1987-03-16

Mr. William G. Lesick (Edmonton East):: Mr. Speaker, I rise with respect to comments attributed to me by the Edmonton Journal of March 13, 1987, regarding the Deschenes Commission report. I wish to state that the intent of my remarks was to acknowledge that both Ukrainians and Jews had suffered enormous losses at the hands of oppressors. Recognizing the tragic death of some five and a half million Ukrainians, I in no way wished to minimize or downplay the atrocities and the evil of the Holocaust perpetrated by the Nazis.
If inadvertently my remarks have given offence or led anyone to believe that I do not share a sense of outrage in the Holocaust, I categorically apologize and withdraw any statement which may be interpreted as offensive to the Jewish community and indeed to any Canadian. Ukrainians and Jews share a common experience as victims of grotesque oppression and cruelty. My desire is to see us work together to ensure neither Holocaust is forgotten nor allowed to happen again.


Some Hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Mr. Bob Hicks (Scarborough East):: Mr. Speaker, pursuant to Standing Order 101, I have the honour of presenting to the House the Fourteenth Report in both official languages of the Canadian NATO Parliamentary Association.


PATENT ACT
Mr. Bill Kempling (Burlington):: Mr. Speaker, on behalf of the Chairman of the legislative committee on Bill C-22, an Act to amend the Patent Act and to provide for certain matters in relation thereto, it is my duty to present a revised report. The first report presented March 5 omitted certain words in the French version only from the amendments adopted in Clause 7, now Clause 8, and Clause 9, now Clause 10. This report now accurately reflects the decision taken by the committee in its study of the Bill.


PETITIONS
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I would like to present a petition on behalf of over 230 farmers from the Lambton-Middlesex area of Ontario, many of whom I had the privilege and honour of meeting this weekend. The petitioners state that whereas the Government has no mandate from the Canadian people to enter bilateral free trade negotiations, whereas Canadian wheat producers who have legislation to establish the price range for wheat produced and consumed domestically would be endangered by a free trade pact, whereas Canadian dairy farmers have an efficient and viable industry that could be destroyed or be traded away, whereas the Prime Minister (Mr. Mulroney) and the Minister of Agriculture (Mr. Wise) have failed to guarantee farmers that the marketing system established through legislative authority would not be traded away, whereas the Canadian poultry industry has geared its production to domestic needs and can also be traded away, wherefore the undersigned your petitioners humbly pray and call upon Parliament to reject any negotiations or proposals that threaten Canadian farmers' marketing systems and programs. The petitioners do humbly and ever pray Parliament will listen to their call.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, it is my pleasure and indeed honour to present a petition pursuant to Standing Order 106. The petitioners call attention to the federal Government's proposal to change the Patent Act

March 16, 1987
Petitions
relating to prescription drugs, suggesting that this will increase drug prices for Canadian consumers and will severely restrict the ability of average Canadians to buy necessary prescription drugs. Therefore, the petitioners humbly pray and call upon Parliament to reject these proposals which again they feel will increase prescription drug prices for Canadians.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I also have a petition signed by residents of a number of communities in northern Manitoba including Flin Flon, The Pas, Gillam, Churchill and Brochet who point out that the Government's intent to change the Patent Act relating to prescription drugs will increase drug prices for Canadian consumers and will hurt those people whose health needs require the purchase of a large number of prescription drugs on an ongoing basis. They also believe that this is another example of the Canadian Government making concessions to the United States at the expense of average Canadians in the free trade talks.


Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, I have a petition here from a number of residents of my riding who indicate that the federal Government's proposal to change the Patent Act relating to prescription drugs will increase drug prices for Canadian consumers and will severely restrict the ability of average Canadians to buy necessary prescription drugs. They also indicate that the proposed changes are another example of the Conservative Government serving the interests of multinational corporations and increasing their profits at the expense of ordinary consumers. They call upon Parliament to reject this legislation.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, I also have a petition signed by a number of people from the constituency of Prince Albert who recognize that the Government's proposal to change the Patent Act will increase the cost of drugs and will unfairly hurt those Canadians whose health needs require the purchase of prescription drugs. They call upon Parliament to reject those proposals which will increase prescription drug prices for Canadians.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, Canadians are still sending in petitions on the question of the proposed supermailboxes. This one is from Toronto and expresses the objection to the two types of mail delivery. The petitioners call upon Parliament to reject the corporate plan proposed by Canada Post and to instruct the corporation to proceed with mail delivery to all Canadian taxpayers without discrimination.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, I have the honour and the privilege to table in the House a petition signed by 2,923 constituents in my riding, which, added to 2,683 similar petitions I have tabled in the past makes a grand total of 5,606.
The residents of my riding object to and disagree with the corporate plan of Canada Post that will reduce postal services to my constituents, and the petition is signed by the people of my riding, who represent many different communities. Mr. Speaker, I will not quote them all this morning, but I would like to point out that about 30 in my riding are represented through the 2,923 signatures I am laying on the Table this morning.
[DOT] (mo)


Mr. Sergio Marchi (York West):: Mr. Speaker, I, too, have the honour and pleasure of submitting to this House a number of petitions from my riding and from the Vancouver area. The petitions deal with proposed changes to the Patent Act. The petitioners are against these initiatives because they are an example of the Government's concessions to the U.S. in its free trade negotiations at the expense of average Canadians and, more importantly, would needlessly increase the price of prescription drugs in Canada. The petitioners ask the Government to back away from these proposals.


Mr. Elliott Hardey (Kent):: Mr. Speaker, it is my duty and privilege to present to this House a series of petitions properly certified by the Clerk of Petitions and containing over 500 signatures of constituents of the riding of Kent. They humbly pray that Members of Parliament support Motion No. 37 presently before the House which would allow unborn babies to have the protection of the Charter of Rights and Freedoms.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I have a total of 22 petitions to present. They deal with the Auto Pact and the very grave concerns people in my constituency have concerning the free trade negotiations with the U.S. The petitioners call on the Government to indicate in clear and unequivocal ways that there will be no threat to the Auto Pact safeguards. They ask that the promise that the Auto Pact will not be a subject of the free trade negotiations be maintained. The petitions are signed by 1,200 people from my constituency of Essex-Windsor.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Point of order, Mr. Speaker. I understand the Hon. Member for Trinity (Miss Nicholson) wants to table a report from the Standing Committee on Public Accounts. I just wondered if we could revert to tabling of committee reports.


Some Hon. Members:: Agreed.
March 16, 1987



PUBLIC ACCOUNTS


Miss Aideen Nicholson (Trinity):: Mr. Speaker, I have the honour to present the fifth report of the Standing Committee on Public Accounts. This is the committee's second report on the subject of the Auditor General's comprehensive audit of the Department of Indian and Northern Affairs Canada. The Auditor General has pointed out that the mandate of the Department is not clear: "The Department was not sure whether it is accountable for producing social and economic gains for native people, or was responsible simply for ensuring an equitable distribution of financial support as native groups pursue their own initiatives." The committee is again recommending that the Department clarify the accountability implications of these two mandate orientations.
On the question of contributions to Indian bands, the committee remains concerned about appropriate controls to ensure that funds are used for the purposes for which they were given. The committee will monitor progress in implementing alternative funding arrangements.
Dealing with the issue of native claims, the committee draws attention to the James Bay and Northern Quebec Agreement and the Department's procedures which have prevented this agreement from being finalized. In addition, the committee is recommending that the Government include in its financial statement provision for liabilities arising from native land claim settlements.
Pursuant to Standing Order 99(2), the committee requests a comprehensive response to certain recommendations.



CANADA-U.S. BILATERAL TRADING ARRANGEMENT

[Stage Direction]
On the Order: Government Notices of Motions.
March 11, 1987-The Minister of International Trade:
That this House supports the negotiation of a bilateral trading arrangement with the United States, as part of the government's multi-lateral trade policy, while protecting our political sovereignty, social programs, agricultural marketing systems, the auto industry, and our unique cultural identity.
Mr. Speaker:: Pursuant to Standing Order 24(2), this Government Notice of Motion stands transferred to and ordered for consideration under Government Orders later this day or at the next sitting of the House.
Motions



MOTION TO EXTEND HOURS OF SITTING

['Agreed.']
Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, in connection with today's debate there have been discussions among the House Leaders in an attempt to provide an opportunity for a maximum number of members to participate in this very important debate culminating, of course, in a vote on the resolution. In an attempt to meet these objectives, the Government has made a proposal to extend the hours today which would amount to the equivalent of a two-day debate. I hope, in the interests of ensuring that all Members of the House who wish to speak have that opportunity, that the House would find it appropriate to agree to the proposal I am about to put. It reads as follows:
That, notwithstanding any Standing or Special Order of the House, the House sit as follows today, Monday, March 16, 1987, for the purpose of consideration of the government motion dated March 11, 1987, respecting bilateral trade, in the name of the Minister of International Trade:
-The House continue to sit until 6:00 p.m., without interruption for lunch break or Private Members' Business or Adjournment Proceedings, provided that statements by Members will be at 2:00 p.m. and Question Period from 2:15 to 3:00 p.m.
-Following a dinner break from 6:00 to 7:00 p.m., debate to be resumed until 10:00 p.m., at which time Mr. Speaker will interrupt any proceeding then under way to put forthwith and successively, without further amendment or debate, any question or questions then before the House, provided that at the request of any Member at that time, a division on any question or questions will be deferred until 6:00 p.m., Tuesday, March 17, 1987.
-Following such question or questions being put at 10:00 p.m. tonight, or following such deferred division or divisions being requested at that time, Mr. Speaker shall adjourn the House.


Some Hon. Members:: Hear, hear!


Hon. Herb Gray (Windsor West):: Mr. Speaker, there have been consultations on the proposal just made by the Government House Leader and, as I indicated to him in a letter I sent on Thursday, we, the Official Opposition, would be willing to agree to the proposal the Government House Leader has just made.


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: Mr. Speaker, this is the first opportunity I have had to see the details of this proposal.


Some Hon. Members:: Oh, oh!


Nelson Andrew Riis: I must say that, to me, it is another example of a disturbing trend we have seen over the last number of months. Whether it be the drug legislation, the National Transportation Act, or other very important issues facing the country, the Government has used procedural tactics to limit debate.


Donald Frank Mazankowski: We are extending debate.

March 16, 1987
Order Paper Questions


Mr. Speaker:: Order. The Government, through the Deputy Prime Minister (Mr. Mazankowski), has proposed a motion. The Hon. Member for Windsor West (Mr. Gray), speaking on behalf of the Official Opposition, has agreed to it. The New Democratic Party, which has every right to have a say in this Chamber with respect to the motion, is speaking through the Hon. Member for Kamloops-Shuswap (Mr. Riis). I ask Hon. Members to respect the dignity of this place.


Nelson Andrew Riis: Thank you, Mr. Speaker. I simply want to point out Section 55 in Beauchesne's Fifth Edition which says:
The privilege of freedom of speech is .. . the most fundamental right of the Member of Parliament on the floor of the House-
We have grave concerns about the request to limit perhaps, in the Government's own words, the most important economic debate in the country to two days. We have very serious concerns about what seems to be a trend of the Government using Parliament as the largest rubber stamp around. We are very concerned about the request before us. As a result of that concern, and the fact that this is the first time I have seen the specific details, I would like to reserve judgment on this until later in the day.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: Perhaps the negotiations could be limited to the House Leaders.



Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I ask that all questions be allowed to stand.


Mr. Speaker:: Is that agreed?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


Hon. John C. Crosbie (for the Minister of International Trade) moved:: That this House supports the negotiation of a bilateral trading arrangement with the United States, as part of the government's multilateral trade policy, while protecting our political sovereignty, social programs, agricultural marketing systems, the auto industry, and our unique cultural identity.


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, I rise to report to the House on the progress of the
Canada-U.S. trade initiatives. I welcome the opportunity to speak to the House on this matter of historic importance. I, along with the rest of the country, very much look forward to the opinions which will be expressed by the Leaders of the opposition Parties on this very important matter.

Mr. Speaker, today we start a historic debate on initiatives that may make the next century Canada's own.

In this historic debate Members of all Parties will be addressing the motion which you have just set out. This motion is designed to create jobs, to generate new wealth, and to create new economic opportunities in all regions of Canada, particularly those which are presently going through great economic difficulties. Because this trade initiative is part of a comprehensive package designed to improve Canada's competitive position for the 21st century, I tell you with pride that the Government of Canada shall today support the resolution in the House of Commons.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: The backdrop of this requires a little explanation. The scope of our relationship is worthy of mention itself. There is $200 billion a year in bilateral trade with the United States, over 75 per cent of which is duty free. This is the largest trading arrangement between two countries anywhere in the world. It is an enormous amount which presents enormous opportunities and great difficulties. Thirty per cent of our GNP comes directly from our exports and about 80 per cent of those exports go to the United States. Most importantly, almost 2.5 million Canadian jobs depend directly on the American market, the richest and most dynamic market in the world which is sitting right on our doorstep. This measure is designed on behalf of all people of Canada, from the people who are hurting in Alberta to the people of Newfoundland and the people of the interior of British Columbia who need help. This measure is designed to ensure that those areas of the country get their kick at the can through enhanced bilateral trade.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: There have been troubling developments in Congress. Over the last number of years the United States has been running a very serious trade deficit. Last year it was in the neighbourhood of $170 billion U.S. Such action sometimes brings out the worst in all of us, including the United States. People get scared. They go back to the reactions of the 1930s and throw up protectionist measures. A wave of protectionism has already meant action against our hogs, our steel, our lumber and our potash. The most important and worrisome part of this, albeit understandable, is that Senators and Congressmen in the United States, seeing the decline of smoke-stack industries and large pockets of unemployment develop in traditional areas of wealth, take these measures.
March 16, 1987

They are looking for what they consider to be the unfair traders. However, one of the major problems upon which I invite the House to reflect is that Canada is a fair trader. We are not an unfair trader seeking unfair access to anybody else's market. As Congress prepares to initiate this competitive legislation, which is trade legislation, the United States is saying that if we want to do business in their markets, this is the price of poker in reference to people they consider to be unfair traders and whom they name regularly. Canada is a fair trader. We do not want to be caught up in a net designed for the unfair seeking access to the American market. We have a history of fair trading and a history of generating prosperity through fair trade. This is designed to strike a fair deal with the United States.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: The trends in trade are there for all to see. They are toward blocks. Japan's emergence as a superpower in trade after the war brought about, in some measure, the creation of the European Economic Community which is now a group of 320 million people within which trade is free, economic intercourse is of the highest and most significant order, and growth and prosperity come about because of the dropping of those barriers.
In another area of the world and for other reasons, but with the fundamentals still in place, Australia and New Zealand have sought and obtained a free trade arrangement between themselves. They are far away from the United States and Europe, yet the structures and objectives apply to them. Over the weekend and today the ASEAN nations from Singapore to the Philippines have been looking at structures which would give them a new free trade association involving hundreds of millions of people. In light of these developments, our domestic market of 25 million people begins to look small and vulnerable. What are our trading options when we strip away the rhetoric? What options are available to any industrialized country? There is GATT, there are sectoral initiatives and there is the possibility of a comprehensive bilateral trade arrangement.
We have been members of GATT for 40 years. The Secretary of State for External Affairs (Mr. Clark) led a major delegation at Punta del Este where we reaffirmed our commitment to the multilateral trading process. However, specific problems exist in the United States. Steel is very much next on the American agenda, and I see Members here from the Burlington area who are in charge of the steel caucus. The GATT process takes time. The Tokyo round took six years to negotiate and eight years to implement. We cannot wait that long.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: The sectoral initiatives attempted by the previous Government have failed because of the new climate
Bilateral Trade
that exists in the United States. Those initiatives are not good enough.
There is one initiative that is not exclusive from the GATT but very much complementary of our GATT international exercise. It is a comprehensive bilateral agreement with the United States under Section 24 of the GATT which will put Canada and the United States at the forefront of liberalized trade here and around the world.

And why are we conducting both bilateral and multilateral negotiations, Mr. Speaker? When we decided to engage officially in trade negotiations with the United States, we knew this would be controversial, that all the old bug bears would be resurrected and that it would fan the flames of past partisan debate on the subject. We have decided to go ahead, regardless of the political risk, because we felt it was in the national interest. Why? Simply because without economic prosperity, there can be no cultural and social development in Canada, and to provide for prosperity, we must preserve and expand our export markets.
Canadians export to many countries in the world, but our main market, and in fact the wealthiest and biggest market on this planet is the United States, our next door neighbour. The jobs of several million Canadians depend on it, but access for our goods and services to the U.S. market, as to any other market, is being increasingly threatened by the wave of protectionism and the undue recourse to legislation that presently predominates in international trade.
There are examples of how this affects every province. I am thinking of Quebec, where annual exports total $22 billion, of which $17 billion worth goes to the United States. There are hundreds of thousands of jobs in Quebec that depend directly on the secure U.S. market. Fifteen billion dollars worth of Quebec exports go directly to the United States, and that is to the United States alone! Fifteen billion is what it cost to build the James Bay project, the project of the century. That is how important the U.S. market is to Quebec. It means that Quebec's annual exports to the United States equal the total cost of the James Bay project, and we know the tremendous impact that particular project had on expanding Quebec's economy. And that is why we want to do this. We want to minimize the risks and maximize the benefits. We want to create jobs and boost the economy through our trade initiatives, whether it is in Quebec, in British Columbia or in any other region in Canada.

Our over-all objective is clear-cut. It is to try to carve out a unique trading relationship with the United States of America that will create jobs, end trade harassment, introduce stability, eliminate trade barriers, enhance competitiveness, spur productivity and build an instrument of liberalized trade between the two greatest trading partners in the world. It will be an agreement that can serve as a model for all countries

March 16, 1987
Bilateral Trade
seeking relief from protectionism, growth in the Third World, and more liberalized access to markets everywhere.
This is not a selfish initiative but it has clear advantages to both sides. We hope it will eventually be seen as a signal against the kinds of vulgar and selfish measures of protectionism and be seen as a noble example of generosity and growth. We can show all developing countries in the world that it is not an initiative of protectionism or cutting off our markets but one by which markets can grow and we can accept more and more goods from Third World countries so that we genuinely contribute through trade to building a better and more equitable world.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Our highest priority is to have an agreement that ends the threat to Canadian industry from U.S. protectionists who harass and restrict our exports through the misuse of trade remedy laws. Let me leave no doubt that first, a new regime on trade remedy laws must be part of the agreement. Second, because trading is so clearly a two-way street, our negotiators have been instructed to ensure that the elimination of existing tariffs takes place gradually, with adequate transition arrangements that are sensitive to the needs of Canadian industry and Canadian workers. Third, it is clear that non-tariff barriers increasingly distort trade. Our negotiators have, therefore, been instructed to negotiate a broad and comprehensive agreement addressing these issues, including changes to government procurement practices. For example, if Canada were to capture 1 per cent of the government procurement market in North America, it could result in the creation of 75,000 new jobs in this country.
Let me turn to the area of agriculture. Our goal is straightforward. It is to help Canadian farmers by increasing the predictability and security of access of exports by the farm sector through ending the deeply destructive subsidization of exports while preserving our farm support policies and the operation of our marketing boards at the same time. These are the principal Canadian objectives.
If the United States wants to increase access to our market and truly wants Canada to sign precedent-setting agreements that could indeed serve as a great model for the world, then our desires must be respected and our wishes accommodated. Otherwise, there will be no deal.
However, we recognize that a good deal must be one that is fair to both sides. We make it very clear that we do not approach our commercial relationships with the United States as an enemy. The United States is a sovereign, hard-nosed nation with its own national interests to protect. It confronts Canada in the same situation, as a sovereign powerful nation with our own interests to protect, as we shall. We recognize that the deal cannot favour only one side. If such an agreement is to have any durability and value, or have any significance as a model in the world, it must be a fair deal. There must be growth and prosperity in the United States as well as in
Canada so that both sides to this agreement shall prosper to the ultimate benefit of the entire world.

So, given these circumstances, if that is the objective, what was our approach, Mr. Speaker? I think the approach was coherent. First, clear declarations of intentions; second, an exhaustive preparation of the case; and third, a historic degree of consultations and co-operation with the provinces, the industry and, we tried, the labour movement.
First, Mr. Speaker, when the Minister of Finance (Mr. Wilson) tabled his document entitled A New Direction for Canada in November 1984, he stated that if we want to promote expansion through export trade we must gain easier and more reliable access to foreign markets under the best conditions possible.
Second, the January 1985 green paper How to Secure and Enhance Canadian Access to Export Markets clearly defined the challenge. It stated: With respect to trade policy, attention focuses on-and on the possibility of taking fresh approaches in the conduct of Canada-U.S. trade relations. Then in the month of March, two years ago tomorrow, I met with President Reagan in Quebec City and we reached agreement on our objective to create a safer climate for bilateral trade and reinforce the multilateral trade system. This initiative was followed by a statement I had the honour to make before the House on September 26, 1985 when I said this: Economics, geography, common sense and the national interest dictate that we try to secure and expand our trade with our closest and largest trading partner. Then there was the external trade advisory committee made up of representatives of all levels of Canadian society under the distinguished chairmanship of Walter Light, various groups of sectorial consultation on external trade.
Fifteen advisory groups, representing all areas of the Canadian economy, from our farms to our steel products to our apparel industry, to mining, to goods and services, were formed. Three hundred or so people, men and women from the best parts of our private sector, came together in intimate consultation with the Government over a period of 18 months in order to help prepare us for these negotiations and to work with us, as they continue to do today.
At the First Ministers' Conference in Halifax we set out the beginning of the process where the Government would consult with the First Ministers on a regular basis. That, too, was a very important indication of our preparation and consultation and our desire to obtain a deal which is good for all Canada. Then there was the vote in the American Senate which gave the green light to its participation in May of 1986. We needed that, of course, because it was at that point in time that the forces of negotiation could effectively be engaged.
March 16, 1987



As to federal-provincial consultations, there were 14 federal-provincial meetings of Ministers and senior officials-an unprecedented series of events, Mr. Speaker. I also had four meetings with the provincial premiers on the question of trade negotiations with the United States, and two more meetings are slated for June and September. This is a first in Canadian history.

This is historic co-operation in terms of the manner in which we wanted it to proceed. Twenty-two years ago, to put it in some contrast, the Government of Canada sent down a group of negotiators to conclude the Auto Pact with the United States of America. They did the Auto Pact and they did a good deal. However, they did it without so much as a by your leave to the duly elected Government of Ontario at the time. I tell you, Mr. Speaker, federal-provincial relations have clearly changed, and very much for the better.
I want to indicate the extent to which this preparation and, I think, this thoughtful consultation with all areas of national life nevertheless had to come together at one bargaining position. While we wanted very much to co-operate with the provinces, and we have, and I want to tell you, Mr. Speaker, that I have said very clearly to the First Ministers, and I say very clearly to the House, the responsibility for international treaty making lies with the federal Government and the Parliament of Canada and it shall not be diluted under any circumstances, we proceeded to select in our judgment the very best team, headed by the very best international and commercial negotiator. I had the honour of asking for, and receiving, the acceptance of Ambassador Simon Reisman who was present on behalf of Canada at the creation of the GATT and who has worked all his life in the Public Service up to the position of Deputy Minister of Finance. Under the instructions of previous governments, he very successfully negotiated the Auto Pact, which has brought such benefits to Canada, notwithstanding predictions to the contrary from other people in this House that it was not going to work. You will hear them again today. The Auto Pact worked because Simon Reisman was the best negotiator in Canada, and we brought him on side to do that job again for the country.
I suppose this leads us to one of the key questions, the rationale and reasoning: why did the Government undertake this historic initiative? It is risky. It provokes controversy and sometimes vexatious and silly questions. It is a "when did you stop beating your wife" situation until you produce the results. We knew that. My Government introduced this historic initiative to create jobs and ensure economic equality for all regions of Canada. Since September of 1984, job creation in Canada has surpassed that of any other industrialized country. We have created 705,000 new jobs as of Friday of last week. Our national unemployment figures have gone from 11.7 per cent down to 9.6 per cent in two years. That is not bad at all.
Bilateral Trade
However, Mr. Speaker, if you look at Friday's figures, I think therein you will see the tragedy. Look at the imbalances in Friday's latest unemployment statistics. These imbalances are largely reflected in our regions and the geography of Canada. Unemployment is down to 9.6 per cent nationally, but in Newfoundland and Labrador unemployment is at 18.4 per cent, and at the other extremity of the country, in British Columbia, unemployment is at 13.3 per cent. Yet in the industrialized heartland of Canada, in Ontario, unemployment is down to 6.8 per cent and in Manitoba it is down to 6.7 per cent, the lowest in the land. What these figures tell us is that over a period of decades, inadvertently, but because of our history and our trading patterns, we are in the process of building two Canadas, one which is rich and promising and one which is underdeveloped and underemployed. That is unacceptable because this Party and this Government stand for one Canada, fairness and equality of opportunity for all.
This is a vital part of that process which will ensure equality of opportunity to all Canadians whoever they are, wherever they live and whatever they do. We are delighted with the prosperity in Manitoba, in Ontario and in certain other regions of the country, but we cannot build prosperity and genuine growth in the country by diminishing anyone else's wealth. What we want is to ensure that Newfoundlanders, British Columbians, Albertans, and others, get their chance, too. They must be given the opportunity to trade their way to new prosperity. That is why I call upon all Hon. Members of the House to set aside the shibboleths and to tell Canadians exactly where they stand today. Are they for this growth and prosperity or are they clinging to the past, because today is a day for the future.
What are the obstacles we have considered? Clearly, in something this important there have been and will continue to be obstacles. First, there is the fact that there are no guarantees. Premier Bourassa of Quebec said that this was a risky but indispensable move, that it had to be done, because the market of 25 million is no longer sufficient in the 21st century to guarantee the kinds of jobs we need. Notwithstanding the progress we have made, and no one can dispute the creation of the 705,000 new jobs, there are still 1.2 million unemployed. It is because I am interested in this, and my Government is interested in this, notwithstanding the risks and not because of the difficulties-we know there are difficulties-we know this requires leadership and daring. There are 1.2 million people still unemployed who are looking to the Parliament of Canada for leadership. I am telling those people that there are new opportunities. Hundreds of thousands of new jobs can be created through trade. This motion is a motion of hope and belief in Canada. That is why I ask the leadership of all Parties to set aside partisanship and to say yes to a more prosperous Canada.


Some Hon. Members:: Hear, hear!

March 16, 1987
Bilateral Trade


Martin Brian Mulroney: There are legitimate concerns that have been raised at various times-entirely legitimate concerns. I tried as best I could to deal with some of them in the House when I indicated that the negotiations would not affect our political sovereignty, our system of social programs, our commitment to fight regional disparities, our commitment to defend our unique cultural identity, or our special linguistic character. These make up the essence of Canada. They are not at issue in these negotiations. They are legitimate concerns that we have tried as best we can to deal with in the type of atmosphere of fear and panic that some people try to promulgate. We will try to deal with them on a continuing basis.
I wish to salute the leadership and maturity of the Premiers who have set aside the attractiveness of these ephemeral techniques to deal with some of the fundamental issues which have ensured that the profile of a major trading arrangement deal is now emerging. There is indifference in the United States. There has been historic indifference in the United States which has been overcome in large measure-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: We will get to the Liberals in a minute. The whole country is waiting to hear their position. I think the Liberals should have the courtesy of allowing others to set out theirs. They may disagree with the position of the Government, but they have to acknowledge that we have one position, not two, three or four.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Canadian issues were on the back burner in the United States, something which we have managed to overcome. We have done this through initiatives with President Reagan. The Secretary of State for External Affairs has had quarterly meetings with Secretary Shultz. There have been meetings with Secretary Baker, as well as our visit in Canada with Senator Bensten and the leadership that he is seeking to provide to the Senate Finance Committee. We have dealt with the serious question, and let us acknowledge it, of historic indifference in the United States to many of our Canadian concerns. The matter has now been taken from the back burner to a point at which the President of the United States in his State of the Union Address indicated his commitment to bring about a free trade arrangement with Canada. That indicates that we have begun to make some serious progress.
Then, of course, in terms of obstacles, I will acknowledge that in a parliamentary system one of the problems has been the confusion in the Opposition. The signals that go out to the financial community, the signals that go out to the world, the signals that go out to the various negotiators causes the Americans to wonder where the Official Opposition stands. As 1 have been able to understand it so far, the Liberal policy has to be with respect to trying to garner support on both sides of the issue, unless the issue is particularly sensitive, in which case the Leader of the Liberal Party does not show up to vote.
With respect to the Liberal Party, I can say it no better than Donald Macdonald, a distinguished colleague of my right hon. friend, said it, as reported in The Toronto Star. He said that in a bizarre turn of events Liberal delegates passed a resolution backing free trade in the morning, then supported a policy opposed to free trade at the day's end. Donald Macdonald called the stand of the Party incoherent. Macdonald, who headed a royal commission into the economy last year that favoured free trade, noted that the Party voted for multilateral negotiations, bilateral negotiations, and sectoral negotiations. "From the outside, we look pretty stupid," said Mr. Macdonald. In the national interest I call upon the Leader of the Opposition to deal with that stupidity today and to put the Liberal Party clearly on the record in support of a great national initiative.


Some Hon. Members:: Hear, hear


Martin Brian Mulroney: With regard to the NDP, we have the resolution of yesterday's convention to consider. As I understand it, the resolution calls upon Canada to withdraw from the comprehensive negotiations with the United States.


Some Hon. Members:: Shame, shame!


Martin Brian Mulroney: We have the Leader of the NDP saying that he will propose a policy of full employment. When he is asked how he will do it he does not have the foggiest idea. We know now that it will not be by trade. I tell the Leader of the NDP and the apostles of reaction who have taken over a few of the positions of leadership of the CLC this. Do not become hostages to the past. Reject this call for protectionism because jobs for ordinary Canadians come from trade. We need your help in supporting this kind of great national enterprise.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: I would now like to deal with the question of research. People say that these matters, of course, have to be considered. Some years ago The Globe and Mail reported that it is often alleged that those supporting liberalized trade have not done their homework. In reality, that is far more true of those who oppose free trade. Among the critics, therefore, rhetoric, passion and a model of nationalism sometimes fill the gap or conceal a defence of economic privilege.
The article went on to ask who the real nationalists are in the free trade debate and who are the defenders of special interests. Who has done the research and who appeals to generalized fears? Those seem to me to be legitimate questions for this House to consider.
The Hon. Member for Saint-Henri-Westmount (Mr. Johnston), presumably speaking on behalf of his Party, said that the point is that those who argue that a free trade agreement will cost jobs must also look at the other side of the coin. What will protectionism cost us? What will the absence of a free trade arrangement cost us? I salute the Hon. Member for Saint-Henri-Westmount for his vision.
March 16, 1987


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Then there is the MacDonald Commission to consider, as well as the Economic Council of Canada, the C. D. Howe Institute and the Institute for International Economics. Anyone who will contest this-and it is a free country, please go ahead since now is the time to do it-let us hear from you. Let us hear from the research. Let us hear from the scientific data that is available. All of the research, all of the hard practical evidence shows beyond a shadow of a doubt that eliminating trade barriers makes us better off individually and nationally. It makes us richer, gives us more, and permanent jobs and a better future. That is what all of the research indicates. There has been no question of that so far.
What did the Macdonald Commission say? This was a commission headed by a former Minister of Finance, a very distinguished member of the Liberal Party, along with a group of colleagues and millions of dollars-I think $20 million was spent on research. The best people in Canada looked at this issue for a number of years. They concluded, on a prudent course, that free trade will help to make us richer, and by making us richer it will strengthen the fabric of our country and increase our self-confidence.

One of the members of the Macdonald royal inquiry commission, who signed the report after three or four years of inquiry and studies, was Montreal lawyer Michel Robert who has since become President of the Liberal Federation of Canada. I would now expect Mr. Robert to maintain his support for free trade as he did in the signed report, the Macdonald report.
The Economic Council of Canada said that Canada can go forward with these arrangements:
-or it can go backward, accepting the steady erosion of our current access to export markets created by protectionist trade actions.
The Economic Council of Canada forecast a possible-over and above what this Government is going to be able to do with foreign investment and with increased productivity-370,000 new jobs as a result of the initiative if the productivity is increased by, as it indicates, a conservative 5 per cent in certain areas. There will be 370,000 new jobs, Mr. Speaker. Can you imagine what this will do for Nova Scotia, and the help it will give to New Brunswick, Newfoundland and the interior of British Columbia? These are hard facts put out by a distinguished group of economists, Canada's leading group of economists. They say there are hundreds of thousands of new jobs. If Hon. Members are opposed to it, let them give us the information that justifies their absence of faith in Canada.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Richard Lipsey and Murray Smith say that the free trade agreement:
Bilateral Trade
-offers the most promising opportunity to create a more efficient, adaptive, and outward-looking Canadian-and U.S.-economy that would provide rising living standards and expanding employment opportunities for the great majority of people.
The Business Council of British Columbia said:
-we must adopt long-term policies based on economic realities which recognize our relationship with the U.S.

La Presse: "Mr. Mulroney's statement is realistic, opens the door to a wide-ranging agreement with the United States and respects the right of Canadians to define the content of a future agreement as negotiations progress". "Canadian culture will never flourish if it fails to stand up to straightforward competition on its own turf, and it must do so outside the country as well."

John Kenneth Galbraith said:
I read in the papers that Canadians are concerned that free trade will impair their sovereignty and bring Canada ever more dangerously under American influence. This is nonsense. The American influence is there, no one can doubt, but it is a factor of geography, not of trade.
That is why I ask Hon. Members to set aside the nonsense and to deal with trade as a job creating issue for Canada.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Pierre Lortie, President of Provigo, one of our great businessmen and economic thinkers in Quebec, says: "It would be criminal not to pursue aggressively negotiations for an agreement with the United States".

The Canada West Foundation said:
The second compelling reason for arguing for a free trade arrangement with the U.S. is the competitiveness issue, what we like to call the faith in Canadians approach. This approach argues that by adopting a more open market and competitive spirit in Canada an environment will be created which would raise Canadian living standards, employment prospects and quality of life.
The Atlantic Provinces Chamber of Commerce say that this trade is:
to promote industrial decentralization in Canada-
Surely, Mr. Speaker, in light of the unemployment results, notwithstanding tremendous progress by this House and this country in the last two and a half years, and we hear the plea of the Atlantic Provinces Chamber of Commerce and the plea that Premier Peckford made at the First Ministers, Conference where he indicated that Newfoundlanders since coming into confederation had only about 52 or 53 per cent per capita income of people in Ontario who are now at 115 per cent as opposed to 52 per cent, this is the growing of two Canadas, and it is unacceptable. We must require and have the assistance of everyone, including the Opposition Parties for people in other parts of Canada who need jobs and prosperity, and trade is the way you guarantee that.

March 16, 1987
Bilateral Trade
In southwestern Ontario, in London, there is a very generous view of the Canadian responsibility. We read:
The better and safer bet would be to try to negotiate a freer trade agreement with the U.S. that would open up new opportunities for productive Canadian firms and businesses, while also safeguarding social, cultural and political values essential to our Canadian identity.
The Saskatoon Star-Phoenix wrote:
To be too fearful of possible consequences would be to invite greater economic isolation.
Perhaps I could conclude-


Mr. Fulton:: Tell us something.


Lloyd Axworthy: When do you start your speech?


Martin Brian Mulroney: I will be glad to quote from a great Canadian nationalist, Richard Gwyn, whose credentials are unchallenged.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: The Liberals and the New Democrats are laughing at a journalist of the esteem and commitment to Canada of a Richard Gwyn. I tell Hon. Members his credentials are unchallenged. I will read a statement from his book:
A national vote in favour of bilateral free trade would represent the ultimate declaration by Canadians of self-confidence in themselves, confidence both in their ability to compete and in their ability to continue as a distinct political and social unit.
There is a commitment to Canada, Mr. Speaker.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: We have garnered the support in this initiative, although some parties would suggest that we have been alone. We have not been alone. The Premiers, the Governments of all political stripes, business leaders from John Bulloch to Jean de Grandpre, from Tom D'Aquino to Pierre Lorti, from Pierre Macdonald to Jacques Parizeau are with us. It is important to note as we begin the debate the extent to which those outside of this House are non-partisan, the extent to which people do take a broader view of politics, politicians and the future of our country.

The Canadian Chamber of Commerce has expressed its support, and also the Canadian Federation of Independent Businesses, the Consumers Association of Canada, the Canadian Export Association, the Canadian Manufacturers' Association, and the Business Council on National Issues.

Negotiators for both countries should strive for the largest possible elimination of barriers to trade, having a broad comprehensive free trade agreement in mind. Such an approach would be in the best interest of both countries.
That is the statement from the Hon. Marc Lalonde.


Some Hon. Members:: Oh, oh!


Cyril Keeper: Is this where you are getting your advice?


Mr. Blaikie:: He is the guy who designed the National Energy Program.


Martin Brian Mulroney: And what are the results, Mr. Speaker?
As far as we are concerned, we know there is no magic formula. The process is always a painful one in a country like ours, especially in the case of such important and historical initiatives. Nevertheless, to me and my colleagues, international trade stands for jobs, prosperity, regional growth and a future for our children. Mr. Speaker, we must consider the impact that initiatives such as establishing new trade relations with the United States will have by strengthening the economy and the unity of this country in the next century.

Nothing is perfect, we acknowledge. Let us consider at the end of the day the alternatives. Who knows, maybe there will be strokes of brilliance and we look forward to hearing them. We will listen to them dispassionately and carefully. If the Liberal Party or the New Democratic Party has a progressive, dynamic suggestion in terms of the manner in which we create new jobs-there is no pride of fraternity in something as important as unemployment-we will take the idea, consider it in the House and, if it will create those kinds of jobs, we will deal with it appropriately.
But consider the implications for Canada for economic growth and Canadian unity of new trading arrangements with our largest partner which can produce hundreds of thousands of new jobs, which can increase our productivity, spur on our competitiveness here and around the world. Consider that in the light as well of what has already been initiated with the provinces, the Government of Ontario and all the other provinces, of a new commitment to national science and technology programs. Consider that in the light as well of another building block, so important for all Members of this House, namely, a question of tax reform based on fairness and equity bound together by a new constitutional formula which will allow Quebec to be brought back into the Canadian family. This is a building block of greatness. This is what the House is considering today as the future of Canada. It is an act of faith in Canada.
It has often been said that young men have visions and old men dream dreams. This is a day for Canada. This is a day both for visions and great dreams. It is a commitment to the future of Canada. It is a commitment to the youth of Canada, to our unity and to our integrity as a nation.


Some Hon. Members:: Hear, hear!


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, this debate should have been held two years ago today, the day before the Prime Minister (Mr. Mulroney) met the President of the United States at the so-called Shamrock Summit and committed our two countries by way of a joint
March 16, 1987

declaration on trade. That declaration was made and jointly signed by the head of our Government and the President of the United States without any prior parliamentary debate, without any prior warning to the Parliament and people of Canada, and without any mandate from the people of Canada because it was not an issue in the last general election.
My first observation this afternoon is to say that despite the opportunity given to us by the Government for the debate, after listening to the Prime Minister this morning and into the afternoon, Canadians are no further ahead and are no wiser than we were two years ago. We wonder why we had this debate.


Some Hon. Members:: Hear, hear!


John Napier Turner: It is true, we have learned, that the Prime Minister has a great clipping service. He called from among newspapers and reports of Chambers of Commerce which he could find for some selective approval. He cited my good friend and successor in the Ministry of Finance, Donald Macdonald. I said to Donald, when he came out with the report of the Macdonald Commission and asked Canadians to take a "leap of faith": "Fine, take a leap of faith, but as a Canadian before I do that I would prefer to know where 1 land".
The Prime Minister has given us no details, no further information, no further factual data, and no precision at all on the Government's position in the negotiations with the United States. We do not know what is negotiable. We do not know what is not negotiable.
We read the motion. It has been called a motherhood motion. We would have thought the Prime Minister might have given us more explanation of what the Government meant. He did not talk much about sovereignty and how we would reconcile that sovereignty in a comprehensive free trade arrangement with the United States. He mentioned nothing about our social programs, how they were to be interfaced. He did not make a defence of our agricultural marketing systems, as the motion sets forth. He made absolutely no reference to the auto industry or to the Auto Pact, more specifically. He talked in only vague terms once again about our unique cultural identity. Canadians are no further ahead after listening to the Prime Minister through their representatives in Parliament, than they were two years ago tomorrow when he made that declaration with the President of the United States.
Of course it is quite clear now that the Government continues to adhere to its game plan as outlined in the leaked communications strategy document which we produced in the House of Commons a year and a half ago. When the issue of free trade was first brought to the attention of Canadians, the game plan as declared in that document-and its authenticity has never been denied-quite simply was to keep Canadians ignorant of what was being discussed in the trade negotiations because the less Canadians knew, the better chance the Government would have to sell it.
Bilateral Trade
The document, if I might recall, also recommended a dirty tricks campaign against those perceived Members of Parliament who might take issue with the initiative of the Government, including a number of Members of Parliament who sit on this side of the House, beginning with the Hon. Member for Vancouver Quadra. It is a strategy on how to get us in our own particular ridings if we opposed the initiative of the Government of Canada. I quote from that document:
The strategy should rely less on educating the general public than on getting the message that the trade initiative is a good idea; in other words, a selling job.
Those were the words of that communique. That has been, and consistently so, the strategy of the Government. It was maintained today in the Prime Minister's speech, because we do not know any more than we did two years ago about where the Government stands in these negotiations on the major issues which have to be dealt with in the negotiations.
A year and a half ago when a resolution was introduced in the House we had a vague 15-minute speech from the Prime Minister clothed in generalities, clothed in shibboleth, laced with rhetoric, and garnished with his usual hyperbole. We got that again today; it took him a little longer. When we are able to analyse and compare the two speeches, he was probably more forthcoming in that first 15-minute speech a year and a half ago.
Perhaps the Opposition should not have pressed so hard for the Government to bring the matter before Parliament or prevailed upon the Government to come clean with Canadians, to let us know, as representatives of people from one end of Canada to the other, where the Government is taking us, what are the general parameters, what is at stake, what is not at stake, what is at issue, and what is not at issue. Perhaps we should not have pressed so hard because the Prime Minister has been a great disappointment to the country this morning.
I thought we were to have a statesmen-like review. For a while the Prime Minister restrained himself, and then of course he descended into the style of the bear pit that he likes. 1 will try to resist but, since he has opened the door, I think Members of Parliament on this side of the House will be excused if from time to time we do not retain the same shrewd control of ourselves that we should.
[ Translation]
Concluding a free trade agreement would bring about profound changes in nearly all aspects of our economy in the years to come. It would have a considerable impact on our way of life, our trading habits, our national sovereignty, our independence and certainly on the quality of life in the northern part of this continent.
The Prime Minister has embarked upon a risky undertaking, and he is once again refusing to let us know the stakes involved. The Government has no mandate from Canadians to negotiate a free trade agreement. There was no mention of this during the election campaign, and in fact we would not even be discussing the matter here in the House, if the opposition Parties had not insisted on having this debate.

March 16, 1987
Bilateral Trade
Mr. Speaker, I also think that the presentation of this motion at this point in time relates much more to the domestic problems now experienced by the Government than to our trade relations with the United States.

This debate should have happened first, not last. As the Special Joint Committee of the Senate and the House of Commons on Canada's International Relations stated in 1985, and I should like to quote from the unanimous report:
It is premature for Canada to initiate formal bilateral negotiations with the United States to determine the receptivity to liberalizing bilateral trade. After a ministerial report to Parliament on the outcome of these discussions and on whether certain conditions have been met, the Government should decide whether the prospects are sufficiently promising to continue on to detailed negotiations.
What the joint report suggested in unanimous terms is that Parliament ought to be apprised in general terms of the discussions. There ought to be a consensus on the parameters as to how those discussions ought to be directed and how they should go, and only then should formal negotiations be initiated with the United States. The Government of our country ignored that advice. Instead, it went headlong into a process for which it was ill-prepared.

What I had asked at the time, and what my colleagues on this side of the House and the committee members have since asked on many occasions, was that Parliament and the Canadian people be made fully aware of all the parameters of Canada's position before the beginning of official negotiations with the United States.
We have asked on several occasions in committee and elsewhere for the cost-benefit analysis of the impact of such a deal upon Canada. In May, 1986, the Government released 24 trade-enhancement studies, but every piece of information which would have given us the slightest indication of the impact on a given sector or a given region of Canada was censored. Whole pages of those documents were absolutely eliminated. What was missing in the 18-minute gap in the Watergate tape is just a tiny blip compared to what was left out of these documents.
The Government was sticking to its game plan, an approach popularized by the present Minister of Transport (Mr. Crosbie) who said during the last election campaign: "If we told you what we were going to do, we'd never get elected". I think that was the most honest, forthcoming and frank statement we have ever heard from a member of the government side.


Some Hon. Members:: Hear, hear!


John Napier Turner: Canadians are giving a clear message to the Prime Minister. They are saying: "Mr. Prime Minister, would you deal honestly with us, would you give us the facts, would you give us the data upon which we can make judgments about the affairs of state and the issues before us?" I believe that if given the facts and if given an opportunity to assess those facts over a reasonable period of time, Canadians will make the right judgment. The gap in the process now before the country is that the Government does not trust Canadians, it is not giving Canadians the facts and it is not allowing the people of Canada to make a fair judgment about what is going on.
After this morning's intervention by the Prime Minister, we still do not know what is being negotiated. The vocabulary changes almost as often as the Prime Minister's valet changes his shirt. I remind the Prime Minister of the statement he made in 1983 on free trade. He said during the leadership campaign of June 1983 in a debate with the now Minister of Transport and the now Secretary of State for External Affairs (Mr. Clark) about free trade: "It affects Canadian sovereignty and we will have none of it". Then on July 4, 1985, The Ottawa Citizen quoted the Prime Minister as saying: "We never discussed free trade. Enhanced trade or trade agreements impact not only on the United States but on our trading relationship with allies and upon GATT".
A little later on July 8, 1985,-

Brian Mulroney, quoted in a Montreal daily, Le Devoir, said: "I agree with the expression "improvement of trade relations" but not with the words "free trade."

These were the opinions upon which the people of Canada were entitled to rely. These were the opinions upon which the Parliament of Canada was entitled to rely before, suddenly, the Prime Minister, in order to enhance his photo image with the President, unrehearsed and unplanned, with no advice to the people of Canada, signed that joint declaration.
Canadians want to know how far we are going and in what direction. Is it free trade? Is it freer trade? Is it enhanced trade or is it a bilateral arrangement? Is it a comprehensive free trade arrangement? The motion before the House does not answer those questions. Just three hours prior to the motion being printed, the Minister for International Trade (Miss Carney) in response to questions in the House of Commons last Wednesday called it a comprehensive free trade arrangement. At the same time, in response to another question, the Deputy Prime Minister (Mr. Mazankowski) called it a comprehensive trade arrangement. Yesterday in her CTV interview, the Minister simply called it free trade. In fact, she used the words "free trade" 14 times in that single interview. What is it?
What we have before us today is not a free trade motion. It is either a considerable retreat from the Government's position as expressed in the joint declaration, as expressed in Ministerial statements and Ministerial responses in the House of Commons and as expressed to journalists, or it is a disguise to
March 16, 1987

get a comprehensive free trade deal. There is nothing in the motion and there was nothing in the Prime Minister's speech today to tell us which direction the Government really contemplates and where it stands on the issue.

The motion is empty, Mr. Speaker. The motion does not give the House any indication of the direction the Government will take in the negotiations with the United States.
And what about the role of the provinces? There is no consensus among the provincial premiers concerning the nature of the agreement which should be concluded.
Yet, a number of questions under study are related to provincial jurisdiction. They affect provincial purchasing policies: Ontario and Saskatchewan purchase programs, grants to agriculture and industry, and so on.
Last month the Premier of Quebec reiterated his conviction that his province has a right of veto in these negotiations. And the Premier of Ontario expressed the same views.
In their meeting with the Prime Minister last week, eight provincial premiers insisted on the need to ratify any trade agreement Ottawa might sign.
Sad to say, the position of the provincial premiers is the same as ours as members and the same as that of most Canadians: we do not know what the Government is negotiating and, quite simply, we are not confident that it can negotiate an agreement favourable to Canada.

Of course the United States is our largest and most important trading partner. In no way do I contest the emphasis the Prime Minister puts on those figures. Of course we should seek greater access to American markets as part of our over-all opening to the world. However, entering into these talks has been ill-timed. There is rising protectionist sentiments in the United States reflected in the newly elected Democratic Congress. There have been years of trade surpluses with the United States and we felt at the outset that this was not the best time to try to obtain a better over-all deal with the United States.
I would say quite frankly that the Government has been absolutely naive in thinking that the very fact of initiating negotiations with the United States, negotiations on free trade or on whatever, as the motion does not indicate what it is, would by itself dissipate the protectionist sentiment in the United States Congress. Of course that has not happened. During these negotiations we have been held hostage by the Congress and the administration of the United States. At the same time as the Americans were negotiating with our negotiators, presumably for a free trade deal, they imposed a 35 per cent tariff on B.C. shakes and shingles. They forced us to impose on ourselves a 15 per cent export tax on lumber. They forced us to truncate our pharmaceutical legislation in order to please the pharmaceutical companies in the United States. On issue after issue, this country has been held hostage
Bilateral Trade
by the protectionist sentiment in the United States and the very fact of these negotiations has had no influence at all on the conduct or reaction of the Americans.
I think there is a question which needs to be put to the Government, with which the Government has not dealt, and we have put the question to Ministers and to the Prime Minister on other occasions. What is the real purpose of these negotiations on the American side? Reading the recently introduced amendments to the U.S. trade legislation, and particularly that piece of legislation now supported in a Democratic Senate by 53 or 54 Senators on both sides of the aisle, one observes that that legislation does not talk about free trade, freer trade or even fair trade. It is a piece of legislation designed to manage the trade of the United States in the interests of the United States. It sets forth a mechanism making it impossible if fully applied for any country trading with the United States to do so on a bilateral basis. It must do so only subject to the will and whim of the United States Congress.
I ask the Prime Minister if we have an undertaking. What is the real purpose of the Americans? Do they want a free trade arrangement with Canada or are they using this mechanism as a way of extracting from us a series of managed trade agreements to their favour? First lumber; what is next, potash, oil and gas, steel, services? We do not know. We have received no report from the Prime Minister. Surely he told the Premiers where he stood. Surely he told the Premiers what the chances were and what was at stake. If he did, fine, but he certainly has not put Members of Parliament in the same position. We have the fundamental role and duty of voting on this matter and recommending to our constituents what the attitude of the country ought to be.
We in the Liberal Party have always favoured finding ways with the U.S. of enhancing access to each other's markets. We believe our policy must be developed as part of a global approach to trade and not focus solely on the U.S. The Prime Minister says he is impatient with the GATT process, it takes too long. That process has served this country well, because as we cut deals in GATT negotiations we have always been able to make on the side a better arrangement with the U.S. than I believe we will ever be able to make head to head in the current negotiations.
The Government refuses to put forward its actual negotiating position. It gives us conflicting reports as to what is actually being negotiated. This resolution tells us nothing. The Prime Minister added nothing upon which we could assess the position of the negotiations. Therefore we will vote against the motion.
The Government and the Minister for International Trade will probably use the excuse that it cannot tell us where the negotiations are because it would impede the negotiations. Surely the Premiers have been given some idea of where the Government is. We have had a series of selective leaks by Mr. COMMONS DEBATES
March 16, 1987
Bilateral Trade
Reisman and others in order to enhance the Government's position every once in a while, hype up the negotiations and titillate the Canadian public. However, when the people of Canada, through their Members of Parliament, ask for the information they are entitled to concerning the range and parameters of the negotiations, the Prime Minister does not tell us, and neither does the Minister for International Trade. Members of Parliament are left completely in the dark and that we cannot accept.
It appears that if these negotiations continue we are going to be faced with some kind of agreement. Whatever it is, the Government will stagger away from the table and cry victory. We have decided to submit an amendment to this House and to the country outlining the basic conditions we believe must be met in any negotiations with the U.S. We have made it detailed and not followed the Government's example of this vacuous motion before the House. These are the principles of our trade policy as it concerns the United States.
I will introduce the amendment at the proper time, at the conclusion of what I have to say, but the conditions we propose include protection of our sovereignty, limiting of U.S. protectionist action, restoring our previous access on softwood lumber, reduction of non-tariff barriers, preservation of our ability to legislate in areas such as social policy, agriculture, regional development, the environment, financial and service industries, language and culture, the Auto Pact, and the provision of adjustment assistance and the ending of U.S. trade harassment on potash, steel, fish, energy and agriculture. We have set forth a blueprint for the Government, if it continues these negotiations, as to where we stand on the negotiations. We do that because the government motion is far more interesting for what it has excluded than for what it actually says. It is, as The Toronto Star put it, a motherhood resolution. That great newspaper has advised us-


Some Hon. Members:: Oh, oh!


John Napier Turner: -to vote for the resolution, but with due respect to that institution, we would be betraying the people of Canada if we supported the motion, and we do not.
In the motion before the House the Government is simply saying this. Give us a complete and free hand. Trust us. I can assure the Prime Minister that at this time in his mandate the Canadian people do not trust him and we do not trust the future of these negotiations and that is why we are spelling it out in this particular way.


Some Hon. Members:: Hear, hear!


John Napier Turner: Trust us, says the Prime Minister. We will go down and get a good deal. We will do it, the motion says, "while protecting our political sovereignty, social programs, agricultural marketing systems, the auto industry, and our unique cultural identity".
Let us examine that motion because it is a joke, but Canadians are not laughing after hearing the Prime Minister this morning. Are we going to trust that Government to protect our sovereignty? That is the same Government which dithered and delayed over the passage of the Polar Sea through our northern waters. It challenged that passage only after the waters had been traversed by the Polar Sea. Can we trust that Government after it sold out our fishermen to France and our pharmaceutical industry to the U.S? That Government gave away everything the Americans wanted before these negotiations ever began. If you are going to negotiate with the U.S. on any kind of trade, why was FIRA and the National Energy Program dismantled first? Why not leave them as part of the bargaining process? Why throw away all our cards so early? I would enjoy a poker game with the Prime Minister because he lays his cards out before he even knows what is at stake.

Mr. Speaker, are we going to rely on the Government to protect our social programs, this Government which made an attempt to de-index old age security pensions and which, in its three budgets, put an unfair burden on the shoulders of low and middle income Canadians, and widened the gap between rich and poor Canadians as a result of the largest tax increases ever in this country? No, Mr. Speaker, we are not going to put our faith in this Government.

What do the words "agricultural marketing systems" mean? Does it just mean marketing boards or does it include financing through the Farm Credit Corporation? Does it include advance payments for grain under the Canadian Wheat Board Act? Does it include freight rates? We do not know because the motion is deliberately vague, keeping the people of Canada in the dark on the one hand and giving the Government of Canada the widest flexibility on the other. We deserve to know more.
The motion says the Government will protect the auto industry. Does that mean the Auto Pact? The Minister said in her interview, as she has already said 1,001 times, that the Auto Pact is not on the table. However, in the Prime Minister's speech in Montreal last week, although he did not mention it today, he said the Auto Pact was not on the table because the other side had not raised it. However, in the next breath he said if they did raise it, it could become part of the discussions. What is it going to be? If tariffs on auto parts and vehicles are given up, the Auto Pact becomes meaningless.

The motion before the House also affirms that the Government will protect "our unique cultural identity". But what does it mean? Does it include our cultural industries? Where was this protection when the Government authorized the Prentice Hall takeover by the Gulf and Western companies?
March 16, 1987



One of the most glaring omissions from this motion, the rest of it being vague vapidities, is any mention of regional equality and the programs to bring it about. In Montreal and again today the Prime Minister said that the Government would never abandon its commitment to regional development. Why is that not mentioned in the motion? Why is something so fundamental to the governing of this country left out? In those circumstances how can the Prime Minister vote for the motion? How can the Minister of Transport vote for the motion? Indeed, how can any Member on that side of the House vote for the motion? It is a vote, as the Prime Minister said, on Canada's future, but the Government, instead of giving Canadians the facts, is asking this House for a blank cheque.
With regard to the Government's regional economic development policy, the Prime Minister mentioned that the trade option is the one solution for Atlantic Canada. The only trade option that the people of Newfoundland have under this Government is to trade unemployment in Newfoundland for a $4 an hour job in Toronto. The Prime Minister said that we must give Newfoundland, Alberta and B.C. a kick at the can. This morning he gave those provinces a kick in the can. This sounds like the rhetoric of an election speech. During the election campaign he promised to inflict prosperity on Newfoundland. Those were his words. Two years later he is still making the same kind of promise and that promise will not work.

The Prime Minister can say what he likes, but we know the Government's attitude to regional equality. Its spending cut-backs on regional development projects are ample proof of this. The House will recall that spending on these projects dropped from S14 billion in 1984-85 to $12 billion in 1986-87.

In his speech in Montreal before the weekend the Prime Minister said that a trade agreement with the United States "is a critical element for any meaningful regional development strategy". In other words, he is telling the Atlantic, western Canada and northern Canada to wait until we are finished negotiating with the United States, then we will get around to them.

However, seven out of 10 provinces in Canada now have higher unemployment than was the case during the worst days of the recession. For Canadians living in the disadvantaged regions of this country, the Government's message this morning boils down to this: If you don't like it, though, move somewhere else! That is not the Liberal view, Mr. Speaker. We do not want a country where we have to tell Canadians who cannot find jobs in disadvantaged regions: Move to Vancouver, move to Toronto, move to Montreal!
Bilateral Trade

We believe that equality of opportunity is the cornerstone enshrined in the Charter of Rights. No matter where you live you should have an equal opportunity for an education, a job and a secure retirement. That is fundamental to our view of the country. It is constitutionally enshrined but is not recognized in any way in the motion before the House recommending a bilateral arrangement with the United States.
I suspect that these very regional economic development programs are being discussed in the negotiations. 1 suspect that that is why there is no mention of those programs or of regional economic equality in this motion. We have consistently demanded to know what is on the table in these negotiations and what is not on the table. The Government has given us a variety of answers. Sometimes some things are on, sometimes they are off.
Last week the Minister for International Trade told us in the House that we would, in her words, have to find out what is going to be in an over-all agreement before we can identify whether federal or provincial jurisdiction applies. That is incredible. Is she telling the House that she does not know what Mr. Reisman is negotiating, that she does not know what Mr. Reisman and Mr. Murphy are talking about? Is she not informed? If she is informed, why does she not tell us? Why does she not give us some simple responses to some simple questions so that Canadians will have a better inkling of where their Government is taking them?
This motion is so vague that we believe the Government does not really know what it wants. Either it does not know what it wants or it is presuming on the goodwill of the country not to tell us what it wants. Either the Government knows and is not telling, or is in the even more precarious position of not knowing.
The Americans certainly know what they want. The office of the U.S. trade representative, Clayton Yeutter, published a list called the National Trade Estimate; 1986 Report on Foreign Trade Barriers. The top trade representative of the United States has set forth in the Cabinet of the United States a clear list of priorities that he and his Government want to discuss with Canada. I am going to send the Minister a copy so that she will know what the Americans want to discuss even if she is not willing to tell us what Canadians want to discuss. I will put on the record that which the Americans want to discuss because they are very clearly set forth.
They want to discuss all tariffs, especially those on textiles, footwear, paper products, furniture, toys, telecommunications equipment, processed foods, electrical products, railway cars and parts, manufactured metal products, and some auto parts. They want to discuss the elimination of all discriminatory liquor practices; the role of the Canadian Wheat Board, particularly import permits; footwear quotas; standards on plywood; government procurement policies, including Supply and Services' 10 per cent price preference on Canadian content; freight rate subsidies; and copyright protection. They

March 16, 1987
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want to discuss pharmaceuticals, especially patent legislation, which, by the way, the Government has already acquiesced to by presenting legislation to increase drug prices for Canadians just to help salvage these trade talks. They want to discuss cross-border broadcasting, magazine advertising, trucking, especially Canada's entry standards; the requirement that data processing of Canadian banks be done in Canada; Investment Canada review of culturally sensitive sectors such as books, films, video and audio recordings; Canadian 50 per cent ownership requirement for oil and gas projects on federal lands; and federal and provincial grants for oil and gas exploration. In addition, they want to discuss financial assistance for oil and gas and mineral exploration, agriculture, publishing, and retail and wholesale commerce; performance requirements on foreign investors; i.e. favouring Canadian suppliers; and postal rates which favour Canadian businesses. That is the American list.
We have had no response from the Government as to where we stand on some of the major items. We have not asked for that type of detail. We know that there must be some negotiating flexibility. However, on the major areas this country should have been as forthcoming as the Americans have been. Whatever one might say about their system, it is an open democracy. The Prime Minister promised us open government and has not given us the type of information we want. Where is our list? What are we after? We do not have the Government's list so have set out our list in our amendment so that the people of Canada will know where the Liberal Party stands on those issues as parameters for the negotiations.
I do not doubt the Prime Minister's word, and I second his feeling, that we are very lucky to be living next to the United States. I think they are a great people. I enjoy, as much as anyone in the House, visiting the United States. We all have American friends and one of three Canadians has an American relative.


Mr. Crombie:: And there's baseball.


John Napier Turner: I have a lot of admiration for the Secretary of State (Mr. Crombie) but he has only been bunting in here. Let us talk about baseball because the Americans always talk about a level playing field. However, they are really referring to a football field. When the Americans talk about fair trade and a level playing field they are talking about a field with their linesmen, their lines, their rules, their ball and their referee. That is the kind of level playing field they are talking about and he ought to remember that.


Some Hon. Members:: Hear, hear!


John Napier Turner: The Americans have the tendency to change the rules when they find they are losing. In the Tokyo Round we gained the right of free access to the American market of Canadian lumber. We paid for that in a trading negotiation. We had to give up other items including computer equipment. When the Americans found that we were
starting to take an appreciable percentage of their domestic market, they changed the rules by using the unilateral countervailing system. The Prime Minister must not be naive in these negotiations. We want meaningful restrictions on countervail.
Speaking of lumber, we saw the Minister's great negotiating skills at work. The U.S. industry called for protection, as it did in 1983. Our lumber industry, supported by good ministerial back-up in 1983, was able to win that case conclusively before the American Inter-Congress Tribunals. The law had not changed since 1983 and the facts had not changed since 1983. Although there was a rising protectionist sentiment in the United States, the main thing that changed was the will and backbone of the Canadian Government to back up a Canadian industry in those negotiations. Undoubtedly, the negotiating prowess of the Minister for International Trade during the lumber dispute will be a case study for business schools across Canada, and presumably even the United States. When is a final offer not a final offer? When is it a final offer? We saw one final offer after another. The Government, through the Minister, pleaded guilty before the American tribunal before the case was ever heard and gave it all the evidence it needed. We still believe that the Minister sold us out and could have done better.
We will wait to see how the issue is eventually determined because the sell-out on Canadian lumber will cost industry at least $600 million per year. If it is ever transferred to a stumpage fee the cost against our industry will probably be $1 billion a year because of the value-added process. Yet the Minister said it is a good deal for Canada and a victory for the country. It will go down as the greatest sell-out in the history of our negotiations with the United States, and the greatest betrayal of a major industry in Canada by a Minister who should be responsible for the export potential of Canada.
The Americans smile because they know it sets a dangerous precedent for other resource and export industries, including pulp and paper, steel, potash, oil and gas, and hydro, as I suggested to the Premier of Quebec.
If this is the style of negotiation we can expect from the Government we will be lucky to keep our shirts on our backs when the matter is eventually brought before the House. That is why the country is nervous and why our Party will not give a blank cheque to the Government. That is why we have asked for more facts and why we are so deeply disappointed with the Prime Minister in failing to use this opportunity for debate to enlarge the factual base upon which Canadians and their Members of Parliament can make a judgment.
I stated from the outset that the Government should have negotiated a standstill agreement on unilateral action, such as harassment to countervail or anti-dumping, prior to the negotiations with the United States. The former Premier of British Columbia, Bill Bennett, took exactly the same position during the lumber dispute. We felt it was illogical for a
March 16, 1987

government of Canada to pursue negotiations in trade with the United States while being beset by unprovoked and unannounced unilateral action. There should not be protectionist harassment if we are supposed to be negotiating a free trade style agreement.
The very day that our negotiators sat down with the Americans, the President of the United States slapped a 35 per cent tariff on British Columbia red cedar shakes and shingles. That was not a good omen for how these negotiations have been carried out. There has not been a good omen since, primarily because of the blanket of secrecy the Government has thrown over the negotiations.
I have also said since the beginning that any agreement with the United States which does not severely limit or eliminate the use of countervail action, such as we saw in the lumber case, will not be worth the paper on which it is written.
The United States has signed a free trade agreement with one other country. It is the State of Israel. In that agreement the Americans did not give up their right to impose countervail action against whatever they consider to be unfair practices. Certainly, members of the Congress tell our Members and leading Senators tell me that the United States Congress is in no mood to give up that remedy under the U.S. Trade Act of 1978. I might point out that in that agreement the United States has the right to prohibit Israel from aiding any new industries. The United States has achieved essentially a controlling element over the future development of that country.
Any deal which allows the current use of countervailing duties will not be fair, will not be free, and will not get the support of Canadians. While we would welcome a dispute resolution mechanism or a joint tribunal between the two countries, an agreement that does not have an appreciable, significant restriction for countervail will not be worth signing on behalf of the country. If there ever is an agreement, under the fast track procedure the Senate, particularly, and perhaps the House of Representatives, will have an opportunity to review whatever document is agreed upon.
The Prime Minister states quite clearly that it is a federal matter, although there will be a need for corresponding provincial legislation in areas of provincial jurisdiction in order for the agreement to be effective. Despite the prerogative of the Government to sign such a treaty without parliamentary approval, I hope the Prime Minister will follow the precedent of the Columbia River Treaty that was signed when Mr. Pearson was Prime Minister. I was Parliamentary Secretary to the Minister concerned at the time and the Government gave Members of Parliament, through a Committee of the House, a full opportunity to examine that treaty, to call the negotiators, as well as the opponents and advocates of the treaty and everyone with a legitimate interest before the parliamentary committee. I hope Members of Parliament, who are elected by the people of Canada, would have a similar right to review the terms and ambit of any agreement with the United States.
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In his televised address to the nation last year, the Prime Minister said that our goods would receive "national treatment" in the United States. However, he didn't mention that "national treatment" works both ways. He said: "Goods from Manitoba will be treated exactly the same as goods from Minnesota". However, that is only half of the equation because goods from Minnesota will also be treated like goods from Manitoba, in Manitoba. That has tremendous implications for both federal and provincial procurement policies and subsidies, marketing boards, and tax incentives to business.
Yesterday, in her interview, the Minister for International Trade said that the negotiators have not discussed the subject. Who do we believe, the Prime Minister who talked about national treatment about which there is nothing in the motion before the House, or the Minister with her statement to journalists yesterday on television?
We had hoped that today we would finally get a clear statement from the Prime Minister about what is at stake in these negotiations. Rather than hear that statement, we have more uncertainty and more confusion.
How will Canadians adjust? Will there be adjustment assistance for industries, for our workers, and for our regions? Is the phase-in period 12 years, 10 years, five years, or two years? Where are the training programs for our workers and our young people and those men and women in their 40s and 50s who, through no fault of their own, are displaced by technological change or potentially by a trade arrangement?


Donald Frank Mazankowski: Mr. Speaker, I rise on a point of order. I regret to interrupt the Right Hon. Leader of the Opposition (Mr. Turner). Considering the time and the fact that we have not heard from the Leader of the New Democratic Party, I wonder whether the House might not be disposed to sit through the normal lunch hour.


Mr. Tobin:: Why did you not do that when he was finished?


Donald Frank Mazankowski: I would have waited until he was finished but we only had a minute left. I regret having to interrupt the Hon. Leader.


Mr. Speaker:: The Hon. Deputy Prime Minister (Mr. Mazankowski) has suggested that the Chair not see the clock. That is what the House has done continually in the past. I gather there is agreement to that. The Right Hon. Leader of the Opposition (Mr. Turner).


John Napier Turner: Mr. Speaker, I do not take umbrage with the Deputy Prime Minister's proper intervention.
What is happening to our educational system and research and development? The Government has consistently cut training programs and has cut its commitment to postsecondary education. That is wrong, regardless of a free trade agreement. Any trading arrangement will not repair the lack of our ability to compete because of our lack of development in research, education, and apprenticeship. If the Government

March 16, 1987
Bilateral Trade
assumes that great opportunities will flow from a trade agreement, how will we capitalize on those opportunities if our workforce lacks the expertise and skills and the required training?
A trade agreement is no substitute for a lack of national economic policy. It is no substitute for a national economic policy on productivity, on working to make us more competitive, on getting us to work smarter and think smarter and to compete around the world. This Government has abandoned that kind of policy, putting all its eggs in one basket by relying on increased U.S. trade as the sole salvation of our economy.
The Liberal Party's trade policy is to fight hard to ensure that any agreement with the United States does not limit those opportunities, or limit our political independence as a nation. Bringing us closer together economically has its risks in terms of our sovereignty, the independence of our foreign policy, our culture, social programs and our regional economic equality. These are important to us. We do not want them negotiated away. I have spoken on two or three other occasions on this trade matter when we had to set the agenda ourselves with our own motions. We enjoy the type of uniqueness and distinction of living on the northern half of this continent with a separate political system, separate traditions, a multicultural mosaic, two official languages and a limitless inheritance in terms of the environment. We like doing things our way. Yet we are an outward looking nation. We do not believe in fortress Canada. We look outward. I do not believe we would feel comfortable in fortress North America. I think we have to be very, very careful as to how we analyse this situation. We respect our American neighbours. We value them as trading partners. However, we will not bargain away our rights as Canadians to control our own destiny.
It is for all these reasons that I present the following amendment to the Government's motion. I move, seconded by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy):
That the Motion be amended by deleting all of the words after the word "arrangement" and by substituting the following:
"or arrangements with the United States, as part of Canada's multilateral trade policy, while protecting Canadian sovereignly through the application of the following conditions.
Namely that:
There not be an all-inclusive free trade arrangement with the United States since such an arrangement would undermine Canada's political, economic and cultural independence; and would jeopardize Canada's regional development policies, agricultural policies, cultural industries, financial service industries, and the Auto Pact;
And that:
Any such negotiations are designed to gain greater access to U.S. markets by limiting the operation of contingency protection and non-tariff barriers such as current U.S. and State government procurement regulations and restoring previous access for softwood lumber in U.S. markets;
While at the same time:
Ensuring Canadian independence for domestic programs, policies and legislative authority in areas such as: social policy, agricultural marketing.
supply management and support programs; subsidies and assistance for regional and industrial development programs including high technology development; the Auto Pact; the environment; bilingualism (including labelling); culture (including cultural industries); financial and service industries;
And that:
The Government of Canada tables transitional adjustment assistance proposals to protect those workers, sectors, firms and businesses which may be adversely affected by such a trading arrangement or arrangements;
And that:
The Government of Canada secure an immediate standstill of U.S. trade harassment including such matters as agriculture, energy, fish, potash, and steel."


Mr. Speaker:: The Right Hon. Leader of the Opposition (Mr. Turner) has completed his address. The House has agreed to not see the clock and we will be looking to the Hon. Member for Oshawa (Mr. Broadbent) to speak on behalf of the New Democratic Party. In the meantime, the Right Hon. Leader of the Opposition has proposed a motion, seconded by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy). I think I should indicate to the House now that the obligation of the Chair is to examine the motion to see that it is in order and to report back as soon as it is appropriate. In the meantime, it is my suggestion that the debate continue and I would recognize the Hon. Member for Oshawa.


Hon. Edward Broadbent (Oshawa):: Mr. Speaker, the central Canadian reality in terms of political and economic relationships is, of course, the relationship we have with the United States of America. Therefore, any measure which comes before the Parliament of Canada which directly impinges upon that relationship in a significant way has to be one which is treated with utmost seriousness by members of all Parties on both sides of the House.
Two years ago the Government of Canada launched a major initiative in terms of its proposed change in economic relationships between Canada and the United States. During the intervening period, serious questions have been raised about the implications of that course of direction on Canadian life. Quite specifically, simply to cite the motion we have before us today, questions have been raised about Canadian sovereignty, about the impact on Canadian agriculture, on our cultural industries, on the automotive sector, and one could extend the list. The impact on almost every aspect of Canadian existence is involved in such a trade relationship, and serious questions have been raised in the last two years about the expansion of this trade relationship.
This debate, in terms of historical comparisons, appropriately ought to raise in Canadian minds the great historical debates we witnessed in this country going back to the founding of our nation, debates involving Sir John A. Macdonald and Sir Wilfrid Laurier and, in different circumstances in the post-war period, debates which have involved Lester Pearson and John Diefenbaker. I say this because, in my judgment, those debates addressed in a serious way historical concerns. I had hoped on behalf of the people of Canada that when the Prime Minister (Mr. Mulroney) got to his feet today,
March 16, 1987

he would have understood what was required of a Prime Minister at this particular juncture in our history and in the discussions of these trade talks, and tell us what was going on in terms of the specifics of the impacts on our culture, on sovereignty, on agriculture, and on the automotive industry. We thought we might get some details. We did not get any.
The implications for me are simply twofold. Either the Prime Minister knew and decided not to share the information with the people of Canada or perhaps, and I am not sure it is more regrettable but equally regrettable, the Government does not know what is really involved in terms of the intricacies of the impact in all these areas. In either case, the Prime Minister and the Government, in these major discussions up to this point, are failing completely the aspirations of the people of Canada.
I ask you, Mr. Speaker, and all Hon. Members of the House, to consider the second part of this resolution which strikes me as significant. First, there is the content, the specific wording, and the reference to particular areas of concern Canadians would have about entering into a comprehensive free trade arrangement. That is fundamentally the substance of an arrangement we would have to consider. The other aspect of the resolution is that the Parliament of Canada at this particular point in 1987 is being asked to authorize the Government to pursue the course of direction it launched in this important and economic political matter some two years ago.
What we have is a Prime Minister who has abolished FIRA, who has sold out Prentice Hall, who has caved in on softwood, who has given away fishing rights in Atlantic Canada, who has yielded to the United States on acid rain, who has sacrificed our generic drug industry and who is now coming to the Parliament of Canada and asking for a blank cheque to continue this approach to Canadian politics. I can tell him that we will not give him that blank cheque.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: I say quite frankly, the first five to 10 minutes of the Prime Minister's speech were what one might expect of a Prime Minister. It was sober in tone. It began to intimate that there would be some answers provided to the serious questions that ought to be addressed by Parliament. Then, for another 30 or 40 minutes, we heard what can only be described as a kind of high-school-cum-Rotary-Club rhetoric that is totally inappropriate to the seriousness of this occasion-totally inappropriate.
Before I deal with the substance of the resolution that is before us and address on behalf of my Party some of the concerns that we have about some of those specifics, I want to take up the Prime Minister's challenge which he made to us part way through his speech. He said that he would like to see what the opposition Parties would put in its place. I think the whole country has noted that the Prime Minister has said that
Bilateral Trade
as justification for this initiative that he launched two years ago we have but one of two options. They are to face massive unemployment on the one hand, or to select this Conservative option on the other. It is an old mug's game. It is a rhetorical device by which one has to choose one or other of the options. Anyone who has thought seriously about anything knows that there are almost always more than two choices in any situation.
I wish to say to the Prime Minister, categorically, before I say something on trade, that I agree with him and any thoughtful person in this country who says that trade is important to Canada. Indeed, one of the crucial ways of expanding employment opportunities in Canada is to extend our trade opportunities, and I also say in this context, trade not simply with the United States, which is important, but also with the Pacific Rim and many other parts of the world. I wish to stress this. On behalf of the unemployed people of the country I find it intellectually unacceptable and morally offensive to suggest that the only way we can deal with unemployment is by way of a major trade initiative.
The Prime Minister cited the Government of Manitoba in his speech. I wish to tell him that I am proud that Manitoba has the lowest unemployment rate in Canada today. I want to tell him also that that was not done by expanding trade initiatives. It was done as a result of a Government which believes in the mixed economy and in the social democratic approach. It believes that one has to have job creation, and it set out to create jobs for the people of Manitoba.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: In this context, because it is so germane to the central justification for what the Prime Minister says about trade, I also want to point to another Government in Canada which, not relying on the primacy of a trade thrust, also dealt with unemployment in the last couple of years. I refer to the Government of Yukon. It is a New Democratic Government as well.
I hear snickers from members opposite. It happened to be the case when the NDP Government came to power that there was an unemployment rate in Yukon of about 20 per cent. But because the Government believed in initiatives other than those directly based on trade, unemployment was cut by 50 per cent in one year.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


John Edward Broadbent: I say to the snickering Conservatives opposite that no matter what country in the world we consider or what region of Canada we consider, if there is a Government in place which is concerned about unemployment, then there are many options other than the trade option with respect to creating jobs to consider.

March 16, 1987
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I now wish to talk about the trade option itself. I am not saying that it is the exclusive way to promote jobs but that it is indeed an important way.

Mr. Speaker, we of the New Democratic Party agree that the United States is and always will be our most important trading partner. Ninety per cent of our exports now enter the United States duty free. That is the situation today, and I think we should try and obtain sectorial agreements with the United States that would benefit both parties. We have one example the Prime Minister has often referred to in the past, namely the Auto Pact, and if we can have similar agreements in other sectors, we would like to take this particular one as a model.
Furthermore, Mr. Speaker, I say we should try and establish a process for settling bilateral disputes so as to restrict the arbitrary levying of compensatory measures by both parties.
Mr. Speaker, I am saying restrict, not eliminate altogether.

In this context I wish to say that if I understood the Leader of the Opposition correctly, it seems to me that in any trade arrangement with the Americans, if we want to protect our sovereignty and respect their sovereignty, it will be impossible, and ought to be impossible, for us to eliminate entirely the right of either nation at some point to take countervailing action against the other.


John Napier Turner: I think I used the word "restriction".


John Edward Broadbent: The Leader of the Opposition is now saying that he believes in restricting that right. If so, then we are in agreement. But we in this Party believe that important steps ought to be taken to establish a bilateral mechanism, something about which all Parties in the House have talked, which could reduce the immediacy of such actions by the other country and eliminate or reduce the range in which countervailing steps can be taken. That would be very useful indeed. We in this Party believe in the sovereignty of Canada and the ultimate obligation we have to make the economic decisions which affect our people, and we know that that is reciprocal. So at some time if we say that we have the right to take economic actions to protect the interests of our people, then we must concede right away that we could not expect the United States to eliminate entirely the right to take action to protect its own citizens. That is a given right.
Having said that, I also want to add that we believe that, in addition to expanding trade with the United States, which I have already said is our most important trading partner, we have to make great efforts to expand trade with other countries. In this context one of the very serious concerns on the part of many provinces which have thought seriously about a special bilateral deal with the United States is that their export arrangements with other countries could be adversely affected. In this context I am thinking particularly of our western
provinces which have important export markets in addition to the United States. I know that there is a deep and genuine concern on their part about the possible effects of a bilateral arrangement made exclusively with the United States which could lead to the reduction or elimination of contracts they now have with other countries outside North America. That is a matter which has to be considered with a great deal of seriousness by the Government of Canada.
Third, in terms of job creation and economic growth, we must begin as a nation to make a serious effort to get away from the massive dependence that we now have on the export of resources and semi-processed goods, whether it be to the United States or to other countries. It has to be and ought to be a major matter of industrial policy in Canada to shift our nation away, to use an old cliche, from being hewers of wood and drawers of water to a policy that begins to use more of our resources as a foundation for manufacturing the goods here in Canada and exporting those goods abroad.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: This specifically ought to entail duplicating in Canada what has been done by other industrial nations in the process of their development, whether one thinks of the United States, Germany, Great Britain or in more recent times Japan, namely, to look systematically at certain sectors for import replacement. Where we have a disproportionate amount of manufactured imports coming in, in certain sectors, we should, if we have an appropriate research and development and an investment strategy, be able to replace those imports with domestically produced manufactured goods. We could then use that enhanced domestic market as a foundation for exporting manufactured goods abroad. That is the longer range strategy. It is one we ought to have had in place decades ago and it is one we need now.
The next aspect of a trade strategy that we see as being appropriate, in addition to expanding our trade relations with the U.S., is one which the Leader of the Opposition (Mr. Turner) indeed talked about just a few minutes ago, namely, to put more emphasis on the GATT. Not only is it desirable in this world of ours, with many Third World nations in utter destitution, to do everything we can to expand trade on a multi-lateral equitable basis, but I say, particularly in the context of our relationships with the U.S., we can get greater access, to put it more precisely-we have good access now-to the U.S. market by taking effective action through the GATT where we are working with other smaller nations like ourselves in terms of economic power in comparative terms with the United States.
I would say in that context to the Prime Minister (Mr. Mulroney)-I do not always give him a reading list to look at-that perhaps he could look at some of the better works of Machiavelli, not the usual vulgar interpretation of Machiavelli that are referred to. He wrote interestingly and appropriately, given our relationship with the United States, about the
March 16, 1987

dangers of a weaker prince entering into a forum and a binding alliance with the stronger prince. When we have limited economic clout, no matter how effective and determined we are in using that, I say to the Prime Minister that we have to be very wary indeed of linking that holus-bolus to the United States, to put it rather directly. We need more emphasis on a multilateral approach in terms of broadening not only our trade with other nations but ultimately to gain greater and more equitable access to the U.S. market.

Fifth, Mr. Speaker, we need some vigorous research in this country to develop more policies for economic self-sufficiency, designed for the purpose of using our market to implement effective job creation policies. That is to say, we could have federal plans for the creation of new jobs established along the same lines as what the Government of Yukon and the Government of Manitoba have already set up in this country.

These are some important initiatives that would expand our trade opportunities. They would give us not only greater commerce but for us, what is the fundamental objective, a greater number of jobs.
The Prime Minister asked for some suggestions. I would be happy to pass on to him a resolution passed during our convention in the last few days from which points have been drawn about expanding trade. I ask him to have a hard look at it and I ask him to pass it to his officials. I am sure they are looking at other resolutions with a great deal of interest, but I ask them to look at this one with care, and perhaps if they adopted some of the measures recommended the Prime Minister would see that there is an option to putting all our eggs in the American basket for economic development.
Having briefly indicated some of the other approaches that ought to be pursued, I want now to address the wording of the resolution in some of its key elements, to express our concern about the Government's direction in this major economic initiative. I have already indicated what I think is our central concern, namely, the Prime Minister's own attitude toward the United States, as has been demonstrated in a whole range of bilateral matters in the past two years. I say frankly that the New Democratic Party simply does not have confidence in the Prime Minister as the principal negotiator with the United States of America.
I want also to say something about the evidence that we have accumulated so far in Canada, that has at least been publicly available, that ought to make Canadians rationally, reasonably concerned about moving into a free trade arrangement with the United States. The Prime Minister did not today present us with new information that might have influenced the decision in a more positive direction, as he would define it. He did not do that, so we have to rely on what has already come out. What has come out frankly is not encouraging. We have had a federal study that was censored very substantially. But even when one sets aside the censured
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nature of that document, we found some rather alarming figures. For example, 900,000 workers in Canada would be directly affected by a new arrangement of the magnitude about which the Government of Canada is talking. The Ontario study showed that in Ontario alone some 281,000 jobs were in what was described, perhaps euphemistically, as the sensitive sectors. That does not even include the 125,000 men and women who work in the automotive sector.
In the Province of Quebec, we know from another study, some 30,000 textile workers directly would be impacted upon, not to mention in that province other workers that we know would be seriously concerned. I am thinking of the clothing industry, the shoe industry and the shipbuilding industry.
To my knowledge, the significant studies on which we have information to base a judgment that I have now alluded to, are the federal Government study, the Government of Ontario study, and the Government of Quebec study. The empirical evidence, I repeat, that we do have ought to make us reticent and ought to give us pause about entering into this kind of an arrangement. Why should we, when we have one million already unemployed, risk putting out on the streets thousands more Canadian workers?
I see another member shaking his head. The implication is that he disagrees with the facts I have given. But the facts I have given have come from three governments, none of them NDP governments. They are their studies, not mine. I also say to the member that if the Prime Minister has counter evidence, instead of giving us broad macro figures about the jobs we might get from a new free trade arrangement, why does he not produce the studies? Why does he not come here and say, "Here is the evidence. In this sector we will have this many new jobs and in that sector we will have that many"? He has not produced the evidence. I say to the Prime Minister that as long as the evidence we have available is negative, as it seems in its implications, we must hesitate to get into this kind of arrangement with the United States.


Philip Derek Lewis: Mr. Speaker, I rise on a point of order. I think there would be a disposition on our side to allow the Hon. Leader of the New Democratic Party to continue his remarks beyond the normal 20-minute period.


Mr. Deputy Speaker:: Is that agreeable?


John Edward Broadbent: I appreciate the gesture, Mr. Speaker.
Our second concern relates to the historical nature of the Canadian economy and a continuing ongoing problem. The reality is that, compared with other industrial or quasiindustrial nations, we have a disproportionate amount of foreign ownership in our economy. Let us look at a variety of sectors. I have some figures. The current data on mining

March 16, 1987
Bilateral Trade
indicates 35 per cent; oil and gas, 40 per cent; and manufacturing, 45 per cent. The implications, in terms of the consequences of entering into a continentalized economic arrangement with the United States, are that these firms, most of which are owned in the United States, could very well have a major economic reason to move their branch plants back to the United States, if not this year, at least in two years. It does not assume that they are sinister. It does not assume that they are plotting against Canadian interests. All it assumes is for them to be what they are-profit-making business organizations. If they can make more money by moving a branch plant from Michigan to Georgia, it is not foolish to think that they may believe it is more economically sensible to move the branch plant out of Oakville or Hamilton or someplace in British Columbia or Manitoba.
If we tear down the border economically and all its implications, with no requirement for a certain level of investment in Canada, why would these firms not move to the greater market in size, which is the United States, not Canada? Again we have serious reasons to doubt the wisdom of the policy of the Government in this regard.
Another concern which we have-and I mentioned it earlier-is that of our trading partners. I happened to speak with the leader of one of the provincial Governments concerned about export markets to other countries than the United States if we have a bilateral agreement only with the United States. The concern is that the export, in this particular instance of raw materials, could be jeopardized if the third trading country thinks that we will have a preferential relationship of some kind with the United States from which it is excluded.
Another concern would be the kind of bilateral mechanism which would be set up to inhibit countervail action on either side of the border. As the Prime Minister knows very well, in the free trade agreement between Israel and the United States, the United States has retained ultimate sovereign control; its right to take countervail action. As I said a few minutes ago, I understand that because my Party and I believe Canada must ultimately retain that control too. If we believe that, the exact nature of the mechanism being discussed between the two parties now is something about which we would like to know a lot. It is something that one would have hoped the Prime Minister would have informed the people of Canada through Parliament today, so that we could have some real understanding of where in terms of this institution we may be heading.
Now I want to talk about the areas of concern which are addressed or named in the resolution. I have some concerns about which I wanted to hear the Prime Minister speak, but did not. Social programs were referred to. In general terms there will be protection of our social programs. We want to know about some of them specifically, not the general phrase. In most aspects in life it is the specifics which count, not the general observations.
In this regard we know that in recent trade disputes the Americans have objected to unemployment insurance benefits
for our fishermen. They have regarded those-and they have argued it-as a form of subsidy. Will we have assurances that whatever form of unemployment insurance we have in Canada will not be affected by a trade agreement between Canada, it and the United States? That is very important to us, and again we learned nothing about it today.
Agricultural marketing is profoundly important to at least half our provinces as a crucial sector of their economy. I want to be very specific about a concern which has been raised with me in this regard. It is one thing to talk about protecting marketing boards, but what may well be involved-and I will be very frank-and what I suspect is involved is that the Government will say marketing boards will be kept but the supply-management side of marketing will go, that there will be no control of imports coming from the United States to these sectors.


Some Hon. Members:: Oh, oh!


John Edward Broadbent: I hear some questioning from the back that that would not be the case. All I can say is that we in this Party are concerned about protecting the interests of farmers. If they are to maintain marketing boards, including the supply-management side, the Prime Minister should have risen to his feet today and told us about it. It is important to farmers producing eggs, poultry, and milk to know where the Government stands on that.
It is also important to refer to another item. I see the Minister of Agriculture (Mr. Wise). I hope he will join in the debate. The Minister knows that seasonal tariffs are applied in Canada to protect fruits and vegetables at certain times. Will the new agreement which is to be talked about with the United States enable our farmers during particular seasons to have the important protection needed from those tariffs? We want to ensure that they are protected. We want to hear from the Government of Canada on it.
Also we are concerned about the auto industry. We are concerned that once again we may have the form of the agreement protected but the substance gutted. The Canada-U.S. automotive pact has two key elements. One is investment requirement and the second is the threat of tariffs or duties if major automotive producers do not live up to their automotive investment requirements. As the Ministers responsible know, that has worked out reasonably well.
However, I will tell the Prime Minister and the Minister of Finance (Mr. Wilson), who is following this debate, that not many days ago I talked with a senior officer of one of the largest automotive companies in Canada. I asked him what would be his response if the Government of Canada kept the Canada-U.S. automotive agreement, said that there should be a certain level of investment on an annual basis in Canada, and at the same time removed all tariffs and duties. I said, "Would that not be an incentive for you to begin transferring all your industry back to the United States and, instead of producing here, starting to export across the tariff-free border from the United States?" I say frankly that there was a pause on the
March 16, 1987

end of the line. The person with whom I talked was quite honest, and he said, "Yes, you are right; there would be an economic incentive to move the industry out of Canada and back to the United States".
That is no laughing or joking matter. If the Government is to indulge in a bogus game of saying that it will keep the formal requirements of the pact which talk about investment levels but remove the negative incentive, if I can put it that way, of tariffs and duties if they do not live up to their requirements, we in this country could see before the end of the century the complete obliteration-and I put it as strongly as that-of the North American automotive industry.
Again I say to the Government, if it has guarantees on the pact, and if it is to maintain the basic structure including the mechanism of the threat to use tariffs and duties if investment is not lived up, then the Prime Minister ought to have told us about that today.
Another subject mentioned in the resolution which I had hoped the Prime Minister would have addressed is our cultural identity. All of us in the House can agree on the cliche that the cultural identity of Canada must be preserved. It is a cliche but it is also reality. I would like to believe all members wish to preserve it. There are all kinds of uniquely important and distinctive aspects to French-Canadian cultural heritage and to English-Canadian cultural heritage which are monthly gaining greater and greater international recognition.
We also know that important protective mechanisms have been put in place in Canada through the years to ensure the survival and growth of Canada's creative people. I say that it is not enough to talk about the protection of cultural identity and uniqueness in this context without talking about the protection of cultural industries. There is nothing in the resolution that refers to cultural industries. Once again, if the Prime Minister had been forthcoming and had wanted to allay some concerns, rather than raising new ones, he would have told us what the Government plans to do with cultural industries.
Another question which looms as a very important concern in terms of the resolution and what flows out of it is what will happen during the phase-in period of such a trade agreement. If we have no FIRA, no effective instrument to protect highly creative, quite profitable, in the Canadian context, and in many cases technically sophisticated industries during this phase-in period, what will stop these companies from being gobbled up by larger companies with more capital resources from the United States? If there is to be a 10-year phase-in period that is supposed to make allowances for adjustments in agriculture and the labour market, setting aside all reservations I have raised about that, what will happen to the ownership of our industries? At the end of the 10-year period, rather than having 25 per cent, 30 per cent or 40 per cent of industries in certain categories American-owned, that figure could double.
Bilateral Trade
After the gobbling up process has begun, the pattern in this kind of international economic development is that an American company first buys a competitor, a good, small Canadian firm, and then operates it as a branch plant for a while. Then the company moves operations back to the United States. We are very concerned about this 10-year, or whatever the magic figure might be, phase-in period and its impact on good, innovative, imaginative Canadian firms that happen to be smaller in size and could be gobbled up by American competitors. The New Democratic Party would not put in motion any kind of resolution that could lead to that. We think, however, that the Government of Canada could do precisely that.
I would like to conclude my observations with a remark made by an earlier Prime Minister, one of the greatest and perhaps the greatest Prime Minister Canada has ever had. For someone living in 19th century Canada, Sir John A. Macdonald had imagination and vision about what needed to be done to build a country. I did not expect to see a social democrat as a Prime Minister in the 19th century, as bizarre as that might sound. One looks for a range of criteria for praising people, and I do not say glibly at all that Sir John A. Macdonald was a great Canadian. His remarks are pertinent to today's debate because in the latter part of the 19th century, he had a choice. There were many voices and arguments saying that we should develop one country in North America and that there should not be a border. They said that rather than expanding to the West, Upper and Lower Canada and what are now the Maritime Provinces ought to join with the United States and there should be one continental country.
Sir John A. Macdonald had a different view, and in retrospect, I say thank God for that. In an important debate in the House of Commons held on March 7, 1878, he said that "there are national considerations that rise far higher than the mere accumulation of wealth, than the mere question of trade advantage. There is," he said, "national status, national dominion and, he concluded, no great nation has ever risen whose policy was free trade." He was right.
Sir John A. Macdonald then went on to talk about Great Britain. Great Britain did not achieve greatness on the basis of free trade. Neither did the United States, nor Japan. The great industrial nations in history have talked about free trade only after they have dominated the economic world. That is the reality.
Sir John A. Macdonald had an appropriate vision. Put in modern terms, he said that Canada had to be something other than a cash register and that there is more to human existence than that. I happen to believe that the modern equivalent of the range of policies needed for our nation, both in economic and social terms, happen to be social democratic in nature. I happen to believe that the kind of political and economic framework provided by social democracy, with a mixed economy using proudly and effectively the instruments of both the private and the public sectors, is the right one. We must proceed with confidence as a starting point and we must have a

March 16, 1987
national development strategy that makes it important for men and women to get jobs while expanding trade. In the final analysis, such a policy says that we have to protect our culture, we have to protect our industries and we have to protect our sovereignty. That is what the Party I happen to lead is all about. It is that kind of political and economic thrust we think is necessary. For that reason, we are completely opposed to the motion before us.


Philip Derek Lewis: Mr. Speaker, the rules provide for a 10-minute question and comment period but I would suggest that in view of the healthy debate we have had on this motion to this point, and our side has no questions or comments, unless members of the New Democratic Party or the Liberal Party wish to engage in same, I would think the House could recess until two o'clock.


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: There being unanimous consent, it being 1.48 p.m., I do now leave the chair until 2 p.m. this day.
At 1.48 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, the Government claims that a free trade deal will be struck with the U.S. but Canadians still do not know whether such an agreement could affect the environment. In 1986 the Canadian Environmental Advisory Council and the Desfosses report warned the Minister of the Environment (Mr. McMillan) about the trade agreement having an impact on the environment.
A free trade agreement could generate pressure by business, particularly multinationals, on government to reduce the cost of environmental regulation. An agreement could seriously hinder federal and provincial measures on controlling point sources of pollution, hazardous waste management, reforestation, fisheries management, waste water treatment and air quality, because the U.S. could interpret such measures as a form of subsidy. The Minister has not yet realized the gravity of the situation. It is of the greatest urgency and I urge him, as
I did on May 6, 1986, to ensure that a trade agreement with the U.S. will not have a negative impact on Canada's environment.



SCIENCE AND TECHNOLOGY


Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, my constituents in Nepean-Carleton have long recognized the importance of research and development and its contribution to our economic well-being. That interest has allowed Nepean-Carleton to become the high technology centre for Canada. My constituents therefore welcomed the signing last week of the historic landmark agreement between the provinces and the federal Government on a science policy for Canada.
Canada's high technology companies are developing world mandates and must compete internationally. Access to North American markets is fundamental and vital. To move forward with a trade agreement, while enhancing our agricultural industry by protecting our agricultural marketing system, will benefit all Canadians, especially young Canadians, because trade is the pathway to our future prosperity.



NEW DEMOCRATIC PARTY


Mr. Robert Toupin (Terrebonne):: Over the weekend, Mr. Speaker, the New Democratic Party of Canada adopted a resolution acknowledging the unique character of Quebec, where French is the language and culture of the majority. From Victoria in British Columbia to St. John's in Newfoud-land, including the Prairies, Ontario and the Maritimes, the New Democrats said yes to Quebec. On the federal scene ours is the political Party which shows the most open-minded approach to Quebec.
It is deplorable and regrettable that the Hon. Member for Laval-des-Rapides (Mr. Garneau) should adopt such a partisan attitude. If acknowledging the uniqueness of Quebec is a trick, as claimed by the Hon. Member for Laval-des-Rapides, how are we going to qualify last November's decision of the Liberal Party of Canada not to acknowledge this unique character of Quebec, as indeed it has always refused to acknowledge in the past?
March 16, 1987



CANADA-UNITED STATES NEGOTIATIONS-IMPORTANCE OF CONCLUDING AGREEMENT

Mr. John Oostrom (Willowdale):: Mr. Speaker, in today's competitive global market where protectionism is becoming the norm, it is imperative that Canada conclude a free trade agreement with the U.S. if we are to remain a major industrial power. Canada needs a secure market for our products if it is to remain prosperous. Trade is the only vehicle by which Canadians can continue to enjoy economic prosperity. Canadian employment and survival depend on our ability to sell our products.
Not too long ago, in a parallel situation, European countries were addressing the same problems we are today. They formed the EEC which guaranteed secure markets for their products. This economic union allowed those nations to become major economic entities which have produced a standard of living equivalent to that of Canada. Each one of those nations addressed the problem of sovereignty, as well as cultural and economic domination. Yet after 30 years that economic union has become a major economic force with four members being part of the G-7 group of countries. A free trade pact with the U.S. is the only method to ensure that present and future generations can continue to enjoy economic prosperity.



CONSUMER AFFAIRS


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, more than 70 Quebec independent consumer organizations cover the province, including 25 which make up three distinct federations. A number of task forces are working to find solutions and take action to help Quebec consumers.
After analysing the new program and funding allotment criteria, I concluded that the Minister of Consumer and Corporate Affairs (Mr. Andre) has a tendency to ignore the decentralized operations of Quebec consumer organizations and their particular way of working.
In 1986-87, two national organizations which are practically inactive in Quebec account for 72 per cent of the funding allotted by the Minister. When setting aside 15.5 per cent of the budget for Quebec associations, the Minister advised them the funding was transitory and final.
In case the situation grows even worse next year, and to improve the situation this year, I urge the Minister to look into this problem at the earliest opportunity.



CANADA-UNITED STATES NEGOTIATIONS-SUPPORT FOR POSSIBLE AGREEMENT

Mr. Lee Clark (Brandon-Souris):: Mr. Speaker, a freer trade agreement between Canada and the U.S. will mean economic growth for Canada and new jobs for Canadians. The Economic Council of Canada estimates that a freer trade agreement will mean about 370,000 new jobs by 1995. Without that agreement, Canada stands to lose over 500,000 jobs by that same date due to American protectionism.
There is also no doubt that a freer trade agreement will benefit western Canada. A study by the Canada West Foundation indicates that one in every five dollars in the western Canadian economy depends directly on sales to the U.S. A study done by the prairie pools indicates a freer trade agreement with the U.S. would mean an extra $60 million a year for prairie farmers. With a built-in guarantee of protection for marketing boards and institutions like the Wheat Board, western Canadian farmers have much to gain and very little to lose from a freer trade agreement.
For over 100 years western Canada has been asking for a freer trade agreement with the U.S. but its interests have always been thwarted by central Canadian protectionism. Once again we are at the crossroads and I believe western Canada wants us to move ahead so that we, too, can benefit from the growth occurring in Canada today.



EXTERNAL AFFAIRS


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, in spite of massive aid from Canada and the U.S., Honduras continues to be one of the poorest countries in South and Central America. The American military presence in that country has created a vast network of roads, air fields and storage facilities which distort the economy and only reflect Ronald Reagan's paranoia about the struggling nation of Nicaragua. These military installations, and the American-supported Contra bases, have done nothing to alleviate the poverty, hunger, unemployment, and underdevelopment of the countryside. We now learn that over the past five years one-third of the $1 billion in U.S. aid has been diverted from economic development into the pockets of Honduran military officials.
No amount of aid can help a nation on the road to development if the Government does not have the right priorities. Because Canada is a significant donor to Honduras we have a major responsibility to Canadian taxpayers as well as to the people of Honduras to pressure the U.S. to cease using

March 16, 1987
Elonduras as a military platform, with all its attendant corruption, and allow Honduras and the other countries of Central America to follow their own path of development in peace.



THE ECONOMY


Mr. Gilles Bernier (Beauce):: Mr. Speaker, we are now striding towards the 21st century. Our future is that of a peace-loving and prosperous nation that aims for excellence. A nation that thanks to the vigour of its economy will be able to provide for the well-being of its people, the full development of its cultural identity and maintain its sovereignty.
Free trade with the United States is something we should seriously consider. The people of Beauce have understood. Forty-six per cent of our products are distributed elsewhere in this country and 39 per cent of our manufactured goods are exported outside Canada, especially to the United States. The people of Beauce will have much to gain from free trade. Our entrepreneurs have understood the need for diversifying their products and taking advantage of foreign markets, and this attitude has made our region one of the most dynamic in the country.
Not long ago I was reading an article in the Reader's Digest about the "beauceron miracle", and we can be proud of the image of quality and performance we project.
The economist and Harvard professor John Kenneth Galbraith said it so well: "A country cannot isolate itself from the rest of the world and solve all of its problems alone, away from the international context, because all countries have become interdependent".



IMMIGRATION


Mr. David Berger (Laurier):: Mr. Speaker, the Minister of State for Immigration (Mr. Weiner) should immediately put a halt to deportation procedures against Salvadorian journalist Victor Regalado. Knowing with what one is charged and being able to defend oneself against those charges is one of the basic principles of our legal system. Mr. Regalado was not given that opportunity.
Changes in the Immigration Act that were made in 1984 now allow for review of a security statement by a monitoring committee of the Canadian Security Intelligence Service.
Mr. Speaker, the Act was amended to allow for situations like that of Mr. Regalado but does not apply to him because his case dates back to before the Act came into effect. Mr. Regalado is the victim of a procedural default which should now be corrected. I want to ask the Minister of Immigration to stop deportation procedures against Mr. Regalado and put his case before the monitoring committee, where he can take advantage of all the recourse and protection afforded under Canadian law.



TARIFFS


Mr. Ken James (Sarnia-Lambton):: Mr. Speaker, nearly 40 per cent of the country's petrochemical industry is located in the constituency of Sarnia-Lambton. The global marketplace is of the utmost importance to the jobs and livelihoods of the residents of Sarnia-Lambton. The petrochemical industries in my constituency do not need a long phase-in period for free trade with the United States. They are ready for it now.
Polysar, the single largest employer in my constituency, exports 21 per cent of its product to the United States. It is of concern that at present the tariff on styrene trade across the U.S. border is about 7.4 per cent. Clearly without the tariff hurdle the market for Canadian petrochemical plants in the United States would be greatly expanded. The money saved by our companies in tariffs could be utilized to cover higher transportation costs to expand further in the American market.
It is a fact that Canadian companies can compete globally, but tariffs limit their sales in the United States. The direction the Government is heading is the right one. We want jobs for Canadians and greater investment in Canada by foreign companies.



TELEVISION


Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, is CTV going to close its Winnipeg and Quebec City offices? Are the firings in news staffs it has begun going to become massacre? We do not know for sure yet, but we do know, as the Caplan-Sauvageau Report documents, that CTV manages to look poor by a fancy bookkeeping arrangement that enables its affiliates to make a bundle. Any claim that CTV might now make that it is losing money and has to cut Canadian program staff should not be believed.
March 16, 1987

CTV has a lot of nerve. News coverage has been the only area where Canadian programming has been remotely adequate. The CRTC is now considering the CTV licence renewal and Canadians are hoping that increased Canadian content will be required. In cutting news staff the CTV is thumbing its nose at the CRTC and the Canadian public for whom it works.
The firings must stop. If ever there were a time for the CRTC to get tough, it is now. If CTV cannot better its Canadian content, it does not deserve a place on the Canadian public's airwaves.



CANADA-UNITED STATES NEGOTIATIONS-OPPOSITION PARTIES' POSITIONS

Mr. William C. Winegard (Guelph):: Mr. Speaker, over the past few weeks we have heard a good deal about the defensive reasons for a new trading arrangement with the United States. There is no question that these are important. What interests me even more, however, is the offence. I hear from my colleagues on the left and those further left that Canada cannot compete. Their comments are covered with rhetoric and chocolate coating, but the bottom line is that they believe Canadians cannot compete, that we would get the worst of a trading arrangement with the United States, that the Americans would take over Canada.
What a tragedy that two of the three political Parties in Canada have no faith in our technology, no faith in our working people, no faith in our management, and, indeed, appear to have no faith in Canada.



EDUCATION


Mr. George Henderson (Egmont):: Mr. Speaker, students throughout Canada are fighting the Government's cut-backs in funding of post-secondary education. In my province, students at the University of Prince Edward Island are burdened with tuition fees which are among the highest in the country. The Government's plans to limit funding increases for postsecondary education under the Established Programs Financing structure will worsen an already abhorrent situation.
This year University of Prince Edward Island students will pay about $1,480 tuition plus other mandatory fees, book costs, and living expenses. Students are struggling with inadequate facilities, overcrowded classrooms and labs, and insufficient course offerings in some programs. Clearly these difficulties affect the quality of education which a student
receives. I ask the Minister of Finance (Mr. Wilson) and the Government to rethink these cut-backs and look upon educating our young people as an astute investment in Canada's future.



CONFIDENCE IN CANADIANS' ABILITY TO COMPETE INTERNATIONALLY

Mr. David Daubney (Ottawa West):: Mr. Speaker, it is time we asked ourselves some tough questions. Are we afraid of our ability to compete fairly with the rest of the world? Should Canadian consumers continue to pay $6 billion every year for import restrictions? Is there some inherent reason why Canadians must fail when presented with the opportunity to triumph? The answer to every one of these questions must be a firm, confident, and aggressive "No".
I make no apology for my confidence in our ability to compete fairly. I make no apology for my belief that the best of Canadian talent, the best of our workers, our managers, our entrepreneurs, will prosper. I make no apology for my desire for a Canadian economy which finds its survival in strength, not in fear. I make no apology, Mr. Speaker, for my confidence that we can and will find a new and dynamic equilibrium in free trade to replace the economic inertia of an economy based on import restrictions and small markets.
Canada has the opportunity now to grab the future and shape it to our needs, to take the tides of change and channel them to our advantage. We can retreat if we are afraid. We can, like the NDP, hide behind psychological barricades, but we cannot hide from the world forever.



ADMINISTRATION OF JUSTICE


Don Boudria: Mr. Speaker, according to the Auditor of the Province of Ontario the provincial court-house in L'Orignal in my riding is so deficient that witnesses must wait for trials in the same rooms as the accused, and is so unsafe that prisoners, juries and judges are at risk from fire. That is, of course, from 40-odd years of Tory neglect at the provincial level.
Today I want to make a formal demand for a grant under the new federal IOU program, since my riding qualifies under the same criteria used in the riding of Central Nova for the building of a court-house there. I take this opportunity to thank the Minister of National Revenue (Mr. MacKay) for creating the IOU program used by the federal Government to build provincial court-houses. There are at least nine other

March 16, 1987
Oral Questions
communities in Ontario which have a need similar to that of the riding of Glengarry-Prescott-Russell. I am sure they would like to participate in the IOU program of the Minister of National Revenue as well.



CANADA-UNITED STATES NEGOTIATIONS-PRIME MINISTER'S POSITION

Ms. Sheila Copps (Hamilton East):: Mr. Speaker, I may be naive-


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Sheila Maureen Copps: -but I came to the House of Commons this morning expecting to hear from the Prime Minister (Mr. Mulroney) about the Government's position on free trade. I suppose it is appropriate that his statement comes on the eve of St. Paddy's Day because what we got was more sham than we got at the Shamrock Summit. We got press releases, we got pronouncements, we got expostulations, but we got nothing from the mouth of the Prime Minister to let us know what I can tell the steel workers in my riding.
Is the Auto Pact on the table? Is agricultural policy on the table? What happens with the steel industry? What we got from the Government was more of obfuscation and mysterymaking. If the Prime Minister is serious about expecting to lead the country, he has the obligation to present his ideas and options here in the House of Commons as the Liberal Party has done. I challenge the Prime Minister to get off Bruce Phillips' speech writing kick and come clean with the Canadian people about the true story behind his so-called free trade deal.



ORAL QUESTION PERIOD


Brian Vincent Tobin: Mr. Speaker, my questions today are for the Prime Minister, but I assume that somebody on that side is acting in that capacity. It takes an extraordinary nerve, or a total lack of sensitivity for Canada's Prime Minister to tell Canada's poorest regions today that they must free trade their way to prosperity. It is the same Prime Minister who, two years ago during an election, promised to "inflict prosperity on the regions immediately".
After 24 months, why should even one of us from Canada's poorest regions believe the Prime Minister's assertion today when seven out of our 10 provinces have higher unemployment than in 1982, when spending for regional economic development has been cut by 39 per cent in the last two years, and when all of us in the regions have recognized the Prime Minister's promise of inflicted prosperity for what it is, empty political rhetoric?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, obviously the Hon. Member did not listen to the speech made by the Prime Minister, considering the inaccuracy which he has enunciated in his question. There is no question that we are concerned about the regional inequities in the country. However, the Prime Minister made it very clear in his statement that one of the key ways that we can diminish these inequities is by opening up trade opportunities to the regions of the country so a larger market can develop for their products in the United States, free of tariff barriers. Surely this is the vision that the Hon. Member cannot quite grasp, but one that the Prime Minister has grasped.


FEDERAL-PROVINCIAL CONSULTATIONS
Brian Vincent Tobin: Mr. Speaker, I do not need the Minister of Finance's Bay Street lecture on the trickle-down theory. The fact of the matter is that the Prime Minister has cut regional economic development spending by 39 per cent. The fact is that during the last election campaign the Prime Minister promised to inflict prosperity on the regions immediately. Today the Prime Minister has the nerve to come back and promise prosperity-


Mr. Speaker:: Will the Hon. Member put his question?


Brian Vincent Tobin: Given that the Prime Minister added insult to injury this morning, saying that only the Government of Canada has the power to make foreign treaties, and given that U.S. trade negotiator Peter Murphy said this morning-


Some Hon. Members:: Order.


Brian Vincent Tobin: -"we are not going to sign an agreement unless the provinces are onboard", how can the Minister square the Prime Minister's assertion that the provinces will not be consulted when U.S. trade negotiator Peter Murphy is insisting that it must be a prerequisite of any signed agreement?


Michael Holcombe Wilson: Mr. Speaker, I do not think that sort of rhetoric sits very well with the provinces. They sat and watched while trying to find out what went on under the previous Government during the whole GATT round of negotiations in the 1970s. They received absolutely nothing in terms of information.
This Government has been consulting in a very co-operative and open way, not just with the Premiers but with an ongoing
March 16, 1987

committee of officials to make it very clear what is required of them and what is the essence of the trade negotiations and discussions to date. The Prime Minister made it very clear this morning in his statement to the House that the federal Government is the sole arbiter of what the negotiations should be in the final analysis. We must take the national view and that is what we will do. What is at stake here is a negotiation that is at the heart of the future prosperity of this country. We will ensure that the position we take as a national government will reflect that challenge.


Brian Vincent Tobin: The people of Canada are used to the Government's commitments and how they vaporize like snow in the spring.


CANADIAN NATIONAL RAILWAYS
Brian Vincent Tobin: Mr. Speaker, the Minister will know that on the weekend Canadian General Electric announced that it will not locate in Moncton, New Brunswick. Since the Government has been in power, the workforce at the Moncton shops has declined from 1,200 to a projected 330 by the end of the year. That is a loss of 850 jobs in an area of high unemployment. Since the Canadian General Electric deal is lost, will the Government and the Minister of Transport finally come to their senses and order CN to keep those shops open and maintain a healthy workforce there, or does the trickle-down theory apply in Moncton as well? Are we getting ready for a free trade pact that sells out the Atlantic economy?


John Carnell Crosbie: Mr. Speaker, the hon. gentleman just trickled down his leader in Newfoundland by dealing a blow on the back with the Newfoundland caucus last week. He is an expert in trickle-down.
The hon. gentleman and all Members in the House know what happened in Moncton. An arrangement for Canadian General Electric to go in and take up much of the employment slack there was stopped by the pipefitters' union and machinists' union which blocked the deal. A $4 million fund is being put in place to encourage industrial development in Moncton. Moncton will remain a major centre for CN operations in the Atlantic provinces. We just completed a $10 million intermodal freight terminal there. CN will continue to have a payroll of some $90 million a year in Moncton. Moncton will continue to have all of the aid and assistance we can give it.
Oral Questions


THE CONSTITUTION
Mr. Jacques Guilbault (Saint-Jacques):: One year ago already, Mr. Speaker, Gil Remillard explained the Bourassa Government propositions to pave the way for the inclusion of Quebec in the Confederation and, last November, the Liberal Party of Canada held its convention in Ottawa and took a clear position on this matter. But the best kept secret to this day is the position of the Progressive Conservative Party in this respect. The silence of the Government might well be interpreted as a lack of leadership. What I want to ask whomever answers on the other side of the House is when will the Government make a decision and unveil its position concerning the adherence of Quebec to the Constitution?


Hon. Flora MacDonald (Minister of Communications):: Mr. Speaker, the Minister of State for Federal-Provincial Relations, the Government Leader in the Senate, has been having discussions with Mr. Remillard and with his counterparts across the country. Indeed, he and the Ministers at the provincial level know that having Quebec enter the Constitution is a priority of this Government. That was stated by the Prime Minister immediately after the election and the work being done is toward achieving that goal.


GOVERNMENT POSITION
Jacques Guilbault: Mr. Speaker, it is a priority which is taking a long time to become reality. The Prime Minister should recall his 1984 election commitment to have Quebec sign with honour and enthusiasm, as he put it. This was two and a half years ago, Mr. Speaker. Whatever happened to the ardour and enthusiasm shown by the Government during the last election campaign? It certainly was not the same enthusiasm displayed here last Thursday by the Deputy Prime Minister when he replied to my-


Mr. Speaker:: I hesitate to interrupt the Hon. Member but preambles which tend to repeat themselves do go on perhaps too long. I would ask the Hon. Member to put his question.


Jacques Guilbault: Mr. Speaker, thank you for calming down the people on the other side.
Last Thursday the Deputy Prime Minister put it this way: The federal Government did not table a counter-offer to Quebec's proposals. That is as clear as clear can be! My question is simple: When are you going to wake up and unveil your position concerning the adherence of Quebec to the Constitution?

March 16, 1987
Oral Questions


Flora Isabel MacDonald: Mr. Speaker, I find it passing strange that a person who was a member of the Government which failed to bring Quebec into the Constitution has the audacity to rise and bring that forward today. This Government is working toward having Quebec in the Constitution. That remains an objective. The work is continuing and the discussions are very relevant to the goal that will be achieved.


INVESTMENT CANADA
Lynn McDonald: Mr. Speaker, Canadians will judge the Government's intention with regard to free trade and the protection of Canadian culture by its actions and not by its vague promises which it has continued to make this morning. My question is directed to the Minister responsible for Investment Canada. It is very specific and really is a test case of the Government's intentions in this regard. The Minister knows that he has had the case of GLC Publishing languishing in his Department for more than a year. It is part of Gulf and Western'"scorched earth" policy on takeovers. Will the Minister tell the House and Canadians if he will implement this Canadian book publishing policy? Is he going to deal with this case? Is he going to disallow the acquisition by Gulf and Western of GLC as a commitment to Canadians that we will have a made-in-Canada book publishing policy in action?


Hon. Michel Cote (Minister of Regional Industrial Expansion):: Mr. Speaker, the Canadian policy on publishers and publications was announced in July, 1985, and in my opinion, it has been very well received by Canadians generally. One objective of this policy was to protect our cultural identity. This is why the Canadian Government did not approve the proposal of Gulf and Western, because we wanted to protect our cultural industry. Negotiations are still going on and a time extension has been granted to the compagny until April 16 to allow it to comply with this policy of the Canadian Government.


REQUEST FOR GOVERNMENT ACTION
Lynn McDonald: Mr. Speaker, I would like to know why the Government seems to be making an exception in this case? Why does it not have the courage of its convictions? Why does it not have some guts? We know about that "scorched earth" threat. Can the Government not understand that this is posturing-


Mr. Speaker:: Again, I hesitate to interrupt the Hon. Member, especially on a lead question, but the preamble is there to lay out facts, not to just engage in limitless argument. Certainly, if the Hon. Member has a question, and I know she does, I would hope that she would put it succinctly.


Lynn McDonald: My question, Mr. Speaker, is this. Can the Government not summon up some courage and implement the very good policy it announced? Does it not have the courage of its convictions to act and implement, not just to make promises?
[ Translation]


Michel Côté: Mr. Speaker, I would like to repeat to my hon. friend that the decision announced in July, 1985 aimed at protecting our cultural identity. Because of this policy, even though the Hon. Member has suggested that the Canadian Government is slow to act, Guy Porter Books was able to purchase Doubleday Canada. Indeed, Mr. Speaker, in our negotiations and discussions with Gulf and Western, we are determined to protect our cultural identity, and this objective is shared by the Hon. Member and the Leader of the New Democratic Party.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of Agriculture. The Minister knows that regulations Nos. 56 and 57 under the Fruit and Vegetables Act will expire at the end of this week. This will allow thousands of vanloads of farm produce to flood into the Canadian market with dumped produce and severely injure our producers. Is the Minister prepared to bring in new regulations on an urgent basis to protect these farmers?


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I welcome the opportunity to respond. I have a definite plan and I will be looking for support from the Hon. Member and, indeed, from all Hon. Members of the House, before the end of this week.


Maurice Brydon Foster: I am pleased to see the Minister is learning at the eleventh hour that action needs to be taken on this, and I certainly hope that it will be.


GOVERNMENT POSITION
Maurice Brydon Foster: I wonder if the Minister can assure Canadian farmers that he will not sell out those farmers under supply management and our collective marketing system in the free-trade negotiations the way these people have been left on the hook till now.
March 16, 1987


John Wise: Mr. Speaker, the Hon. Member has two questions. It is not an eleventh hour interest. The Hon. Member must recognize that under the new rules of the House it is the only way. In fact, it is unique. It has never been done before in the history of this country. The Hon. Member will recognize that a joint committee of the House and the Senate dealt with regulatory reform. Consistent with the new rules of the House, this is the only opportunity the Minister of Agriculture has, and I am utilizing this opportunity on behalf of the Canadian industry to ensure that those regulations which have been in effect will continue to be in effect until we take some other appropriate action.
With respect to the Hon. Member's second question, I do not know what else we can do. I can just refer the Hon. Member to the contents of this motion, the contents of the Prime Minister's speech this morning, and I hope to have some comments later this afternoon in the debate.


EMPLOYMENT
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. For the first time in 18 years, under this Government, the wage gap between men and women has widened. Women earn an average of $19,000 as compared to $29,000 earned by men. This trend is likely to increase under free trade.


Some Hon. Members:: Oh, oh!


Margaret Anne Mitchell: Will the Minister agree today to introduce pay equity legislation which requires equal pay for work of equal value in every area of federal jurisdiction?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Mr. Speaker, for a number of years now, the Government of Canada has been promoting . . . This is about the Hon. Member's comment on free trade, Mr. Speaker, but the connection was pretty weak. What I want to say is that the Government of Canada is aware that wage gaps of this kind between men and women cannot be tolerated. However, the Hon. Member will have to admit that though the process is relatively slow, we have set up procedures for improving the situation, and I am referring to employment equity. I may recall that my colleague, the Minister of Supply and Services, turned down a contract for the first time ever when a company refused to submit to employment equity rules. There is the federal procurement policy. The Government of Canada encourages provinces like Manitoba and Quebec, and soon Ontario, that set up such policies, but the Hon. Member will agree that this is a joint effort by all parties involved, and not
Oral Questions
just the federal Government, which in turn is prepared to support all measures being implemented with this in mind.


GOVERNMENT POLICY
Margaret Anne Mitchell: The Minister does not seem to understand the difference between employment equity and a pay equity policy. Will he introduce mandatory pay equity in this session? And will he persuade the provinces to do so, as Manitoba has already done?


Benoît Bouchard: Mr. Speaker, I understood the question perfectly well, and the Hon. Member should realize that if women are to have access to equal pay, there are a number of factors, including training and the availability of the positions in question. If women do not have access to the jobs, and that is a case of employment equity: yes, it is a pay prerequisite. I am sure the Hon. Member will agree that the federal Government has and will continue to set up the measures to deal with this, and I am sure she will take the time to realize that we have done in two years what our predecessors failed to do in 20.
*
* *


CANADA-UNITED STATES NEGOTIATIONS-EFFECT ON REGIONS
John Napier Turner: Mr. Speaker, this morning in his speech on free trade the Prime Minister has apparently handed his responsibility for regional development over to the President of the United States. He has told the people of Newfoundland, Alberta, and British Columbia: "Don't count on me. Ask Ronald Reagan". If the Prime Minister is so concerned about development in the less favoured regions of the country, why did he and his Government cut $2 billion more out of our regional development fund this year?


Martin Brian Mulroney: Mr. Speaker, the answer, of course, is that we did not. My right hon. friend knows full well-


Some Hon. Members:: Oh, oh!


An Hon. Member:: Tell the truth.


Some Hon. Members:: Order.


Mr. Speaker:: The Right Hon. Prime Minister is answering a question put by the Right Hon. Leader of the Opposition. I think all Hon. Members would want to hear the answer.

March 16, 1987
Oral Questions


Martin Brian Mulroney: The suggestion from the Right Hon. Leader of the Opposition is as silly as I know he intended it to be in terms of regional development. Since this Government came to office, unemployment has decreased in all of the regions of the country, including-


Margaret Anne Mitchell: In B.C.?


Martin Brian Mulroney: I said it has decreased in all of the regions of this country. There have been 705,000 jobs created, a larger number than in any other industrialized western country. What I indicated this morning was that, notwithstanding this, there were still areas of tremendous regional disparity. One of the ways, and not the only one, of dealing with this is by creating a climate and a comprehensive agreement which would allow Newfoundland, British Columbia, and Alberta, to name but three, to create jobs and to trade their way to greater degrees of prosperity. I think my right hon. friend will agree that that, along with the attraction of foreign capital which is coming in in record amounts and a number of other initiatives we have introduced, is designed to create new wealth in the regions of Canada. Surely that is what the trade measure is designed to do.
a (1440)


REGIONAL DEVELOPMENT-GOVERNMENT POLICY
John Napier Turner: Mr. Speaker, if the Prime Minister would look at the Estimates tabled by his colleague he would see that in the last two years alone regional development has been cut by 39 per cent. There have been further cuts to research and development, to apprenticeship programs and other programs that would have benefited Atlantic Canada, western Canada and northern Canada. Why is it that in his speech this morning the Prime Minister admitted the vacuum in his own regional development policy and now relies, hopefully, on a future trade arrangement to provide what his Government is not doing for the people of Canada?


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Mr. Speaker, I did not admit to a vacuum in policy in regard to regional development. I said that there was the equivalent of an indictment of all Governments of Canada since the country was founded, that the country has not done enough for the far-flung regions, and I mentioned this morning Newfoundland and Labrador, Nova Scotia and New Brunswick, and now the interior of British Columbia. I am not casting blame on someone two years ago or three years ago; it is part of the process that has evolved in our country.
If there is 6.8 per cent unemployment in Ontario and 18.4 per cent in Newfoundland then that is unfair and unacceptable in Canada. It cannot be corrected by reducing Ontario; it is corrected by creating new wealth through trade to raise Newfoundland up to Ontario's standards. That is what the Government is committed to trying to do.


Some Hon. Members:: Hear, hear!


AUTO PACT INQUIRY
Steven W. Langdon: Mr. Speaker, my question is for the Prime Minister. There are 125,000 jobs in Canada which depend directly on the auto industry and hundreds of thousands of other jobs which depend indirectly on it. In his speech this morning why did the Prime Minister not address how planned across-the-board tariff cuts-if we believe all those leaks from Mr. Reisman in the free trade talks-can be reconciled with maintaining Auto Pact safeguards which themselves depend on the existence of those tariffs?


Martin Brian Mulroney: Mr. Speaker, in the time that was available to me I think my hon. friend would agree that I could not address in detail all the items under every chapter of such a complex international negotiation. 1 addressed very carefully the question raised by my hon. friend in a major speech in Longueuil on Thursday night. It will be addressed by the Minister of Finance and the Minister for International Trade, just as the agricultural sector will be addressed by the Minister of Agriculture, during the course of the debate. The nature of the debate is to permit as many Members of Parliament and as many members of Cabinet to participate in particular areas so that the interests of the entire country can be heard. One of the reasons we hope that the NDP will allow extended hours and let this matter come to a vote is so that we can find out where everyone stands.


Steven W. Langdon: Mr. Speaker, if the Prime Minister had spent less time on partisan attacks and more time answering these types of detailed questions, then he would have made much more of a contribution to the debate.


Some Hon. Members:: Hear, hear!


DEMAND FOR FIXED AMOUNT OF CANADIAN CONTENT
Steven W. Langdon: Here is my supplementary question, Mr. Speaker. Since the Government is talking about protecting the automotive industry, will the Government now take steps to draft regulations governing the 60 per cent Canadian content applicable to any company, be it Japanese, Korean or Canadian?


Martin Brian Mulroney: Mr. Speaker, this question deserves consideration by the House and, undoubtedly, the Minister of Finance and others will be commenting on the views already expressed by the Hon. Member. But in connection with the Auto Pact itself, it was negotiated 22 years ago by the Government of Canada and it has brought considerable benefits to Ontario and Canada as a whole. The position I explained in Longueuil the other night was that we did not want to change it because it is a source of appreciable benefits to all Canadians. In spite of that, unless I
March 16, 1987

am mistaken the New Democrats adopted a policy in 1977 and 1978 under which the Auto Pact would be renegotiable every five years. That was the NDP position, and we reject it. It is unacceptable, a dangerous position for the Canadian automotive industry. That is what we reject.


CANADIAN JOBS STRATEGY
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is addressed to the Minister of Employment and Immigration. The reason that women are losing ground in the battle to reduce the wage gap with men for the first time in 18 years is because the Government made changes so that it is more than ever training women in low-paying traditional work. When will the Minister revise his program and guarantee the access of women to all training programs, especially for non-traditional work?
Benoît Bouchard: Mr. Speaker, the job strategy was designed for all Canadian men and women who can qualify on the basis of a certain number of criteria for one of the six avenues open to them. For instance, many women in Canada have access to the job entry program and make use of its services. I could quote what was said by the President of the Advisory Council on the Status of Women, Mrs. Gold, with respect to the jobs strategy. We realize much remains to be done, as I said earlier to the Hon. Member for Vancouver East. However, the measures are in place, and I think we will gradually get the desired results.


REQUEST THAT PROGRAM BE CHANGED
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, women's groups from all across the country have criticized the Canadian Jobs Strategy because women who are applying under it are being referred for training in traditional low-paying work. Why does the Minister not recognize that criticism, change the program, and guarantee places for women in non-traditional work training?
Some Hon. Members:: Hear, hear!


Benoît Bouchard: Mr. Speaker, unfortunately, I must disagree
Oral Questions
with what was said by the Hon. Member. Women in this country see the jobs strategy as a good program. However, I repeat there is room for improvement, if we consider the situation in which women found themselves, and the fact that your Party did absolutely nothing when it was in power. It makes it all much harder when one picks up the reins from a Government that managed by decree but never created a single policy for women.


CANADA-UNITED STATES NEGOTIATIONS-PARLIAMENTARY DEBATE ON POSSIBLE TREATY
Mr. Alan Redway (York East):: Mr. Speaker, my question is for the Prime Minister. Most Canadians understand that one does not negotiate agreements in public, even if they are labour contracts or trade agreements with other nations. However, if those agreements affect the lives of Canadians then they are interested in knowing the details and the implications before anything is signed. Will the Prime Minister assure the House that Parliament will have the opportunity to see and approve any trade agreement with the United States before it is signed by Canada?


Martin Brian Mulroney: Mr. Speaker, I thank my hon. friend for his question. Of course the authority of the federal Government to conclude international treaties, including one of this nature, is unchallenged. One of the reasons we have implicated the provinces and the First Ministers so deeply in the consultative process is, as one of them mentioned after Wednesday night's meeting, being so intimately involved in the process precludes any requirement for any ratification.
It may very well be that the treaty to be concluded will be almost exclusively within federal jurisdiction. It may be that matters covered will be exclusively, or almost exclusively, with a smaller amount within provincial jurisdiction, in which case, of course, enabling provincial legislation would be required. But the right of the Government of Canada to sign international treaties is undiminished and shall remain undiluted.
Meetings are scheduled for June and September at which we hope all the concerns that anyone may have will be satisfied, something which we hope all Canadians will endorse. There shall be no treaty signed until such time as Members of the House of Commons have been apprised of it and have been given an opportunity to speak to it.

March 16, 1987
Oral Questions


PRESENCE IN GALLERY OF DOMINION PRESIDENT OF THE ROYAL CANADIAN LEGION
[Stage Direction]
the marketing systems in the form of marketing boards but will have the enforcement mechanism in place, namely, supply management as well, so that our farmers will not have their markets glutted at totally inappropriate times by American imports?
Mr. Speaker:: I would like to draw the attention of Members to the presence in our Gallery today of Mr. Tony Steacy, the Dominion President of the Royal Canadian Legion.


Some Hon. Members:: Hear, hear!


PRESENCE IN GALLERY OF FORMER SWEDISH PRIME MINISTERS
Mr. Speaker:: I would like also to draw the attention of Members to the presence in the Gallery of Mr. Torbjorn Falldin, a former Prime Minister of Sweden, who is accompanied by His Excellency Ola Ullsten, Sweden's Ambassador to Canada and also a former Prime Minister of Sweden.


Some Hon. Members:: Hear, hear!


CONTROL OF CULTURAL INDUSTRIES-GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, my question is directed to the Prime Minister. In the free trade resolution, the Government promised to protect Canada's cultural identity, but there is not one word about our cultural industry. My question to the Prime Minister is simply: Will the Prime Minister guarantee that control over our cultural industries will be exercised by Canadians?


Martin Brian Mulroney: Mr. Speaker, we tabled a motion, not a dictionary. We could not possibly cover every eventuality and every issue. Of course we are referring to the protection we need for Canadian culture. The Minister of Communications and other Ministers, like myself, have examined the question at length. Canadian culture and its underlying industries are not on the table in these talks.


AGRICULTURAL MARKETING SYSTEMS
John Edward Broadbent: Mr. Speaker, the Prime Minister said he could not deal with every detail. Members of the House would have been happy if he had dealt with a single detail.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Again, in the resolution there is a reference to the Government's interest in protecting agricultural marketing systems. Will the Prime Minister guarantee the farmers of Canada that the Government will not only maintain


John Wise: Mr. Speaker, if the Hon. Leader of the New Democratic Party had any respect for the record he would know the answer to that question to be yes. Again I remind him to read and reread the motion before us today. He should recognize that we have about 125 different marketing boards, commissions and so on. Obviously what the Government is saying, and what Canadian farmers will understand when we use the terminology agricultural marketing systems, is that if you are a grain grower in western Canada it will mean the Canadian Wheat Board; if you are a dairy farmer anywhere across this country, particularly in the Province of Quebec, it will mean the maintenance of the National Dairy Program, and if you are a member of the feather industry in many provinces it will signal a recognition for the continued support of those existing marketing boards dealing with the feather industry.
The Hon. Member should also recognize that if the Government gives a commitment of this kind, many are contingent on various underpinnings. Naturally, if our commitment is going to remain good-and it is-then obviously you would have to attach the underpinnings. I hope at the end of the day the New Democrats are here supporting the Canadian Wheat Board, and I hope the Liberals are here supporting-


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


John Edward Broadbent: Mr. Speaker, the issue before the House today is whether this Government will protect any Canadian interest. The Government has the obligation, this side of the House does not.


REQUEST FOR TREATY RATIFICATION BY PARLIAMENT
John Edward Broadbent: Mr. Speaker, since the Prime Minister said just a moment ago in reply to another question that before any final deal is signed with the United States in the free trade area Parliament would at least have a word or be able to discuss it in some sense, but he made no commitment that the content of the resolution or the agreement would be brought back before Parliament, and given the potential historic significance of this agreement, will the Prime Minister assure the people of Canada that such a negotiated agreement will be brought before Parliament for ratification?


Martin Brian Mulroney: Mr. Speaker, I have already said that there would be an occasion for an opportunity to consult the House in regard to this important matter.


An Hon. Member:: Consult?


John Edward Broadbent: Let's see what he means.
March 16, 1987


Martin Brian Mulroney: As we speak, negotiations are ongoing right today between Ambassador Reisman and Ambassador Murphy. We do not have a document to submit to anybody. It may very well be-as I indicated this morning, there being no guarantees in life, least of all in these kinds of important negotiations-that we will be unable to achieve all the objectives we seek. I believe we can. I believe that we shall, in which case, as I have indicated, there will be an opportunity to consult the House. But we are months away from that possibility. I think it is important that we let Ambassador Reisman and the Canadians who are representing our strategic industrial interest negotiate, as negotiations must take place with some degree of confidentiality. Do not expect us to throw out all of our negotiating positions so that the Americans can see them and pick them off one by one.


James Ross Fulton: You already have.


Martin Brian Mulroney: Let Ambassador Reisman speak for Canada. The Hon. Member has the assurance that the House will be consulted.


AEROSPACE INDUSTRY
Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is for the Minister of Regional Industrial Expansion. When the Government sold de Havilland to the Boeing Corporation it gave Boeing hundreds of millions of dollars of research and development for no charge. The consideration was that de Havilland, to quote a press release of the Government, would have:
-a world product mandate for the design, development, production and marketing of its products. No foreign production will be allowed without the approval of the Minister.
Now an American trade bulletin, the China Trade News, shows that Boeing is negotiating with China for the manufacture of the Dash-8 in Shenyang or Dalian in northeast China. What benefit is it for Canada with the money spent on research and development to have Dash-8s made in China, and why has the Minister given his approval to it?


Michel Côté: Mr. Speaker, perhaps I ought to point out to my colleague that indeed, when we agreed to sell de Havilland, we put an end to a financial haemorrhage which had first cost taxpayers $1.2 billion and which was about to cost an additional $1.5 billion thanks to the previous administration. Such was the inheritance of Canadians. Quite simply, we made sure, first that the Canadian aerospace industry would survive and, second, that job creation would be maintained in Canada.
Oral Questions
Again I can assure my colleague, who is obviously referring to rumours that de Havilland is about to award contracts to China, that there is no question of that at all. We have looked into this matter and we are convinced that de Havilland has no intention of handing over some of its production contracts to China.


INQUIRY WHETHER CANADA WILL REMAIN EXCLUSIVE PRODUCTION CENTRE FOR DASH-8
Robert Phillip Kaplan: So can I have the Minister's assurance that Canada will remain the Dash-8 exclusive production centre?


Michel Côté: Once again, Mr. Speaker, I can assure my colleague that Canada and de Havilland will remain the only producers of Dash-8 aircraft.


FERRIES
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I have a question for the same Minister. In mid-February, the Minister officially inaugurated construction on a second ferry at Marine Industries in Lauzon. At the time, the Government and Marine Industries promised to recall between 800 and 1,000 workers by the end of June. My question is as follows: Could the Minister explain to the House today why the Government and Marine Industries are in the process of reneging on their commitment, since the plan now is that only 350 workers instead of 800 or 1,000 will be recalled by the end of June? Why did they renege on their commitment, Mr. Speaker?


Michel Côté: Mr. Speaker, the Government certainly did not renege. In fact, we have given Quebecers and Canadian shipbuilders an industry that is becoming increasingly stronger. We have rationalized the industry in Quebec. We have made it possible for Quebec shipyards to be in far better shape and far more competitive.
Mr. Speaker, the Hon. Member referred to a work schedule. After acquiring the shipyard, Marine Industries was supposed to observe the work schedule and if necessary review it, and it is possible that changes will be made. It is now up to Marine Industries to adjust its production schedule according to the contracts the Government has been able to give the company.


MINISTER'S ROLE AND MEASURES GOVERNMENT INTENDS TO TAKE CONCERNING MARINE INDUSTRIES
Lorne Edmund Nystrom: Mr. Speaker, this is a very important contract which is worth $230 million. Could the Minister explain what his role has been in this

March 16, 1987
Bilateral Trade
matter and what measures he intends to take vis-a-vis Marine Industries? The Government seems to agree with the company's commitment to the workers who were laid off, because it indicated to the union yesterday or maybe two or three days ago that only 350 employees out of a potential 800 to 1,000 would be recalled.


Michel Côté: Mr. Speaker, I repeat, when we concluded this transaction, we made it clear that it was now up to Marine Industries and its management to look at a production schedule, in terms of the contracts it has been given, that will be adequate in view of the work involved and the time available. I met with the workers last weekend and gave them the assurance that the Canadian Government would be keeping a very close and interested watch on further developments. However, I repeat, it is now up to Marine Industries to take the requisite action.


CANADA DEPOSIT INSURANCE CORPORATION
Aideen Nicholson: Mr. Speaker, my question is for the Minister of State for Finance, and it concerns a deal proposed to the Canada Deposit Insurance Corporation by Peter Pocklington who sold millions of dollars worth of over valued property to Fidelity Trust when he controlled it. Later, Fidelity Trust failed, Mr. Pocklington cut his losses, and CDIC moved in to protect the depositors. Will the Minister confirm that recently Mr. Pocklington offered to pay $10 million for $150 million worth of Fidelity's tax losses, which he intended to use to shelter taxes on his other successful enterprises? Will the Minister confirm that CDIC considered this scheme for several months before finally deciding that it would not be in the public interest?


Hon. Tom Hockin (Minister of State (Finance)):: Mr. Speaker, I cannot confirm the first allegation or the last allegation, but I certainly find the whole narrative astonishing.


FUNDING OF CORPORATION
Aideen Nicholson: Mr. Speaker, since the CDIC, which is supposed to be self-funding, now owes over $1 billion, will the Minister not agree that CDIC only considered this hare-brained scheme because it badly needed to bring some money into its battered treasury? Will he tell the House when he will bring in serious measures to deal with the CDIC, instead of his current proposal to allow that corporation to borrow another $1.5 billion from the taxpayers of Canada?


Thomas Hockin: Mr. Speaker, the Hon. Member should be aware that the Bill
dealing with CDIC was tabled two or three weeks ago. All the provisions are there for future replenishment of CDIC needs.


REGIONAL INDUSTRIAL EXPANSION
Rodney Edward Murphy: Mr. Speaker, my question is for the Minister of Regional Industrial Expansion. He knows that the people of Cape Breton are nervous to know exactly what are the Government's intentions with regard to Sydney Steel. Will the Minister rise in the House at this time and confirm that the Government will go ahead with the expansion of the $157 million upgrader?


Michel Côté: Mr. Speaker, the Government of Canada remains committed to our arrangement with Sysco, but it is up to the company as well to table a business plan by the end of March in terms of how it sees its future. We must look at the business plan to see if we want to concur with it, and then we will react to it.


GOVERNMENT POSITION
Rodney Edward Murphy: Mr. Speaker, it is really up to the Government of Canada to indicate what it is willing to do and to say so now, so that the people of that community do not have the fears and apprehensions which they have at the present time. Why is the Government unwilling to make a firm commitment at this time?


Michel Côté: Mr. Speaker, again I think we have made our commitment. We have said in so many words-and the Prime Minister said it as well-that we remain committed to Sysco. However, it is up to the company to submit a business plan by the end of March. We are concerned about the situation which prevails there, and I assure the Hon. Member that we want to do everything possible to help the workers in Cape Breton.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Miss Carney:
That this House supports the negotiation of a bilateral trading arrangement with the United States, as part of the government's multilateral trade policy, while protecting our political sovereignty, social programs, agricultural marketing systems, the auto industry, and our unique cultural identity.
March 16, 1987
Mr. Speaker:: I am now ready to rule on the amendment which has been offered by the Right Elon. Leader of the Opposition (Mr. Turner). As Hon. Members will have noticed, the amendment is unusually long and complex. I think the Chair must comment that it comes quite close to being a disguised or expanded negative, that is, a vote for the amendment would have the same effect as a vote against the main motion.
However, while there might be procedural grounds for ruling against the amendment, in view of the importance of the debate which is taking place today and the fact that the amendment is relevant to the main motion, the Chair has decided to allow greater latitude than is perhaps consistent with a narrow interpretation of the rules and procedures of the House.
I want to point out, however, that while the Chair would not wish to inhibit in any way a debate on one of the most important issues which is ever likely to face this nation and as a consequence, I am therefore prepared to rule that the amendment is in order, but I would not wish this decision to be cited as a precedent on future occasions.


John Napier Turner: in amendment thereto:
That the Motion be amended by deleting all of the words after the word "arrangement" and by substituting the following:
"or arrangements with the United States, as part of Canada's multilateral trade policy, while protecting Canadian sovereignty through the application of the following conditions,
Namely that:
There not be an all-inclusive free trade arrangement with the United States since such an arrangement would undermine Canada's political, economic and cultural independence; and would jeopardize Canada's regional development policies, agricultural policies, cultural industries, financial and service industries, and the Auto Pact;
And that:
Any such negotiations are designed to gain greater access to U.S. markets by limiting the operation of contingency protection and non-tariff barriers such as current U.S. and State government procurement regulations and restoring previous access for softwood lumber in U.S. markets;
While at the same time:
Ensuring Canadian independence for domestic programs, policies and legislative authority in areas such as: social policy, agricultural marketing, supply management and support programs; subsidies and assistance for regional and industrial development programs including high technology development; the Auto Pact; the environment; bilingualism (including labelling); culture (including cultural industries); financial and service industries;
And that:
The Government of Canada tables transitional adjustment assistance proposals to protect those workers, sectors, firms and businesses which may be adversely affected by such a trading arrangement or arrangements;
And that:
The Government of Canada secure an immediate standstill of U.S. trade harassment including such matters as agriculture, energy, fish, potash, and steel.''
The question is now on the amendment, and I recognize the Hon. Minister for International Trade (Miss Carney).
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Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, it is a rare privilege to have the opportunity to introduce a motion in the House which has the potential to enhance profoundly the future of our country, and that is my privilege today.
The trade debate is about Canada's future. It is about jobs-20th century jobs and 21st century jobs. It is about economic growth for those regions of Canada which are not sharing in the wealth that our present economic system provides. It is about sovereignty, because only an economically strong country can provide our unique social programs and preserve our cultural policies which protect our national identity. However, most of all, the great debate is about security and enhancing our access to our largest market and our biggest customer, the United States, in a long-term binding treaty.
This concept frightens some Canadians. It scares the opposition Parties which have no vision for Canada and offer no hope for Canadians who are unemployed now or who fear that they will be unemployed in the future as technology changes the nature of their jobs. Scare tactics are a cop-out. They are a way of browbeating Canadians back into the 19th century.
Our Government is prepared to lead Canadians through the final decade of the 20th century, turbulent with change, and into the 21st century, only 13 years away. As the Prime Minister (Mr. Mulroney) has said, we choose to negotiate not because it is easy and not because it is without political risk but because it is in our national interest. We serve that national interest, he reminds us, by securing an agreement with our largest trading partner which will provide stability and security for traders, investors, workers and for our future. Let me tell the House why this is so.
From the earliest days of mankind, from the era of barter systems through to the development of the first great trade routes, trade has been the generator of growth. Cities sprang up where traders met to exchange goods and all the world's great cities have their origins in trade. History is dominated by trade wars and their impact on the development and decline of regions. Trade has determined the future of nations and trade will determine the future of Canada.
Canada's economy is dependent on trade to a greater degree than almost any other country. Today we export about one-third of all we produce and we import about 30 per cent of what we consume. Growth in trade translates into growth in economic wealth. For the first 40 years since the post-war world first adopted the international rules of the General Agreement on Tariffs and Trade, Canada's exports have multiplied 10 times over and our national wealth has more than tripled. Today our international trading system which helped create unprecedented wealth is in trouble. It is being

March 16, 1987
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eroded by protectionism as countries try to reduce unemployment by putting up barriers to other countries' goods and services.
Part of the problem is the GATT itself. Its institutions have become dated, its procedures are ineffective and its dispute mechanisms are often cumbersome. That is why the 92 countries of GATT met in Uruguay last fall to start the eighth round of trade liberalization under the GATT which was first established in 1947. One major objective of that round was to reduce trade barriers and to define rules and regulations for those areas in which no rules exist: areas like services, the fastest growing trade area, and intellectual property and investment. Very importantly, the agricultural sector has never been adequately covered by international rules and regulations.
If one wonders about the value of international rules and regulations governing trade, one need only take a look at the agricultural sector in which no such rules exist. The result is anarchy in agriculture. World agriculture trade is governed not by comparative advantage but by the size of national treasuries. For example, for every dollar the Japanese farmer receives, the Japanese taxpayer pays $2.50. For every dollar the European farmer receives, the European taxpayer pays $1.50. In the United States, the taxpayer pays $1.38 for each dollar the U.S. farmer receives. Canada cannot afford to compete with these huge subsidies and that is why the Prime Minister pushed so hard to get agriculture on the agenda of the economic summit.
Where does the U.S.-Canada bilateral fit into this worldwide picture? There are two answers. The first is jobs. We believe that this provides the best opportunity to create hundreds of thousands of new jobs and economic studies support this. I can cite studies done by the Economic Council of Canada which show that with free trade, as many as 370,000 jobs could be created in the next five years while we could lose half a million without free trade. University of Maryland studies indicated that a free trade agreement with the U.S. could cause an increase in the GPD of Canada of about 5 per cent. Trade is where the jobs are.
Second, we must deal with the rise in U.S. protectionism in a way that protects Canadian interests. As Atlantic fishermen, Quebec aerospace workers, Ontario steel workers, prairie farmers and British Columbia woodworkers know, we must trade to survive let alone to prosper and we are now fighting the ugliest outbreak of protectionism in the U.S. and around the world since the 1930s. We are fighting for those three million Canadians holding a quarter of Canadian jobs whose pay cheques depend on trade. We are fighting for a secure future and for more jobs in the years ahead.
American Congressmen and politicians are concerned about their trade deficit. For the first time in their memory, Americans are buying more from abroad than they are selling and they are losing jobs to overseas competition. They are turning inward, turning away from what gave them the strongest economy and the highest standard of living in the world. They
are using all sorts of weapons at their disposal, raising all kinds of non-tariff barriers to stop imports in the mistaken belief they can maintain jobs through protectionism.
In the last seven years, Americans have launched some 40 actions against Canadian goods. Many have failed but those that have succeeded have penalized Canadian exports worth over $6.5 billion. No region of Canada has remained untouched by American trade actions against us. These actions have cost Canadians opportunities and jobs.
There are no signs of weakening in the protectionist mood. There are hundreds of protectionist Bills awaiting action in the Congress. That mood should convince even the most skeptical Canadians that our trading relationship with the Americans is under attack. The new trade Bill would resume that attack if we are unsuccessful in our trade negotiations.
Let me deal with the agenda of the trade talks. We were asked this morning to specify the agenda. We have done so before but we are more than willing to do so again. First let me stress what is not on the table. Regional development and our capacity to sustain regional development is not on the table. Only the opposition Parties are dragging it onto the table. Our cultural policies and our ability to protect our national identity is not on the table. The negotiators know that that is not a subject for negotiation. Only the opposition Parties keep dragging it onto the table. Our social programs are not on the table. Again, only the opposition Parties raise our social programs and try to drag them onto the negotiating table. They are trying to put culture, regional development and social programs on the table, we are not.
Our negotiators are meeting today. Therefore, it is not in their interests to mention specific negotiating positions. However, I do want to say what is on the table and why we are dealing with these matters. Tariffs are on the table because experience has shown that the Canadian economy has prospered through tariff reduction. This is so even with the Auto Pact which the Opposition keeps bringing up. Members of the Opposition fail to mention that tariffs have come down steadily within the Auto Pact. For vehicles, they have come down from around 17.5 per cent to around 9.2 per cent. For auto parts, they have come down from as high as 25 per cent to 9.2 per cent. We have been reducing tariffs for years, and in the trade talks we are seeking to reduce them to zero on Canada-U.S. trade over a period of 10 or 15 years, whatever is negotiated.
Non-tariff barriers are on the table. Since the early 1970s, non-tariff barriers to trade have proliferated. Some are clear, imposing quotas on imports, for example. Some are not so clear, using technical or health standards for protectionism rather than for legitimate purposes. Another item on the table is government procurement practices. We are seeking to drop our "Buy Canadian" for their "Buy American", and as the Prime Minister pointed out today, 1 per cent of American government procurement could create 75,000 jobs in Canada.
March 16, 1987

Also on the table are customs matters. We want to facilitate commerce between the two countries by reducing the paperwork at the border. That will mean lower costs for Canadian businessmen. Agriculture is also on the table. I have touched upon the massive global problems we face in agriculture and they exist because there has been insufficient progress in bringing international rules to agricultural trade.
We know that we cannot resolve all our trading problems in the U.S.-Canada bilateral, but we can deal with some of them. We can deal with some tariffs, we can deal with health standards and we can deal with dispute settlement mechanisms that are used to harass agricultural products. Agriculture is very much a part of these talks.
Also on the table are subsidies and related measures. Those are important to regional development because under the existing trade laws, we often do not know what kind of subsidies we can use in regional development plans without bringing on U.S. trade actions. We want clear rules. We want to know what programs we will be able to implement for regional development. The existing international rules are not well defined and the U.S. is seeking to broaden them in, for example, the softwood lumber dispute and natural resource pricing. We want better rules in both countries because the U.S. subsidizes its products as well. We want better rules on what we can and cannot do. We need adjustment programs for the retraining which the Opposition talked about. We need programs for women.
One of the most important things on our agenda for negotiation are dispute settlement mechanisms. We want to replace the existing ones. The ones we have in place currently operate within the GATT framework but they do not make sense in application and they are unilateral. We want impartial mechanisms. For example, if the U.S. alleges that our stumpage programs are subsidies, we want an impartial, binational tribunal to deal with the issue, not the U.S. Department of Commerce.
Also on the table is intellectual property. This involves two issues: ensuring adequate protection for those who create new products, services or ideas, and ensuring access to those new products, services or ideas. Let me give you an example. One reason why companies locate their R and D in the U.S. is that if they want U.S. patent protection and someone else is developing the same idea, in the case of a tie the company which did its R and D in the U.S. gets preferred status. We do not like that because companies will locate in the U.S. to ensure their patents get U.S. patent protection. That means that good jobs for highly-trained Canadians are in doubt. We want free trade in intellectual property. We want free trade in services. This is a new area not now covered by international rules. More and more of our economy is service-based. It is about 67 per cent of our GPD these days. We have a solid record of growth in services of about 3 per cent per year. GATT is addressing these problems and new rules for services.
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So are we in the Canada-U.S. bilateral negotiations. We have some of the finest service industries in the world in engineering, financial consulting, computer services and banking. We are world-class competitors and we want to ensure access to world trade and services.
Also on the table is investment. All countries around the world are loosening their investment policies. We did so when FIRA became Investment Canada. The result was a record $6.8 billion worth of investment for 1986. So far we are dealing only with trade-related investment measures. The Americans want more. We are listening but we have not given the negotiators a general investment mandate.
The Opposition has raised the question of what the Americans want from this. Why are they bothering with the bilateral negotiations with Canada? What motivates them? Several things. First, we are their biggest market and their only growing market in the world today. Second, they want better rules on trade in goods and services and tariff procurement practices and provincial practices on intellectual property. They have the same agenda as we do. Much of this is new ground. What is very important to them is the trade and services agreement with us. The Americans can no longer dominate traditional markets such as steel and automobiles, and they threatened to walk away from GATT if trade and services was not included. The feeling in America is very strong that if they cannot make a deal with Canada in these new areas in particular, if they cannot define rules and regulations for new issues like services and intellectual property, they are unlikely to do it in the wider world of the GATT. They have a major and fundamental interest, even a historic interest, in trying to come to terms with us. So the conditions for these negotiations are far more balanced than the Opposition would lead us to believe.
We cannot stand still. Either we see our trading opportunities and eventually our prosperity fall prey to American protectionism, or we seek an agreement with Washington which will give us more secure access to that market. Let there be no doubt, standing still will make us poorer. Only moving forward will make us richer.


Some Hon. Members:: Hear, hear!


Pat Carney: As Minister for International Trade no one knows better than I about the effect American trade remedy laws have had on our exports. We have seen it in shakes and shingles, fish, lumber, and farm products. Those unilateral decisions on what they call unfair practices are the problem between us. Americans call them fair trade laws but they are not. Americans say they cannot accept dumped or subsidized imports from us. We agree. We do not want theirs either. However, we do need a better way to work out these problems. If things were working smoothly neither side would need a change. The simple fact is that the present laws are not working and we need a way which eliminates the problems rather than introducing new barriers at the border. We need a system to ensure that neither country is penalized without a

March 16, 1987
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fair and impartial method of resolving disputes under agreed rules.
Let me repeat the message that the Prime Minister gave so clearly to this House. There will be no agreement without such a change. No agreement this Government signs will hold Canadian workers or industries hostage to the unpredictable whims of American protectionism. Canadians want to compete openly in a larger market with clear rules and fair access and that is the kind of agreement we are pursuing. For those who doubt what a trade deal with the United States can do they need look no further than the booming economy of southcentral Ontario. Much of that boom is based on what now amounts to free trade in automobiles. My colleague, the Minister of Finance (Mr. Wilson), will be speaking more specifically about the Auto Pact a little later in this debate. Just let me remind Members of this House that there was considerable controversy over that agreement when it was negotiated more than 20 years ago. The Leader of the NDP in this House has consistently called for its renegotiation. Instead, it has been a resounding success and created thousands of jobs in Ontario. Those of us from other parts of the country watch this trade-based boom in Ontario with some envy. However, we mostly ask why our workers and our industries cannot have the same chance. If free trade is good for Ontario, why not for Atlantic Canada, Quebec, the Prairies, or British Columbia? What better way is there to reduce regional disparities than to give others a shot at competing in the American market on the same terms?
This Government has laid out what it is seeking to achieve, and why, in these negotiations with the U.S. We are seeking a secure economic future for Canadians working now and for those to come. We firmly believe that free trade is the best route to that goal. We have a plan and we are on track, but what do we hear from the other side of the House? From the Liberals we have a long complicated resolution which says "maybe", "if', "but", and "ifsoever". There is nothing positive in this long complicated Liberal amendment. There is no suggestion that there are other things which are equally important for us. There is the implication that if they do not get everything here in this long list, then maybe they do not want to proceed at all. I do not think that is good enough for Canadians.
From the NDP we have a long complicated motion presented at their convention this past weekend which says no to free trade. It says categorically: "Therefore be it resolved the New Democrats in Government will withdraw from the comprehensive trade negotiations presently taking place with the U.S. and would instead pursue the following trade strategy". It is a mishmash, a cherry-picking list of sectoral free trade. History has shown that sectoral free trade is not on for either country. It is not acceptable.
The NDP talk about GATT but ignores the fact that our negotiations are consistent with GATT. The Liberals make a point of saying they do not want an all-inclusive free trade agreement with the U.S. but they do want more negotiations in
GATT. Those two positions, as the Hon. Member knows, are inconsistent. You cannot have a free trade agreement consistent with GATT unless it is a comprehensive agreement. GATT will not permit it. The way we are going is the way we can go within GATT. The way the Liberals are pursuing this issue is inconsistent with the GATT that they talk so much about supporting.
I want to comment on one issue which is not sufficiently stressed in this House.


Mr. Deputy Speaker:: As the Minister's time has expired, I ask her to conclude please.


Pat Carney: Do I have the agreement of the House?


Some Hon. Members:: Agreed.


Pat Carney: In closing, I want to speak about Canadians being world-class competitors, although the Opposition implies this is not the case. Canadians are not afraid of the future. The welders who are helping to build the oil pumping systems for Venezuela's oilfields at Canadian Foremost in Calgary know that they are as good as any in the world. The systems designers at Ottawa's Cognos Incorporated whose new computer language is used by 115 of the top 500 companies in the world know they are the best in the world. The technicians at CANAC International in Montreal know that they beat out the best in Germany, France, the United States and Britain in winning a contract for the new control system for India's railroads. They know, as we do, that we cannot deal with protectionism and prepare Canada for the next century if we walk away from this challenge.


Some Hon. Members:: Hear, hear!


Steven W. Langdon: Mr. Speaker, I would like to raise two specific questions with the Minister whose speech was, I must say, as was the Prime Minister's (Mr. Mulroney), full of generalities and very, very short on progress reporting which we expected to hear in the House today. I will try with some questions to get at least a sense of what progress is taking place.
Is it correct that across-the-board tariff reductions are being considered? Would the Minister please address herself to the difficulty of doing that while maintaining the safeguards in the Auto Pact, which themselves depend on the existence of those tariff arrangements as enforcement mechanisms? In dealing with that specific point could the Minister deal with the other specific point with respect to marketing boards? What are the implications with respect to such boards for import policies with regard to seasonal imports and imports in areas presently served by marketing boards such as the Egg Marketing Board, the dairy board, the various feather industries and so on and so forth?
March 16, 1987


Pat Carney: Mr. Speaker, I am disappointed that the Hon. Member has found our report to Parliament to be so generalized. I thought I went into great detail to tell him what was on the agenda, what we were discussing, why we were discussing it, and why it is in our interest. That he thinks that, with Ambassador Murphy sitting at the negotiating table in this city, I would candidly chat about what our cards were and what cards we were playing today shows how ignorant he is of this historic negotiation. It shows that he does not understand the stakes involved and the jobs involved. We are giving this report and debating the issue. However, the idea that we would give specific negotiating positions while Peter Murphy is listening is really naive on the part of the Hon. Member.


Some Hon. Members:: Hear, hear!


Pat Carney: The Hon. Member raised the issue of safeguards. I want to assure him that the automobile industry in this country is working well above the level of safeguards. If production ever fell to the safeguards in the Auto Pact this country, the Province of Ontario, and that Member would be in trouble.
Finally, with regard to marketing boards we have said repeatedly that marketing boards are not the subject of negotiations. As my colleague, the Minister of Agriculture (Mr. Wise), has patiently and repeatedly explained, and as is reflected in our resolution today, marketing boards are not a subject of these negotiations. Since I cannot put it more clearly than that, possibly the Member will wait until the Minister of Agriculture speaks on the issue.


William James Kempling: Mr. Speaker, the Minister is aware of the threat to our steel exports from pending legislation in Congress. Could she review for us where our steel industry would stand should we conclude a free trade agreement with the United States? Specifically, what is the state of our industry? Can our industry continue to compete in that market, and are we fair traders?


Pat Carney: Mr. Speaker, I am happy to respond to Mr. Steel who knows the answers to those questions far better than I do since he is one of my chief advisers on the steel issue. Yes, we are fair traders. Yes, we can compete in the U.S. Our problem is that we are taking a greater share of their markets than the Americans would like us to. That is precisely the kind of issue we want to address in these free trade negotiations.


Mrs. Finestone:: Mr. Speaker, the Minister has been referring to intellectual property and the need to negotiate. Is the Minister including in her negotiations Canadian cable companies which are distributing programs that occupy our Canadian air space?


Pat Carney: I appreciate the Hon. Member's concern, but this again gets into the details of negotiations which are not appropriate for discussion at this time. We are discussing the over-all agenda and the areas in which we are seeking these kinds of agreements. I do not feel that it is useful at this point
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in the negotiations to start cherry-picking what specific items are involved.


Mr. Deputy Speaker:: The Hon. Member for Argenteuil- Papineau (Mrs. Bourgault) for a question or comment.


Mrs. Bourgault:: Mr. Speaker, Madam Minister, when I go back to my riding, I keep being asked by several of my constituents about the Canada-US relations, especially with regard to the triangle that involves Japan. Could the Minister explain the medium-and long-term benefits for Canada of a bilateral agreement with the United States as concerns our relations with Japan, for instance, which did not invest enough in Canada because our access to the American market was uncertain? Could the Minister tell me, or explain to my constituents what an agreement with the United States could mean to us by reason of the triangle with our second trade partner, Japan?


Pat Carney: Mr. Speaker, the Hon. Member raises an important point and she is entirely correct. Foreign investment in Canada means jobs. Our investment has historically been less than it could be because of uncertainty of access to the U.S. market. As long as we have the present countervail system and the present trade remedy laws, as long as there is great uncertainty about what we can and cannot do in order to access that market, it will be a drag on investments. All of my discussions with Japanese investors and the Japanese Government encourage me to believe that should we have security of access to the U.S. market and give the U.S. equal access to our market, that would be an access secured by a long-term, binding treaty. Foreign investment from Japan and other places would flow in increasing quantities to Canada and create jobs.


Lloyd Axworthy: Mr. Speaker, I, too, welcome the opportunity to participate in this debate. It is two years late in terms of timing. The musty quality of the Prime Minister's (Mr. Mulroney) speech which we heard this morning reflects the fact that it was drawn out of the vault, rather than being a contemporary analysis of the important issues and concerns facing Canada. Nevertheless, this is an opportunity for us to examine the anxiety as well as the opportunity Canadians expect from any trade strategy. First, I want to reiterate an important point made by the Leader of our Party this morning. The Liberals believe in expanding trade. Liberal Governments have been the most important architect of developing an international trade system. It was Liberal Governments that helped develop the GATT, that moved the trading realm into the broad reach around the world.
It was Liberal Governments that negotiated the Auto Pact which the Minister for International Trade (Miss Carney) said was one of the important elements of present day progress.

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May I remind her that the negotiation of the Auto Pact had nothing to do with the kind of trade the Government is negotiating. It was a managed trade agreement with guarantees on both sides of the border about jobs, investment, and content. Any attempt to try to sell the Auto Pact as being the model the Government is following is another example of the maladroitness of the Government to try again to raise a smokescreen rather than deal with facts. Therefore, we take no backseat in terms of a commitment to expanding the horizons of international trade opportunities.
At the same time, I believe the peculiar genius of Canadian trade policies since the Second World War until this Government has been the recognition that while one must expand that trade it must be done both by strengthening international rules so that big, middle and small countries were equally protected and building up our own distinctive institutions at home to preserve our identity as a country and preserve the right to make our own economic decisions in Canada. It is necessary to preserve our right to make choices in order to maintain that important balance in sharing the North American continent with one of the largest and most powerful countries in the world. That has served us well until now.
The Government has deliberately veered from that course and made a major shift in the basic Canadian understanding that we must expand trade but not sacrifice our rights and freedoms to make choices about ourselves, our institutions and our economic programs. That is the cause we are raising today: how to adopt a trade strategy that expands trade but does not sacrifice the very basic elements of sovereignty in this country and the right to make economic choices for ourselves.
Let us examine what has been said today. The Minister, the Prime Minister and, I suppose, the resolution allude to some kind of commitment to this international trade system. However, the Government has cut back the number of embassies and consulates. It has cut back funds for the Export Development Corporation. It has downgraded the place of the ambassador for multilateral trade so that she plays second fiddle to the Canada-U.S. negotiators when the opposite should be true.
All the Government's actions have been designed to restrict our capacity to broaden our trade base. Perhaps the clearest example is in the Prime Minister's comments this morning about his objectives. He said he is trying to achieve a special deal for Canada, that there are a lot of unfair traders in the world whom the Americans do not like but since Canadians are fair we will negotiate a special deal for ourselves. Is that the way to reinforce and strengthen the international trade system? Is that the way to provide a proper balance of interest to ensure that there are rules that apply to large and small alike? Is the Prime Minister not really abandoning the Canadian tradition and the interests we have tried to pursue in strengthening that international system?
The Government has contradicted its objectives by its actions. We hear the rhetoric, but when it comes to action we see that the Government is not interested in multilateral trade
or expanding its international options. It is preoccupied with getting this kind of trade arrangement with the Americans which carries with it very serious implications for this country.
The Government says that the reason it wants this agreement is to create jobs. No one will object to creating more jobs, but where is the proof that more jobs will be created?
The Government refers to the Macdonald Royal Commission. Unfortunately, the figures it used were out of date and did not take into account the reduction in tariffs that had occurred under the GATT system. The Macdonald Commission devoted all of three paragraphs to the surface industries which generate some 60 per cent to 70 per cent of new jobs in this country. There is no research or examination, just three paragraphs outlining the job impact on the surface industries.
What proof does the Prime Minister have for stating that a flourish of regional development will result from this proposed trade deal? There was certainly nothing in the paper the Government tabled several months ago to prove that. Yet I can refer to the study by the Canada West Foundation which generally purports to support free trade but says jobs will be lost in western Canada in food processing, in furniture making, in the service industries, in the horticultural industries, in poultry and in dairy industries. Do we hear the Prime Minister say there will be a loss of jobs in the balance? No. While certainly there will be some benefits, there will also be losses but there is absolutely no recognition of it. The study "l'actua-lite" in the Province of Quebec revealed that 280,000 jobs in the Province of Quebec alone were in jeopardy. There is the Radwanski study for the Government of Ontario which indicated that hundreds of thousands of jobs in the service industry were at risk.
The fact is that there is no clear evidence that an incredible bonanza is being created.
It is useful to refer to a study commissioned by the Province of Manitoba. It states:
For the sake of discussion, let us assume that free trade with the U.S. will now generate a further five per cent increase in real GNP. Since any liberalization of trade would be phased in over ten years, we could only expect GNP to increase each year by about half a percentage point more than would be the case if we maintained the status quo. Given that, over the past ten years, the average amount by which real growth rates varied from year to year was 3.4 percentage points, there is no way we will notice whether or not we have obtained our extra half a point of growth or not. In other words, we may never even notice the benefits of free trade, even if they do occur.
It is worth considering whether the problems associated with free trade will be equally invisible.
The fact is that when we consider all the evidence, all the computer print-outs from the high-priced economic think tanks, do we really have the kind of guarantee of the bonanza we hear about from the Prime Minister or the Minister for International Trade? There is absolutely no such assurance. In fact, we must begin to ask how many more jobs will be at risk and what will be the results if we do not provide the adjustment programs that our Leader talked about this morning to at least insure there is some kind of cushion.
March 16, 1987

If the Minister for International Trade is so smart, she will vote for our amendment. She will support our amendment because it includes the kinds of requirements we believe are important, such as a major adjustment program. The Government forgot to include such programs in its motion. It will let everyone hang in the wash, and all those workers who are affected can go on the scrap heap, as far as the Government is concerned.
The Government can show that this is not its policy by supporting a Liberal trade policy. We have the experience to show what must be done in this country to provide a rational approach. The Minister accused the Opposition of engaging in scare tactics, but she does not understand. We are not frightened of expanding trade, we are frightened of the Government's approach to it. We are frightened of a Minister who negotiates a deal on softwood lumber that imposes a 15 per cent tariff on our industry, throws the secondary manufacturing industry in to sweeten the pot somehow by accident, and agrees to increase stumpage fees, building in another $300 million or $400 million. She does not take into account the exchange rate so we will have higher costs. This is a Minister who says: "Trust us". This is a Minister who has probably committed one of the great all time give-away sell-outs in the history of trade and she says: "Have confidence in me. I am going to do a great job". What earthly reason can we have, after the debacle of the softwood trade issue, to have any confidence in this Minister or this Government? Can the Government explain why we should trust it when we see what it has already done in the cultural industries? It tells us that culture is not at stake, but it gave away Prentice Hall. It tells us not to worry about industry, but it gave away our patent production. Every time we turn around the Government is negotiating on its knees once again, yet it says: "Don't worry about it. We will do it okay next time".
The reason we raised in our amendment the kinds of very clear conditions we did is that Canadians are equally afraid of what the Government has done. They know full well, whether they are farmers in southwestern Ontario or in the interior of British Columbia that they are at risk when it comes to negotiating the supply systems and the export and import controls. The Minister says: "I am going to bring down tariffs". Does that mean the Government is going to negotiate the seasonal tariffs? Does it mean the Minister is going to put the farmers in Ontario and British Columbia, the farmers in the Fraser Valley and large parts of southern Ontario and New Brunswick out of business? That is the implication of her remarks. That is the clear message she is giving. That is what she is negotiating away if she is going to reduce those tariffs. Our Party kept them in there because we recognize the need to protect those industries.
What is it that the Government is trying to negotiate? The Minister began to give her own little shopping list, and that really begins to telegraph clearly why this debate should have happened much earlier. It should have happened at the time
Bilateral Trade
the report of the joint committee of the Senate and the House of Commons indicated that there should be a debate in the House of Commons first before we get into negotiation. The former chairman is here and will know that I certainly supported that recommendation. The fact is that what really is at stake is that level playing field about which the Americans like to talk. It is the idea that we are going to negotiate away our right to choose for ourselves what subsidies or programs we will be able to apply domestically to support our own industries. The Minister has conceded that this is on the table. She has said that we are going to negotiate subsidies, services and investment. We now know that the Government is engaged at the present time in negotiating away the kind of independence Canada will require in order to initiate and control its own economic formula.
1 would like to refer for a moment to a Manitoba study done by a Dutch economist, Goran Therborn, on the 15 OECD countries. He analysed them from the point of view of which countries have succeeded in gaining full employment and those which had the worst record. When one takes those 15 countries and analyses the factors, one asks oneself, is it related to export performance? No. Is it even related to economic growth figures? No, it is not. What Mr. Therborn analyses is that the primary rationale, if one compares the top five countries and the bottom five countries in the OECD, and their capacity for creating employment, was the capacity to have an independent economic decision-making so they could choose the kind of policies and programs they need when they need them. That is exactly what the Government is negotiating away. It is exactly what is on the table. The kinds of rights the Government is abandoning is the right of the Government to be able to select the mixture of programs we can apply as a country to secure more employment for Canadians. That is the kind of analysis which should have been done by the Government, but it was never done. That is one reason we believe it is very important to establish those kinds of conditions and requirements to ensure we preserve the right to choose what subsidies we apply for high technology development, what kind of support programs we have in the area of regional development, to ensure the Government does not negotiate Bill C-58, another service industry, to ensure we do not abandon the kind of guarantees we have in telecommunications, trucking and other service industries which provide a large percentage of our jobs. But we now have the admission that that is what is being negotiated away. That is what is on the table.
I would say to the Conservatives opposite that if they want to provide confidence that in fact they will not negotiate away those rights, because they say that somehow we are putting up a screen, then they have one very clear way of proving it. They can vote for our amendment. They can give us right now in this House all the assurance and guarantees which Canadians need, but I do not think they are going to do it. They will not give those assurances because that is what they are negotiating away.

March 16, 1987
Bilateral Trade
The Government tries to pretend that this is the only alternative, that the only way we can have a dispute settlement mechanism is through a bilateral agreement. It tells us that the only way we can deal with countervail powers is through a bilateral agreement. Of course, that is not true. The fact is there are already in place perfectly good mechanisms under the GATT system for dealing with those issues.


Mr. McDermid:: They don't work.


Lloyd Axworthy: The Parliamentary Secretary says they will not work. We know the level of understanding he has about trade matters. Canada has already taken seven matters to the GATT and has had five decided in its favour. We have already used an impartial panel to determine what is right or wrong. The Minister tells us we are going to get an impartial panel of Canadians and Americans to decide this. If we really want an independent panel, Mr. Speaker, perhaps we should have an impartial panel of people who do not have any vested interest in the issue at all.
We also know full well that we could have within the existing system of GATT other kinds of applications to offset the matter. However, the one time the Government had the opportunity to prove that it believed in the international system, to prove we could make the system work, it backed away. In fact, it foreclosed the right of Canada to go to GATT on the softwood lumber case. We signed it away as part of the agreement. We did not even have the guts or courage to pursue that issue. We signed it away. Do not think, Mr. Speaker, that that does not set a precedent. Do not think that many other countries around the world are not seeing how Canada is putting its tail between its legs and running for cover. That does not contribute to the enhancement and growth of the international trade system.
It is true that the world is heading towards the emergence of regional blocks. There is no question that that is one of the clear and prevailing dangers in world trade. However, is it the solution or antidote for us to join the pack? Is it our solution to try to push that trend along as opposed to offsetting it? Should we not be fighting against that trend and showing we have a different solution?
We know, of course, and it is clear, that one has to continue dealing with the Americans. We have made many deals in the past as a Liberal Government. In fact, one of the last successful commercial arrangements signed was when I negotiated in the transportation area back in 1984. It was certainly more successful than anything the Minister for International Trade has been able to sign until now. Of course, we know we have to continue talking, discussing and negotiating. But we should make it very clear that the attempt to provide for the wide open, unrestricted, all inclusive ambition which will incorporate the concept of national treatment and prevent us from maintaining our capacity and ability to decide for ourselves what kind of economic blueprint we want for Canada, is what is really at stake.
That is why the amendment we put forward clearly recognizes the need to support the international system, to avoid the kind of entanglements an all-inclusive trade agreement would provide, and that any negotiations should seek to preserve the rights of Canadians to maintain their freedom of choice. That is the basis of our trade policy. It is far more clear, cogent and effective than anything we have received in the kind of resolution the Tories put forward today. That is why we think Canadians are turning against the Government. They do not have trust or confidence that it can negotiate well or is negotiating towards the right objectives.


Pat Carney: Mr. Speaker, I have three questions I would like to put to the Hon. Member. First, if the softwood settlement was so devastating to the industry, as the Hon. Member and his Leader suggest, could he explain to me why the stocks of MacMillan Bloedel have gone up 100 per cent since December 29, the day before our settlement, which is leading to the first stock split since the two companies were merged in 1959? Can the Hon. Member explain this 100 per cent increase in the stock of MacMillan Bloedel and the 127 per cent increase in the stock of Canfor?
Second, can the Hon. Member explain why he would have preferred $600 million going to the U.S. Treasury under the countervail when, under our settlement, that money will stay in Canada?
With respect to the GATT, the Hon. Member's Party was opposed to the duties on books which were imposed in response to the shakes and shingles issue. Can the Hon. Member explain how, if we had won before the GATT, therefore winning the right to seek compensation in the form of other duties against American goods, he would have imposed $600 million worth of duties on American goods coming into Canada which would have hurt our competitive position?


Lloyd Axworthy: Mr. Speaker, it is unfortunate that the Minister has not taken the time to read the proceedings of the committee which has been examining Bill C-37. If she had she would have had her questions answered for her. In light of the fact that she has not taken the time to read the transcripts of the testimony, I can relate to her the type of evidence that has been given. Perhaps it will stimulate her into actually examining the issues at hand.
With respect to the softwood lumber settlement itself, the Minister says that the stock market is now the arbiter with respect to whether this is a good deal or a bad deal. She seems to think that the stock market will indicate whether there is a healthy economy or not. What has been pointed out is that the burst in the price of MacMillan Bloedel stocks was due to the progress being made in the pulp and paper industry. Many of the companies dealing exclusively in softwood lumber are in fact being negatively affected at the present time. Between 80 and 100 companies have been forced to go out of business in the secondary remand areas.
March 16, 1987

Mike Apsey, who is the Executive Director of COFI and who appeared before us, said that the fact of the matter is that whatever boom is being experienced in the lumber industry is a result of the completion of inventories after the strike. As they head further into the third and fourth quarters they will face a downturn in the industry. The 15 per cent added cost differential means that the threshold of closing of mills and the threshold of losing money is so much higher than it was before that many of these companies have lost their flexibility. If the Minister thinks that good trade policy should be based on what goes up and down on the Toronto Stock Exchange from day to day, then I say that that is an awfully good reason why Canadians should have even less confidence today than they had yesterday in the capacity of the Minister for International Trade.
The Minister asks whether or not we would have liked to keep the $600 million here in Canada. We said all along that we had a good case. We were convinced that we could have won, in which case no one would have had to spend $600 million on anything. This is $600 million which has been imposed on the Canadian forest industry. It cuts the capacity to expand. It cuts the capacity for capital investment. It also raises the threshold of plant closures. The fact of the matter is we believe that the country could have successfully pursued the case through either the American tribunal or the GATT tribunal. We believe, as does the industry, that the case could have been won or that we could have had the tariff reduced.
It is ironic that this is a Government which says that the market-place is right, that we must listen to private enterprise, but if it comes down to a choice of obtaining the advice of the industry then the Government turns its substantial other cheek and says: "No. We will not listen to that advice".
With respect to going to the GATT, as our Leader said this morning we had already paid for access of our softwood lumber to the American market under the Tokyo round of negotiations. We had given very broad-based access to American goods in the computer business equipment area, which makes up close to a $10 billion market. That was part of the deal that was negotiated. The Americans broke the deal. We were an accomplice in the breaking of that deal by going along with it. The fact of the matter is that if we had been given the right to retaliate, if many American industries, the big multinationals-the IBMs and the Burroughs, which presently have open access to the Canadian market because of the softwood lumber case-had felt they would be restricted, there might have been a very different set of political pressures brought to bear in the United States.
Once again, that is the reason we need a Government that can think through a trade strategy and that does not simply react to some Pavlovian stimulus provided by the Premier of British Columbia whose last job was running Fantasy Land and whose next job may be doing the same thing. That is why we are arguing in our amendment for something that begins to make sense.
Bilateral Trade
I suggest that if the Minister wants further elaboration on these important points there are several hundred pages of transcript that might provide useful reading for her.


Steven W. Langdon: Mr. Speaker, like many Members of the House I have been studying this omnibus resolution. That is what we called it at our convention this weekend since it covers just about everything. I wish to ask my good friend, the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), if this resolution were to pass would it indicate an acceptance of a comprehensive bilateral deal with the United States or would it indicate a rejection of such a comprehensive deal? I have trouble trying to sort this out, which may be my fault. I have trouble trying to sort out whether the conditions, if they were accepted, would be sufficient to put the Liberal Party solidly behind this initiative.


Lloyd Axworthy: Mr. Speaker, I am always interested in helping the Hon. Member for Essex-Windsor (Mr. Langdon) in trade matters and to give him the best advice I can to develop his understanding of these matters. With respect to the question he raised, there is a very easy and simple answer. The Hon. Member should read the first paragraph of our amendment in which we state that we oppose an all-inclusive trade arrangement with the United States. I do not think I can be much clearer than that.
In listening to the speech of the Hon. Member's Leader this afternoon I heard him say that members of his Party are not against negotiating with the Americans but that they have certain conditions as well. That sounds to me as if the NDP is about ready to support the Liberal amendment. Considering the events of last week, I think that would be only fair under the circumstances.
The amendment speaks for itself. We oppose an all-inclusive agreement which would set out a whole series of conditions which we feel must guide any other form of negotiation or agreement that is being made. We welcome the support of the New Democratic Party in this regard, just as we welcome the support of the Conservatives in the establishment of a clear trade policy.


Mrs. Collins:: Mr. Speaker, I take exception to the remarks of the Hon. Member with respect to the Premier of British Columbia, who we feel is doing an excellent job on behalf of British Columbia. I am sure that the Leader of the Hon. Member's Party would want to dissociate himself from the comments of the Hon. Member. It would not be the first or the last time, I am sure, that the two do not agree.
Speakers this morning have cited many quotations. I would like to add to those which have been put forward this morning and read the following:
Yielding to protectionism under the guise of economic nationalism is self-defeating for Canada. This country has always proposed freer rules of international trade. Ad hoc retaliation here and there is not ultimately in the Canadian interest. If any of the current reciprocity Bills before the U.S. Congress ever become law, Canadians will learn what retaliation is all about.

March 16, 1987
Business of the House
I am sure Hon. Members think that perhaps those are the words of one of our Ministers or a member from this side of the House. In fact, it is a statement made by the Hon. Member's Leader back in 1982 when he was with McMillan Binch. I applaud the comments of the Leader of the Opposition. I think he takes the right approach, an open approach to free trade.
Can the Hon. Member advise me how he can reconcile the views of his Leader, which were so forcefully and appropriately set out in 1982, and the view which he has just stated that his Party is against an all-inclusive trade arrangement with the United States? The amendment which has been put forward contains so many caveats and so many ifs, ands and buts, it is like sending a boxer into the ring with both hands tied. How can one negotiate an arrangement with all that? In fact, it reminds me of a cross between a horse and a donkey. We all know what that would end up with. It would be a mule that is sterile and cannot produce. With this type of amendment the Liberal Party will not be producing either. Would the Hon. Member care to enlighten me on the discrepancy between his Leader and himself with respect to this particular issue?


Lloyd Axworthy: Mr. Speaker, first let me say to the Hon. Member for Capilano (Mrs. Collins) that in referring to the Premier of British Columbia I was simply stating a fact that that was his last place of employment. If the Hon. Member is disputing that, then it is only consistent with the Tories inability to deal with facts and reality by always dealing in the realm of fiction. The hon. gentleman is now the Premier of British Columbia and, of course, we will accord all the honour due that position. We will listen to him with interest as he makes statements or ruminates on matters of trade or other such matters.
I want to come to the main part of the member's question about the ability to have retaliation. There is a major difference. Ad hoc retaliation is what the Government used on the shakes and shingles. It brought in a sort of stupid tax on books that simply crippled the book industry, to say nothing of having deprived widows of their tea and children of their Christmas trees. That is what you call an ad hoc capricious, silly retaliation.


John Napier Turner: And the Minister finally recognized it.


Lloyd Axworthy: The Minister of Finance (Mr. Wilson), who is usually nine months behind time, recognized his error by bringing in a correction to his Budget.
I was talking about a clearly determined right of retaliation under international rules. Where there is a major countervail action, as the United States took on softwood lumber which we consider to be totally unfair, given redress by GATT under the international rules we would have been able to apply a proper mode of retaliation under those rules. That is what makes those rules work, and that is the point we are after. Let us
make the rules work. Let us have an international system that works effectively instead of skirting around it, trying to get out from under all the time, which has been the practice of the Conservative Government. We believe that if the system worked properly, and we think it would have worked properly-the Americans themselves say their interest is in broadening international rules-we would not have had to retaliate. The Americans would have backed down on the countervail and we would not have $600 million being applied against our lumber industry today.


Mr. Deputy Speaker:: The period for questions and comments is now over.


BUSINESS OF THE HOUSE
Philip Derek Lewis: Mr. Speaker, I rise on a point of order. There have been discussions among the Parties. I believe that if you would put the following motion to the House you would find there is general agreement. It is basically the same motion as was put this morning with one small change to delete a dinner break. I move:
That, notwithstanding any Standing or Special Order of the House, the House sit as follows today, Monday, March 16, 1987, for the purpose of consideration of the Government motion dated March 11, 1987, respecting bilateral trade, in the name of the Minister of International Trade:
-The House continue to sit until 10 p.m., without interruption for Private Members' Business or the Adjournment Proceedings at which time Mr. Speaker will interrupt any proceeding then underway to put forthwith and successively, without further amendment or debate, any question or questions then before the House, provided that at the request of any Member at that time, a division on any question or questions will be deferred until 6 p.m. Tuesday, March 17, 1987.
-Following such question or questions being put at 10 p.m. tonight, or following such deferred division or divisions being requested at that time, Mr. Speaker shall adjourn the House.


Mr. Deputy Speaker:: The House has heard the terms of the motion proposed by the Parliamentary Secretary to the President of the Privy Council (Mr. Lewis). Is there unanimous consent?


Jacques Guilbault: Mr. Speaker, we agree with this motion.


Nelson Andrew Riis: Mr. Speaker, after listening to the Prime Minister's (Mr. Mulroney) presentation today and hearing his presentation indicating a willingness to discuss the whole matter of the negotiated settlement prior to the final decision with Parliament, we concur that the debate take place into the evening and the vote be held tomorrow at 6 p.m.


[Stage Direction]
Motion agreed to.
March 16, 1987


[Stage Direction]
The House resumed consideration of the motion of Miss Carney:
That this House supports the negotiation of a bilateral trading arrangement with the United States, as part of the government's multilateral trade policy, while protecting our political sovereignty, social programs, agricultural marketing systems, the auto industry, and our unique cultural identity.
And on the amendment of Mr. Turner (Vancouver Quadra) (p. 4158):
John Wise: Mr. Speaker, before 1 begin my remarks in this debate, I want to express my appreciation to my two colleagues, the Minister of Finance (Mr. Wilson) and the President of the Treasury Board (Mr. de Cotret) for allowing me to enter the debate at this time enabling me to fulfil a long time commitment with a large number of eastern Ontario farmers later tonight.
Canadian agriculture has an important stake in international trade negotiations. And, as Minister of Agriculture, I am pleased to speak for Canadian farmers in the Cabinet, in the House and on their behalf in the bilateral trade negotiations.
The federal Government understands and appreciates the importance of Canada's farm industry. Furthermore, we believe that the family farm is and should continue to be at the heart of the industry. Canadians, too, understand that agriculture touches all of our lives every day. We do not take for granted the contribution that our farm industry makes to the national economy and to the economies of many rural towns and villages from coast to coast. We do not take for granted the 1.6 jobs provided directly or indirectly by the agriculture and food industry. And certainly no Canadian should ever take for granted this country's reliable supply of high quality reasonably-priced food. Indeed, the Government's top priority commitment to agriculture is a commitment to a strong, healthy agri-food industry and thus a strong, healthy Canadian economy.
That is why our Government has undertaken many helpful and important agricultural initiatives. Most significantly, we delivered the SI billion special Canadian grains program, the largest special initiative ever taken on behalf of Canadian farmers by any federal Government in the history of Canada. This and many other actions are tangible proof that we have acted in good faith on behalf of farmers. In the same way we are acting in good faith and in the best interests of our farmers in our international trade negotiations.
Canada's farm industry truly reflects the trading heritage of this nation. Close to half of last year's farm cash receipts in Canada, about $9 billion, were derived from export sales alone. That is why it is essential we get the best possible deal for agriculture in our international trade negotiations.
Bilateral Trade
Let me speak first about the problems of international trade and grains. The ill-conceived export subsidy war between the treasuries of the EEC, and the U.S. is making victims of Canadian farmers. The Government of Canada is determined to see an end to this insane subsidy war. We are fighting for fairness in world agricultural trade. Most Canadian farmers understand and appreciate our many efforts. For example, Canada played a key role in having agriculture put on the table in the new round of multinational negotiations. We are now pursuing the Canadian interest with vigour at the GATT. At the Tokyo Summit last year, the Prime Minister (Mr. Mulroney), the Minister of Finance, and the Secretary of State for External Affairs (Mr. Clark) expressed the need for an end to the international subsidy war as a matter of urgency.
I am positive the Prime Minister will be doing the same at the upcoming summit. My colleague, the Minister responsible for the Canadian Wheat Board, has met twice to discuss grain trade problems with the five major grain exporting nations. Canada, in fact, initiated the first meeting. There will be more. We must find a solution. We must restore fairness and equity to the international trade world.
These multilateral initiatives do not stand alone. Canada is also acting on another important international front, namely, bilaterally, to improve our trading relationship with the United States. The Americans are by far Canada's largest export customer for farm products. When you realize that the United States is a relatively small customer for our major farm export, grains and oil seeds, then the significance of the U.S. market becomes even more obvious and apparent. More than half of our non-grain and oil seed farm exports are sold to the U.S. market. Sales of our farm products to the United States equalled 10 per cent of all farm cash receipts in Canada.
The importance of the United States market varies from one commodity to the next, but that is Canadian agriculture. It is an important point to remember. For instance, about three-quarters of our red meat exports go to the United States. Without exports to the Americans, our red meat industry would shrink dramatically. About two-thirds of our horticultural and special crops go to the United States, and well over half our potatoes are exported to the United States. In fact, if we look at the Canadian pork industry, we see that well over a third of all pork produced in Canada is sold in the U.S. market.
Clearly a strong future for many sectors of our farm industry is contingent upon future access to our largest market, namely, the U.S. This is why many farmers are, and rightfully should be, concerned about the increasing protectionist move which is running rampant south of the border.
We have all seen the writing on the wall. Action by U.S. pork producers resulted in the imposition of a countervail duty on live swine. A number of midwestern states restricted imports of our live animals and meats for more than a year. It was allegedly done for health reasons, but it was really to keep

March 16, 1987
Bilateral Trade
Canadian products out of the U.S. market. U.S. potato producers in Maine continue to try to restrict Canadian potato markets in that particular region. The legal costs of this action and the imposition of special inspection procedures create a hardship for potato producers in the country, particularly those in eastern Canada.
There were anti-dumping and countervail duty investigations into British Columbia raspberries. Restrictive import quotas were imposed on certain sugar products. This has caused an estimated trade loss to Canada of about $40 million. Now there is an investigation of beef imports from Canada.
Canadian farmers are not standing still during this process. Many farm groups are beginning to take successful action on their own to protect their own interests. Even as we negotiate nation to nation for new and better rules governing agricultural trade, we cannot and will not leave ourselves disarmed.
A good example is the corn countervail decision which was issued on March 6 by the Canadian Import Tribunal. It found that American subsidized corn was causing injury to Canada's grain corn industry. This decision was a direct result of farmers' own actions.
All these disputes point to the troubling changes which are taking place in our trading relationship with the United States. For our farmers these disputes create uncertainty about the future and future market opportunities. Unless there is an effort on both sides of the border to discuss and resolve these difficulties through the negotiation of a new trade deal, we can bet that there will be more problems and indeed more trade barriers.
The benefits for Canadian farmers will be tremendous, if we are able to negotiate a new trade deal with the United States. It must be a deal that prevents many disputes from happening in the first place. It must be a deal that establishes a reliable and fair mechanism for handling disputes which arise in a manner that does not involve new trade barriers. It must be a deal which, once and for all, regulates technical barriers in order to prevent their use to block trade, and a deal which gives Canada more secure access to our largest agricultural market.
From an agricultural standpoint, that is what these negotiations are all about. They are about fighting off the ground swell of protectionism in the United States, and they are about securing Canada's access to a large American market of some 235 million people.
To get the best deal possible, we are consulting fully with the industry, with all sectors, and with all provinces. I should like to make mention of the membership of Walter Kroeker and Ted Turner on the permanent International Trade Advisory Board. In addition, we have some 15 sectoral advisory groups on international trade. We also have one of the largest sectoral groups on agriculture, food, and beverages, with about 34 members.
More than half the total farm cash receipts in the country are derived from the sale of commodities covered by marketing boards. Producers of many commodities from grains to turkeys to hogs have been served well by the marketing board system. Today there are about 125 active marketing boards in Canada, and the vast majority of them are promotional in nature and established under provincial legislation.
However, an important distinction must be made for dairy, poultry, and egg farmers who operate under a full supply-management system. I appreciate the concern among some of these producers about what our negotiations with the United States may mean for them. My cabinet colleagues are well aware of those concerns as well.
The Secretary of State for External Affairs, the Minister for International Trade (Miss Carney), and the Prime Minister have stated the Government's position on the issue very clearly. In fact, the motion before the House clearly addresses itself to that problem. I have repeated the message time and time again that the Government will retain the right to decide in Canada what kind of marketing systems are best for our agricultural commodities. We are not about to dismantle the Canadian Wheat Board or any other marketing boards, whether or not they have supply-management powers. Let me make that statement very clear. We are talking with the Americans about trade, but we will not sign any deal unless the deal is a good one for Canadian farmers. Obviously any deal which is a good deal for Canadian farmers is a good deal for Canadians generally.
The Government's position on agriculture in the trade negotiations reflects the high priority we place upon the country's agri-food industry. We believe that our positions, our policies, and our actions must and do reflect a commitment to a healthy and viable farm industry in Canada.
I welcome whatever time is remaining for questions.


Stanley J. Hovdebo: Mr. Speaker, I want to ask the Minister to expand a little on what he is saying about marketing boards, in particular the Canadian Wheat Board and the grain commission. Mr. Yeutter, the U.S. Trade Commissioner, has stated very specifically that they cannot accept the grading system established in Canada and that it is unfair to them. In fact, he called it "phoney". That grading system has made us the producer of the best grains in the world, and the United States has complained about it for many years. It has suggested that it wants the system out of the way and that if we are to have a level playing field, it must be out of the way. I want the Minister to assure us that the Government respects the grading system which is in place as far as grains are concerned.


John Wise: Mr. Speaker, I suppose I can take some satisfaction from the fact that at least the question is a different one. For the last six months or eight months certain people have been travelling around the country deliberately stirring up some uneasiness and anxiety by indicating "forget it, fellows, you are going to lose your marketing system". They have indicated to people who have operated so well under supply-
March 16, 1987

management-and some of them have done so for 50 years- that it will go down the tubes.
I hope we have established the facts very clearly today. When the Hon. Member started his question, I thought he was about to raise again a question about the possibility of the Canadian Wheat Board being dissolved or disappearing after the talks. The fact of the matter is that it will not be. We have deliberately used the term "agricultural marketing system". I indicated that we have about 125 boards in the country. Some of the boards have supply-management and some do not. Some are marketing commissions. Some are not much more than associations. Some are groups of producers who sit down on behalf of their membership to try to negotiate contracts with processors and so on. Maybe we are making progress here in respect of the Canadian Wheat Board.
I suppose the grading system is like any other grading system for a whole variety of products. We have some real problems with the grading systems in reference to our U.S. counterparts, and we would not mind talking about that at all. They have a habit of changing these things overnight without even giving us the courtesy of notifying us. They happen to use all sorts of things that give us problems, and I think that is one of the trade irritants about which we should talk.
I can tell the Hon. Member one thing and that is that we will not make any decision on changing the grading systems until such time as we fully utilize the advisory group that exists and until we touch base with the industry people. My colleague, the Minister in charge of the Canadian Wheat Board will, I am certain, be using each and every occasion to seek the advice of the leadership of the grain trade before we make any move on that particular aspect of it.


Lloyd Axworthy: Mr. Speaker, the Minister's colleague, the Minister for International Trade (Miss Carney), indicated earlier today that the Government would be seeking to reduce customs duties, to reduce tariffs and to negotiate in the area of investment and services. Taking that into account, I would like to ask the Minister some explicit questions.
If investment is to be negotiated, would that affect the way U.S. grain companies compete with prairie grain co-operatives and pools which now have special investment advantages? Second, if by negotiating import quotas and tariffs we allow for import restrictions on U.S. grain to be lifted, how will that affect the two-price wheat system? Third, if customs duties on imported fruits and vegetables are revoked or removed, would that not affect our emergency protection laws as well as our seasonal customs duties that now apply for the protection of the horticultural industry? Fourth, how would this affect the wineries in British Columbia and Ontario? The Minister for International Trade said that we would negotiate away government procurement. The wine and beer industries are based on the special advantages they now enjoy with liquor commissions across Canada. Have all those applications of the Government's plan been examined?
Bilateral Trade


John Wise: Mr. Speaker, I appreciate those questions. In response to a question which I believe was posed by the Hon. Member's colleague, the Hon. Member for Algoma (Mr. Foster) earlier today, I made it very clear. When we make a clear statement dealing with agricultural marketing systems like the one we made in today's motion, there should be no doubt that we are sending a clear signal across the country that we will maintain the right to decide in Canada what system of marketing a particular commodity deems advisable for its own use. We are also recognizing the continuation of supply management.
Some marketing boards have supply management, but the Canadian Wheat Board is a little different. It does not have supply management powers but it does have powers to issue import permits. We have sent a clear signal that the Canadian Wheat Board stays and that marketing boards, even those with supply management powers, stay. At the same time, there must be a recognition that certain underpinnings are required and will have to remain in place. There is no way the supply management system can operate unless it continues to have other trade advantages.
Let us look at the dairy industry, for example. We can compare any dairy farm in Canada with a dairy farm in the State of Florida. The farmer in the State of Florida will probably not have any more money in his entire operation than the average dairy farmer in Canada has in his or her milk house. That is just common sense. Those who understand the industry know that there is no way Canadian dairymen could compete against dairymen south of the State of Georgia because of weather conditions alone. The same is true of the middle states. Any state further south of Georgia has two crops a year. How in the world can we compete against that? We must recognize that reality. We will not shut them down at all.
With reference to Sections 56 and 57 of the fruit, vegetable and honey regulations, again I indicated in answer to the Hon. Member's colleague that I have an option to express my views on that in accordance with the new rules of the House and I will do so. I will exercise my option on behalf of the Canadian fruit and vegetable industry on Wednesday, I believe. I hope that all Hon. Members, regardless of political affiliation, will join with me in support of that motion so those regulations are not rescinded.
I have spoken of geographic locations and the economy of scale. We always have to be conscious of those. We live in half of the North American continent. Americans can put 10 per cent of their produce into this market and occupy 100 per cent of it. We could put 100 per cent of our produce down there and it would only impact on about 10 per cent of the market. We know that. In fact, I have established a Canada-U.S. port advisory group which has worked well together and will continue working together. There is a respect for our need to pay special attention to those items which impact on Canadian agriculture and particularly the fruit and vegetable industry at certain seasons of the year.

March 16, 1987
Bilateral Trade
As I have travelled across the country, I have experienced some frustration. A member of my staff told me that I made 190 speeches last year, and I will probably make as many in the future if I have the good fortune to remain in this particular position. As I travel around the country, I find that almost without exception, people are pretty edgy on the trade issue, particularly those who work in supply-managed commodities. I acknowledge that. However, we have decided, and it is the right decision, that we should only say certain things at certain times. 1 know my colleague, the Minister for International Trade made that point today in answer to my colleague across the way. Whatever we do, we must not jeopardize our chances of striking the best possible deal. We have satisfied ourselves at this point in time that we can be very definite on marketing systems with supply management. The process will go on and as time goes by and negotiations continue, we will be making more definite statements on other aspects as well.


George Roland Henderson: Mr. Speaker, I would like to ask the Minister a couple of questions about Canadian dairy farmers. Of course, the Minister probably has a copy of the letter that was addressed to him by the president of their association dated March 13. The dairy farmers made a number of points on the free trade deal with the United States as it relates to the dairy industry to which I would like the Minister to respond.
First, dairy farmers say that their domestic market must not become a disposal ground for U.S. overproduction. The Minister already stated that certain parts of the United States can certainly produce more cheaply than we can in Canada due to our geographic dislocation, if you will, and climatic conditions. This is what bothers the dairy industry, certainly in my province, about free trade. I am sure they would like to have some assurances from the Minister that the import control list is a fundamental element of the Canadian supply management system and it must not be weakened under any conditions in these negotiations. On the contrary, they say that if any changes are to be made they should go towards strengthening of the list, notably through the addition of dairy products such as yogurt and ice cream. If we do not have some way of stopping the import of those products, especially those in the dairy sector, given their longer production runs and their ability to compete against us, then supply management will be thrown out of the window as far as Atlantic Canadian farmers are concerned.


John Wise: Mr. Speaker, I believe I dealt with that question earlier in Question Period and in my other remarks. This Government provided dairy farmers with a five-year commitment of $1.5 billion. This motion we are debating today indicates that supply management stays. The long-term dairy policy stays. There is no question about that. The Hon. Member should take some comfort from that. I also said that would require the retention of certain underpinnings now in place in order to maintain the commitment to that long-term dairy policy. Dairy farmers can take some satisfaction from all
three statements. However, the observation I wanted to make dealt with the example I used previously of the difficulty a dairy farmer has here in Canada compared to one south of the State of Georgia, particularly in Florida. I also wonder if the Hon. Member knows that the U.S. dairy industry can send ice cream across the bridge from, say Detroit but we do not have access to the U.S. market. That concerns me. It might well be an interesting item to raise, but we will not be raising it unless we are requested to do so by the industry.


Mr. Deputy Speaker:: Resuming debate with the Hon. Member for Essex-Windsor (Mr. Langdon).


Steven W. Langdon: Mr. Speaker, let me start off by saying that my sympathies lie with the Minister of Agriculture (Mr. Wise) as he tries desperately to defend his farmers, as he sees them, against the assault posed by the free trade agreement. He is, as I see it, agonizing his way along as toughly as he can. Frankly, I wish him luck, but I also have to say that I think farmers across the country will find some very rude surprises in what is going to take place.


Flora Isabel MacDonald: That is your wish.


Steven W. Langdon: That is not my wish.


Flora Isabel MacDonald: Indeed it is.


Steven W. Langdon: That is not my wish. I have dairy farmers in my riding.


John Wise: Not many of them. How many?


Steven W. Langdon: Far fewer than there used to be, and that is a commentary on past agricultural policy. However, those who are there are very concerned about what may happen not just because of the potential threat to the dairy industry, but also because of the potential threat to cross-boundary product movements which could undercut the industry and in turn undercut farmers and the farm sector itself. I wanted to make that point at the beginning.
This is perhaps one of the most important debates which has taken place on the economic future of this country since 1867. We have to choose the direction we are going to take, and that has tremendous implications for our future as a sovereign nation. There is, too, a broader issue involved in this debate. That issue is crucial to all Canadians. That is, the question of the integrity of Ministers who now stand behind this policy when they stood behind quite a different policy prior to their election. The Prime Minister (Mr. Mulroney) started this debate with some quotations and I want to do the same. I would like to begin with a quotation from the Secretary of State concerning free trade with the U.S. This is from Maclean's in 1983: "It is silly. Canada must improve relations and trade with the United States, of course, but our natural destiny is to become a global leader, not America's weak sister." Let me quote as well the Minister of Finance (Mr. Wilson) from the same source: "Bilateral free trade with the U.S. is simplistic and naive. It would only serve further to
March 16, 1987

diminish our ability to compete internationally." Either the Minister did not believe it then or he is agonizing over supporting what is taking place now. Finally, let me quote the Prime Minister from that same source: "Canadians rejected free trade with the U.S. in 1911. They would do so again in 1983. Canada must increase its share of total world trade which has dropped by 33 per cent in the past two decades."
What we have here is a series of leading economic Ministers who, when they were seeking the leadership of the Conservative Party, and I could quote the Secretary of State for External Affairs (Mr. Clark) if I wanted to on this issue, indicated very clearly that they were against free trade. Yet once elected with this vast majority, they led the country in the direction of a comprehensive agreement with the U.S. That carries some extreme dangers, not just for our future sovereignty but for our economic well-being. Those remarks apply to what the Minister for International Trade (Miss Carney) said today. She made the most remarkable statements about the Auto Pact being an example of free trade and how she wished all the country could share in it. Those of us in southern Ontario who benefited from the Auto Pact and therefore from free trade should be willing to share our goodies. Let me make it quite clear that if the Minister still believes that an agreement which has safeguards both with respect to numbers of cars which must be produced in this country and with respect to Canadian content is in fact free trade, then she simply does not understand anything about the definition of the portfolio in which she is required to work.
I must take this point further. In his remarkable speech this morning, which in so many words said so little, the Prime Minister came at one point to a rather remarkable conclusion. He said,that every research study had shown that there would be tremendous economic benefits for this country. I have here on my desk enough research reports which have shown exactly the contrary to keep this House busy for hours. I have one from the University of Maryland which says that among 28 industrial sectors analysed in this report the net employment is positive in 5 industrial sectors and negative in the remaining 23 sectors.
I can quote as well from reports of the Government of Ontario undertaken by Jack Baranson, an American who is unlikely to be biased on this. He makes the point very forcefully in that research report that there will be a tremendous outpouring of American branch plants from this country.
I can make the point with respect to studies done by the Province of Quebec which indicated significant job losses which would take place in Quebec. I can make the point with respect to another study done for the Government with respect to the Auto Pact and its conclusions which said that the Auto Pact should not be permitted in any way to be affected by this negotiation. It is quite clear now that it will be affected by this negotiation if across-the-board tariff cuts are going to be put into place.
Bilateral Trade
Abundant research reports have demonstrated that the Prime Minister's points to us this morning and to the nation were not, as they should have been, reflections of reality but instead were reflections of hope. If he actually read the research reports which have been done on this subject by a great many groups across the country which include sectoral studies which have finally been produced, not by the Government publicly, but by the-

Quebec Coalition against free trade, groups which commissioned those studies carried out by Quebec economists, which clearly stated that in all the industries which were considered, there will be terrible losses as a result of that free trade arrangement.

That is in fact what the studies have shown us and that is in fact what the Prime Minister should be aware of as he speaks to this House and the nation.
He also spoke this morning about the resolution which came out of the New Democratic Party's convention over the past weekend. In that, too, he was selective. He chose the one point which he wished to attack without making clear to the nation that in that resolution was a very broad and detailed trade strategy that would take us in a different direction which would give us trade expansion with the rest of the world including the United States but would not sell us out as the present trade initiative is clearly going to do.
I could talk about some of those alternatives. I could talk, for instance, about the support for small business and mediumsized firms which the Government has not been prepared to give in the export sector through the EDC as it should have. I could talk about the necessity of working to build up more production and import replacement in high-tech sectors in this country through planning with business and labour. I could talk about an extension of the approach that has been taken in the Auto Pact and its 60 per cent Canadian content rules which would give us thousands of new jobs right across the country. I could also talk about the realities as opposed to the myths of GATT presented by both the Minister for International Trade and the Prime Minister.
The reality is that GATT is urgently trying to deal with many of the problems which we are being hit by from the United States; the problems we have seen in softwood lumber, the problems we have seen in fish, and the problems we experience in Ontario in pork. That is a route which can be taken which would give us rapid action toward solving the problems that face us.
I could talk, as well, about the need to establish dispute settlement mechanisms which I think would be quite helpful between ourselves and the United States. That is the kind of strategy which can and should be taken in this country. However, that is not the direction which is being taken and across the country, contrary to the quotations which the Prime Minister read this morning. There is a crescendo of opposition

March 16, 1987
Business of the House
emerging to this free trade thrust, opposition which I am predicting will lead to this thrust being rejected in the end despite the brave words of the Prime Minister this morning.
I could quote from the Gazette of March 14 which suggests that the Government should clarify its position on Monday because it has not clarified it yet. I could quote from Won-nacott's, economists who have supported free trade in many respects and who say that because a free trade arrangement is bound to create a number of specific problems it would best be undertaken when major disturbances such as widespread unemployment or an international financial crisis are absent. That, as we all know, represents the conditions which face us at this stage in Canada with 9.6 per cent out of work.
I could quote from Albert Breton, a member of the Macdonald Commission, who says:
I continue to hold that anti-Americanism in Canada can be better kept in check and the prospect for free trade over the long term better protected, if unilateral reinterpretation of fair trade laws by the U.S. Government is directed at all its trading partners, rather than if a bilateral agreement calls "special" attention to Canada.
As Breton says, what will stop the U.S. Government from unilaterally reinterpreting and redefining any agreements, however formal, between Ottawa and Washington? Certainly not a sense of fairness or responsibility or even respect for the written word. I could quote from Arthur Donner who states:
All of this suggests that Canada should not count on a free trade pact with the U.S. to rescue it from its productivity doldrums. Aside from the politics of the issue, Ottawa should be looking at other ways of boosting the economy and productivity.
I could quote Peter Francis, a small boat manufacturer who owns ACF Grew Inc., who states:
If free trade becomes a reality, I expect to see some U.S. companies retreat across the border and serve the Canadian market from their larger and more efficient plants. I would not be at all surprised if we find Canadian companies establishing their new plants in the U.S. sun belt, where unions are practically nonexistent and a large number of employees work for minimum wages and benefits.
I could quote the head of Labatt's, who says:
The costs of free trade are very high. Under present conditions, any economic advantages of free trade to the American brewing industry would be offset by severe financial and human dislocation in the Canadian brewing industry.
Perhaps I could finish by quoting George Grant, who has been a member and supporter of the Conservative Party for many years. He says:
There seems to be no doubt that Canadian political sovereignty would be put in question both domestically and internationally if our two societies were homogenized economically. For example, social security policies: we just could not have policies that put us at a taxation disadvantage.
That is the reality that faces us if this path is taken. There is another path by which this country can get back on its feet.
This Parliament must address itself to those dreams of our children and communities throughout the country of a free, independent sovereign nation which will be able to direct its own affairs so that it will not be told, as in the case of softwood lumber, what it can and cannot do. We must look toward a sovereign future in which Washington does not tell us what we can and cannot do in a free trade agreement. We must direct what takes place and decide how we shape our regional development policies, our agricultural strategies, our cultural policies and our development.
That is not the direction in which the Government is taking us. Rather, we are faced with camouflage by the Government and must rely on information that leaks from the chief negotiator and Canadian press in order to get a sense of what is on the negotiating table.
If the Government wanted to regain its sense of leadership on this issue, today was its opportunity to do so by giving the House a real progress report instead of a bogus set of presentations that have not explained what is taking place in the free trade talks.
We want the dream of the future, we do not want bogus directions which will be so devastating for all of us in the future.


BUSINESS OF THE HOUSE
Philip Derek Lewis: Mr. Speaker, I wish to advise the House that tomorrow will be day number four in the budget debate, and Wednesday will be an allotted day.


Nelson Andrew Riis: Mr. Speaker, I rise on a point of order. There is an understanding that at ten o'clock tonight the debate will end and the vote will automatically take place at six o'clock tomorrow. Is that correct?


Philip Derek Lewis: Provided that is satisfactory to the Table Officers, we have no difficulty with it. In other words, my friend is saying that the vote will automatically be at six o'clock tomorrow rather than being called at ten o'clock for six o'clock. In other words, we know that the vote will be at six o'clock, if it is all right with the Table Officers.


Mr. Deputy Speaker:: The House has heard the motion. Is it agreeable?


Some Hon. Members:: Agreed.
March 16, 1987