fact was taking place. The Americans are making major commitments here and now to a very active defence system which will result in the fundamental militarization of Canadian territory, a vast network of active defence systems. That is a choice which Canadians should be making. It should not be made for us. It should not be made piecemeal. It should not be made in Washington. It should not be made in the NORAD headquarters. It should be made in this Parliament. However, it will only be made if Canadians understand what is going on. This means that the Government has to rid itself of its secretive attitude about what is taking place and start divulging far more of what it knows about the plans.
We must also look at the alternatives. If we say to the Americans, who are our allies, that we will not fully integrate our defence system with theirs if they go ahead with star wars, it means that we must put something in its place. We must put forward an alternative for the northern part of North America. As the Senate recommended a few years back, perhaps we must have our own form of satellite detection. We must develop an alternative to the proposals being put forward by the United States Defence Command. That is the important choice. It may mean that we have to utilize defence expenditures in a different way. We may not have to utilize them in a conventional or routine sense of going along with the conventional wisdom. We may have to establish a more independent defence posture in order that we can provide a bargaining position, a sense of leverage, with the United States in this very important and very crucial strategic security choice.
If the Hon. Member had his way and all those good minded Canadians who are very concerned about the arms race in effect abdicated and pulled out their money, there might not be money to provide the counterweight or counter ploy to the star wars program. That is a choice which should be retained in the hands of the Government, and it should be answerable for it. I agree fully with the stated purpose of the Hon. Member, that much more must go into the research and development of alternative techniques. One of the last acts of the Liberal Government, of which I was very proud, was the
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establishment of the Canadian Peace Institute with an endowment of $5 million. I am pleased to say that the successor Government continued with that initiative. However, it is not enough; it is just a beginning.
Let us look at the tremendous appetite or hunger on the part of Canadians for more information. There is a tremendous ability in the number of peace groups across the country; there is individual time and talent; there are our educators and numbers of groups, ploughshare groups and others; and there is a kind of force they could bring to bear. We must find a better way of financing their efforts, a far more independent way so that they do not feel totally beholden to the Government. There must be an independent body which provides them with funding. They must feel far more free to undertake the kinds of investigation about which the Hon. Member talked. I fully agree with him. I would be prepared to say that perhaps we should look at the tax system to see if a more generous deduction could be allowed. It could be similar to the system of financing political Parties; that might be an alternative. I am not here to prescribe it, but 1 am saying that it is worthy of examination.
1 see the Chairman of the Standing Committee on External Affairs and National Defence sitting opposite. Perhaps he would be prepared to take the question of peace education as part of his agenda for the committee in years ahead. It is critical and Canadians want it. However, if we follow the total advice of the Hon. Member, although I fully agree with his intent, in a sense we may be denying ourselves in Parliament the responsibility we need to make some very fundamental choices. For that reason, I express that reservation without expressing any reservation whatsoever about the intent, purpose, and objective of what he does.
In closing, Mr. Speaker, having expressed that reservation, we must still recognize that it is time for Parliament to have a much broader and more significant debate about the arms race and what we are doing, as a country, in the nuclear age. Canadians are far ahead of their Governments and this Parliament in expressing their concerns. They are leading us. One of the reasons is that we have not had an opportunity in this House to have a full-scaled broad-based debate about where Canada will go in the 1990s with regard to the matters of which the Parliamentary Secretary spoke, but which we have had very little opportunity to debate in the House.
I again recommend that Members of the Government side, who I know also feel very deeply about these concerns, represent to their caucus that it is time for Parliament to provide some leadership rather than to follow. It is time to let individual Members speak their minds and fully express what is in their hearts on this very fundamental issue. I compliment the Member for Regina East for at least giving us an hour of parliamentary time to do that. I wish we had an hour every day to do this. 1 wish this were an ongoing debate. If we had an ongoing debate, we may be able to accomplish what so many Canadians, particularly young Canadians, want us to do.
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They want us to find some answers to this very complicated, deep, and abiding issue which affects us all.
I want to extend to the Hon. Member my appreciation for his motion. Even though I have reservation about the actual technique, his objective is right. It behooves us, as Parliamentarians, to countenance his words and see how we can provide more leadership and direction in this very crucial issue.


Mr. Jim Jepson (London East):: Mr. Speaker, I welcome the opportunity to take part in this debate. The issues raised by this motion are important and fundamental. For that reason, I do not apologize if my remarks today are similar to those expressed in this House last September 26 when we debated virtually the same proposal.
I have concerns about this proposition, albeit not about the ultimate goal of promoting peace and disarmament. It would be hard to take issue with the Hon. Member for Regina East (Mr. de Jong) on that most desirable objective. However, the method he is proposing in this motion is not one which this House should adopt. There are important issues of tax policy and fiscal policy which argue against adoption of this particular proposition. There are also important questions of parliamentary democracy which are involved, questions about the way in which our society tries to live together and govern itself.
Therefore, Mr. Speaker, I will not hesitate to be repetitive today and to discuss the same issues as we debated last September on a similar motion of the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly). The sponsor of today's motion was repetitive in the same way. I can only regret that our arguments of six months ago did not succeed in changing his mind. We will try again today.
First, I would like to deal with an unfortunate implication in the wording of this motion. It contains the idea that somewhere there is a fundamental opposition between the search for peace and disarmament and our expenditures on defence. What kind of conclusion is a taxpayer likely to reach if, on his T-l tax return form, we present him with the option of earmarking 10 per cent of his income tax, or whatever percentage of federal spending goes to defence, to be spent instead on peace and disarmament, research and education? Is the taxpayer not likely to conclude that these two fields, defence and peace, are considered by the Government to be diametrically opposed?
I am in no way arguing that a valid case cannot be made for conscientious objectors, those who for strongly-held personal principles are opposed to serving in active combat where they could be called on to take another's life in defence of their country. However, that is in wartime. We are at peace now, and there is no contradiction in the position taken by the Government and accepted by a great majority in this House and across the country that our defence dollars are being spent to maintain peace and to prevent war.
Our defence expenditures reflect the long-standing Canadian policy in support of national and international security. For
years Canada has played an honourable international role in
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seeking peaceful settlements of conflicts between countries. Our support of NATO and NORAD reflects the broadly-based public recognition that those alliances serve to enhance international security. I recognize that the New Democratic Party does not accept that position and would have Canada withdraw from the western alliance. However, 1 do not think that their position goes so far as to call for abolition of Canada's defence forces. This motion does not advocate such an extreme step. I think the reason for that is clear. The NDP, like the rest of us, recognize that our defence forces serve Canada's vital national interests in many ways.
If the New Democrats, by some strange chance, were ever called upon to form a government here, I wonder whether that Government would really adopt the principles which this motion advocates. This motion calls for a system of opting out which involves an issue that affects our national well-being in a very vital way. I do not think that this way of doing things is part of our system of parliamentary democracy. In our society, democracy involves much more than just the idea that the majority rules and imposes its view on the minority. Canadians have always sought tolerance. Through public debate we have sought to develop policies which take differing views into account, and we seek solutions with which everyone can live.
In the debate last September 26 on his motion, which is virtually the same as the one before us, the NDP Member cited the Canadian Charter of Rights and Freedoms. He argued that freedom of conscience and religion, as protected in the Charter, should allow citizens to opt out in this way from financial support of a major sector of Government activity. I remind the House that the rights and freedoms in the Charter are conditional. They are "subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society".
In our democratic society, we are all subject to reasonable limits on our freedom of conscience, religion, and self-expression. This simply means that tolerance must work both ways. The majority must be prepared to listen to individual differences, but at the same time the individual must recognize that there have to be broadly-accepted rules which apply to all in our society. I do not believe it is unreasonable to expect all citizens to bear their fair share of the cost of Government services provided for the common good. It is not unreasonable to say that a democratic Government should decide, in the final analysis, where and how those public funds are spent. I reemphasize that in our democratic society those decisions are made after the widest public debate with sensitivity to differing viewpoints.
The premise of this motion would allow any special interest group in the country to put forward a similar motion. If they were against abortion, they would want their funds to be earmarked for anti-abortion programs. If they were in favour of capital punishment, they would want their funds to be earmarked for that purpose. There are many special interest groups which would like to have their tax dollars earmarked for their special projects. Yet, we are faced with the reality of having to maintain the defence of the country. The previous
Government took the strict diplomatic route and totally ignored the physical defences by which we maintain the safety of the country.
We must remember that the Russians understand only one thing; a position of strength rather than weakness. If you have any doubt, talk to Poland, East Germany, the Ukraine, Hungary, or Czechoslovakia. These countries lost their freedom to the Soviet Union, which has very little sympathy at the negotiating table for the rights and liberties of the people in these countries. It is vital to the safety and well-being of our country that we ensure that we are wise stewards of our tax dollars. I suggest, Mr. Speaker, that the best position for peace is a position of strength. If we do not prepare adequate defences for the country, we could find ourselves in the same predicament as so many other countries find themselves.


Mr. Speaker:: The hour provided for the consideration of Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

John Barry Turner: Mr. Speaker, this is my first experience with an adjournment debate as a follow-up to my question on February 24 to the Acting Minister of Public Works and I intend to get to the heart of my extremely serious concern quite quickly.
The National Capital Commission will be making a fundamental planning and political error if it recommends to the Government that the Mile Circle be used to house embassies. The local, regional, and indeed national outcry of total opposition to this proposal should in itself be a proper, clear, concise message to the Commission that it is making a big mistake. The duly-elected representatives of the four levels of Government directly affected are unanimously opposed to the proposal. Those representatives are myself at the federal level, Mr. Gilles Morin, the provincial Member, Mr. Marc Lavi-olette, the local alderman, and the Reeve of Rockcliffe Village which borders on the site, Mr. Pat Murray. There is no local political will for this project, why should there be a bureaucratic administrative one?
The Mile Circle land has been held in trust since 1904 by the federal Government as parkland. I cannot believe that today, in 1986, with all of our collective knowledge and experience, that the Commission is actually threatening to
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destroy these parklands. 1 cannot accept the arguments that any development will be done in such a way as to maintain open spaces and a parkland setting. That is impossible since thousands and thousands of tons of concrete and steel will be sewn together by architects, engineers and construction workers to build embassies on the Mile Circle.
My professional background is in conservation and tourism development, and I know what impact infrastructures can have on parkland. If parks are for people, and I truly believe they are, then you put any or all development outside of them. Thomas Keefer meant for the Mile Circle to be used by people-people of all ages and from all places, not just from the National Capital region. The National Capital Act of 1958, Section 10(1) states:
The objects and purposes of the Commission are to prepare plans for and assist in the development, conservation and improvement of the National Capital region in order that the nature and character of the seat of the Government of Canada may be in accordance with its national significance.
I have received letters from across Canada opposed to this proposal from Canadians who feel that the Commission is compromising one of its fundamental philosophies, namely to conserve many of the natural parkland settings of our great capital. 1 am very proud of our magnificent city and 1 credit the Commission with making it that way. I, for one, want to keep it that way. In 1972 I defended Banff National Park from being raped by tourist developers. As someone who has lived in Ottawa all my life, I am proud to defend the Mile Circle Park from being raped by the Commission. This act of short-sightedness must be stopped. There are certain sections of our city that are sacrosanct, and this is one of them.
The Policy for Parkways and Driveways, published by the NCC as approved in July, 1984, the official plan of the Regional Municipality of Ottawa-Carleton as approved by the Province of Ontario in November, 1983, and the official plan of land use of the City of Ottawa, published in June, 1984, all state their commitment to the public open-space corridor along the Ottawa River, with the Mile Circle as part of this landscape conservation. These are commitments made to their constituents by three levels of Government. If the federal Government places embassy offices on this land, it would be an expression of contempt for the due process of planning.
Treasury Board wants to raise new revenue by selling some land, and I think we will all agree that this is worth while. However, for the sake of financial expediency, this particular case is not in the national interest. Is the NCC willing to reopen the terms of reference for the contract to study the Mile Circle site so that it would include the study of other potential sites as well? Will the Commission be willing to consult or will it not consult beforehand with community groups on such projects?
Is the Commission prepared to put its final selections through the due rezoning process required of all other citizens by the City of Ottawa and the Province of Ontario? If not, what form is there for the citizens of this region to participate in major rezoning projects by the Commission? Will the
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Commission seriously consider an appropriate site on the Rockcliffe Air Base as a timely alternative to the Mile Circle? My last question is: Will the consultant report on this proposal be made public?
In conclusion, let me congratulate the tremendous efforts of the Save the Mile Circle Committee for their work, and to my executive in Ottawa-Carleton for unanimously supporting my opposition to this project. If this proposal is part of the vision for our capital, then I cannot see very clearly.


Mr. Ron Stewart (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, I would like to first compliment my colleague, the Hon. Member for Ottawa-Carleton (Mr. Turner), for his diligence and commitment not only to this House, but outside the House and in caucus. His record is well known to his constituents.
As you know, there are no simple solutions to a complex issue such as the site for the U.S. embassy. The process that we are going through is lengthy. We are dealing with an issue of major national importance. We are also dealing with the very real concerns that were expressed and which all committees face in an evolving capital city. All of us need to share the responsibilities as well as the benefits of living in a capital city in the late 20th century. The relocation of the American embassy has a very long history. I do not want to bore Members with the endlessly long details of the events which followed the evolution of this issue, but I would like to point out a couple of significant highlights and events.
The relocation of the embassy first arose in 1969 when the embassy proposed to expand its facilities along Wellington Street to meet the growing accommodation requirements. However, this property was considered to be of paramount importance in meeting the accommodation needs of Parliament. The Government of Canada subsequently proposed to find another site to which the American embassy could be relocated. As the federal Government's agent responsible for creation of the capital, the National Capital Commission was charged with finding an appropriate site.
Until about a year ago, it was considered that a top priority site would be the one on Sussex Drive, north of the Connaught building. However, the U.S. Government imposed regulations for locating new embassy buildings. Obviously we know why. The NCC was asked to add additional criteria to the list for site selection. These new criteria for site selection included among others: a minimum site area requirement of at least six to eight acres; no tall buildings adjacent; and a buffer zone all around the embassy.
In all, 12 major criteria were used in evaluating some 20 sites in both the Quebec and Ontario parts of the National Capital Region. During the process of site evaluation, a certain number of sites were rapidly eliminated. Selections of these sites would throw into question a number of long established fundamental capital planning principles, as pointed out by my colleague. These principles include, among others, preservation of our river front properties. This exclusion is consistent with the NCC long-standing policy to retain federal river front land

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in Canadian ownership for public use. This policy acts to ensure direct access by the public to the river shore. The remaining candidate sites were considered in detail, and the Mile Circle was selected as the site which best met all criteria.
As part of the site selection process, the NCC has retained the services of a consultant charged with carrying on a detailed site analysis. This analysis includes such matters as the suitability of land use arrangements in the Mile Circle, environmental impact, landscape design and ecological considerations. The study should be completed by spring. At that time the NCC intends to recommend a specific site in the Mile Circle area. The Canadian Government may then exchange this site with the American Government for the U.S. embassy land and buildings on Wellington Street.
It is my sincere hope that at the end of this process we will have produced a site development concept for the Mile Circle which enables the Government to meet its national and international obligations. I am sure that I need not remind my hon. colleagues that the Government of the United States spared no effort in providing our own Government with one of the most prestigious sites for our embassy in the City of Washington. In this context, I would call on the citizens of this great capital city to recognize their shared role and responsibility in this international dimension of the capital.


MULTICULTURAL1SM-PRESERVATION OF IMMIGRANTS' HERITAGE
Bill Attewell: Mr. Speaker, a while ago 1 asked the Minister of State for Multiculturalism (Mr. Murta) about the Government's plans to continue providing strong encouragement for the cultural heritages of immigrants to Canada. The Minister assured me of the Government's commitment to retention of cultural heritages, and that he was in the process of reviewing the funding criteria for those programs encouraging the retention of ethnic culture.
Multiculturalism is a very important aspect of our lives. In fact, multiculturalism is part of what it means to be Canadian. In my riding of Don Valley East, one of its most exciting features is the cultural diversity.
My wife, Sandy, and I can recount many close friends from varying cultural backgrounds. George and Penny Poulos are of Greek heritage. Jay and Ann Hong are from South Korea. Rhett and Betsy Abarquez's roots are in the Philippines. Incidentally, one can imagine how thrilled they are with the new democratic Government of President Corazon Aquino. Garo and Zaro Pashayan are proud of their Armenian heritage. Mrs. Setsuko Thurlow of Olsen Drive is a survivor of Hiroshima. Frank and Judy Wilson are recognized leaders in the Jewish community. Vincent and Agnes Ching cherish their Chinese heritage, having been born in Hong Kong. George and Margaret Hayling from the black community take great pride in being from Barbados.
The peaceful coexistence of people of diverse races and
cultures, bonded by common citizenship, not only fosters social
cohesion and national unity, but also creates the basis for the
eradication of prejudice and bigotry. The cultural diversity of Canada is as much a part of our national identity as regional diversity.
This diversity has been a factor throughout the history of Canada. Our nation was founded on the basis of cultural pluralism. The subsequent arrival of immigrants from many countries added to the pluralistic nature of the developing Canadian society.
The multicultural nature of Canadian society was officially recognized in 1971, when the House of Commons gave unanimous consent to the Government's response of the 1969 report on the "Cultural Contribution of the Other Ethnic Groups" of the Royal Commission on Bilingualism and Biculturalism established in 1962.
The Government adopted an official policy of multiculturalism within a bilingual framework. In 1972, the Multicultural Directorate was established within the Department of the Secretary of State, and a Minister of State for Multiculturalism was appointed. In 1973, the Canadian Consultative Council on Multiculturalism was established. In 1983, this Council was revitalized and restructured to become the Canadian Multiculturalism Council, or the CMC.
In 1982 the Charter of Rights and Freedoms was proclaimed. Section 27 reads: "This Charter shall be interpreted in a manner consistent with the preservation and enhancement of the multicultural heritage of Canadians".
In May of 1985, the first deferal/provincial/territorial conference on multiculturalism was held. Employment Equity legislation was passed by the House of Commons. Also, in response to the recommendations of the "Equality for All" report of the Special Parliamentary Committee on Equality Rights, a Standing Committee on Multiculturalism was established. With the inception of this committee, everything pertaining to multiculturalism can be examined in depth. The mandate, to encourage and monitor the implementation of the principles of the multiculturalism policy throughout the Government of Canada, is a great responsibility and, indeed, a great opportunity. I am proud to be a founding member of this Standing Committee.
The Government's policy on multiculturalism is to help to preserve and enhance the traditional cultures; help members of the enthocultural minorities to develop the skills they need to participate fully in Canadian society and the economy; help all Canadians to recognize the multicultural nature of the country and to adapt themselves and their institutions accordingly. This provides a solid framework for all Canadians.
$)
Canadians are proud of their origins and cultural heritage and wish to retain this essential part of their identity. The retention of cultural heritage is very important, not only to the various ethnocultural groups but to Canadian society as a whole. We are all enriched by cultural diversity. Indeed, our own family is expanding its cultural roots. While Sandy's parents were born in Scotland, my mother is of Irish descent and my father of English descent. Our younger daughter,
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Leslie, married John Strolenberg, who was born in Holland. Our elder daughter, Pamela, married Mark Zaorski, who is of Polish-lrish heritage. Therefore we are developing a rich diversity within our own growing family.
As the Minister of State for Multiculturalism (Mr. Jelinek) has pointed out recently, multiculturalism encompasses all aspects of our lives. It has to do with jobs and rights as well as cultural retention. It must become both a social and economic reality. The Prime Minister (Mr. Mulroney) has stated, and I quote:
There is no obligation more compelling, no duty more irresistable than to ensure that our minorities live at all times in conditions of fairness and justice.
It is a cornerstone of multicultural policy that there shall be no barriers to prevent Canadians, whatever their origins, from enjoying all the rights and privileges of citizenship.
In closing, may I say that the Minister of State for Multiculturalism in recent statements has spoken about the need to bring ethnic minorities more fully into the economic mainstream of Canada. Multiculturalism, in addition to its widely perceived value as a cultural asset, also makes good business sense. It is also a decisive advantage in a highly competitive economic environment. One way to create economic opportunity is to take greater advantage of the talents and resources of our ethnocultural communities. Over half of all small businesses in Canada are run by members of ethnocultural communities. In recognition of this fact, the Minister of State for Multiculturalism is sponsoring a conference in April called "Multuralism Means Business". I am very proud to be a part of this Government for its initiative in the field of multiculturalism and I look forward to even greater things to come.


Mr. Geoff Scott (Parliamentary Secretary to Secretary of State of Canada):: Mr. Speaker, I am equally proud of the Hon. Member for Don Valley East (Mr. Attewell) for raising this matter which allows both of us to put on the record what means so much to us, the multicultural nature of this country. As the Minister of State for Multuralism (Mr. Jelinek) said in reply to the Hon. Member for Don Valley East (Mr. Attewell)
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last November 5, 1985, and 1 quote from page 8372 of Hansard:
1 am very happy to sec an interest in this important matter coming from this side of the House as opposed to the Opposition Parties.
I strongly concur with the Minister's statement. Like the Hon. Member for Don Valley East, I have, as I am sure have many Hon. Members of the Government, a multitude of ethnocultural groups, a veritable treasure-trove of different languages and foods in my riding. I think at one time I came up with 52 different ethnocultural groups which reside within the Hamilton-Wentworth region alone. There must be as many more ethnocultural groups and nationalities in Metro Toronto, Vancouver, Montreal and other parts of this country. Not one of those peoples would see any conflict in being a Canadian first, yet the wonderful mosaic that makes up my own region stems from the fact that they retain their cultural heritage and roots and wonderful sense of their homelands. That makes up the fabulous cultural mosaic in our region.
I do not see the sense of Canadianism and homeland feeling as being mutually exclusive, nor do I see this as crossing any kind of political boundaries, although, as I said at the outset, I do agree with my Minister that no one opposition Party should presume to represent these people exclusively. From a Government point of view, it is entirely possible for the Government to be receptive to the idea of cultural pluralism, the preservation of fundamental concept of national unity.
Nobody should be obliged to suppress cultural identity. By emphasizing the need for all Canadians to have equal opportunity to participate actively in the economic life of the country, the Government regards as essential the playing and the maintenance of identity, the playing of all of these ethnocultural groups in the wonderful multicultural nature of this country of ours and in our future.


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


[Stage Direction]
The House adjourned at 6.21 p.m.
[Stage Direction]

Tuesday, March 11, 1986