1987-02-05

Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to petition No. 332-420.



INTERPARLIAMENTARY DELEGATIONS


Mr. Marcel Danis (Vercheres):: Mr. Speaker, pursuant to Standing Order 101, I have the honour of tabling, in both official languages, the report on the meeting of the Standing Committee of the Conference of Commonwealth Speakers and Presiding Officers held at Kuala Lumpur, Malaysia, from January 6 to 9, 1987.


PETITIONS
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, pursuant to Standing Order 106,1 have the privilege to present a petition on behalf of a number of residents of British Columbia registering their complaint against the proposal of the Government to change the Patent Act relating to prescription drugs. They believe that this will increase drug prices for Canadian consumers, and that it will severely restrict the ability of average Canadians to buy necessary prescription drugs. The petitioners believe that the proposed measure will unfairly hurt those Canadians whose health requires the


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker,
I have the pleasure to present to the House several petitions from my constituents who wish to avail themselves of their ancient and undoubted right to present a grievance.
Whereas a decision has been made to close Rideau Hall grounds by the National Capital Commission, the Department of Public Works, the RCMP, and the Office of the Governor General without prior notice; and whereas the closure of this attractive and tranquil park affects thousands of visitors to the capital from across the country who held Canada's uniquely accessible Rideau Hall as a symbol of the trust, openness, and democracy of which Canadians are so justly proud; and whereas area residents from the entire National Capital Region, who have used and enjoyed the grounds of Rideau Hall, recognize the security concerns that prompted the closure decision, the petitioners cannot accept a blanket closure of the 120 acre park to public access.
Therefore, the undersigned petitioners humbly pray and call upon Parliament to open that decision for consultation with a group of citizens representative of the large and growing opposition, in order that a modus vivendi be created that would satisfy both the Government and the public.


Jean-Robert Gauthier: I also have several petitions from constituents of Toronto, Scarborough, Willowdale, and Downsview. The petitioners wish to state that whereas the Government of Canada has imposed a retaliatory tariff on imported books in the English language which has limited the access of Canadians to literature and information, and whereas the tariff has had little negative effect on the publishing industry of the United States, it penalizes Canada's consumers, book publishers, book sellers, distributors, and Canada's culture. Rising book prices have placed a strain on the book acquisition programs and policies of our nation's public and specialized libraries. Therefore, the undersigned petitioners humbly pray and call upon Parliament to rescind this tariff, which threatens irreparable harm to the Canadian book industry and compromises federal policy on cultural industries in respect of free trade negotiations.

February 5, 1987
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Mr. Les Benjamin (Regina West):: Mr. Speaker, I have the honour and the duty to present two different petitions to the House. The first petition is from Senior Power and is signed by citizens of the City of Regina. The petitioners request Parliament to reject the proposals to increase prescription drug prices for Canadians by amendments to the Patent Act, and also because they will increase the cost of drugs to provincial government drug plans. The petitioners humbly pray for support from Parliament.


Leslie Gordon Benjamin: I have a further petition signed by residents of Vancouver, Coquitlam, and White Rock in British Columbia. The petitioners humbly sheweth that in their opinion transportation is a natural monopoly without economic regulation, and that deregulation of the dimensions proposed by the Government in Bill C-18 will create unnecessary chaos in the transportation industry leading to unacceptable reductions in safety standards and deterioration in quality, type, and frequency of service. Therefore, the undersigned petitioners humbly pray and call upon the House to have Bill C-18 withdrawn.
[DOT] (U10)


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, pursuant to Standing Order 106, I have the honour to present a petition certified by the Clerk of Petitions and signed by 76 residents of the villages of South Gillies, Nolalu, Kakabeka Falls, and Hymers in the rural area of Thunder Bay.
These residents are very concerned about the survival of their small rural post offices. They petition the House of Commons to reject any suggestion of closures and to protect by law or direct intervention the right of rural Canadians to full postal services.


Mr. Simon de Jong (Regina East):: Mr. Speaker, I rise, pursuant to Standing Order 106, to present a petition signed by people from Alberta and Manitoba. They petition the House not to proceed with changes to the prescription drug Act. The petitioners believe that the present legislation before the House would increase the cost of prescription drugs.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I have the honour to present a number of petitions from residents of my riding. The petitioners are from the communities of Thompson, Sherridon, Lynn Lake, Cross Lake, Flin Flon, Leaf Rapids, The Pas, Snow Lake, Norway House, Wanless, and Pik-witonei. The petitioners express real and deep concern that the Government's attempt to change the Patent Act will indeed force the cost of prescription drugs to rise and, of course, hurt those people who need to use large quantities of these drugs.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, once more I have the honour and duty to present petitions from the City of Windsor, protesting the Government's new Patent Act amendments which would increase the cost of drugs. It is with pleasure that I represent the people of that city, but it is not a pleasure that they have found cause to petition Parliament.
I submit one, two, three, four, five, six, seven, eight more petitions from the City of Windsor, representing hundreds of additional signatures to the thousands already submitted, and there are more.



PUBLIC ACCOUNTS


Mr. Stan J. Hovdebo (Prince Albert) moved:: That the first report of the Standing Committee on Public Accounts, presented to the House on Tuesday, November 4, 1986, be concurred in.
He said: Mr. Speaker, I rise in this debate to make the point that we in this Parliament need tax reform very badly and that we should be working toward that end.
Many years ago the New Democratic Party, which at that time was led by David Lewis, used a slogan during an election campaign that I think best identifies the issue before us in this particular motion. During that election campaign and at times before and after-and I think it is still a valid description of the situation-he talked about corporate welfare bums taking advantage of the system and using the money of Canadian taxpayers as much as possible. They used the system to obtain assistance from taxpayers when they did not really need it and there was no reason for them to receive it.
In his 1985 report the Auditor General made a very specific statement regarding the tax remission orders conferred on certain companies. He was referring to a particular tax remission order which was granted to the Hudson's Bay Oil and Gas Company which allowed it to take advantage of the tax system up to a possible $1 billion. When the Standing Committee on Public Accounts tabled the report, the level already given, I suppose under this remission order, was an amount up to $400 million.
I should like to refer to what the Auditor General said in his report on February 5, 1985. He said that an income tax remission order was granted to Hudson's Bay Oil and Gas Company Limited, enabling it to deduct for income tax purposes financing costs which its parent incurred in acquiring it. He went on to say that the order may provide the company with an after tax benefit of up to $1 billion and permitted the use of a method of transferring losses for tax purposes which, in May 1985, had only been proposed to Parliament.
The actual decision to do this was made by the previous Government. In July, 1984 the Government announced its
February 5, 1987

intention to provide Hudson's Bay Oil and Gas Company Limited, a subsidiary of Dome Petroleum Limited, with an order remitting income taxes pursuant to Section 17 of the Financial Administration Act. However, that remission was not granted until February 5, 1985, so both Governments were involved in the process.
Remission orders in themselves are used extensively and are needed. For instance, the operation of the Auto Pact depends extensively upon the ability of the Government to pass remission orders which, under the Auto Pact, allow the Government to repay companies that import automobile parts, after the cars have been built and have been sold in Canada or returned to the United States. The concern here is not the process of remission orders. The concern of the committee and the concern I am bringing forward now is that the Government, without the consent of Parliament, is spending up to $1 billion of taxpayers' money.
This process of tax expenditure without the consent of Parliament, the Auditor General suggests in the 1986 report, is becoming more prevalent on the part of the Government. The concern of the committee was that we should have in place the kind of law which would make it impossible for the Government to spend taxpayers' money without coming before Parliament. A basic democratic process is that Parliament passes all expenditures that are made by the Government, but it is far from correct here.
This expenditure about which we are talking, the remission for Hudson's Bay Oil and Gas Limited, is an example of the kind of thing that can go on and where some corrective measures should be taken. The 1985 Auditor General's report draws attention to this specifically in Chapter 3. We are concerned that not only does this remission order authorize money for that year but authorizes it until possibly 1990. The only limiting factor that will be offset by this remission order-this is why I suppose there could be some discussion as to the amount-is the amount of tax the company will have to pay during that period of time. It can offset all of its taxes until 1990, if the company has enough. Knowing the ability of our tax lawyers, the chances are that the company will project financing costs beyond that time or make sure that by other acquisitions the company will be able to use the absolute maximum possible.
The committee had a number of concerns, and I would like to put them before the House. First, Parliament's consent was not sought and Parliament was not involved in a substantial expenditure of public funds. That is not acceptable, I am sure, to anybody in this House. In this case a corporate loss transfer procedure was used, a procedure not otherwise allowed in law. It is currently before Parliament as a proposal from 1985 in a budget discussion paper only. Are we going to have a procedure such as: "We are going to do this and eventually we will allow it to happen and then implement it"? A remission order
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is often used. But this type of arrangement has never been used before because it was illegal, although it has been suggested.
What we should be asking in Parliament is whether this use of the remission order is acceptable in the broad criteria that had been established to be as in the public interest. What we are looking at here is whether it is a good idea to allow, under any circumstances, expenditures of any amount. This one happens to be very large and it is probably an exceptional example. But is it a good idea to allow any expenditure of government funds without reference to Parliament?
The committee makes a number of recommendations some of which I will put before you, Mr. Speaker. The committee suggests that the Government make changes in the Financial Administration Act and as quickly as possible get rid of the process of tax expenditures which allow corporate structures to take advantage of tax breaks when they do not really require them and have no real right to them. Remission orders are generally used as a means of granting relief from some aspects of the tax system. As I said, we do not particularly worry about that fact but in this case the remission order was used as a means of implementing a policy that is not necessarily the policy of the Government. Large amounts of public money were involved, and the use of the remission order suggests that the bureaucracy was taking the law into its own hands and making the legal decisions without coming before Parliament.
The Auditor General goes on to say in his report that the Department of Finance advised him that if it had not done what it did, Dome would have been forced into bankruptcy and the federal Government would have suffered a substantial revenue loss. The Government was also concerned that the failure of Dome could have serious adverse effects on the Alberta economy. In the circumstances, the Department believed it could not accurately determine costs or prepare meaningful cost figures. Officials of the Department of Finance appeared before the committee, but in my eyes and in the eyes of the committee they were unable to justify any of these points. It appeared to me, and I think probably to other members of the committee, that the process was gone into in order to allow the takeover of Hudson's Bay Oil and Gas and to allow the putting in place of the remission order, which would end up being very beneficial to a corporation.
The remission order permitted Dome Petroleum Limited to make use of a method of allowing losses for tax purposes to be transferred within its ownership group. It had not been approved by Parliament. In May 1985, that had only been proposed as a part of a budget paper. Consequently, in the opinion of the committee, Parliament's consent should have been sought before the remission order was made.
The committee made a number of recommendations, and I would like to put some of those recommendations on the record. In his 1986 report, the Auditor General gave a lot of support to the recommendations that we made. In fact, he

February 5, 1987
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made very similar recommendations in that report and has done so on other occasions as well.
We recommended that the Financial Administration Act be amended to require the following: the tabling in Parliament of all income tax remission orders and the preparation of an explanatory note to accompany each remission order so tabled outlining why the remission order is in the public interest. The key statement in the Financial Administration Act is that remission orders are given only in the public interest. However, if one looks at the public accounts of any particular year, one will find pages and pages of remission orders. I would expect that it would be very difficult to provide an indication of why each remission order was given, but when the remission orders are in the magnitude of even a portion of the one we are discussing today, they ought to be explained not only to Parliament but to the people of Canada.
If the Auditor General had not put his finger on this particular remission order and the fact that it had not been consented to by Parliament, it may have gone through and gotten only minor play across the nation. As it is, it is the reason we should move in a number of areas.
The committee suggested that a reference of all remission orders so tabled be made to the appropriate standing committee and that prior approval of Parliament be sought of all income tax remission orders exceeding S20 million in value, and this is probably a key recommendation. This would mean that major remission orders would have to be explained. Many members of the committee suggested that the bureaucracy justify every remission order. In the end, we agreed on the figure of $20 million as being a central figure which would ensure that the Government was in hand.
We made a number of other recommendations and I hope that other Hon. Members will put these before the House along with the reasons of the committee for making them so that Hon. Members may see why this particular report should be taken very seriously by the Minister of Finance (Mr. Wilson), the Cabinet and the Government. The issues brought up by this report should be dealt with by Parliament.


The Acting Speaker (Mrs. Champagne):: Questions or comments? Debate.


Mr. Alan Redway (York East):: Madam Speaker, I appreciate having the opportunity to say a few words in connection with the motion of the Hon. Member for Prince Albert (Mr. Hovdebo) because I am a member of the Standing Committee on Public Accounts. The question of the Dome Petroleum and Hudson's Bay Oil and Gas remission order is a very troublesome one. It highlights a problem that dates back many years. One of my colleagues, a former member of the committee, has described this as being part of the Liberal legacy with which the present Government was left. The particular problem of the Dome Petroleum and Hudson's Bay Oil and Gas remission order is one that relates back to the days of the former Government, and the remission order concept itself certainly relates back to the former Government, though I
suppose it has been a part of the laws of Canada for a long time.
This report identifies a problem at which we should take a very close look in the very near future in an effort to ensure that this sort of problem does not and cannot happen again. In fact, the problem relates to Section 17 of the Financial Administration Act which provides that the Governor in Council, on the recommendation of the Treasury Board, whenever the Governor in Council considers it in the public interest, may remit any tax, fee or penalty. In effect, that means a cabinet decision can forgive a tax and simply eliminate it as if there were no laws on the books of the country indicating that that tax had to be paid. I felt so strongly about this after dealing with the matter on the Public Accounts Committee that I have placed a Notice of Motion on the Order Paper which I hope will be debated before too long.
My motion is that, in the opinion of this House, the Government should consider the advisability of repealing Section 17 of the Financial Administration Act and requiring that all remissions of taxes, fees or penalties be submitted to Parliament for approval each year. That motion goes a long way, and I am sure the Government and other Hon. Members will have some reservations about going quite that far in dealing with remission orders. As the Hon. Member for Prince Albert has pointed out, there is perhaps some logic in having remission orders in some cases.
The real effect of a remission order is to forgive a tax. Even though there is a tax law on the books, the executive of the country can wipe out that tax for you, Madam Speaker, or for me but not for our neighbour. That seems to me really to strike at the roots of democratic Government and democratic principles. Section 17 of the Financial Administration Act allows members of the executive of the Government to say: "There is a tax on the books that you have to pay but I do not have to pay". Because of Section 17 of the Financial Administration Act, they could wipe out their taxes personally just by passing an Order in Council. They might not do that for themselves, because they might feel that that would be a little embarrassing, but they might do it for a friend. I am not suggesting in any way that they would do this or that that has happened but I am saying that that is what Section 17 of the Financial Administration Act allows. It allows a highly discriminatory situation to exist where the Government could decide that one person has to pay a tax and no one else has to, or that one person is exempted from paying a tax and no one else is. I think we should take a very close look at this section of the Financial Administration Act with a view to either repealing it altogether or restricting very severely the way it can be used.
The Standing Committee on Public Accounts, when it considered the Dome remission order in particular, saw the problems I have just pointed out. That order certainly highlighted very dramatically this kind of difficulty. The order
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had the effect over a 10-year period of allowing Hudson Bay Oil and Gas to deduct for income tax purposes the financing costs which Dome incurred in acquiring Hudson Bay. The value of that deduction, according to the Auditor General, was some $400 million, not a small sum, particularly if we were to apply it to the deficit.
The peculiarity of this situation is illustrated, it seems to me, by the fact that Dome Petroleum bought Hudson's Bay Oil and Gas but it did not have any income against which it could write off its financing costs. So what happened? Hudson's Bay Oil and Gas wrote off the financing costs incurred by Dome when it bought Hudson's Bay Oil and Gas. That something like this would be allowed just boggles the mind. Why was it allowed? Because Dome Petroleum was in such sad financial shape that there was concern that it and its suppliers might go down and all its employees might lose their jobs. It would be a tremendous blow to the Canadian economy, particularly that of western Canada. Therefore, the former Liberal Government entered into a commitment to allow this arrangement to take place, and the present Government proceeded with it because it did not feel it had the moral right to go back on the commitment. It was proceeded with but it cost the taxpayers some $400 million. That, as I said, is no small sum.
The impact of the remission order was, by an act of Cabinet, to change the tax laws of this country without an Act of Parliament. It gave great financial benefit to one company but other companies doing exactly the same thing did not receive that benefit. A preference was given to one taxpayer over others, and that brings our tax laws into disrepute, as if they need any more disrepute than they already have.
As my hon. friend for Prince Albert indicated, the Standing Committee on Public Accounts recommended a number of things that should be done to the Financial Administration Act. For example, there should be the tabling in Parliament of all tax remission orders with an explanatory note outlining why the order was in the public interest. It recommended approval by Parliament of all tax remission orders exceeding $20 million in value. That means that this particular tax remission order would have required parliamentary approval. My own motion, if the Government sees fit to adopt it and actually repeal or amend Section 17 of the Financial Administration Act, would require all such remission orders to be approved by Parliament. While there may be some piddling amounts involved in some remission orders, ones of this size are certainly significant. In my view even something involving $19 million should certainly be approved by Parliament, bearing in mind that it gives a preference to one taxpayer over another.
The other concern which the committee had with the Dome remission order was that a beneficiary of the order was not specified directly. In effect, the remission order did not limit the benefit to Hudson's Bay Oil and Gas because that company could sell off the benefit to someone else. It was an open-ended order and there was no way of limiting it to Hudson's Bay Oil and Gas. There are a lot of problems with this particular remission order, and a lot of problems with
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remission orders in general, because they leave the door wide open for the Government to give special preference to one citizen or company and not to others.
Bearing in mind my concern that what we need here is not to just to deal with the Dome remission order, and bearing in mind my concern that even the recommendations of the committee in its first report are not sufficient because they do not go far enough, and bearing in mind that the Government is to respond within the next few days to that report, I move, seconded by the Hon. Member for Edmonton-Strathcona (Mr. Kilgour) that the motion put forward today be amended by deleting all of the words after the word "That" and substituting the following therefor:
-the first report of the Standing Committee on Public Accounts presented to the House on November 4, 1986, be not now concurred in but that it be recommitted to the committee for further consideration.


The Acting Speaker (Mrs. Champagne):: Resuming debate. Mr. Hovdebo: Any questions?


Philip Derek Lewis: On a point of order. With respect, Madam Speaker, I believe the 10-minute question period should apply directly after and that would allow my friend to question or comment on the statements made by the Hon. Member who just completed his remarks.


The Acting Speaker (Mrs. Champagne):: The Chair agrees that that is the way to proceed.


Stanley J. Hovdebo: Madam Speaker, I would like to ask a couple of questions in order to put a couple of things on the record. Is it the Member's understanding that if Hudson Bay Oil and Gas is sold within the next two or five years the remission order will be removed? What would the effect be if it were not?


Alan Redway: Madam Speaker, I want to thank the Hon. Member for the question. My understanding of the remission order in this particular case is that there is no limitation on the remission of tax in the event of the sale of Hudson Bay Oil and Gas. If the company were sold to another company, that other company could take advantage of the remission order and receive the tax benefit. It is not limited specifically to the one company. That was one of the concerns expressed by the committee.
In fact, in paragraph 12 it was recommended that, where applicable, future remission orders include conditions specifying the ownership of the companies for whom the benefit is intended. If this recommendation is adopted by the Government, there would be no possibility of that type of thing taking place in the future.


Stanley J. Hovdebo: Madam Speaker, when this matter was before the Public Accounts Committee the Member was concerned that all remission orders have explanatory notes.

February 5, 1987
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That is a major undertaking. Why does the Member consider this to be important in this particular structure?


Alan Redway: Madam Speaker, as the Hon. Member is aware, Section 17 of the Financial Administration Act talks about allowing the Governor in Council, on the recommendation of the Treasury Board, to remit the tax fee or penalty when the Governor in Council considers it to be in the public interest. The purpose of the recommendation for explanatory notes is for the Government to indicate why it thinks there is some public interest to be served in a particular case by making a remission order. If the Government only indicates that, in its view, it is in the public interest to forgive certain taxes, but we are not informed of how the Government came to that conclusion or the reasoning behind it, in fact, we have no reason to believe, other than taking the Government's word at face value, that it is in the public interest at all.
If the Government is not required to give an explanation or its rationale, it could very well forgive the income tax of the Hon. Member for Prince Albert while requiring me and everyone else to pay through the nose. The Government would only have to say that that is in the public interest. I am sure the Hon. Member may think that that is in the public interest, but the rest of us may differ in our opinions.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, I would like to speak in support of the motion moved by the Member for York East (Mr. Redway). I think it would be useful for the Public Accounts Committee, which has already considered this matter in some depth, to continue to do so. The report which was tabled on November 4, 1986, requested that the Government provide a comprehensive response in accordance with Standing Order 99(2). That response is due shortly and it will be very appropriate for the Public Accounts Committee to consider the matter further in light of the response.
This particular report dealt with remission orders in general, but particularly with the remission order granted to Dome. In July, 1984, when Parliament was not sitting, a press release was issued by the then Minister of Finance which indicated the Government's intention to provide a remission order to Dome to become effective December 32, 1984. The intent was to assist the company's efforts to achieve private sector financing. The debt rescheduling agreement which was ultimately entered into by Dome replaced a 1982 agreement which had contemplated a significant investment in Dome by the Government.
The Hon. Member for York East stated that the decision was made by the previous Government and that his Government merely gave effect to it. I do not particularly quarrel with that, but I point out that the remission order was made in February, 1985, and that the matter had not been raised in the House. I hope that in the future the Government will raise in the House matters which concern so much foregone revenue.
The remission order, which was granted under Section 17 of the Financial Administration Act, authorized Hudson Bay Oil and Gas to deduct, for income tax purposes, the financing costs
which Dome incurred in acquiring it. The value of the remission order is high. Officials quarreled before the Public Accounts Committee with the estimate arrived at by the Auditor General, but did not offer any other figures in rebuttal. However, it is clear that the cost to the citizens of Canada was high. The Public Accounts Committee was concerned that the consent of Parliament was not sought and Parliament was not involved in a substantial expenditure of public funds. A corporate loss transfer procedure was used which, as far as members of the Public Accounts Committee could see, was not allowed in law. In fact, it came before Parliament in May, 1985, three months after the remission order, and came before Parliament as a proposal in the budget discussion paper. Indeed, it was described in the budget discussion paper as a new concept which needed to be: "fully discussed before implementation". Yet it had been used in February, 1985.
The officials from the Department of Finance justified their decision by claiming that Section 17 of the Financial Administration Act allows a remission order to be made if it is in the public interest. The concerns expressed in the Public Accounts Committee were that when a large expenditure of this kind is being made the question of what is in the public interest should be discussed in Parliament and should not be defined by officials behind closed doors.
Another concern raised at the Public Accounts Committee was that according to the Financial Administration Act there is a requirement to publish in the Public Accounts of Canada details of remission orders and their costs. There are some 44 pages of remission orders in the Public Accounts of Canada, but a full page of them includes cases where there are no figures attached. The Public Accounts Committee considers that this is unsatisfactory and that, in future, officials, even if they are unable to give accurate costs, should explain why they are not providing the costs and perhaps give their best estimate and describe it as such.
While I do not wish to repeat the points made by the two Members who spoke earlier, I want to stress the concern of the Public Accounts Committee about the lack of clear information in this matter. The Auditor General's staff were initially told by the Department of Finance that no economic analysis or cost benefit analysis of this measure had been done.
When the matter was before committee, the Deputy Minister of Finance said that there was a cost benefit analysis but it was a cabinet document and could not be made available to either members of the Public Accounts Committee or the Auditor General. Subsequently, whatever they had was made available to the Auditor General for examination. However, it is an example of an ongoing difficulty in getting clear facts and figures from the Department of Finance.
I do not want to be unduly critical or apportion blame. I want to concentrate on the recommendations of the Public Accounts Committee which I believe are constructive and
February 5, 1987

valuable to any Government. First, we suggest that the Financial Administration Act be amended to require the tabling in Parliament of all income tax remission orders, with an explanatory note outlining why each remission order is in the public interest. We also propose that all remission orders so tabled be referred to the appropriate standing committees and that prior approval by Parliament be required in the case of all income tax remission orders exceeding $20 million in value.
We also recommend that the Minister of Finance (Mr. Wilson) in future ensure that income tax remission orders do not deal with any matter currently before Parliament. This refers to what I said earlier, that the remission order in this case was passed in February, 1985 but there was a new proposal in May, 1985, as part of a budget paper to give effect to the method which had been used here.
Another concern was that the remission order in this case did not limit the benefit to the present owner of Hudson's Bay Oil and Gas. If Dome should decide to sell, it could lead to an unintended benefit to another taxpayer. We were concerned that there were no conditions involved. Therefore, the Public Accounts Committee recommends that, in future, remission orders include conditions specifying the ownership of the companies for which the benefit is intended.
Our final recommendation was that the Treasury Board develop guidelines for the reporting in the Public Accounts of the estimated amounts of remission orders where an exact figure is not available. We find it unacceptable and something that has potential for abuse when the officials do not meet the requirement of the Act to give a figure because they say they are unable to estimate the figure accurately.
We are looking forward to seeing the government response to this report which was tabled on November 4. The Government's comprehensive response is due shortly and I am looking forward to pursuing the matter at that point.


Simon Leendert de Jong: Madam Speaker, my question for the Hon. Member may be unfair because she may not have the actual figures. However, how much does the Government lose every year in terms of remission orders, particularly as they pertain to the Income Tax Act? I understand that there are remission orders dealing with the payment of customs and excise tax, but does she have any idea of the magnitude of public revenues lost because of remission orders affecting income tax?


Aideen Nicholson: Madam Speaker, the only information I have is what is in the Public Accounts of Canada, where a figure is given. I do not have that figure in front of me, but I believe that it added up to some $840 million.


The Acting Speaker (Mrs. Champagne):: Resuming debate.


Simon Leendert de Jong: Madam Speaker, I rise to support the effort by my colleague, the Member for Prince Albert (Mr. Hovdebo), to bring the report of the Public Accounts Committee before Parliament. It deserves attention
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by Parliament because it deals with some very important matters. First, there is the loss of some $1 billion in public revenue. The Government has forgone the significant sum of $1 billion that should have been paid in taxes.
We are living in a time of restraint, in which the Government is making cut-backs. Various Departments have been told in the last number of years to cut back their expenditures, and we have seen a decrease in such services as research and development, and grants to universities and to the provinces in the area of medicare. There have been cut-backs in the Department of the Environment and restraints in job-creation programs, unemployment insurance programs and others. We have also seen some major tax increases imposed upon the Canadian taxpayer in the last number of years, all, of course, in the name of fighting the deficit. Yet despite all the efforts of this Government and the previous Liberal Government to cut expenditures and raise more revenues, they can with the stroke of the pen forgive a major company some $1 billion in taxes owed to the Government and to the people of Canada. It just amazes me how in some areas the Government is nickel and diming, yet in other areas it allows the throwing of some $1 billion out of the window.
We see the loss of $1 billion with this remission order concerning Dome. We saw the loss of some $1 billion in bailing out the banks, a decision made over a weekend. We saw the loss of some $600 million, $700 million again because of a tax decision which allowed the Reichmann's to buy Gulf Oil. There has been the loss of major sums of money. Yet these decisions are made almost at the snap of a finger.
The particular case we are discussing today, the loss of some $1 billion in revenues from Dome Petroleum, is the topic of the first report of the Standing Committee on Public Accounts. It goes into some detail and I wish to examine some aspects of its report and place some of its observations and recommendations on the public record. The report states:
In February 1985 a remission order pursuant to Section 17 of the Financial Administration Act was granted to Hudson's Bay Oil and Gas Limited, a subsidiary of Dome Petroleum Limited.
Over a 10-year period, Hudson's Bay Oil and Gas was authorized to deduct for income tax purposes the Financing costs that Dome incurred in acquiring it. The value of the remission order is considerable. To date, the Auditor General has estimated that $400 million has been expended.
The first part of the committee's report outlines the magnitude of this decision and the fact that so far it has cost some $400 million in lost revenue. The report continues:
Your committee has a number of concerns with respect to this remission order:
(a)	Parliament's consent was not sought and Parliament was not involved in
a substantial expenditure of public funds;
Perhaps, Madam Speaker, in this whole sorry state, this is one of the most serious observations made by the committee, and I repeat:
Parliament's consent was not sought and Parliament was not involved in a substantial expenditure of public funds;

February 5, 1987
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This decision erodes the role of Parliament and our role as Members of Parliament. That role is to scrutinize the expenditures of public funds by the executive, by Cabinet. That was denied to us. Of course, if there had been an open and public discussion in the House, there would have been publicity. There would have been the reporting of such a debate in the newspapers and the media. The public would have known what was happening and I would tend to think that the public would not, on the whole, have approved of what the Government was doing. Public disclosure and public awareness of what was happening would have forced the Government to have gone a different route in terms of accomplishing its objective of attempting to save Dome Petroleum. The report continues:
(b)	A corporate loss transfer procedure was used, a procedure not otherwise allowed in law and currently before Parliament as a proposal in a budget discussion paper;
In other words, the committee was saying that what this remission order did was not legal. It was not allowed in law. It was only a proposal in a budget paper before Parliament. There was not even specific legislation which would have allowed that remission order to have occurred. Again, the committee points out that this remission order was outside the existing law and that there was no proper discussion by Parliament. The report observes:
(c)	there was an unconvential and unprecedented use of a remission order which was approved on the basis of the broad and general criterion of "being in the public interest";
As other speakers have pointed out, this general phrasing of "being in the public interest" is too broad. To allow and justify the loss of some $1 billion, just on the basis of the five words "being in the public interest" is just not good enough. The Government has to demonstrate in a much more precise and specific manner why it is in the public interest.
The Government, of course, failed to do this. The report continues:
(d)	there were less costly alternatives to the use of a remission order;
In other words, the committee was saying there was another way the Government could have solved this problem, a less costly way. Yet the Government ignored that option. Had the Government come to Parliament and had there been parliamentary discussion, the less costly alternative would have been also discussed. And, perhaps, in making it public, the less costly alternative would have been used. Perhaps there is some justification for this. Certainly, if Dome Petroleum was to go belly-up it would have a tremendous impact not just on the economy of Alberta and the hundreds of workers who work for Dome Petroleum, but on the many financial institutions which have lent money over the years to Dome Petroleum. However, if the public, through its Government, is going to take some of the risk, as surely we have done with this $1 billion in forgone taxes that Dome Petroleum owes to the Canadian public, if we are going to make that type of investment, surely the public has a right to be in on the action. If Dome Petroleum makes a profit in the years ahead, we can also have some of the benefit of the $1 billion investment we have in Dome Petroleum. If we are going to forgo revenues of nearly $1 billion, perhaps the
Government of Canada should have taken some equity in Dome Petroleum, so that when the oil industry turns around and Dome Petroleum starts to make money after a number of years, the public will benefit from the good times. If the public invests money in the bad times, surely it has the right to benefit from the good times.
The committee goes on to note:
(e)	analysis upon which the remission order was based was initially withheld from the Auditor General.
Why did the Government withhold this information? Why the tremendous amount of secrecy? Why were decisions made behind closed doors? There was no proper open parliamentary discussion. Information was withheld from the Auditor General. Why was there wheeling and dealing behind closed doors in the wee hours of the morning away from the glare of public concern and openness? Why was this deal cooked in such a tremendous amount of secrecy? What was the Government trying to hide?
In its final observation under this section the committee states:
(f)	the amount of the remission order was not reported in the Public Accounts as required by government directives pursuant to the Financial Administration Act.
This is another tidbit about the Government not following the proper procedures, the law itself. Again I repeat the question that I posed earlier, why the secrecy? Why not the open reporting that is required by law?
The committee makes some important and useful recommendations, and I quote:
Your Committee recommends that the Government give consideration to amending the Financial Administration Act to require the following:
(a)	the tabling in Parliament of all income tax remission orders;
In other words, that means open and full disclosure. I agree with this entirely. The next recommendation states:
(b)	the preparation of an explanatory note, to accompany each remission order so tabled, outlining why the remission order is in the public interest;
In other words, a greater amount of accountabiity is needed. If this is going to be done, explain why. That makes a lot of sense. It further states:
(c)	the reference of all remission orders so tabled to the appropriate Standing Committees;
In other words, a proper standing committee sees what the remission order is and it has an opportunity of debating it and asking questions about it.
It further proposes, and I quote:
(d)	the prior approval by Parliament of all income tax remission orders exceeding $20 million in value.
The committee is recommending that Parliament take back its traditional power over the purse, and that the Government be accountable to Parliament for such expenditures.
February 5, 1987

What the Government did is highly unusual in allowing Dome Petroleum to write off an estimated $1 billion on its taxes, and it is outside of the existing tax law. I wish to quote from the committee on this. What it states is very pertinent. It
says:
The Department informed your Committee that the use of a corporate loss transfer in the Dome case was not offensive to existing tax policy concepts. Your Committee disagrees. The Income Tax Act permits companies to incur interest obligations for buying the shares of other companies, and then through amalgamation or winding-up to make the two companies one and have the income of the acquired company offset against the interest expense of the acquiring company.
This is what is allowed in law. The committee further states, and I quote:
However, your Committee noted that Dome and Hudson's Bay Oil and Gas did not amalgamate. The remission order was therefore used to circumvent the Income Tax Act. Moreover, the remission order made use of a procedure outlined in a budget paper currently before Parliament. As the Auditor General noted, the budget paper referred to the corporate loss transfer system as "a new concept". This concept needed to be "fully discussed before implementation". The Dome tax remission therefore pre-empted Parliamentary consideration of an innovative and significant tax measure.
It is estimated that there are some $38 billion in unused business tax losses and tax credits, in other words, some $38 billion in tax deductions that the business community has not yet used. In essence, that amount of deductions can allow the businesses or the corporations not to pay taxes for the next three or four years. There are tremendously high unused tax losses on the books. If the business community decided to use all those tax losses, it would mean they would not pay one cent of tax for the next three or four years. Of course, the Government is extremely concerned about this.
I commend the Government for taking some steps in preventing the transfer of business losses, the buying and selling, and the wheeling and dealing of business losses to prevent a haemorrhaging of public revenues. What it has done here is the opposite. It has been made easier to use the business losses from one company to offset what another company should have paid.
Part of the frustration that Canadians felt with the Liberal Government, and which they are certainly now feeling with the Conservative Government, is the sloppy management and the loss of some billion dollars thrown out of the window. It is no wonder that Canadians are upset at this foolish business management of the Government which allows $1 billion to slip through its fingers. At the same time we have the deficit, and the cut-backs to human and social services.
In conclusion, I wish to talk briefly about tax reform. If the Government is serious about tax reform, it would not allow the type of remission orders that it allowed in the Dome case. Tax reform would mean fewer loopholes, lower rates, but a larger base. The remission order pertaining to Dome Petroleum is the opposite to tax reform. It is a hidden tax measure. There is no accountability by that company to the Government. The $1 billion in tax losses that this remission order allows to be written off can be bought and sold. It is not only directed to helping Dome. It will help Dome today, but Dome can wheel
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and deal, and other people and companies can benefit from that. There is no accountability. What a manner in which to run a Government! What a manner in which to look after the public interest! It is a shame, and surely it is a crime.
I congratulate my colleague, the Hon. Member for Prince Albert, in moving his motion today in order that there be this type of debate in Parliament.


Stanley J. Hovdebo: I wish to ask a general question. This tax remission can only be defined on a general basis as a tax expenditure, because it is tax that the Government will not receive. Over the years this has become a major method of under the table financing for many projects of many corporations and many economic regional development projects. In some cases they are very good, but I should like to use as an example another kind of tax expenditure-it is not the same as a remission but it is a tax expenditure-the scientific tax research program.
One of my concerns-and it is shared by many people around the country-is that if one is given a grant to do something, one must account for how the money is spent, but if one does it through the income tax system, the Income Tax Act does not allow for looking into how the money was spent. Consequently, a company receiving a direct grant and one receiving an equal amount through the tax system are treated differently. I should like the Hon. Member to comment on that real problem as far as the grant and tax expenditure structures are concerned.


Simon Leendert de Jong: Madam Speaker, it was that very point which I was raising toward the end of my remarks when I talked about tax reform. The Auditor General has estimated that there are billions of dollars in what are called tax expenditures. I believe the amount is something like $45 billion to $53 billion. These items do not appear on the books. They are special tax incentives, loopholes, and deductions which are used by individuals and, to a very large extent, by corporations.
For example, if the Government wishes to see some regional development in Cape Breton, it offers special deals or special tax breaks to those people locating industries there. A few years ago, as another example, the Government decided that we needed more rental property and introduced MURBs. Individuals putting money into the building of rental properties were able to take advantage of certain tax deductions.
The money which is lost or which the Government does not collect because of various tax provisions is called tax expenditures. It does not show up on the books as money collected and spent because it was never collected. It is money which should have been paid to the Government but was not paid because of various loopholes.
Certainly what happened to Dome in terms of the tax remission order was one example of many which could be used

February 5, 1987
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to arrive at the billions of dollars of lost public revenues called tax expenditures.
Tax reform would do away with most of the tax loopholes and deductions. If that were the case, the Government could be collecting some $50 billion in revenue every year. The notion behind tax reform is that if we reduce the number of deductions, we collect more money and can therefore reduce income tax rates. If the Government wants to help support a particular industry, as was the case with Dome, because it is considered to be in the public interest, or if it wants to help in the location of industries in certain regions because it is considered to be in the public interest, or if it wants to help people raise children or whatever, then it can be done through direct grants rather than the taxation system.
There is no accountability in the tax system. Someone who takes advantage of a particular tax deduction or loophole does not have to come back to the Government to say how many jobs were created or what was done. As long as it can be justified through an accounting system, the tax deduction is allowed. There is no way for the Government to ensure that the deduction did what it was supposed to have done.
This is why we in the New Democratic Party support tax reform to make certain that there is a proper accounting of the moneys lost to the public. We were sad to see that the Minister of Finance (Mr. Wilson) postponed introducing tax reform for perhaps another year or so. It will mean the loss of many more billions of dollars of public revenue and the continuation of a system which does not allow for accountability.


Mr. Scott Fennell (Ontario):: Madam Speaker, it is not often that I have had an opportunity to rise in the House during the last year and a bit, but I wanted to put some facts on record today. There are colleagues of mine in the House today who spent eight weeks in Room 112-N, and I think it was the result of the ringing of the bells in 1982 that some changes were made.
I commend the Hon. Member for bringing this matter to the attention of the House and for providing us with an opportunity to discuss public accounts. However, the debate could have been foreseen in 1982. It arose from the National Energy Program. It was because of that program that we are discussing the situation today.
I was also glad, as an aside, that the last Hon. Member who spoke mentioned SRTCs which, as he will know, were cancelled as soon as we took office, as much as we possibly could without being totally unfair. We had to grandfather some of them, but most of the damage had already been done before we assumed office in September, 1984.
This is simply a landmine which we inherited. I feel badly that $400 million of taxpayers' money had to be spent, but it was part of the problems created by the National Energy Program. They were trying to encourage Canadians to invest and buy back Canadian oil companies which had been created and were owned by Americans.
I should like to refer to a company which was self-sustaining and sound, one of the best oil companies in western Canada. It had the greatest developed and undeveloped resources of almost any small independent company. Unfortunately, the National Energy Program brought it to an end, because at that time it was owned by the Continental Oil Company. I have to place a certain amount of the blame on the former management of Dome that tried to take advantage of the National Energy Program. Actually, I believe it was the management of Dome which created a great deal of the energy policy of the Liberal Government. As a matter of fact, we saw Jack Gallagher in Ottawa more often than people saw him in Calgary, Edmonton, or anywhere out West. I know Bill Richards came to Ottawa many times to lobby Government. Dome was a sound creation, but it was destroyed by its own making. It was only one of many companies which suffered as a result of the National Energy Program. It was brought to everyone's attention because of its massive debt which was created by the National Energy Program, by encouraging it to buy something it could not afford.
I recall a meeting concerning what we referred to as "baby NEP". The members of the committee attended a meeting in a small committee room, which the Speaker has now taken over as part of his offices. I remember the public servant from the Department stating that they had to make a change in the National Energy Program because they found that the figures in the black box were not quite right. They suddenly decided that we were not to have $100 oil. It was only a few months after they had introduced the legislation. They also decided that there would not be $50 oil, and at that point they were talking about slippage. Almost before the National Energy Program became law it was questioned by the people who created it, that it would not accomplish what they had anticipated. I said to the hon. gentleman at that time, "Do you mean by simply adjusting a couple of numbers in a computer that you can change your whole view of what you have been telling Canadians for the last year?" He said "Yes, we have".
I wish they had said a little more and adjusted the figures a little further at that time. Had they done so, there would not be the chaos in western Canada that there is right now. I saw that chaos in 1982 and I see it again today. I see a responsibility of our Government to assist the West in some way. The West is an important part of Canada. It has a resource that I believe eventually will be in great demand.
We think we have a supply of oil forever, but I read the newspapers today turning from one page to another and all I read about was conflict, terrorism and problems in the Middle East. One day something in the Middle East may blow up that will make us responsible here for supplying our own oil. To manipulate an industry as the National Energy Program did was the cause for the damage. I am glad that the Public Accounts Committee had an opportunity to review the situation and bring it to the public's attention. We inherited this situation. We had no choice. As the Hon. Member who
February 5, 1987

just spoke said, they probably did not have a choice because of Dome's immediate financial problems.
I am trying to put on the record a review of what has caused the problems. The Hon. Member touched on the SRTC's. I happened to question the validity of the SRTC's in the Finance Committee-it is on the record-long before those instruments were passed into law. I said there would be flagrant abuse of those research tax credits. I am not always right, but I have given two examples of when I was right in the past. It is fortunate, however, that our Government came into power and was able to correct some problems and was able to adjust and accept the responsibilities left.
Now we come to tax reform. I, for one, am a strong supporter of tax reform, Madam Speaker. It has been needed for many years. We had a Liberal Government that manipulated tax laws to suit its political needs, but our Government is bringing in tax reform. We are doing it with thorough thought and by looking at the consequences of all the past legislation on tax. We do not want to make the mistakes that have been made in the past. Tax reform for the sake of tax reform is not enough. Tax reform is only suitable when it is successful and it suits the needs of all Canadians. I am personally delighted that tax reform has been delayed. I believe that when it is brought in, and it will be brought in by our Government, it will eliminate the necessity of the Public Accounts Committee trying to dig up where we are losing funds through tax loopholes.
I sat with the Hon. Member for Prince Albert (Mr. Hovdebo), who introduced this motion today, on the Public Accounts Committee, not only in opposition but also in government. We have worked closely together over the years concerned as we were about the loss of funds, the bad expenditure of funds, and the tax expenditures that are not acceptable. I think we have brought to light the importance of the Public Accounts Committee and the importance of bringing to the attention of Canadians examples of where money is wasted. I am proud of my Government because it has dealt with the recommendations of the Public Accounts Committee. It has dealt with the recommendations of the Auditor General. We are trying to get the expenditures and the revenues of our country under control. We started with a deficit per annum which was higher than it is today. We are slowly eroding the damage that has been done.
I want to say, and I know the Hon. Member across the way will agree with me, that his motion is an idea that he and I have discussed in the past. There should be an opportunity to have a day's debate in the House of Commons when a report from the Standing Committee on Public Accounts is introduced. I think it is healthy because we can pinpoint problems.
What we are debating today, Madam Speaker, is the landmine left to our Government. We are dealing with it in the only possible way. Even though I do not like it, the problems that occurred in the West as well as the problems of today were caused by the National Energy Program because the Liberals put the hopes and anticipations of all of Canada,
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particularly those of western Canada, into the belief that the price of oil would keep going up. There is no commodity in this world that has ever been on an upward scale without a slight change from time to time. The example today is gold. Everybody has said that the price of gold would go sky high. I noticed yesterday in the paper that the price of gold dropped below $400 an ounce.
We should not, as a Government, be in a position to project or anticipate what the value of a resource might be. We should not try to take control of our resources with a view to taking more tax out of one segment of our society at the expense of another.
I appreciate having had these few moments to speak, Madam Speaker. I want to commend the Hon. Member for Prince Albert for bringing the matter to our attention. I would like to say too that I have enjoyed working with him in the past and I hope to continue working with him in the future.


Stanley J. Hovdebo: Mr. Speaker, I appreciate the comments of the Hon. Member for Ontario (Mr. Fennell). I have a couple of questions for him. I know how he feels and I know his position on most of these issues because, as he has indicated, we worked together for several years on the Public Accounts Committee. The impact of the Public Accounts Committee report was to recommend a change in a structure which allowed this particular remission order to be issued. Would the Hon. Member comment on that recommendation? Does he think it is a good direction to be going in or is there another alternative?


Thomas Scott Fennell: Madam Speaker, we should look at all of the possibilities. I think this is one of them. It is part of the tax reform package. There have been many changes and manipulations in the tax laws to suit the needs of Government. I do not think they were to the benefit of Canadians at large.
As one of many changes required, yes, I would agree with the Hon. Member that this should be reviewed and that it should not be abused. I do not believe it is being abused but we should definitely have a review of it. Preferably, we should have total tax reform in a total package that may be discussed in the House to ensure that we will have the best tax reform ever accomplished in a democratic country.


Stanley J. Hovdebo: Madam Speaker, the Hon. Member for York East (Mr. Redway) has suggested that Section 17 of the Financial Adminstration Act be deleted in its entirety. That was the suggestion on which I was asking the Hon. Member to comment, and perhaps he will do so.
As has been mentioned, tax expenditures over the years are not things for which companies or individuals are accountable in the same way as they are accountable for grants. Still tax expenditures have been a major means of getting money to corporations, individuals and organizations. I wonder if the Hon. Member for Ontario would agree with the Auditor

February 5, 1987
General's suggestion that they should either be accounted for or disallowed entirely.


Thomas Scott Fennell: Madam Speaker, I disagree that tax expenditures are not totally accountable because any tax expenditure is subject to review by the Department of National Revenue. They are also accountable to the shareholders of the companies.
I do not think tax expenditures have been as abused as members of the NDP are inclined to indicate. That is where are our positions differ. I do not believe they have been abused to that extent because the Department of National Revenue reviews tax returns and if they are found to be out of order, deductions are disallowed.
I personally do not believe in grants because I believe that if we give people something for nothing, they will treat it with the same amount of respect. I know the Hon. Member's next point. He can turn that around and talk about deductions, but at least tax credits are reviewed by the Department of National Revenue, by independent chartered accountants and by the shareholders and audit committees of corporations. I feel that there are protections for the tax base.


Stanley J. Hovdebo: Madam Speaker, I have one further question. I was intending to do exactly that, to turn that around and say that tax remissions are also gifts in the sense that they are expenses the companies do not have to pay. Consequently, I cannot really see the difference between a grant and a tax remission because we do require companies to tell us how they spend grants.
In 1985, remission orders cost us S882 million. A lot of those remissions were custom remissions for which there were good reasons. Would the Hon. Member comment on the possibility of requiring each Department to estimate the amount of money it is not receiving because of remissions as being one method of controlling tax expenditures and remissions?


Thomas Scott Fennell: Madam Speaker, this is now getting into a lot of detail. I would like to touch on the Hon. Member's first statement. A tax expenditure is based on income earned by a corporation being productive and useful to the Canadian economy. I do not know that I am personally in favour of making minor changes to the Income Tax Act. If we remove Section 17 only, thus satisfying one segment of the public, we are not solving Canada's problem, which is the need for total tax reform.
For each Department to estimate how much tax expenditures cost would be difficult. If I were the head of a Department, I could establish a pretty general idea of the amount, but I think the only person who could give the specifics would be the Minister of National Revenue (Mr. MacKay). The Department would have to go through the last 10 years of audited statements to determine exactly how much every deduction has cost the revenue base.
The Hon. Member is making the assumption that it is the
right of the Government to tax. I believe that it is the right of a
company to make its own expenditures, to create jobs, to be productive and to earn income which provides a return for the shareholders. I do not think it is the Government's God-given right to determine how much money each person should receive. Going beyond that, we would be looking at a society very similar to one with which I do not have much sympathy. We would be handed a pay cheque by the Government at the end of each week instead of earning money in the way we can earn it using our own means. Theoretically, we are taxed on an equitable basis so that we can pay the expenditures required by Government. I am not totally in sympathy with all government expenditures, but that is how we are treated today and that is the way I would like it to remain.
I do not know that I wish to enter into a philosophical discussion which, however, would be worthwhile and interesting. I think we must make total changes in the tax system. We cannot live with what we have had in the past. We do not know to whom it has been fair or unfair, and this is part of the process that is being undertaken at the present time. Whatever changes we can make for the betterment of Canadians are changes I would support.


Stanley J. Hovdebo: Madam Speaker, if I may, we are dealing with an amendment to my motion. I know that there are only a couple of minutes left so I would like to speak for a couple of minutes if possible.


The Acting Speaker (Mrs. Champagne):: The Hon. Member would like to debate? There are 35 seconds left.


Stanley J. Hovdebo: Madam Speaker, rather than letting this amendment go to a vote, I would prefer that the report of the Public Accounts Committee stay before the Government so that it is required to answer to it under the law. I am going through this process because the motion will be referred back by the very fact that the Government will be required to make an answer to the report.


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


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, a full page ad appeared in The Globe and Mail suggesting that millions of Canadians are outraged by the investigation of
February 5, 1987

Nazi war criminals in Canada. This inflammatory message is a distortion of reality. It is totally reprehensible to suggest that individuals who should not have been admitted to this country in the first place because of heinous crimes be allowed to enjoy the privileges of Canadian citizenship due to any lapse of time.
At a time when neo-Nazism is rearing its ugly head and when some pretend the Holocaust never occured, failing to bring war criminals to justice vindicates old Nazis and encourages new ones. There is every reason why justice must be done. To do anything less would betray what the victims of World War II died for and what this country and its soldiers fought for.
Prosecuting suspected war criminals in Canada has nothing to do with the nationality of a suspect but has everything to do with morality. It is a moral stain on the fabric of Canadian society to allow such persons to use this country as a safe haven. That is what outrages millions of decent Canadians.



TOURISM


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I would like to congratulate the Government for signing a Memorandum of Agreement with the American Bus Association to increase motor coach travel from the U.S. to Canada. The Hon. Member for Dartmouth-Halifax East (Mr. Forrestall) signed the agreement on behalf of the Minister of State for Small Businesses and Tourism (Mr. Valcourt). The Canadian tourism industry stands to gain a great deal from the potential for more American visitors entering Canada by way of motor coach.
I would also commend the Government for its program promoting Canadian tourism at Walt Disney World's Epcot Centre. The Canada Showcase, which opened there in 1982, has hosted millions of visitors by highlighting the architecture, culture, and woodland wonders of Canada. This country has proven it deserves to be among the prime vacation destinations in the entire world.



HOUSING


Mr. Neil Young (Beaches):: Mr. Speaker, after a long period of negotiation, the co-op housing movement in Canada thought it had reached an agreement with the federal Government to provide 5,000 new co-op housing units in 1986. Some 30 per cent, or 1,500 of those units, were to be eligible for rent
supplements. Those funds were to provide assistance for low-income households so that they do not have to pay more than 25 per cent of their income for housing. The co-ops found out in November, however, that funds were available for only 3,200 units.
In addition, even though money for 1,500 rent supplemented units had been budgeted, the Government decided to offer only 950. We are well aware of the admirable record of the co-op housing sector and I call upon the Minister to release the funds for the full 1,500 units. If the Government were interested in creating jobs, jobs, jobs, one of the best ways to do it is to enter into the housing market where not only is employment provided but adequate housing as well.



RENDEZ-VOUS '87 TRIBUTE TO ORGANIZERS

Mr. Marcel R. Tremblay (Quebec East):: Mr. Speaker, I would like to draw the attention of the House to Rendez-vous '87, a world class event that will take place in Quebec from February 8 to February 15. Three countries will be represented on this occasion, namely Canada, the United States and the Soviet Union. Rendez-vous '87 will be televised via satellite and give Quebec City, the province of Quebec and Canada tremendous visibility on television screens throughout the world.
The organizers have put a tremendous amount of time and effort into the preparations for this spectacular occasion, which will have an impact locally, nationally and internationally.
I would like to take this opportunity to express my appreciation of the organizing team which has been able to meet this formidable challenge and has put so much energy into ensuring this event will be a historic and unprecedented success.
Mr. Speaker, the eyes of the world will be on Quebec City next week, and I am proud to be a Quebecer and a Canadian as well as the Member for Quebec East, where a number of activities will take place.



UNEMPLOYMENT INSURANCE


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, the coalition that is defending Quebecers who took early retirement in 1985, 1986 and 1987 is furious about the

February 5, 1987
Government's decision and the silence maintained by Conservative Members from every part of the country. Mr. Speaker, in 1985, 35,000 people in Canada acted in good faith, on information provided by Canada Employment Centres. According to the Act, for anyone under 65 a pension fund is not considered to be employment income. The Quebec Pension Plan is not considered to be a form of remuneration.
Mr. Speaker, in 1985 that was the information given by the Department of Employment and Immigration. The Deputy Minister has admitted no advice to the contrary was sent out, and at this very moment the Minister still refuses to reimburse those 35,000 people, simply because the Government has decided to save money to reduce the deficit and give more to the rich.
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FINANCE


Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, the long decline in interest rates has thus far benefited only the issuers of credit cards, not the more than 10 million Canadians who pay excessive rates of interest. Why has the cost for credit stayed up while the cost of money has gone down?
Ten years ago when the bank rate compared with today's, Master Card charges were 3 points below what they are now.
In 1980 major Toronto department stores paid more for capital than they do now and charged their customers almost 8 percentage points less for credit.
I admit that these stores are giving extra services to charge card users, but do these services have to cost that much? Are some people right when they suspect this is plastic piracy? Surely when money is cheaper the big operators should not get all the benefit. Mr. Speaker, the issue is fairness.
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statement of political will that is long on rhetoric and short on details.
Despite irrefutable evidence that deadly toxic chemicals are seeping into the Niagara River, the Declaration of Intent and accompanying work plan contain far too many unsettling references to ongoing studies, discussions, and negotiations to be of much comfort to anyone. In particular, despite its promise to reduce persistent toxic chemicals by 50 per cent by 1996, the declaration only makes passing reference to the excavation of the most dangerous dump sites on the U.S. side of the river, raising fears that the Americans still plan to pursue unproven technologies of extraction as part of their clean-up effort.
The Prime Minister (Mr. Mulroney) says that Canada's cultural identity is not up for negotiation in the free trade talks with the United States. Good. But why does the drinking water of millions of Canadians continue to be negotiable?



ENVIRONMENTAL AFFAIRS


Mr. Allan Pietz (Welland):: Mr. Speaker, yesterday I was in Toronto on behalf of the Niagara regional caucus to witness the signing of an historic accord. The Declaration of Intent relating to the Niagara River Toxic Management Plan is a commitment by the Governments of Canada, the United States, New York State and the Province of Ontario to cut in half the dumping of persistent toxic chemicals into the Niagara River by the year 1996. The Minister of the Environment (Mr. McMillan) should be congratulated for this successful conclusion to a year of intense negotiations with the Americans.
The pollution of the Niagara River is a source of great concern to all who depend on it for their water supply. This accord represents a giant step, not only toward the clean-up of the river but also toward international co-operation on environmental issues. Let us hope it sets an example of cooperation for all of our negotiations with our American neighbours.




Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, Canadians should not greet yesterday's signing of a Declaration of Intent to reduce toxic chemicals in the Niagara River with a great deal of enthusiasm. After four decades of study and negotiation the Governments of Canada, the United States, Ontario and New York have only managed to sign a



VOLUNTARY ORGANIZATIONS

[Stage Direction]
HOSPICE/PALLIATIVE CARE SOCIETY OF CAPE BRETON
Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I rise to join with my constituents in saluting the Hospice/Palliative Care Society of Cape Breton and its efforts to form such a service for Sydney, Nova Scotia, and the surrounding area. Through the hard work of the steering

February 5, 1987

committee of this society and the support of the region, a hospice volunteer program began in September, 1986.
While the long-term goal of the society is the establishment of a free-standing hospice, the immediate plan is to provide a community hospice service to match up trained volunteers with a terminally ill patient and family. The volunteers will provide emotional and practical support to the patient and family members. Each volunteer is trained to help dying patients and their families to live each day as fully as possible.
The efforts of the Hospice/Palliative Care Society of Cape Breton deserve every support which can be provided. I urge them to continue their efforts on behalf of the people of Cape Breton. I also urge the Government of Canada to provide meaningful financial assistance in order that their goals may be achieved in the very near future.



CANADIAN ARMED FORCES


Mr. Bob Hicks (Scarborough East):: Mr. Speaker, a few moments ago in Toronto the Minister of National Defence (Mr. Beatty) delivered an address in which he announced an increased role for women in our Armed Forces in those few areas in which they do not already serve.
The Minister emphasized that the fundamental principle involved here is that every Candian citizen has equal rights and responsibilities when it comes to the defence of our country.
Canada stands in the forefront of military forces in the world in regard to the employment of women. The important points, however, are that even though Canada is already leading in this area we are committed fully to the principle of equality for women in the Forces, and that further changes will be made based upon valid scientific trials to be conducted as soon as possible with the objective of determining how, when, and in which occupations remaining restrictions can be removed.
I am certain that all Canadians applaud the Minister's approach and attitude.



CANADA-UNITED STATES LUMBER AGREEMENT

Iain Francis Angus: Mr. Speaker, millions of Canadians have been humiliated by the sell-out of
15,000	Canadian jobs and the compromise of Canadian
sovereignty which was the price the Prime Minister (Mr. Mulroney) paid to get an agreement on softwood lumber.
Yesterday the U.S. Ambassador to Canada, Thomas Niles, said that the success of the lumber agreement is evidence of the dynamic and positively developing relationship between the two countries and that the lumber agreement is an example of the success that is possible on acid rain.
While the Prime Minister and Thomas Niles herald the success of the lumber agreement, it is apparent that neither side agrees on what the lumber agreement means. U.S. officials continue to maintain that the United States has the right to dictate forestry regeneration policies under the terms of the agreement. The Canadian Government says no, that is not the case. The United States responds that it is.
This supposedly successful agreement has further poisoned relations between Canada and the United States. Since acid rain is a poison which is killing thousands of Canadian lakes, infecting Canada-U.S. relations, and threatening the health of all Canadians, I tremble to think what the Canadian Government will call a successful agreement on acid rain, and what price it will pay to get it.



ENVIRONMENTAL AFFAIRS


Mr. Joe Reid (St. Catharines):: Mr. Speaker, acid rain does untold damage in the Province of Ontario. Carriers on the St. Lawrence Seaway, mostly based in Ontario, are looking for downward cargo. Yet the Premier of Ontario continues to obstruct the use of low sulphur western Canadian coal.
A federal-provincial study reports that such use could create thousands of jobs-40 per cent in Ontario-and at one stroke cut the acid gas emissions in the province by one-half.
Ontario Hydro is a major polluter. We see the use of western coal as Canadians working together toward solving two major national problems: the fight against acid rain so graphically described in the U.S. by the Ontario Minister of Environment; and strengthening the western economy.
The Premier's foot-dragging on this matter, coupled with his intervention on the Kimberley-Clark controls as proposed by his Minister, destroys the hard-won credibility of that Minister and puts environment in the Province of Ontario on the back-burner.

February 5, 1987
Oral Questions



FOOTWEAR INDUSTRY


Mr. Alain Tardif (Richmond-Wolfe):: In June 1985, Mr. Speaker, the Government stated its intention to support the Canadian footwear industry. In November 1986, the same Government abolished men's shoe quotas on the basis of three arguments: lower consumer prices, minimum disruption of Canadian production, no job losses.
Well, barely one year after this ill-advised decision, the results are nothing short of catastrophic. Consumer prices have gone up, imports of men's shoes have soared by 50 per cent, and 2,000 jobs have been lost.
In light of these facts, Mr. Speaker, the Government can and must forthwith restore quotas, or else the Canadian footwear industry might very well sink, along with its 20,000 workers.



ENVIRONMENTAL AFFAIRS


Alan Redway: Mr. Speaker, if Inco or Falconbridge said that they could not reduce their acid rain emissions for the next five years, would Premier Peterson sit quietly waiting for time to pass?
If western Canadians bought American products instead of the ones made in Ontario, would Premier Peterson be pleased?
If another Government could create 13,000 jobs in Ontario, would Premier Peterson tell them to save their money?
Not on your life, Mr. Speaker. It is time for Premier Peterson to sit down with the Deputy Prime Minister (Mr. Mazankowski) to see how Ontario Hydro can cut its acid rain emissions in half and, at the same time, create 13,000 jobs by using western Canadian instead of American coal.
If the premier hurries, he may even have time for another skate on the Rideau Canal.
servicemen and retired Royal Canadian Mounted Police are feeling like second-class citizens these days.
Many of these ex-servicemen have paid unemployment insurance premiums for 30 years. Now they discover that when they cannot find a job they are not allowed to collect unemployment insurance payments. It is time the Government gave these people, who have dedicated their lives to the service of Canada, a chance to feel their service was appreciated, and allow them to collect unemployment insurance benefits.


EXTERNAL AFFAIRS
Mr. John Nunziata (York South-Weston):: Mr. Speaker, Canadian Sikhs are justifiably alarmed and concerned about an extradition treaty which is about to be signed between Canada and India. A quarter of a million Canadian Sikhs feel this treaty will allow the Indian Government to terrorize and intimidate randomly members of the Canadian Sikh community.
Of particular concern to Canadian Sikhs is the prospect of having the internal strife related to Punjab autonomy spill over into Canada. India also has a disturbing record of human rights abuse which adds to the apprehension felt by Canadian Sikhs. This apprehension can be traced to two Indian statutes which have been described as "Draconian", the Terrorist and Disruptive Activities Act which, among other things, has clamped down on press freedom, and the National Security Act, which allows for preventative detention without charge or trial for up to two years.
Offences under both of these Acts appear to be extraditable offences. We do not know concusively because the details of the treaty have not yet been released. Unfortunately, the Government failed to have meaningful discussions with the Sikh community before the Secretary of State for External Affairs (Mr. Clark) left for the treaty signing. I call upon the Government to delay the signing of the extradition treaty until the necessary consultation with Canadian Sikhs has occurred.


UNEMPLOYMENT INSURANCE
Stanley J. Hovdebo: Mr. Speaker, during
his visit to Africa, the Prime Minister told the world that he as
a Canadian has never been a second-class citizen. Retired



ORAL QUESTION PERIOD


Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, my question is directed to the Prime Minister.

February 5, 1987

Yesterday the Minister of Transport, on behalf of the Government of Canada, made public in Newfoundland a telex to Premier Peckford in which the Minister of Transport in effect calls into question the honesty of the Premier of Newfoundland. The telex says:
I regret that for some reason you wish to make it appear that you heard nothing of this proposed visit
-to Parisbefore it occurred.
Do the Prime Minister and his Government stand behind this contention of the Minister of Transport that in fact the Premier of Newfoundland is now engaged in some kind of political charade?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, the Minister of Transport stands very strongly in favour of the rights of the fishermen of Newfoundland and Labrador. I understand he is on his way to his home province for a meeting with the Premier and other interested parties. I understand that is taking place tonight or tomorrow.


EXCHANGE OF MESSAGES BETWEEN NEWFOUNDLAND AND OTTAWA
Brian Vincent Tobin: Mr. Speaker, two days before the Canada-France fish treaty was signed, the federal Minister of Fisheries telephoned the provincial Minister of Fisheries, Mr. Rideout, and advised him of Ottawa's intention to make concessions to the French. Will the Prime Minister now acknowledge that the Premier of Newfoundland telexed him that same day, two days before the treaty was signed, rejecting Ottawa's position on concessions to the French? Will the Prime Minister also tell us, given Newfoundland's unequivocal position, why he refused to acknowledge the telex of the Premier of Newfoundland and why he did not instruct his Minister of Fisheries not to proceed with the treaty with the French?


Hon. Thomas Siddon (Minister of Fisheries and Oceans):: Mr. Speaker, once again the Hon. Member, along with his coherts, has the facts rather confused. I called my colleague, the Minister of Fisheries for Newfoundland, on the Monday after the agreement had been signed. Shortly thereafter the Deputy Prime Minister also called the Premier of Newfoundland.


POSSIBLE MEETING OF PROVINCIAL PREMIERS
Brian Vincent Tobin: Mr. Speaker, the Hon. Member does not have the facts confused. He has the telex, which was unanswered and not responded to, in his hand. It is clear the Prime Minister was personally involved in this deal. It is clear he refused to respond to the telex of the Premier of Newfoundland and call off the signing of the treaty.
Is the Prime Minister prepared to say today that he will abide by a recommendation of Canada's 10 Premiers to cancel the Canada-France fish pact if indeed, as we expect, such a
Oral Questions
recommendation is the result of a meeting of all 10 of Canada's Premiers? Will he do that?


Martin Brian Mulroney: Mr. Speaker, we are working with the Government of Newfoundland and Labrador, and the industry. Mr. Lome Clark, the chief negotiator, is presently in Newfoundland. I understand he had a productive series of meetings this morning. He is meeting with Premier Peckford this afternoon.


Brian Vincent Tobin: Oh, oh! A tough meeting.


Martin Brian Mulroney: I am just trying to answer the Hon. Member. I am told it was that type of productive meeting.
My hon. friend implies that it would be good policy for the Government of Canada to surrender its responsibility into the hands of the provincial Premiers in the event of conclusion of international accords. Without in any way diminishing the impact of the Minister of Transport's visits to Newfoundland and the responsibilities that he discharges so well, it is the Government and the Parliament of Canada that speak for the people of all Canada, and not the provincial Premiers, or any combination thereof. Notwithstanding our genuine desire to work in intimate co-operation with all of them, it is the Parliament of Canada that speaks for all Canadians.


TERMS OF 1972 TREATY
Hon. William Rompkey (Grand Falls-White Bay- Labrador):: Mr. Speaker, my question is directed to the Prime Minister. Yesterday the Prime Minister claimed that the deal his Government came to with France was necessitated by the 1972 Treaty negotiated by this Party when we were the Government.
I am not prepared to sit on this side of the House and hear the names of honourable men, like the Hon. Don Jamieson and Romeo LeBlanc, dragged through the mud. I wish to ask the Prime Minister now if he will do the honourable thing and withdraw his allegation, because all Canadians agree that that allegation is false?


Mr. Crosbie:: Withdraw the treaty.


Thomas Edward Siddon: History speaks well enough for itself. It is important that members of the Opposition, and all Canadians, especially the fishermen and the people of Newfoundland and Labrador, realize that what we have agreed to is the beginning of a process to resolve once and for all the serious overfishing by France in the disputed area south of St. Pierre and Miquelon, and to ensure that the longer term fishing arrangements provided for in that treaty are to the advantage of the fishermen of Newfoundland and Labrador, and not to their detriment.

February 5, 1987
Oral Questions


Bill Rompkey: Mr. Speaker, I cannot accept that. The Minister of Fisheries and the Prime Minister have lied to this House.


Some Hon. Members:: Oh, oh!


Bill Rompkey: I ask them now, will they withdraw those allegations?


An Hon. Member:: You know better.


Mr. Speaker:: This is a matter of very great importance to the country, and certainly to Newfoundland and Labrador. I would ask that the Hon. Member withdraw those words and put his question more properly.


Bill Rompkey: Mr. Speaker, I regret that the one thing that is most important to the House is the truth. The people of Newfoundland did not send me here to say anything but that.


Some Hon. Members:: Hear, hear!


An Hon. Member:: He wants to get thrown out.


Mr. Speaker:: Order, please. I am sure that in due course, when the Hon. Member has a chance to consider his position, he will take the opportunity to withdraw those words.


Bill Rompkey: Mr. Speaker, I am afraid that I cannot withdraw those words, Sir. I know what your ruling will be. In anticipation of that, I take the only course that is open to me.


Mr. Speaker:: I am sure that in due course the Hon. Member will think over his position. In the meantime, the Hon. Member for Nickel Belt.


MINISTER'S TELEX TO NEWFOUNDLAND PREMIER
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is directed to the Prime Minister. It has to do with the Canada-France fishing agreement. Yesterday the Minister of Transport, or the Minister responsible for Newfoundland as he is better known in the Cabinet, sent a telex to the Premier of Newfoundland.
I should like to quote the following statement from that Telex:
When I was informed of that telex on Thursday, January 22nd, I took steps of my own which I thought had resolved the issue but this turned out not to be the case and an interim agreement was signed at Paris on January 24th.
Will the Prime Minister confirm that his Minister responsible for Newfoundland had serious concerns about this interim agreement and that he was left out in the cold when the signatures were appended to the agreement?


Thomas Edward Siddon: Mr. Speaker, my colleague, the Hon. Minister of Transport, can speak for himself in the appropriate place, as he always does. He will speak strongly and positively on behalf of the
interests of the fishermen in the province he represents. It is important that the House note that opposition questions focus more on what we might call water under the bridge than on this tremendous opportunity which will be pursued with dignity and integrity by the Government, to the benefit of the fishermen of Atlantic Canada and Labrador.


REQUEST THAT AGREEMENT BE TORN UP
John R. Rodriguez: Mr. Speaker, my supplementary question is for the Prime Minister. Outside Cabinet today the Minister of Transport, in conversation with the press, hinted that his days in Cabinet might be numbered over this issue.


John Carnell Crosbie: That is not true.


John R. Rodriguez: What more evidence does the Prime Minister need than the people of Newfoundland, the Atlantic Premiers, and the threatened resignation of his Minister responsible for Newfoundland? What more does he need to tear up this agreement, start all over again, and do it the right way?


Martin Brian Mulroney: Mr. Speaker, I can tell my hon. friend what the Hon. Minister just said, that that is not true. He is here to defend the interests of the people of Newfoundland and Labrador as brilliantly and as effectively as he has done for many years.


FEDERAL-PROVINCIAL RELATIONS
John R. Rodriguez: Mr. Speaker, we now have the spectacle of a looming First Ministers' Conference on the matter. It is back to the federal-provincial confrontation days of the previous Liberal Government. Does the Prime Minister not see what we need to do now? He should do the honourable thing. He should put aside this agreement and in fact start all over again and do it the right way, rather than return to the days of confrontation. Does he not recognize the importance of this issue?


Thomas Edward Siddon: Mr. Speaker, if the Government chose to take the advice of the Opposition, which we have heard not only on this issue but on the matter of Canada-U.S. trade and on the matter of energy policy, et cetera, we would have produced nothing of change and nothing of benefit to the people of Canada as has been well demonstrated by the turn-around in the economy and by improved employment from one end of the country to the other.


MINISTER'S PRESS RELEASE
Mr. George Baker (Gander-Twillingate):: Mr. Speaker, the Government claims that it has an obligation under the 1972 agreement. Indeed the official press release from the Secretary of State for External Affairs, dated January 27, indicated:
February 5, 1987

Oral Questions TRADE
The French will also receive in 1987 fishing allocations in Canadian waters outside the Gulf in accordance with obligations under the 1972 Canada-France Treaty-
In the absence of the Secretary of State for External Affairs who is on his passage to India, I will direct my question to the Minister of Fisheries and Oceans. Does he recall issuing a press release on November 26, 1986, in which he said:
We have told the French that under the 1972 Treaty we have no obligation to provide them with any fish to replace what they have been catching in the Gulf and, specifically, no obligation to provide them with any northern cod-
Why this complete about-face? Is it because the Government is concerned about a shortage of cod at Maxim's in Paris?


Thomas Edward Siddon: That, Mr. Speaker, is most definitely not the case. We certainly are concerned about a shortage of cod to the fishermen of the Hon. Member's province and throughout Atlantic Canada. That is why we are embarking on a series of important negotiations, and that is why for this present year the French allocations of cod in Canadian waters have been reduced by 14,000 tonnes to half what they were last year because this Government believes it is time to patriate those resources to the benefit of our own fishermen.


CONSERVATION OF RESOURCES-QUOTA ALLOCATIONS
George Baker: Mr. Speaker, in the 1972 agreement, Article 2, as quoted by the Prime Minister, it states:
-the right of French nationals to fish in these waters subject to possible measures for the conservation of resources, including the establishment of quotas.
Did the Minister of Fisheries or did he not cut Canadian quotas because of conservation of resources and establishment of quotas, and did he or did he not ban Canadian fishermen from the nose of the Grand Banks because of conservation of resources and the establishment of quotas? Since he did that to Canadians, why does the Government feel so obliged to bend over backwards for the French? Fish and chips are just as good as cod au gratin.


Some Hon. Members:: Oh, oh!


Thomas Edward Siddon: do not know where the Hon. Member purchases his fish and chips, Mr. Speaker, but I can tell you that our objective is to keep the fishermen of Newfoundland and Labrador in the chips.


Some Hon. Members:: Oh, oh!


CHARGE ON LUMBER EXPORTS-USE OF REVENUE IN BRITISH COLUMBIA
Nelson Andrew Riis: Mr. Speaker, my question is for the Minister for International Trade. From the other side of Canada the Minister learned just a few minutes ago the devastating news from British Columbia that, in spite of her repeated assurances in this House that the money collected from the export tax on softwood lumber would be reinvested in the forest industry, the Minister of Forests of British Columbia just announced that the Government of British Columbia plans to spend none of the $400 million collected on the reforestation of silviculture and, as a matter of fact, is cutting back on existing programs. In spite of the Minister's repeated assurances that she gave this House and the people of Canada that this is how the money would be used, what steps does the Minister plan to take now to ensure, in that major lumber exporting province, that this money will be returned to the forest industry?


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, I am not aware of the reports to which the Hon. Member refers. I find it interesting that the Party which fought our attempts to save money for British Columbia is now apparently in favour of saving money for British Columbia.
Let me answer this question-


Some Hon. Members:: Oh, oh!


Pat Carney: -if the Opposition allows me the opportunity. Our Government provided the Government of British Columbia the opportunity to use funds that would have gone to the U.S. treasury, for reforestation in B.C. As the Hon. Member knows, that is provincial jurisdiction. As the Hon. Member knows, and as every British Columbian M.P. knows, our forests are a silvicultural slum and if the Government of B.C. does not act in a proper way to ensure that reforestation policies are carried out when the federal Government has provided the funds, the Government of B.C. will have to answer to its voters.


STATEMENTS ATTRIBUTED TO BRITISH COLUMBIA MINISTER
Nelson Andrew Riis: Mr. Speaker, is the Minister for International Trade telling us that she has been conned by the Socreds of British Columbia? Is she saying that in spite of the fact she has been across the country and throughout the entire Province of British Columbia on a number of occasions giving us the assurances that money will be reinvested in the forest sector, the Minister of Forests for British Columbia did not have the courtesy to inform her or her colleague, the Minister of State for Forestry, that he was making that decision today and that in that announcement none of this $400 million will be going back to develop the forest resource in the Province of British Columbia?

February 5, 1987
Oral Questions


Pat Carney: Mr. Speaker, if, in fact, the Forestry Minister made those statements-and I told the House I am not familiar with the statements-he would be contradicting his own Premier who has regularly indicated publicly that that money would be used for reforestation.


CURRENCY EXCHANGE RATE-EFFECT ON LUMBER INDUSTRY
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I too have a question for the Minister for International Trade. While the recent rise in the Canadian dollar is good news for many Canadians, I think the Minister will agree that for the hard hit lumber industry, already suffering the pernicious 15 per cent export tax, it is bad news. Is the Government aware that the recent rise in the Canadian dollar will cost the lumber industry over $170 million on an annual basis, and on the basis of that the industry will be paying the equivalent of over 20 per cent export tax? Based upon those figures, is the Government now prepared to request from the United States a renegotiation of that agreement to take into account the major change in the exchange rate so that the lumber industry will not be paying the equivalent of a 20 per cent export tax?


Leslie Gordon Benjamin: Figure it out.


Pat Carney: Yes, the Hon. Member from the NDP has it right, I am trying to Figure out the garbled arithmetic of the Hon. Member opposite.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Pat Carney: There is an ad valorem tax of 15 per cent, an export tax, which we negotiated to keep those funds in Canada. That, in fact, is what is happening. If you look at the prices of lumber since the export tax was imposed, the Americans are paying that tax and the money is going into provincial coffers. Why the Hon. Member wants to add in exchange rate differences, to which the lumber industry is well accustomed, is something for him to explain.


MINISTER'S POSITION
Lloyd Axworthy: Mr. Speaker, it is a sad commentary that the Minister for International Trade does not understand that a rise in the exchange rate will have a devastating effect upon the lumber industry. How stupid can one Minister be? She is responsible for international trade. That is shameful, Mr. Speaker. When will this Minister come to her senses and begin acting as a Minister of Trade and do something, knowing that the exchange rate on top of her 15 per cent export tax will destroy the industry? When will she start smartening up and do something for the lumber industry?


Pat Carney: Mr. Speaker, I think that the comments, which are fairly gross of the Hon. Member, about the stupidity of the Minister for International Trade-


Lloyd Axworthy: It takes one to know one.


Pat Carney: -are not supported by the performance in the market of the stocks involved. Let me explain to him in terms of forestry stocks, which indicate the health of the industry as perceived by public investors. MacMillan Bloedel stock has gone up 39 per cent since the deal was put through, Canfor stock has gone up 40 per cent, B.C. Forest Products stock has gone up 32 per cent, Abitibi Price has gone up 36 per cent, and West Fraser stock has gone up 21 per cent. In fact the entire forest index has gone up 27.7 per cent. That is a public reaction to the softwood lumber deal, not the remarks of the Hon. Member.


Some Hon. Members:: Hear, hear!


Lloyd Axworthy: You are being governed by speculators; is that what you are doing?


John Carnell Crosbie: Ask another one, Lloyd.


Lloyd Axworthy: She is so stupid we will keep asking questions.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: The Hon. Member for Yorkton-Melville.


Mr. Nystrom:: Maybe those two Members should step outside, Mr. Speaker.


CANADA-UNITED STATES NEGOTIATIONS-AGRICULTURE MARKETING BOARDS
Lorne Edmund Nystrom: Mr. Speaker, my question is for the Right Hon. Prime Minister. I will shift from a West Coast/East Coast issue to an important national issue. American Secretary of Agriculture Lyng said that Americans intend to discuss the Canadian Wheat Board and other farm marketing boards in free trade talks, and one of Lyng's senior officials, Daniel Amstutz, said "functioning of marketing boards is now on the negotiating table".
Yesterday the Prime Minister rightfully said that Clayton Yeutter's comments on cultural matters were "a stunning ignorance of Canada". Does the Prime Minister agree that the comments of these two senior officials on the future of Canadian agriculture and marketing boards represents the same stunning ignorance of Canadian agriculture as Clayton Yeutter's were of Canadian cultural matters?


Pat Carney: Mr. Speaker, the agricultural issues are involved in the free trade talks with the United States. However, I have already informed the House that the major problem we have in
February 5, 1987

agriculture is between the European Community and the U.S. We feel very strongly that the solution to these problems will be found at the GATT negotiations, not the Canada-U.S. bilateral negotiations.


NON-NEGOTIATION OF MARKETING BOARDS
Lorne Edmund Nystrom: Mr. Speaker, the Minister does not understand the question. I think the farmers of Canada deserve an answer from their Prime Minister.
The Prime Minister should know that farmers have fought for marketing boards, they have built marketing boards, and marketing boards are vital to the future of farming in Canada. Will the Prime Minister now tell Canadian farmers that marketing boards will not be on the table and, if the Americans insist on it, we will pull out of the trade talks here and now? Will he tell that to Canadian farmers here and now?


Hon. Charles Mayer (Minister of State (Canadian Wheat Board)):: Mr. Speaker, the Minister of Agriculture as well as the Minister for International Trade have repeatedly said that our marketing board system will not be on the table when we get into trade talks with the Americans. With regard to the senior official from the Department of Agriculture, the Hon. Member is talking about Mr. Daniel Amstutz, the Undersecretary to the Secretary of Agriculture in the United States. I can well understand his frustration with our system of selling because it is far superior to theirs and we have been outselling them.
Again, I said last week that I would make a different offer. We would be prepared to go to the United States to explain how our system works so that they may adopt it and do a better job of selling. If they would accept that offer, I am sure we would all be better off because they would do a better job of selling and we would not have to get into the ridiculous situation of having to lower prices in order to make sales.


DEPARTMENT OF EMPLOYMENT AND IMMIGRATION
Mr. Sergio Marchi (York West):: Mr. Speaker, in the absence of the two Ministers of Immigration, I address my question to the Deputy Prime Minister. My question concerns the Department of Immigration's special investigation aimed at discrediting members of the media. I received a letter from an immigration official who said the following:
This is a dangerous and disgusting event. These two men and Lussier are creating a feeling of fear, terror and intimidation. Please do something to stop it.
How can the Deputy Prime Minister justify such an unethical journalistic witch-hunt at the expense of the taxpayers? Will he assure the House that the findings of this shameful operation will be ignored since they were solely
Oral Questions
intended to discredit members of the media and shamefully intimidate officials in the Department of Immigration?


Hon. Jean J. Charest (Minister of State (Youth)):: Mr. Speaker, the object of the investigation to which the Hon. Member is referring was put in a memorandum sent to employees of the Department on November 26 last. It was indicated that the investigation was done because of leaks and security breaches within the Department, and also that people who worked in the Department were called upon to co-operate if they wished. There have never been any complaints from the unions or anyone else except for the one to which the Hon. Member is referring today. We find it unusual that it would come in that form, but that is the only thing that is behind this whole story.


REQUEST THAT INVESTIGATORS' REPORT BE MADE PUBLIC
Sergio Marchi: Mr. Speaker, the Minister knows that the only reason the investigation was conducted was to cover up at any cost the embarrassing mistakes and judgment calls of the two Ministers of Immigration. He knows that and the Government knows that. Given that the media have an important role to play in the political process and given that officials of his own Department are threatened and offended, does the Minister not feel that it was a flagrant abuse of taxpayers' dollars to conduct such an intimidating witch-hunt? If he has nothing to hide, is he prepared to make the report public and table it in the House of Commons so we may learn the purposes behind that investigation?


Jean J. Charest: Mr. Speaker, I will not answer in the same primitive tone in which the Hon. Member put his question.


Some Hon. Members:: Hear, hear!


Jean J. Charest: Suffice it to remind the Hon. Member that not too long ago his own Party thought it was the end of the world when, in another Department, there was such a breach of security. The same thing happens in this Department and, all of a sudden, we are trying to fight the press. The Hon. Member should make up his mind and try to be consistent.


NATIONAL SOVEREIGNTY
Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, my question is directed to the Associate Minister of National Defence. Will the Minister categorically reject the screwy suggestion of the Canadian Institute for International Peace and Security to place, in peacetime, live mines in Canadian Arctic waters?


Hon. Paul Dick (Associate Minister of National Defence):: Mr. Speaker, I think the Hon. Member has adequately

February 5, 1987
Oral Questions
described the suggestion and it is not a suggestion which is under contemplation by the Department of National Defence.


CULTURE
Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, my question is directed to the Prime Minister, who insists on feigning ignorance about culture and free trade.
I am asking this very specific question for the fourth time, Mr. Speaker. Will the Government confirm it is excluding the cultural industries, in other words, television, film, publishing and music, from the free trade talks? Will the Prime Minister address this concrete question instead of talking vaguely about cultural identity?


Hon. Flora MacDonald (Minister of Communications):: Mr. Speaker, I agree with the comments made by the Prime Minister yesterday. He again said that our cultural identity was not on the table, and this also applies to program content and ownership of our cultural industries.


REQUEST THAT BOOK TARIFF BE REPEALED
Lynn McDonald: Mr. Speaker, does the Government not realize that it has put culture on the negotiating table itself by imposing a book tariff as a retaliatory measure for the shakes and shingles deal? Will the Government undertake to withdraw that book tariff as a sign of good faith to Canadians that culture will not be up for grabs in negotiations on free trade?


Flora Isabel MacDonald: Mr. Speaker, I do not know how often members of the NDP need to be reminded that Canada's cultural identity is not on the table. I do not know if they are trying by their promotion to put it there but we would resist any effort made by members of the NDP to have our cultural identity negotiated.


Some Hon. Members:: Hear, hear!


CANADA EMPLOYMENT CENTRES
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is for the Minister responsible for multiculturalism. In answer to a question I put on November 26 about racial discrimination on the Montreal
waterfront by an official in the Department of Employment, the Minister for Employment said that he would suspend the official and conduct an investigation. We have now learned that the so-called investigation was tainted because the union and members of the union would not participate, the key dossier in the file disappeared mysteriously, and the official was only suspended for two weeks. Since the Minister responsible for multiculturalism has an interest in racial discrimination matters, would he repudiate this fiasco which took place and urge the Government to have an impartial public inquiry into this matter?
Hon. David Crombie (Secretary of State):: Mr. Speaker, the Minister of Employment and Immigration is obviously not in the House. I am not aware of the file but I will certainly raise the matter with the Minister of Employment and Immigration.


REQUEST FOR PUBLICATION OF INVESTIGATOR'S REPORT
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, we have also learned that although the investigation was tainted and incomplete, the investigator gave his report to the Government two or three weeks ago. The report was requested by the president of the union and the Minister would not give it to him. Would the Minister responsible for multiculturalism also ensure that that report, incomplete as it is, is made public so that we may all see it?
David Edward Crombie: Mr. Speaker, as I indicated, I will advise the Minister of Employment and Immigration of the Hon. Member's concerns when he returns to the House.


THE JUDICIARY
Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, my question is for the Minister of Justice and concerns the recent appointment of former Tory Premier Sterling Lyon to the Manitoba Court of Appeal. Yesterday the Minister stated that he consulted with Manitoba Attorney General Roland Penner prior to making this offensive appointment. In view of the fact that this morning Attorney General Roland Penner sent to the Minister of Justice a telex categorically denying that suggestion, saying that he is both astonished and angered by the suggestion, and demanding a retraction, will the Minister of Justice now apologize to the Attorney General and the people of Manitoba? Will he explain why there was no consultation on this important appointment to the bench?


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I think the apology for the slander of a distinguished Canadian should come from that
February 5, 1987

Hon. Member, not the Government. The reality is, as both the Hon. Member and the Attorney General know, that the appointment to the Court of Appeal was discussed in Ottawa at the time of the meeting with representatives of the provincial Attorneys-General. I have read press reports concerning the Manitoba Attorney General and the contents of that discussion, and I have indicated to him and publicly that that was not at all that was discussed when I had my discussions with him about the Court of Appeal.


Mr. Speaker:: I am going to recognize the Hon. Member for Burnaby but I do caution him. He is an excellent counsel, as some others of us are, I hope, and will know that when discussing this matter he should choose his words carefully.


Svend Johannes Robinson: Mr. Speaker, it is a sad day for justice and for federal-provincial relations when the Minister of Justice deliberately misleads the people of Canada on this fundamental issue.


Mr. Speaker:: I noticed that the Hon. Member did not say the Minister of Justice had deliberately misled this House but the people of Canada. However, it is getting awfully close and I would ask the Hon. Member to recognize the courtesies which are extended here. The Member has a point, he knows how to make it well, and there is no particular reason to impugn the motives of a Minister, and certainly it is not appropriate to say that the Minister is misleading this place deliberately or anything near that.


SYSTEM OF MAKING JUDICIAL APPOINTMENTS
Svend Johannes Robinson: Mr. Speaker, what action is the Minister taking to follow up on the promise made by his predecessor a year ago to, in effect, change the system of judicial appointments to ensure that patronage does not play a role and that a man who has displayed such contempt for the Charter of Rights and for equality for women and Francophones in Canada-that that kind of system no longer plays a part in judicial appointments? When will he change that system?


Ramon John Hnatyshyn: Mr. Speaker, I think you are aware of the fact that Citation 321 of Beauchesne's puts parameters on reflections on members of the judiciary, especially when they are falsely based as the Hon. Member falsely bases the premise of his question. I am very proud of the quality of appointments to the judiciary by my predecessor and myself. For example, more women, as a percentage of appointments, have been appointed since I have been Minister of Justice than under any previous Minister. They have been of the highest quality, and I absolutely feel that the Hon. Member's question is unfounded and unjustified.
Oral Questions FINANCE


EFFECT OF FEDERAL SALES TAX ON SMALL BUSINESSES
Mr. Alfonso Gagliano (Saint-Leonard-Anjou):: Mr. Speaker, my question is directed to the Minister of Finance. Since the Tory Government was elected the federal sales tax has been increased by 3 per cent. Alexander Ceramic Studio in Ville La Salle is almost bankrupt because of the federal sales tax. Will the Minister save that business and increase the sales tax exemption ceiling for small businesses?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, if the Hon. Member reflects on the broader aspects of his question he will understand that interest rates are down some 4.5 percentage points over the last two years. A number of specific provisions have been made in the Income Tax Act to help small business people meet their obligations and objectives. He will also know that the level of economic activity in the country has been a good deal higher than in previous years and is doing as well as we ever have in Canada relative to practically any other country in the industrialized world.


NEED TO INCREASE FEDERAL SALES TAX EXEMPTION
Alfonso Gagliano: Mr. Speaker, the Minister of Finance doesn't understand how important the federal sales tax exemption is and how it works. Will the Minister of Finance make a commitment here and now to increase the exemption from $50,000 to $250,000, to help small businesses and, more specifically, Alexander Ceramics Studio, which will go bankrupt in a few days unless the Minister announces these changes?


Michael Holcombe Wilson: Mr. Speaker, if the Hon. Member wants to bring me the details of the specific company he is referring to I will be happy to look at them. He knows, at least I hope he does, the importance of bringing the deficit down in measured steps. That is one of the principal reasons why we have interest rates at a nine-year low and why mortgage rates are at a 13-year low. Those low mortgage rates are leading to record housing starts which are creating jobs.


CAPITAL GAINS TAX EXEMPTION-REQUEST FOR ELIMINATION
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my question is directed to the Minister of Finance. He will know that two days ago the Economic Council of Canada joined the long list of business as well as labour and other organizations which have called for the elimination of the $500,000 lifetime capital gains tax exemption. It also called for capital gains to be taxed in full. Will the Minister accept the Council's advice and send a signal to ordinary Canadian taxpayers that the Conservative Government is sincere in its commitment to tax reform by eliminating the capital gains tax exemption in his Budget on February 18?
3150

February 5, 1987
Oral Questions


Michael Holcombe Wilson: Mr. Speaker, I am sure some of his colleagues in western Canada-the Hon. Member for Yorkton-Melville is leaving the House in disgust at the suggestion the Hon. Member has made that we eliminate the capital gains tax exemption for farmers.


Some Hon. Members:: Hear, hear!


ECONOMIC COUNCIL'S RECOMMENDATION
Michael Morris Cassidy: Mr. Speaker, now that the Minister has digressed perhaps I can bring him back to the main question which is on speculative profits and stock deals, the profits of individuals. It does not relate, as the Minister knows, to the question of farms which everyone agrees should be exempted.


Some Hon. Members:: Oh, oh!


Michael Morris Cassidy: My Party has said that on many occasions. Is the Minister prepared to accept the advice not just of the Economic Council of Canada but also of his friends on the Business Council on National Issues who also stated that the capital gains tax exemption should be eliminated and capital gains should be taxed at full rates? Will he reform the tax system that way or not?


Michael Holcombe Wilson: I guess that is probably the quickest flip-flop the NDP has ever made.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: I am sure the Hon. Member has thought carefully about what he is proposing but I want to draw his attention to the fact that the Economic Council called for quite a significantly different treatment of savings. I believe in the past the Hon. Member made some critical comments on the RRSP proposals we legislated last year. The Economic Council is proposing that rather than an 18 per cent limitation, in exchange for elimination of the capital gains exemption, the limit go to 25 per cent or 30 per cent. Perhaps the Hon. Member would like to address that part of the proposal by the Economic Council.


CANADA-UNITED STATES NEGOTIATIONS-CULTURAL INDUSTRIES INQUIRY
Sheila Finestone: Mr. Speaker, the U.S. Vice-President, George Bush, met with the Prime Minister a few weeks ago to discuss the progress of the free trade negotiations. Why did the Prime Minister not seize that opportunity to obtain a specific commitment from Mr. Bush that Canadian book publishing, periodicals, and TV would be non-negotiable? Why will he not name these as protected
cultural industries and part of the essence and identity of Canada?


Pat Carney: Mr. Speaker, it has been explained repeatedly in this House, and as recently as yesterday, that the Prime Minister has said that cultural affairs are not on the free trade table. You cannot take off the table something which is not on the table.
With regard to the tariff on books, we have explained that it was put on because of the United States action in placing a tariff on shakes and shingles. When the U.S. moves to remove that tariff, we will be in a position to remove ours.


Sheila Finestone: Mr. Speaker, I do not know that our cultural industries will find that to be a very satisfying response.


GOVERNMENT POLICY
Sheila Finestone: Mr. Speaker, can the Minister answer yes or no as to whether the border broadcasting policy, the disallowance of tax privileges for foreign magazines, and Investment Canada book publishing are to be negotiated by the Government? Is it up for grabs? Will the Minister answer yes or no with respect to those policies? We want a straight answer.


Pat Carney: Mr. Speaker, I refer the Hon. Member to yesterday's Hansard at page 3102 where the Prime Minister again repeated the statement which he made at the University of Chicago. He said:
If we and our American partners cannot strike a deal that will achieve these goals, a deal will not be struck. Our political sovereignty, our system of social programs, our commitment to fight regional disparities, our unique cultural identity, our special linguistic character-these are the essence of Canada.
They are not at issue in these negotiations.


Sheila Finestone: I read that yesterday.


Pat Carney: We will repeat that every day in the House of Commons should it be necessary so you can understand it.


MUNICIPAL AFFAIRS
Iain Francis Angus: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. He is aware of the growing crisis in Canadian cities which are literally rotting and falling apart. For the past two years the Federation of Canadian Municipalities has been making a plea to the federal Government for financial assistance which his Minister of Finance has turned down.
February 5, 1987

Will the Prime Minister now accept the responsibility of his office, overrule his Finance Minister, and insist that funds be included in the upcoming Budget to restore the integrity of our cities?


Michael Holcombe Wilson: Mr. Speaker, I believe I answered that question from the Hon. Member for Trinity last December. The hands of the federal Government are full dealing with matters which are 100 per cent federal government responsibility and those which are shared costs between the federal and provincial Governments. Municipal infrastructure is a responsibility of the municipalities and the provinces. We have done nothing to hold back municipalities or provinces from dealing with that matter if they think it is as serious as they say it is. I encourage them to get on with the job if they feel that way.


GOVERNMENT POSITION
Iain Francis Angus: Mr. Speaker, the Minister knows full well that the provinces and the municipalities together cannot afford the price tag. He also knows this would create 75,000 jobs. Why will he not provide the financial assistance necessary to get these cities back in shape? Every hour he waits the price goes up.


Michael Holcombe Wilson: Mr. Speaker, the logic of that is quite flawed. There is nothing to stop a municipality or a province, or the municipalities and the provinces together, from fixing a bridge, a pot-hole, or a water-main. Whatever the provinces and municipalities want to do in that area of their responsibilities is within their jurisdiction.
With regard to jobs, we have been getting on with the job of getting the economy going again. In the last two and one-half years 666,000 jobs have been created. That is directly related to the policies which the Government has followed in getting interest rates down and creating a better investment environment. Capital is coming into Canada from Europe, Japan, and the United States, which has created jobs, dealing with the very thing which the Hon. Member asks about.


ENVIRONMENTAL AFFAIRS
Alan Redway: Mr. Speaker, my question is directed to the Deputy Prime Minister. Will he advise the House whether he has yet heard from Premier Peterson to set a date to discuss the cutback of acid rain emissions in Ontario through the use of low sulphur western coal?


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I appreciate the Hon. Member's continuing interest in this very important
Business of the House
matter. I have had correspondence from Premier Peterson. We will be meeting on March 2.


POINT OF ORDER
Mr. Speaker:: I ask Hon. Members to wait a moment to hear a matter. I have received a note from the Hon. Member for Grand Falls-White Bay-Labrador (Mr. Rompkey). He would like to make a statement.


Bill Rompkey: Mr. Speaker, I hold the Chair and, more particularly, you personally, in the highest regard. I believe the House should know that there is no issue of such fundamental importance to my province as the one before the House now. Never, in the 15 years that I have been here, have I seen the level of emotion in my province so high as it is on this issue. That is because it goes to the very heart and soul of what makes us a people and what makes the province so special and, indeed, what it is. It is my place today to reflect the level of emotion which my people feel. I did that.
We use words to convey messages. While I am confident that in the long run the message which I conveyed today will stand up, there are, nevertheless, rules of this House. You have made rulings which I respect. I now want to withdraw the word in question which I used to convey the messages which I expressed today.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: I know that Hon. Members would want me to say to the Member for Grand Falls-White Bay-Labrador that we do understand the depth of feeling and the emotion which he has expressed. His chivalrous and courteous withdrawal of the offensive words is a credit to this place and is very much appreciated. We thank him for that.


BUSINESS OF THE HOUSE
Hon. Herb Gray (Windsor West):: Mr. Speaker, I would like to ask the Government House Leader to tell us what business the Government intends to present to the House for the coming seven days.


Donald Frank Mazankowski: Mr. Speaker, I will do so with pleasure. We will start today with Bill C-19, which will be followed by Bill C-21 and then Bill C-12, the Bill to amend the Prairie Grain Advance Payments Act; report stage of Bill C-6,

February 5, 1987
Point of Order-Ms. Copps
the Bill with regard to the Atlantic Accord; and then Bill C-2 with regard to Canagrex.


POINT OF ORDER
Ms. Sheila Copps (Hamilton East):: Mr. Speaker, during Question Period today the Minister of Justice (Mr. Hnaty-shyn) used the word "slanderous" for the second time in reference to another Member. If you refer to citation 320 in Beauchesne's you will see, as you obviously know, that slanderous reference to a Member is unparliamentary. I ask that the Minister review the "blues" and stop using this word so lightly. He has used it in reference to myself in the past and has now used it in reference to the Member for Burnaby (Mr. Robinson).


Mr. Speaker:: The Member for Hamilton East (Ms. Copps) raises a complaint about the use of the word "slanderous". The complaint is properly taken. I am sure the Minister will reflect upon the representation which has been made.
I ask all Hon. Members to remember that the use of such words does cause agitation in the Chamber, which could lead to disorder with which the Speaker must deal. In addition, there are words which are not necessarily unparliamentary which, used in certain ways, create exactly the same disorder. I thank the Hon. Member for Hamilton East for her intervention.



GOVERNMENT ORDERS


Donald Frank Mazankowski: , for the Minister (Transport), that Bill C-19, an Act respecting motor vehicle transport by extra-provincial undertakings, be read the second time and referred to a legislative committee.


Mr. David Kilgour (Parliamentary Secretary to Minister of Transport):: Madam Speaker, it is an honour and a privilege to open the debate on Bill C-19.
The Motor Vehicle Transport Act, 1986 will effect the
reforms of economic regulation of our trucking industry right
across the country, reforms to which the federal and provincial
Governments have agreed. The provisions of the Bill may be summarized very quickly.
Entry requirements to the industry now based on the test of "public convenience and necessity" will, after a transition period, be based on a new simple fitness test. Truck applicants will only be required to prove that they have met the allimportant safety standards and bonding and insurance requirements.
Other restrictions on operating licences, such as routes and places to be served, as well as controls over fares to be charged, will be eliminated. There is a rather long history behind these new provisions.

Madam Speaker, the trucking industry has gone through tremendous changes during the last sixty years, if we only consider the trucks themselves, trucking routes, loads and distances travelled.

Who could have foreseen that the business of local cartage that existed in the 1920s would give rise to everything up to transcontinental service with routes now reaching deep into the United States?
Trucking is a vital and constantly growing part of Canada's national transportation system. As a whole, the trucking industry generates over 70 per cent of total surface freight revenue. The for-hire segment alone contributes over $6 billion annually to our Gross National Product.
The industry pays the salaries of some 90,000 men and women who work in for-hire trucking across the country. I suggest there are perhaps another 200,000 to 250,000 of our citizens who earn their daily income from the spin-off industries providing goods and services to this industry.
Canada is an exporting nation, and trucking is increasingly important to our exports. In 1984, trucks carried 50 per cent of our exports to the United States. I might remind Hon. Members that 2 million to 2.5 million Canadians owe their livelihood to our exports to that market, which accounts for approximately 80 per cent of our entire exports. I believe many other Canadians earn their living from the transport, distribution or handling of exports to Canada.
Over the years, the relationship between the industry and Government has also changed. Since 1984, the provinces have been responsible for trucking regulation in both their own and the federal Government's jurisdiction.
Over the years, different regulations grew up across the country. In different provinces there were different requirements for entry, routes, rates, commodities, safety precautions and so on.
That reality made the trucker's job of meeting the needs of shippers more difficult than need be. However, as the trucking industry has grown and matured, regulation has been reduced in all provinces, especially in recent years. This has gradually
February 5, 1987

given our truckers greater freedom to compete within the industry and with the railroads and other modes of transportation.
However, the industry remains saddled with a regulatory regime which limits growth and innovation which frequently differs from province to province. It restricts services and imposes unnecessary costs on the industry, on its customers, and ultimately on the economy as a whole.
This is not the way to meet future needs. Surely, an efficient, flexible transportation system is critical to Canada in order to link up east and west and to connect us to major markets in the United States.
Designing a transportation system that achieves the best service at the best price is vital to Canada's economic wellbeing. In trucking, that task has involved federal and provincial Governments, the trucking industry, producers and shippers in extensive consultations spread over a number of years. A broad consensus developed that we need less economic regulation and more uniformity in regulation of trucking across Canada.
An historic agreement on regulatory reform of the trucking industry was signed in February, 1985, I believe by all the provinces, the Territories and the federal Government. The new Motor Vehicle Transport Act, through Bill C-19, puts that agreement into law.
The Bill also provides for further federal-provincial agreements, including the definition of the fitness test and a uniform national safety code. Federal and provincial Ministers responsible for transportation agreed to these additional elements last October.
As we develop new economic and transportation policies, it makes some sense to look at the policies of our neighbour to the south, particularly when we consider the value of the transportation crossing our borders. We can learn from their mistakes and successes and I believe we have learned a great deal from the U.S. experience with the deregulation of the trucking industry. We have looked at what has worked well, what has not, and considered the profound differences between the two countries. We now have a truly made-in-Canada policy for our trucking industry.
Let me illustrate this with two important examples. The United States adopted a strategy which called for economic deregulation of trucking, to be followed by reform of safety regulation. It appears that they have yet to get around to safety. Of course, we intend to do quite the opposite because we believe that safety of the transportation system is the number one priority of truckers and all Canadians. The Minister has stated this on many occasions. Consequently, a uniform national safety code has been developed and approved in consultation with the provinces and the trucking industry. This code will be the cornerstone of the new fitness test. The other elements of that test will be insurance and bonding requirements.
Motor Vehicle Transport Act, 1986
The second illustration is the step by step approach to implementing reform. The Americans introduced sweeping trucking deregulation in an environment of quite restrictive entry requirements and rate controls. Unlike the Americans, we have gradually introduced reforms within the existing regime. To a large extent, much larger than in the United States just prior to their deregulation, our trucking industry already operates under market competition.
In addition, the reform to which I believe the federal, provincial and territorial Governments all agreed provides for a transition period. During that time, a reverse onus public interest test will apply in addition to the new fitness test.
Finally, the federal and provincial Governments in their agreement of 1985 aimed to begin the transition period in January, 1987. The transition period will now begin a year later, in January, 1988. As a result of further consultations and compromise, the fitness only test will not come into effect until 1991. What that means is that Canada's trucking industry will have roughly a decade to adjust gradually to less regulatory control.
The Memorandum of Understanding also called for an independent study of the potential effects of eliminating the "public convenience and necessity" test in favour of a "fitness" test. That study has now been completed and released. Let me mention briefly some of its conclusions: First, the gradual weakening of control by the provinces over market entry and rate regulations has already caused significant changes in the trucking industry. That industry is, therefore, better prepared for reform than the American industry was in 1980, just prior to the U.S. deregulation. Second, many small independent operators have already entered the industry. A sudden flood of new entrants, as has happened in the United States, is therefore unlikely. Third, there is no evidence that the current regulatory regime is supporting extra-provincial services to small communities which would be discontinued after reform of entry requirements. Fourth, many rates are already competitive. Price competition may intensify and should be monitored. Fifth, a shake-out similar to that which happened in the United States is unlikely. Regulatory reform is not expected to cause disruption in the industry. Sixth, a gradual process of restructuring and consolidation has been under way for some time. This will continue. There is no indication, of which I am aware, that worrisome levels of concentration will develop. Our industry is competitive now and we hope it will be even more competitive in the future.
These predictions are reassuring, but what if the experts are not right? I believe that less regulation and more competition will lead to the lowest possible costs and the best service for our shippers. We are a nation of shippers. Certainly, my region of western Canada is based on our resources, and many men and women who work in those industries depend enormously on the trucking industry as well as rail and air modes of

February 5, 1987
Motor Vehicle Transport Act, 1986
transportation. I am also certain we must preserve a healthy, financially viable trucking industry.
[ Translation]
Consequently, the Government of Canada has committed itself under Bill C-18 to monitor diligently the effects of the reform on all modes and to report on its findings every year. Hon. Members are aware that in four years time, in 1992, a thorough review will be made of all reforms, including those involving the trucking industry.

In addition, bearing in mind the three-year transition period in Bill C-19, the federal and provincial Transport Ministers have agreed jointly to commission a special study of the effects of reform on trucking. The study will be completed in 1990. The Ministers have also agreed to monitor the participation by U.S. truckers in the domestic and transporter markets. This will be done along with existing monitoring of transporter traffic under the Brock-Gotlieb Agreement. That agreement also provides a mechanism for discussing and correcting transporter traffic imbalances.
Perhaps these independent reviews will tell us that our trucking industry is failing and is unable to compete in a free market. I do not believe this will be the case. I know that U.S. participation in Canadian trucking is of concern to many truckers in our country, some of whom have suggested that the new legislation should include specific provisions to restrict entry of U.S. truckers. However, Canadian truckers have been doing very well in competing with U.S. truckers for transporter traffic. In fact, the Canadian share of transporter traffic increased by roughly 10 per cent between 1980 and 1984. That is a very good performance by our domestic trucking industry. U.S. truckers, on the other hand, say they have a few beefs against us. Unfortunately, that is said about every sector these days. U.S. truckers claim that entry restrictions in many provinces remain strict, compared to easier rules in the United States and that entry restrictions vary by province.
The Americans appear not to be happy that close to 1,000- I repeat, 1,000-Canadian carriers have been granted wide-open operating authority in the United States since deregulation in 1980. This is done through one licence issued by the Interstate Commerce Commission. Licences of U.S. truckers in Canada are limited in many respects and they must obtain a licence from each and every one of our 10 provinces. That is not exactly symmetry, is it, Madam Speaker?
In transporter traffic the biggest threat from the United States arises in the long-haul market, as Hon. Members all know. Some U.S. carriers who now interline with Canadian carriers may try to provide single line service. However, U.S. carriers operating in Canada under existing regulations are already trying to do exactly that, so how will this Bill change what is already going on within the existing laws of Canada and the provinces? As I mentioned, Canadian truckers have been successfully meeting the competition. I do not believe
these proposed changes to the regulatory environment will make Canadian truckers uncompetitive in transporter traffic.

Madam Speaker, if we are not prepared to offer more or less equal access to truckers in the United States, we must expect U.S. pressure to increase in the years or even in the months to come.
I am told that in the United States, one stroke of the President's pen can eliminate all our Canadian truckers who work down there today. I think this would probably be a disaster for some of the 1,000 Canadian truckers who ply their trade in the United States.

Unless we provide for roughly equal access for U.S. truckers, we can expect pressure to grow in the U.S. to limit Canadian access to its important market. In our domestic market, a number of American companies have established here under the existing regulatory regimes. They have been good corporate citizens and have the right to compete as well.
For all of these reasons, neither the federal nor the provincial Governments see it as desirable or necessary to legislate barriers to the entry of U.S. truckers. We do not live in a hermetically sealed economy. We have to compete in the world markets, and on that premise we have allowed U.S. truckers to compete within Canada on the basis of being good corporate and individual citizens.
What will be useful is the transition period through to 1991 during which a modified public interest test for entry will continue to apply. This will allow additional time for adjustment to a more competitive environment. Our shippers, almost unanimously, have called on the Government simply to deregulate. "Do not wait", they say. We understand their concerns, but the Government believes that Canadian truckers should have more time to adjust to a more open competitive situation.
We can have both the benefits of a more competitive market and a strong financially viable Canadian trucking industry if we carry out these reforms in the measured way proposed in the Bill now before the House. Some adjustments will, of course, be required. For example, greater opportunities will present themselves for truckers to work out, with their existing and new customers, business contracts specifying whatever combination of service and price is to their mutual advantage.
This flexibility will enable carriers and the shippers' customers to adapt to changing economic circumstances at home and abroad over the years to come without interference from government regulators.
The new Motor Vehicle Transport Act is before us for approval in principle, which I heartily support. I wish to remind Hon. Members that it will be the subject of careful consideration in committee. The Minister of Transport (Mr. February 5, 1987

Crosbie) has already indicated that he will be listening to all representations made to that committee. Over-all, I believe that these are the right reforms at the correct time, and the right policies for the correct reasons. They will bring us less but more uniform economic regulation of trucking, rebounding to the benefit of both carriers and shippers, more efficient service, and a safe, financially healthy trucking industry will be encouraged through greater reliance on market forces, accompanied by modern, clear, and uniform safety requirements. All of that will help our producers and shippers to be more competitive in both domestic and international markets. In turn, it will well help consumers, and it will help stimulate economic growth and job creation from one end of this country to the other, from St. John's to Nanaimo to Cambridge Bay.


Leslie Gordon Benjamin: While dozens of truckers go broke. [Translation]


Hon. Andre Ouellet (Papineau):: Madam Speaker, today we are studying Bill C-19, an Act respecting motor vehicle transport by extra-provincial undertakings. Significantly enough, this Bill will replace the Motor Vehicle Transport Act of 1953-54. This statute, which relates to the interests of the trucking industry and inter-provincial bus companies, will be replaced by a series of new deregulation criteria which, I might point out, have to do only with the trucking industry. Still I hasten to add that it is too much anyway, for all people affected by this Bill do not want any part of this Conservative initiative.
Considering the uproar triggered by Bill C-18, we would have thought that the Government would have been farsighted enough to appreciate the fact that it had to be extremely careful and hesitant in its attempt to turn the Canadian transport system upside down. No, Sir, the message did not get through! Right on the heels of the mess it created with Bill C-18, here it goes again with Bill C-19 which is no better than the other one. Most regretfully and notwithstanding my deep admiration and esteem for the Parliamentary Secretary, I must say I cannot fathom whatever motive made the Minister of Transport (Mr. Crosbie) decide to miss this opportunity to introduce his own Bill. This utterly cavalier attitude on the part of the Minister of Transport is unacceptable. If he really has the interests of his Department at heart, if he feels that legislation before the House is important and deserves priority, he should be right here to defend his own Bills.
He made it a point to stay away from the House throughout the study of and debates on Bill C-18, and now he insults this institution by choosing not to be here to defend this second Bill introduced in the same week.
In my judgment, what needs to be said is that Bill C-19 is bound to have a strong impact on one of Canada's major industry. Indeed Figures for last year, 1986, show that this industry did about $8 billion worth of business and had over
50,000	people on its payrolls. Trucks carry about 40 per cent of all goods in Canada and about half of our exports to the United States.
Motor Vehicle Transport Act, 1986
So we are looking at one of the prime movers of the Canadian economy. Like the rest of us this industry had its ups and downs in the early 80s due to the recession, but it managed to pull through and continued to provide thousands of jobs throughout Canada for dedicated workers who have been able to earn quite a decent living thanks to the trucking industry. This is why, as we speak, operators, owners, interest groups and experts in the road transport industry have serious doubts about the changes the Conservative Government seeks to introduce by way of this Bill.
Together let us have a look at the propositions which, according to people who work in that sector, seriously threaten the very survival of hundreds of Canadian road transport companies, not just one or two. The Government is suggesting that we ought to drop the "public convenience and necessity" market criterion. This requirement, I may recall, has been in existence since 1954. It puts the burden of proof on the applicant, which means that if he is to have any chance at all of obtaining a licence, the applicant must prove that the service he intends to provide is absolutely necessary and that the general public will benefit. As a result, only truckers who provide a service for which there is a market can obtain a licence at the present time. The Government, allegedly for the sake of increasing competition, has decided to change all this and to substitute for this criterion the concept of "fit, willing and able". So what exactly does that mean? It means that from now on, the onus will be on existing licence holders to prove that adding a new carrier on a route where the service is already available will be a threat to the economic viability of that service. It will no longer be up to the party who wishes to provide a service to prove that what he is offering is essential. It will be up to the carriers already on the market and who want to prevent new carriers from entering the field to prove there are reasons why they should not do so. This kind of system makes no sense at all, since the parties who must prove that the other guy should not be licenced will be accused of being partial, and there is no way they can then submit evidence that will hold water and be objective, to keep the competitor from entering the market. The difference between the two systems is crystal-clear. Without a formal complaint, anyone who has a truck on four wheels and is willing, fit and able to operate the truck has a very good chance of obtaining a licence. It will be practically automatic. Anyone who wants to drive a truck will be able to get a licence.
I think we should consider the consequences of this kind of situation. The general effet on the Canadian market will be that more carriers will be competing, not for other markets but for the same market. If the purpose was to provide opportunities for expansion, one could consider it useful and appropriate to have more competition, but since it is the same market, the Canadian market, one wonders why the Canadian Government is taking this route. However, the additional competition from a few individuals who get a licence because they have a brand new truck will be negligible compared with the potential attraction of a more accessible Canadian market for the U.S. trucking industry giants who will compete with our domestic

February 5, 1987
Motor Vehicle Transport Act, 1986
trucking industry. We could expect foreign takeovers of Canadian surface carriers to increase rapidly over the next five years.
Look at what has happened in Canada in recent years. Since 1981, operating costs have increased 28 per cent, mainly owing to the taxes on gas and the shockingly exorbitant rates being charged for liability insurance. That is an area the Conservative Government has preferred to ignore. I think the Minister of Consumer and Corporate Affairs (Mr. Andre) should find out as soon as possible what is happening in this area, because liability insurance in this country has become a crushing burden, not only on the trucking industry but on a host of other sectors as well. Municipalities, companies and whole industries are being gouged by the insurance companies. This is a major problem, and although it is not within the purview of the Bill we are considering today, it is a very relevant issue for all these trucking companies.
Because of the increases the trucking industry must cope with and the fact that shipping rates have increased only 5 per cent, the net result or the profit margin, according to figures provided by the trucking industry, is down to 3 per cent. One of the lowest margins since the Second World War! US carriers, with a combined turnover far greater than that of the Canadian industry, could penetrate Canadian markets, lower their rates and absorb a few losses for one, two or three years, after which they could take over Canadian carriers who were unable to hold the distance. That is the danger of introducing this kind of access requirement when we are operating with this very low 3 per cent profit margin in Canada. Canadian carriers would not be able to lower their prices to compete with US truckers.
The Governement of Canada knows that. The Minister of Transport (Mr. Crosbie) and his predecessor, the present Deputy Prime Minister (Mr. Mazankowski), were told as much by the Canadian trucking industry. Absolutely appalling though it may be, both the present Minister of Transport and his Conservative predecessor turned a deaf ear to these representations by the trucking industry.
We are talking about the danger that American companies might invade the Canadian market and impose cut-rate prices. Our main concern is that Combines Investigation Act provisions just cannot put a stop to that kind of competition. A few weeks ago the Conservative Government introduced a competition Bill which, admitedly, is a step in the right direction. But at the time the Official Opposition, the Liberal Party, stated that it was a practically toothless measure unlikely to go far enough to protect Canada's sound competitive market. Well, we now have the proof before us. The competition Bill introduced by the Conservatives a few weeks ago will do nothing to prevent American companies from imposing predatory rates. This is a basic question for us and, when this Bill gets to the parliamentary committee, my Liberal Party colleagues and I will move an amendment to Bill C-19 to make sure that it contains this kind of measure.
As it happens, this was part of the Canadian Trucking Association representations made as early as last December when it voiced its initial reaction to Bill C-19. Here is part of its important statement:
Competition Act provisions relating to predatory or discriminatory pricing have limited application to transportation. Bill C-19 is silent on the question of predation, meaning that the Canadian for-hire trucking industry is being thrust into a continental market-place increasingly dominated by a handful of billion dollar U.S. general freight carriers with absolutely no safeguards and certainly no assurances that those dominant continental truckers will provide a significant number of jobs in Canada while tapping key industrial markets.

Since July 1985 when the Government released its deregulation policy paper entitled Freedom to Move, four Canadian motor carriers have already been taken over by two major American firms: Akron's Roadway of Ohio has bought Arkena Express Lines of Toronto, and Overland's Yellow Freight of Kansas has bought three regional trucking firms of Windsor in Ontario.
So the process is already under way. It is quite possible, in fact not only quite possible but absolutely certain, according to people who know this sector, that the situation will grow worse and that Canada's trucking industry will be litterally swallowed by American interests.
I just cannot understand how this Conservative Government, stubbornly persevering in this course which is both absolutely pointless and detrimental to Canadian interests, can introduce such a Bill which surrenders outright to the Americans the whole Canadian trucking industry. The Conservative Government is prepared to sacrifice to American interests the jobs of some 50 000 Canadian workers, to pursue this pointless and certainly dangerous dream of the Prime Minister (Mr. Mulroney) who had no idea of what he was getting into when he agreed to start discussing free trade with the President of the United States.
Concerning the strategy of major American corporations, Mr. Gerry Reimer, vice-president of Reimer Express Lines of Winnipeg said, and I quote:

American companies can come here and cut rates to smithereens for a year or two and all domestic truckers will be gone.

It is one of the senior officer of a Canadian company who said that, and he is not the only one. Mr. John Kennedy, president of Kingsway Transport of Rexdale in Ontario added, and I quote:

There is no question deregulation will have a devastating impact on the financial condition of the Canadian motor carrier industry. It will ultimately result in waves of mergers, buy-outs and bankruptcies.
February 5, 1987

These testimonies are not statements made by Members of the Opposition to embarrass the Government. They were made by people who operate daily in the Canadian trucking industry and who feel their industry being jeopardized by the incompetence and childishness of this Conservative Government. This situation is utterly unacceptable.
To emphasize the seriousness of possible foreign take-overs,
I urge the House to compare the difference between the turnovers of some American and Canadian firms. The biggest trucking firm in Canada, or rather Quebec is the Brazeau company with a turnover of $160 million in 1985. Kingsway Transport Limited, from Rexdale, Ontario, one of the biggest trucking firms in Canada, had a turnover of $250 million in 1985.1 repeat: The biggest in Quebec, $160 million; one of the biggest in Canada, $250 million. On the other hand, Roadway Express, the biggest trucking firm in the United States, had a turnover which exceeded $4 billion in 1985. It is easy to realize the enormous financial power which huge American corporations can exert. What is likely to happen in Canada is already happening in the United States, and this is a blind and stupid obstination on the part of the Conservative Government that we just cannot understand.
Deregulation in the United States has resulted in increased concentration and brought about, not increased competition, but reduced competition. Well, we suggest that the same thing will happen in Canada. We must stop this slavish and mindless aping of the Americans. What they did failed to benefit the American economy, so why should it benefit ours? There are some eloquent examples. Ever since the 1980 U.S. Motor Carrier Act came into effect, marking the start of deregulation of the trucking industry in the United States, the major companies have been expanding their operations.
In fact, the four giants, which are Roadway Express, Consolidated Freightway, Yellow Freight and United Parcel Services, have increased their share of the U.S. market by 24 per cent. This clearly shows that these companies can, and will, quickly increase their market share. If we open the gates wide as the Conservative Government, in its innocence, intends to do, these companies will come and increase their market share in Canada, gobble up Canadian companies and lay off hundreds if not thousands of Canadian workers who are earning a decent living in the trucking industry in Canada.
It is clear the federal Government is using this Bill to make it easier for these U.S. companies to operate on the Canadian market. When the Government says it wants to increase competition, I think there is a very real risk that most of this competition will not come from other Canadian companies, which would at least be some consolation, but from the U.S. giants, and that Canadian companies that are making a decent profit today will be face with the choice of closing down, laying off their workers or selling out to the Americans.
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As the Executive Director of the Canadian Trucking Association, Mr. Ken McLaren, said so eloquently, and I quote:

Mr. Ken MacLaren said that this legislation, Bill C-19, the one that we are discussing today is like "letting Attila the Hun and Genghis Khan loose to feed on Canadian companies".

I see that the Minister is smiling at this comment, and I can understand him because this situation is one which amuses the Conservatives, but saddens tens, if not hundreds and thousands, of truckers who fear that, because of their irresponsible attitude, the Conservatives run the risk of giving away to the Americans a major Canadian industry. It is a well-known fact that the American companies are bigger and more monopolistic than ours. Indeed, we have to admit that the dynamic infrastructure which links the major American centres and the terminus network put up many years ago by the American companies make for a most effective system. Then, there is the fact that the Americans have a road network of no less than 860 highways linking various American metropolitan markets of over one million inhabitants. How many Canadian centres have a population of over one million? I repeat that there are 860 American cities with a population of about or over one million while we have only three in Canada. It is obvious that the American highway network gives the American companies an edge over the Canadian companies.
In addition, the increased difference between our two taxation systems since the major reform introduced in the United States in 1986 favours the American companies. As we know, American companies pay proportionately lower taxes because of the changes to the rules on vehicle depreciation in the United States. The America pay much lower taxes on gasoline and the American Governments intervene much less often in labour relations. Because of all these factors, it is clear that the American companies are much better off than Canadian companies in the trucking industry. We believe that, in all decency and to be fair to the trucking industry, the Conservative Government has no right to introduce this reform before the Minister of Finance (Mr. Wilson) has completed his tax reform and enabled the Canadian trucking industry to compete on an equal footing with American truckers. To proceed now with the deregulation of trucking in Canada when, for the second time, the Minister of Finance is drawing back from the promised tax reform because he does not have enough courage and conviction to go ahead with it is quite unthinkable. In my opinion, to do so would rob the Canadian truckers and that would be unconscionable.
I believe that one of the provinces which could lose a lot under this Bill is Manitoba. Eight of the 14 largest Canadian trucking companies with over 10,000 workers are located in that province. The industry representatives of that province are very concerned and the president of the Manitoba Trucking

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Association, Mr. Roily Painchaud, had this to say about the situation:
Manitoba stands to lose more than most provinces if reform of the trucking industry fails to safeguard domestic routes from competition by giant U.S. firms.

As we can see, the Government was given a warning but failed to take the message seriously, and that is regrettable.
I can see two Members from the Province of Manitoba-the Hon. Member for St. Boniface (Mr. Duguay) and his colleague from Winnipeg-behind the curtain of the Conservative lobby. I hope they will take part in this debate and protect the interests of their constituents and their province because Bill C-19 may indeed prove to be very damaging to the Manitoba economy.

Indeed, I am looking forward to seeing the Hon. Member intervene in this debate and talk sense with the Minister of Transport (Mr. Crosbie). This legislation will be murder for the trucking industry in Manitoba. I am looking forward to hearing some of those members of the Conservative Party from Manitoba who have the courage to speak out against this terrible legislation.

Not only do the consequences of deregulation undermine the motor carriers' ability to compete against the Americans, they also put them at a disadvantage with respect to the railway companies because of a provision contained in the other Bill which is part of this diabolical Conservative Government project aimed at revamping the trucking industry, and I am talking about Bill C-18 which will force truckers to play second fiddle to rail carriers. I want to refer to the provisions concerning confidential contracts. The confidential rates mentioned in Bill C-18 will enable CN and CP Rail to hold secret negotiations with the shipper with a view to setting the rates. As a result, the shipper who deals with both companies will be in a position to pay lower freight rates. But this will also force road transport companies to reduce their rates just to remain competitive with railway companies with respect to goods that can be shipped either way. Let us keep in mind that the current trucking industry profit margin is barely 3 per cent. How can any one expect fair competition under such circumstances? It stands to reason that this additional competition from the railways will so squeeze the trucking concerns that here again we can expect to see many of them throw in the towel and sell out to Canadian or foreign interests.
The situation is getting more involved as we look into the safety implications of deregulation. Even with all the indications obtained from the Government, even with all the indications stemming from the American experience since 1980, the Conservative Government has chosen to overlook
that aspect. This Tory Government is turning a blind eye and making pious statements that there is no safety problem. They say they will never compromise on safety. But here are the facts: Since the U.S. Motor Carrier Act of 1980 went into force, there has been an 18 percent rise in accidents involving trucks in the United States. And there is no reason to believe the same thing will not happen in Canada with deregulation.
The fierce competition that was experienced in the United States following deregulation brought rates down, and trucking companies were forced to cut their costs. Wages went down, drivers had to work long hours and companies started to skimp on vehicle maintenance work. The result was that seven trucks out of ten were being driven around in the United States with unsafe equipment. And out of those seven trucks, 80 per cent belonged to new entrants on the American market since 1980.
The experience clearly points to the fact that deregulation makes it easier for one-truck, one-driver companies to enter the market and very often skimp on safety in order to be in a better position to compete with larger companies. Furthermore, such competition forces established companies to compromise on safety by reducing maintenance schedules, lenghthening driver working hours and extending the life cycle of pieces of equipment.
I therefore submit that by implementing Bill C-19, the Government is betraying the call of Canadians for greater road safety in Canada. We can easily expect the American experience will repeat itself in Canada and our roads will become less safe because of the Tory Government's irresponsible action.
For quite some time provincial ministers and representatives of the Canadian trucking industry have been asking for the implementation of a national safety code. In addition, they have also asked that it be put in place before or at least upon the Bill coming into force. But we find that to date, the Government has totally ignored those requests from the provincial authorities. The national road safety code would ensure that the American experience would not be repeated in Canada, or at least with the same degree of seriousness as in the United States.
And why such a delay? Because, in fact, the Tory Government that boasted of entertaining good relations in the area of federal-provincial exchanges did nothing in that area. There was a conference where pious wishes were expressed, but there really has been no formal agreement between Ottawa and the provinces. Why such a delay? For those truckers, and for all motor vehicle passengers in Canada, that delay means additional serious risk. I submit that risk should not be taken. There should be no compromise on safety when human lives are at stake because of a desire to enact post-haste deregulation in Parliament. The fact remains that these road transport companies, American mostly, did not respect safety measures and I would be very surprised indeed if in a similar context, without any constraint, Canadian companies would do any better. Had this Government any common sense at all I
February 5, 1987

suggest it would reconsider its structure and its strategy. The fact that the Government is prepared to put an industry which employs 50,000 Canadians through this kind of ordeal, perhaps leading to its demise, proves that it governs in the interest of a very small minority. In one fell swoop it may very well undo the work of several generations of people who built in this country a road transport industry which, besides being strong, happens to be competitive and provides a considerable number of well-paid jobs. In conclusion, Madam Speaker, I will say that this Government is running the risk of undermining all these past efforts only to please the American Government which seeks yet another concession from the Conservative Government in the free trade negotiation process. I think this is quite unacceptable. I think it is absolutely shameful, and the Liberal Party will fight to the end to prevent the Conservatives from crawling once again before the Americans.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mrs. Champagne):: Order, please. It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Glengarry- Prescott-Russell (Mr. Boudria)-The administration-(a) Conflict of interest guidelines, (b) Request for inclusion of punitive measures; the Hon. Member for Spadina (Mr. Heap)-External Affairs-United States support for Salvadoran Government; the Hon. Member for York West (Mr. Marchi)-Immigration-(a) Minister's broadcast interview, (b) Request for apology.


MOTOR VEHICLE TRANSPORT ACT, 1986 MEASURE TO ENACT
[Stage Direction]
The House resumed consideration of the motion of Mr. Crosbie that Bill C-19, an Act respecting motor vehicle transport by extra-provincial undertakings, be read the second time and referred to a legislative committee.
Iain Francis Angus: Madam Speaker, I am very pleased to be the lead-off speaker for the NDP on Bill C-19. However, I must say it is like a time warp for me. As a member of the Ontario Legislature some 11 years ago I was a member of a select committee charged with studying regulation or deregulation of trucking in Ontario. Having gone from that House to this House I now find myself
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back where I started, debating once again the merits of regulating or deregulating the trucking industry, not just in Ontario this time but across Canada.
That time spent on the select committee gave me a very broad understanding of the industry in Ontario and its importance to the people of that province. We travelled around the province to many communities, in fact many more communities than the committee of this House did in its study of the White Paper Freedom to Move. You will remember that the Standing Committee on Transport went to three communities, Halifax, Winnipeg and Vancouver, and held hearings in Ottawa as well. While I do not remember the number of communities we went to in Ontario during the 1976 hearings, it was considerable. We went through a number of communities in northern Ontario to get a sense of what trucking meant to those towns and villages and the people who reside in them so that we could understand the economic impact of changes in the regulations. Quite frankly, it appears to me that nothing has changed. Trucking is vitally important to them. It is their mainstay and they need the protection of regulation because they will not get any protection through freeing up the industry.
What I would like to do today is give you and Members of this House, and those Canadians who happen to be watching, an idea of the state of the trucking industry in Canada. I will then go into some specific examples of the impact of deregulation in the U.S. on their carriers and workers and communities, as well as the impact in Canada, and my assessment of the over-all impact on Canadians of this particular Bill.
The Canadian trucking industry, for several reasons specific to its structure in Canada, will be particularly hard hit by deregulation. While the devastating impact that deregulation had on the American trucking industry, i.e., massive lay-offs, bankruptcies, increasing concentration, loss of service to the hinterland, and so on, will be repeated in Canada, there is a real likelihood that because of the particular character of the industry here the consequences will be even more severe.
There are three features of the Canadian trucking industry which must be borne in mind when assessing the likely impact of deregulation. First, market size and orientation. Unlike the American market with its demographic concentrations, the Canadian market has only three cities with a population over one million. While the U.S. has 1,722 city pairs with a one million plus population, Canada has only six, with a huge gap between Quebec-Ontario and the west. Without regulation of the trucking industry in a form similar to what we have now there will be little incentive to maintain an east-west transportation system, the historical basis of our economic system.
An individual who is knowledgeable about the trucking industry, in a speech on October 25, 1985, to the Chartered Institute of Transport in Ottawa, Mr. John F. Kennedy of the Kingsway group of companies, gave this impression of the industry in Canada. He said that by the late 1970s it became very evident that while the Canadian trucking industry was trying to follow the growth pattern of its U.S. counterpart,

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absolutely no thought was ever given to the fact that the Canadian market-place was completely different from that in the U.S. The industry simply failed to recognize that the major distinguishing market characteristic between the two nations is that Canada derives its economic strength from its natural resource base, whereas the United States generates its economic activity predominantly through its manufacturing base. In other words, Canada is mostly a truckload country while the U.S. is largely less than truckload or LTL.
The Canadian trucking industry also demonstrated an overall lack of perception regarding other significant differences between the Canadian and U.S. market-place which resulted in a massive under-utilization of hundreds of LTL terminal facilities across Canada. To begin with, for-hire trucking in Canada is estimated to be a $6 billion industry consisting of thousands of individual carriers, whereas in the United States the 10 largest carriers alone control close to $7 billion in annual freight revenues. The United States has 42 cities with a population over one million which produces a matrix of 861 major inter-city traffic arteries, whereas in Canada we only have three cities with over one million in population and a linear grid of three major city traffic arteries.
LTL weight expressed as a percentage of total weight is in the 60 per cent to 80 per cent range for most general commodity carriers in the U.S., while in Canada it is rare to find a major carrier which handles in excess of 30 per cent LTL by weight.
A further analysis of class one and two common carriers reveals that 42 per cent of all the freight handled in the U.S. is LTL, whereas in Canada LTL freight represents only 14 per cent of the over-all tonnage handled. The reason for these significant statistics is obvious when one considers that 25 major manufacturing centres in the U.S. provide the hub for all the movement of freight and generally LTL movements move in all directions from these hubs. Canada, on the other hand, has basically two major manufacturing centres and both are situated in eastern Canada. This dictates that the majority of LTL freight moves in one direction, that being east to west, and proportionately speaking there is a much smaller volume of LTL freight moving in the opposite direction.
Given this tremendous imbalance of LTL freight moving between eastern and western Canada, Canadian motor carriers have to maintain a relatively high proportion of truckload freight on eastbound lanes to offset fixed costs, and should the volume of truckload traffic decrease significantly many carriers would have to shut down their operations.
Our present regulatory system, with its control of market entry, pricing and commodity and destination restrictions, has intentionally created a pattern of cross-subsidization of traffic through the encouragement of transportation generalists. To cite an example given by the Canadian Trucking Association, a long-haul trucking company will give up perhaps 10,000 pounds of capacity and $20,000 in costs per trailer to move
general freight, for example, manufactured goods, from Ontario to the East or West in order to obtain backhaul which includes significant movement of perishable products such as refrigerated beef or fish. This pattern of accepting less than truckload could only occur where the competition was managed and there was a predictable return on investment, for example, through regulation.
The reduction or elimination of this regulatory control in the industry would encourage the super efficient and the transport specialist to the point of driving the transport generalist out of the market. The generalist would no longer have the incentive to haul LTL. With the demise of cross-subsidization and the generalist goes the historic east-west pattern of transportation. The economic logic of efficiency and deregulation will mean the demise of service for the regions and the smaller communities of the market centre.
That is exactly what we heard in 1976 when we toured northern Ontario. The smaller communities which do not have the volume coming in, let alone going out in terms of manufactured goods, are concerned that through deregulation they will be at the mercy of whichever carrier survives in a cutthroat market. To them deregulation means increased costs and reduced service.
When the United States introduced deregulation in the trucking industry in 1980 it did not have a much larger neighbour nearby with the geographic and economic capacity to enter and predominate in the transport industry, among other things. With all of the upheaval caused by deregulation the U.S. trucking industry did not face the additional distraction of competition from an economically stronger and better prepared international competitor. Canada clearly does.
With the erosion of our east-west trading and transportation systems through the economic logic of deregulation will come the flip side of the coin. The Canadian trucking industry will be beaten in the international competition for the north-south trade. The economic stakes are high. Presently half the value of Canadian-American trade travels by truck. That is one-half the value. This generates $1 billion in carrier revenue of which Canadian carriers reserve half. Loss in jobs, equipment purchase, foreign exchange earnings, and tax revenue and the potential loss for Canada is readily apparent.
In a study the Canadian Trucking Association notes that the impending danger from American competition comes not from Canadian inefficiency but from the inherent advantages enjoyed by the U.S. These advantages include the short haul extension which the Canadian market represents for American truckers. With the purchase or creation of several terminals in Canada the U.S. trucking company has access to the Canadian import and export trade. The reverse is not true.
State deregulation has not occurred to the same degree that is proposed in the Canadian provinces. Combined with the demographic differences, the U.S. trucker will have a much greater ease of entry than a Canadian carrier into the U.S.
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The penetration of the Canadian market for the U.S. trucker will invariably mean a turn-around operation close to the border where backhauls are less important. For the Canadian trucker, on the other hand, the long haul means a trip deeper into the U.S. industrial heartland with a greater difficulty of obtaining backhauls to Canada.
U.S. truckers will have a greater ability to grant discounts and contract rates based on volume because more of this international traffic will be included with their domestic traffic. The high degree of American manufacturing and industrial subsidiaries in Canada, whose exports account for 50 per cent of all Canadian exports, will likely favour a single line service to the U.S. American trucking companies will have a distinct advantage in obtaining this trade, in part because of the discounts offered by U.S. truckers to the American parent company as part of an over-all agreement for the continental business of the parent.
In November of 1985 The Globe and Mail reported that U.S. trucking companies are expecting that Canadian trucking deregulation will mean a continental bonanza by giving them unrestricted access to the Canadian market, thus allowing them to offer non-stop Los Angeles to Vancouver or Miami to Toronto service. The Globe and Mail went on to note:
One area where the U.S. carriers are expected to make inroads is in the business currently going to private carriers. Last year, (1984) Canadian companies did about $5 billion worth of business in their private fleets, but with rates falling, they would be encouraged to shift to for-hire carriers.
U.S. carriers also expect to take business away from Canadians by signing deals with U.S. parent companies to transport the goods of the parent and its Canadian subsidiaries.
"That would settle the fate of a lot of things in Canada without Canadian companies getting a kick at the cat", Mr. Cope, (Executive Vice-President of the Ontario Trucking Association) said.
There is clearly the question of the vulnerability of the trucking industry in Canada. Given the likely demise of our historic east-west economic and transport system, weak as it is, and the impending domination of the north-south trade by the American trucking industry, there is a real concern that deregulation will quickly undermine an efficient but fragile domestic industry.
While reliable figures about the structure of the trucking industry and its financial position are not easy to come by, what figures are available portray an industry marked by many small firms and a few very large firms, all operating with a slender profit margin. The majority of the approximately
10,000	trucking carriers in Canada are small one to three truck operations with a small profit margin and an inability to weather a sustained reversal in business fortunes. Even among the very large trucking firms there historically has not been a pattern of large profits. An industry spokesman recently remarked that even in the best of times industry-wide profit levels are only around 3 per cent. In 1984, 22 per cent of companies reporting to the Ontario Trucking Association were still suffering losses.
Although the limited data available on the structure of the industry has not indicated an undue amount of market
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concentration up until now, the first show of deregulation is already here. In 1985 specifically there were at least four major takeovers and mergers which were triggered in large part by the spectre of deregulation. Reimer Express Enterprises bought Inter-City Truck Lines in April to create one of the largest trucking companies in Canada. In August of that year Dominion Consolidated Truck Lines and Overland Express merged to create the largest trucking company in Ontario. The same month CP Express, Canada's largest road carrier, bought Pickard Moving and Storage. As well, Direct Transportation System was sold to Canadian Motorways, creating what The Globe and Mail described as the biggest shake-up in the industry so far.
The Globe and Mail quoted one industry spokesman as saying that the result of these developments is a concentration of the market in the hands of a few carriers which is inevitable under deregulation. He said that "Eventually, the Canadian market is going to be dominated by five or six big companies, and they are going to fight it out". Another industrial spokesman quoted by the same paper said that his company's decision to merge was influenced by the pending deregulation. He said that "In the United States and Australia large well-financed trucking companies have been the clear winners under a new regulatory environment. We are convinced this pattern will hold true in Canada".
The myth accompanying deregulation is that with the elimination of government's visible hand competition will reign free, the economy will revive, the consumer will again be sovereign, and there will be so many winners that those few losers who fell by the wayside by the process of natural economic selection will be grateful for the chance to be martyrs for efficiency. Indeed, the centrepiece of the statement by the Minister of Transport (Mr. Crosbie) when he released his Freedom to Move paper was his declaration that the object of deregulation was to promote "flexibility, innovation and competitiveness".
Even if the impact of deregulation in Canada is no worse than what has happened since 1980 in the United States, the trucking industry as we know it will likely be left competitive and more concentrated than before. An American trade journal, Fleet Owner, noted:
The handful of nationwide LTL carriers is consolidating its hold on the market, as predicted prior to 1980 by deregulation opponents. While some 350, mostly LTL carriers have gone out of business or severely curtailed operations since mid-1960, the industry's 10 largest companies have substantially increased their market share. Last year (1983) those 10 companies controlled more than half of the industry's total profits.
Carrier overcapacity in the United States has become a crippling problem. The executive director of the Independent Truck Owner Operators Association, a strong proponent of deregulation prior to 1980, testified before congressional oversight hearings in 1983. He said, "The effects of the Motor Carrier Act of 1980 on the trucking industry and labour have been disastrous". Both the truck load and the LTL sectors were ravaged by deregulation with "the medium-sized carriers forced out of business through the destructive practices

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engaged in by large carriers through the use of discounting tactics". He cited academic studies which predicted that after the initial shake-up of the industry has been completed there will be four or five giant nationwide LTL carriers, approximately 20 medium-sized regional LTL carriers and little else.
Let me point out a disturbing aspect of the process we have gone through. The Transport Committee had before it the White Paper Freedom to Move. We were allowed to travel to three Canadian cities to talk to Canadians about what they believe might be the effect of deregulation in their various sectors. However, we were not allowed to go to the United States to talk to truckers, airline officials and government officials to discover from them, first-hand, what the impact of deregulation has been on their industries.
Quite clearly, if we are to copy the rules of the game from the United States, we should at the very least have the opportunity to meet with them and find out how those rules have worked, if they have worked at all.
Let me refer again to Mr. Kennedy's speech regarding the U.S. situation. He said that if there is one particular thing that U.S. truck deregulation has taught us, it is that nothing can be cross-subsidized in the trucking business. There has been a tremendous increase in the number of truckload carriers on the one hand and a heavy concentration of large LTL carriers on the other. The losers are the regional and inter-regional carriers who have mixed truckload and LTL operations.
But at the same time the trucking industry is not the only business sector to feel the consequences of deregulation. The small and medium-sized manufacturing companies that do not have access to the LTL volumes required to take advantage of carrier discounts are left with the burden of having to pay higher freight charges in order to offset the lower rates being charged to ship the larger volume shippers.
He went on to say that the principle of "the larger shipper pays less and the smaller shipper pays more" has some serious implications for all Canadian businesses, not just for Canadian-based trucking companies. I suggest that this applies as much to the smaller communities between major cities as it does to the smaller business operations.
The irony of deregulation is that by opening the doors to unregulated competition, it promotes concentration. In the period following the passage of the Motor Carrier Act in 1980 in the United States, virtually anyone applying for an entry trucking permit received one, I presume as long as they were fit, willing and able. By 1983 there were some 11,000 new carriers competing, setting off rate wars that chopped truckers income by as much as 30 per cent. Thousands of independent truckers, some of whom had enjoyed a stable and prosperous livelihood prior to deregulation, and others who had invested their life savings to grab a share of free enterprise when they thought they heard opportunity knock in 1980, went out of business.
In 1983 The Wall Street Journal estimated that the numbers dwindled from nearly 300,000 to just 100,000 since the late 1970s. Commenting on the fatal price squeeze faced by the small independent truckers, a spokesman for the American Trucking Association said, "A lot of these guys are living off their depreciation. They are in a going-out-ofbusiness sale and they don't even know it".
Accompanying that increasing concentration of the American trucking industry were significant decreases in rates charged and industry profits brought on by deregulation. In 1983, profit levels were less than 3 per cent industry-wide and falling. Despite the ongoing economic recovery, 29 per cent of trucking companies lost money and an industry association estimated in late 1984 that as much as one carrier in five was a potential bankruptcy candidate. I wonder how many are still around.
Aside from bankruptcies, growing concentration, and industrial profit decline, trucking deregulation in the United States meant a sudden increase in truck terminal closings. In the spring of 1980 Philadelphia had 97 truck terminals in operation. By December, 1983, not even three years later, only 68 terminals remained open. In the same period, Boston, Kansas City, Pittsburgh and Cleveland also suffered a doubledigit net percentage decline. In Ohio, every major city except Columbus showed a net decline in terminal closings. With these closings came an accompanying loss of terminal-oriented jobs and a reduction of choice of shippers and fee scales. Of course, this means fewer competitors.
The threat posed by deregulation to the Canadian trucking industry will have several dire consequences for Canadian workers in the industry. Clearly, they will be among the most prominent of losers should this Bill be passed. They would face a career spectre of massive lay-offs, a decline of wages and benefits for those who remain, and a deterioration in their safety and working conditions.
There are an estimated 100,000 people working in the for-hire trucking sector, with approximately 80,000 of those classified as employees, that is, workers belonging to, or eligible to belong to unions. Another 285,000 Canadians work in the private trucking sector, driving or assisting in the driving of goods from companies who own the goods such as Stein-burgs or Carling O'Keefe. There are no accurate figures on the degree of unionization among the for-hire trucking sector, but it is estimated to be 60 per cent with the Teamsters, CBRT and GW, and BRAC as the predominant unions.
In the United States, deregulation has created a chaotic industrial relations environment, marked most prominently by the disappearance of hundreds of thousands of good paying jobs. It is estimated that over-all in the industry, between
250,000	and 300,000 union members have lost employment in recent years. Thousands more saw a generation of wage increases and working benefits rolled back as the trucking unions, principally the Teamsters, gave concession after concession back to the companies. The initial cause of this supply side industrial relations was the emergence of a large
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number of non-union carriers freed of the restrictions of market entry and licence limitations. Since the trucking industry is labour intensive, this influx of lower cost carriers knocked the bottom out of the industry's wage structure and employment figures and the industry has been spiralling ever since.
There may be those in this country who believe that a reduction in wages will mean less cost to move goods. They forget, however, that it is those same unionized, decently paid employees who shop in their stores and buy those consumer goods. If they have less wages they will buy less and ultimately the store owner and operators will lose because of that reduction in earning ability. We should keep this in mind rather than assume that lower wages will mean a better situation nationally.
As a consequence, the ability of the trucking unions to ensure adequate working and living conditions for their members has been drastically sliced in the last five years. Wage reductions, wage freezes for extended periods, and deferral of negotiated payments until future dates are now the order of the day. Because of the wage sensitivity of the deregulated industry, a whipsaw effect has emerged; a wage concession in one company brings another, often deeper demand from another, until the cycle comes back to the initiating company that now demands a new wage concession "to remain competitive".
Other ominous emerging trends in the industry bargaining are reduction in holiday and vacation time, health and welfare and pension concessions, erosion of work jurisdiction rules, the double-breasting of unionized and non-unionized subsidiaries, two-tier wage structures, immensely decreased bargaining strength and vigorous efforts by non-union employees to keep unions out. Industry spokesmen in the U.S. have stated that while a smaller, cheaper and tamer workforce was not the primary reason for their support of deregulation, they now recognize it as its greatest blessing.
Meanwhile, thousands of former trucking employees remain on the outside staring in. Despite the proliferation of small, non-union trucking firms, there are not nearly enough jobs to make a serious dent in the unemployed truckers' ranks, even if most of the unemployed would be willing to take trucking jobs that would pay, in many cases, half their former wages and benefits. The U.S. economy has lost productive workers whose consumption needs and wants are a necessary pre-condition for an economic recovery. We certainly do not want that to happen in Canada.
One feared industrial relations consequence of trucking deregulation will be the forced conversion of company drivers into independent owner-operators. Instead of working under a collective agreement with a set wage, set benefits and an agreed upon work schedule, the driver would have to become a "tiny capitalist", with his own overhead, uncontrolled hours, and unstable income and benefit earnings. Not only does the company lessen its wage and compensation costs, but it also
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destroys the bargaining strength of the unions by making the driver an employee, but by another name.
Aside from massive employment dislocation, trucking deregulation threatens safety on our highways. As in other industries, the regulation of trucking was designed to ensure that the nation receives safe, adequate and continuous service to all at reasonable rates. The issue of safety is tied to the issues of entry ease, level of competition, adequate wage and benefit levels and rate of return.
It is obvious that with the floodgates of comptetion being opened, the scramble for freightloads will force down the already narrow cost margin. Safety in trucking and elsewhere has historically been one of the most expendable items when profits and productivity are threatened. The erosion of trucking safety is a matter which will be very difficult to police in the absence of a regulated and financially stable industry.
Regardless of safety provisions, deregulation brings hazardous road conditions. Carriers who operate on a shoestring can hardly attend to matters of new tires or brake overhaul when they live, as a vast majority of them will, from shipment to shipment. Trucking companies will stay on the road longer as companies are forced to cut expenses to the bone. The quality of repair work and upgraded equipment will deteriorate in all but the most profitable of companies. Truckers, particularly small owner operators, will drive longer stretches and carry more overweight cargo as freight rate cutting forces them to accept any available assignment, thus increasing the danger to themselves and those with whom they share the highway.
In northwestern Ontario we have a lot of trucks on the road. They are there for a few reasons. From this side of Kenora, the eastern side of Kenora, through to Shabaqua Corners, which is just west of Thunder Bay, there are alternate routes. We have Highway 11 or Highway 17. From Shabaqua Corners to Systonens Corners, there is a single two-lane highway. From Thunder Bay to Nipigon there is a single two-lane highway. They are funnels, if you like, Madam Speaker, where all of the east-west highway trucking must take place. In addition, on all of those highways running through the north-west we have a very large concentration of pulpwood trucks, large trailer trucks hauling the harvest of our forests to the mills which are becoming located farther and farther away.
Over the last couple of years in northwestern Ontario we have had a number of very serious accidents involving pulp transport trucks. A number of lives of innocent people have been lost.
With deregulation there will be many more trucks on the road. There will be greater movement of goods from east to west by road rather than by rail. There is even talk of bringing grain from Manitoba and Saskatchewan to Thunder Bay by truck. As more of these operators, who have a dream and who are supposedly fit, willing and able, whatever that means, go

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from load to load or contract to contract, they will be cutting corners.
What price will we have to pay on those northern highways for this increased traffic? What will be the pressures on the provincial Government to add to the road capacity and construct four-lane highways across northern Ontario? There will, of course, be pressure on the federal Government from the provinces to do the same thing. The federal Government is already contributing $50 million to upgrade the Yellowhead route in western Canada. There is no reason they would not be expected to pay to upgrade the Trans-Canada Highway through northern Ontario to standards equivalent to that of the prairies and southern Ontario.
I would like to give an example of the difference between regulating safety and the economics of the trade. New pulp truck trailers come with brakes on every set of wheels. There is one axle which is used only at a time when the truck has a load. I have learned through a constituent that the tendency is that when the brakes on that extra axle wear out they are not replaced. It is not required by regulation but is something the manufacturer adds. The operator uses them as long as they work but once they wear out the company cuts the brake cables and does not replace them. That is not against the law. However, it eliminates the truck's extra stopping power. That is the kind of thing which will happen as the trucking companies get squeezed and squeezed because of what will probably be cutthroat competition. They will check the manual and find that they must replace the brakes every 5,000 miles. You can be assured, Madam Speaker, they will not replace them at
4,000	miles even if they are showing some wear because the rules say "5,000 miles". In fact, I would not be surprised if they would wait for 5,020 miles or 5,100 miles before replacing them. They will squeeze those extra miles out. That is what we are concerned about.
We do not doubt that the Minister of Transport (Mr. Crosbie) believes that safety is the number one criteria, but we must look at the economic factors. First, in this case it is the provincial inspection staff who will be examining the trucks. Certainly, in northwestern Ontario we do not see them often enough. They are not always out there. There are very few of them. What about the truckers who are taking the gamble? They have the bailiff almost knocking on the door and the bank calling every day. They have Esso or Gulf demanding payment of that $4,000 fuel bill. How far are they going to stretch it? What chances are they going to take in order to stay alive in the trucking business? That is what we are afraid of.
We are not against a redefinition of the rules of the road. We recognize that this is 1987 and we have to re-examine all of the rules under which we operate, all the regulations and all the laws. Laws which were written in 1950 do not necessarily apply to the technology of today. We are not against examination of regulation or against bringing them up to the 21st century.
I can give an example, Madam Speaker. The Minister of Transport has announced that effective, I believe, 1989, all motor vehicles which are produced will have to have running lights. That is a very excellent suggestion. It is guaranteed to save lives on the highway. It will reduce the load in our hospitals. That is the kind of work we would like to see done, not creating chaos, not matching the American system, but doing it the Canadian way. We should do it in a thoughtful and knowledgeable way. We should not rush through it.
I think back to the hearings of the Committee on Transport. We had our three visitations. But, as my colleague, the Hon. Member for Regina West (Mr. Benjamin) mentioned, we did not even visit the villages of Montreal and Toronto. We did not go to northern Ontario. We did not go into Saskatchewan and Alberta. We did not go through various parts of Atlantic Canada, or through the Province of Quebec. Had we been able to do so, we might better understand the trucking industry and how it relates to their economy and infrastructure. Those are the kinds of things we should be doing if we truly want to rewrite the rules. We cannot rely just on a philosophical assumption about free enterprise. Second, we cannot allow the bureaucracy to tell us how our country should be run. Third, and most importantly, we cannot allow the United States of America once again to decide what is going to happen in this country.
I spoke the other day on Bill C-18. That is phase one. Bill C-19 is phase two. We have a third Bill coming up which deals with the marine sector. There are three elements in the deregulation move, but it is all part of the grand strategy to almost turn this into the poverty-stricken state of Canada, designated number 50 or number 51 by a little extra star on the bottom of the American flag. That is what we will become. We may still have our Parliament, but their transportation sector will have taken over. Goods will not move east-west, they will move north-south. Eventually grain will not come from western Canada and go through Thunder Bay and out the St. Lawrence, it will go through the United States. The jobs will be down there because it is cheaper.
Canada is important to us. This Bill, together with Bill C-18, is clearly a threat to our autonomy and our life as we know it. Quite frankly, we will not allow this Bill to go forward easily. We will do what we can to convince the Government that it is misguided in this matter.
A number of my colleagues wish to speak on the issue, whether they are from British Columbia and concerned about the movement of containers, wood, and fibre-based products, or from the Prairies and are concerned about manufactured goods coming in from Ontario, and grain, potash, and food products going out. My colleagues from northern Ontario will wish to speak, because of their concern about what this particular Bill will do to their small communities, and to the people who live there. My friends from southern Ontario will wish to speak, particularly the Members from Windsor who
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recognize the threat of the domination by the United States, and the impact on trucking. My collegue from Quebec will wish to speak about that province and the impact on its economy, and, of course, those of us who are concerned about Atlantic Canada will be speaking. We believe that this Bill is extremely important. We wish to make it clear to the Government that we are not prepared to accept this change in our lifestyle lying down.


Mr. Andre Plourde (Kamouraska-Riviere-du-Loup):: want to thank you, Madam Speaker, for this opportunity to speak to Bill C-19 which concerns the trucking industry. Madam Speaker, like all its economic partners, Canada has now entered a new era in the transportation of goods and passengers, which requires a thorough reform of our approach to this industry. All regions in Canada are experiencing major changes in their economic structure, and because of certain new realities, we shall have to change our working habits and consumption, our production methods and what we produce, as well as the way we deal with to various problems.
Canada has gained access to new markets, which is a good thing, but others, some of which were very important, it has lost to its competitors, who for various reasons have been able to charge lower prices for the same type of products. This fierce struggle with our competitors is forcing Canadian entrepreneurs to rationalize their production operations for goods and services. Every penny saved as a result of this rationalization process will help entrepreneurs charge lower prices for goods and services, which will of course benefit the Canadian consumer. However, the decision to help make our prices more competitive with prices charged by foreign producers and suppliers will also help our country improve its trade balance. We must not forget that a large part of our economy depends on the quality of our exports.
In Quebec, the transportation industry has had a decisive impact on the economy of the province. In addition to its role in developing harbour, railway, highway and aviation facilities to open up new territories in the province, Quebec, if we consider its geographic location and the location of Montreal, also plays an important role in distributing goods to the rest of the country. It is that function, Madam Speaker, that is one of the pillars of Montreal's economic development. Efficient transportation functions are imperative in an economy like that of Quebec which exports over 40 per cent of its production. They are also imperative if Montreal and the Port of Montreal are to continue to play a major role in handling container traffic. This efficiency must therefore be maintained and enhanced if we are to continue our efforts to rebuild the economy of Quebec.
I believe the proposed reforms for the railway freight industry and the trucking sector will, and many Quebecers will agree, help to achieve this goal. The major changes which have occurred in the Canadian transport industry in the last 20 years and the deregulation of the industry in the United States in the early eighties convinced the Government and the
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majority of the people involved in Canada that an in-depth reform of this vital sector of our economy was required. This reform is being carried out by and for Canadians. This is an important point that I wish to emphasize. Following publication of the statement of principle Freedom to Move in July 1985, numerous and detailed consultations took place under the direction of Transport Canada for one year. These consultations and the hearings held by the Standing Committee of the House on Transport throughout Canada led to the development of the major components of this reform. The Government is aware that it must help Canadian businesses in this rationalization process. That is why, since its coming to power, the Government has implemented a series of major economic reforms with the basic objective of bringing us into the modern era and of providing producers of goods and services, businessmen and all Canadian consumers and workers with better adapted and more modern mechanisms to improve their living and working conditions.
Among the reforms considered essential, there is naturally the National Transportation Act and more specifically the Motor Vehicle Transport Act. Following a series of consultations with provincial Governments and in cooperation with industry representatives, it was agreed that the National Transport Act and the Motor Vehicle Transport Act should be amended and that this reform should be in accordance with the conclusions contained in the document signed by the federal and provincial Transport Ministers on February 27, 1985. Some of the basic elements contained in this agreement in principle suggest amendments to extra-provincial trucking regulations on entry and licenses as well as safety throughout Canada.
Madam Speaker, while our Government is aware that we must make our trucking system more efficient, it is not suggesting reforms which could reduce safety standards on Canadian highways. I repeat that the Government is not proposing reforms which might reduce safety standards on Canadian highways. Far from it, Madam Speaker. The Government wants to increase safety on our roads.
Bill C-19 on Motor Vehicle Transport requires that transport services comply with certain basic fitness criteria if they want to obtain a license to transport their goods from one province to another. These criteria include sufficent insurance coverage and compliance with safety standards.
As I mentioned earlier, Madam Speaker, the present federal Government and the provinces are cooperating closely to develop a national safety code for trucking to establish practical standards governing vehicles, drivers, hours of work, road safety and the requirements for accident reports and bookkeeping which the companies will have to meet. This code will provide a complete series of effective standards dealing with the safe use of commercial vehicles.
Most issues that were examined to develop the safety code are nothing new. In fact, the code contains in a comprehensive form all of the regulatory work already carried out by the provinces.

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In the area of trucking or motor vehicule transportation of goods, the reforms proposed in the Bill will have very important repercussions and implications in every region. These reforms, Madam Speaker, will allow trucking operators to be more efficient because they will be allowed greater flexibility.
The new statute will provide for the ability to compete and will allow for a series of new alternatives that are better adapted to the needs of shippers, especially as concerns the price-quality ratio of services. Our reforms will enable agressive, ambitious, and competent trucking firms to handle new markets.
Madam Speaker, the legislation will have a tremendous and positive impact on the price of consumer goods since it will encourage reductions in overall transportation costs.
The competitive position of small and medium sized businesses, that are great users of motor vehicule transportation services, will soon improve significantly.
As I pointed out in my opening remarks, this nation's economic prosperity is directly linked with its ability to compete on international markets.
The cost of transporting goods is a determining viability factor for our larger producers and our major industries, including agriculture and manufacturing.
Giving producers and shippers access to lower transportation rates for their products can only widen their markets and create a significant number of jobs. For instance, Madam Speaker, let me quote a few comparative figures as between Canada and our American neighbours who proceeded with reforms and deregulated trucking in 1980.
From 1980 to 1984, employment within the American leasetrucking industry increased 2 per cent. At home in Canada, over the same period during which we maintained the regulatory status quo, that industry experienced a 17 per cent job decline.
All those factors, Madam Speaker, and many others indicate that this Government was right in bringing forward Bill C-19. In Quebec, especially in my constituency of Kamouraska-Riviere-du-Loup, and in all of Eastern Quebec,
I am sure the trucking industry will meet the challenge of a new kind of competition unfettered by unnecessary regulations, and provide customers with good quality services at competitive rates.
The reform of the regulatory framework of the trucking industry will prove to be an important asset for the preservation and reinforcement of the competitive position of the manufacturing industry in Quebec and in the Montreal region where close to 50 per cent of the economic activity of the province is concentrated.
Madam Speaker, the Progressive Conservative Party considers this legislation not only as the outcome of a global philosophy, but also as an instrument of regional economic development. This Government is committed to the long term economic recovery of Canada. Considering the importance of
the trucking industry is in a trade oriented economy, there was no choice for the Government but to review its transportation policies. The National Transportation Act and the Motor Vehicle Transport Act are some of the steps that it will be taking to contribute to and build upon the success of that policy. Both legislations give all the parties concerned an opportunity to achieve that goal.
Madam Speaker, as we deal with this crucial matter involving both the safety and the economic and social welfare of every Canadian citizen, we can all look forward to the benefits to be derived from this essential reform.


André Ouellet: 
André Plourde: Madam Speaker, I think the Hon. Member for Papineau (Mr. Ouellet) must know, and otherwise perhaps I may inform him, that before going into politics, I worked in the private sector for twenty-eight years, and this is also for the benefit of the other Members chatting in the back. I would like to inform the Hon. Member that in Eastern Quebec, there is a lack of trucking services. The Hon. Member for Papineau referred to the national safety code for trucks and buses. I don't see why Bill C-19 shouldn't be adopted before we go on to the national safety code, because what is the use of adopting a Bill on the national safety code if we don't adopt Bill C-19? Besides, the Hon. Member knows perfectly well that most trucking legislation is provincial, and that trucking licences and shipping rates are a provincial matter.
In fact, Bill C-19 sets out clearly that there will be negotiations with the provinces. I may add for the benefit of the Hon. Member for Papineau that in my experience, and I noticed there was a lot of talk about safety in his speech and in the speech by the New Democratic Member, in my experience in the trucking industry, I have yet to know a single private company, either small or not so small, that has neglected the safety factor in an attempt to make more money. I would say the opposite is true. And I don't think we should give Canadians the impression that Bill C-19 is going to destroy the trucking industry in Canada. In fact, the purpose of this legislation, which will apply across this country, is to deregulate the industry and thus give smaller companies a chance to be licenced for extra-provincial trucking.


André Ouellet: Just a very short supplementary, Madam Speaker. The Hon. Member must know a company in his riding, called Anjou Transport. Before the Hon. Member rose in the House to support this Bill, did he consult with this major company in his riding, and what did the company's management have to say about the Bill?


André Plourde: Here again, Madam Speaker, the Hon. Member for Papineau has not heard the latest news-Anjou Transport no longer exists. It was bought by Cabano Transport interests a few months ago, and I happen to know these people very well, just as I also know Theberge Transport. The Member for Papineau, you will understand that transport deregulation-


The Acting Speaker (Mrs. Champagne):: Order, please. I would ask the Hon. Member for Kamouraska-Riviere-du-Loup (Mr. Plourde) to address the Chair rather than his colleague. The Hon. Member has the floor.


André Plourde: Madam Speaker, I apologize for this oversight. As I was about to say, on the contrary in the eastern region of Quebec a number of private transport companies have been bought by others, and this is where Anjou's Cabano group comes into the picture, as the Hon. Member said. Madam Speaker, I was going to say that what has been happening in eastern Quebec in recent years is that people like
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Cabano Transport have been strong enough to buy at least three other companies and, in my estimation, deregulation through Bill C-19 will make that company even more prosperous.


The Acting Speaker (Mrs. Champagne):: Questions.
Comments. Debate. The Hon. Member for Glengarry- Prescott-Russell (Mr. Boudria).


Mr. Don Boudria (Glengarry-Prescott-Russell):: Madam Speaker, I am pleased to take part today in the discussion of Bill C-19. I would like first to commend my colleague, the Hon. Member for Papineau (Mr. Ouellet), for the excellent work he has done on behalf, not only of the Liberal Party but of all Canadians who will benefit from his contribution, and for the way he defended them against this Government who never listens to reason, as you no doubt know. I would like to extend my congratulations to the Hon. Member for Papineau.
I know that deep down, certain Conservative Members think exactly as I do, but you know how those Members can be partisan at times, Madam Speaker, and I am sure they would like me to send that message for them, since they cannot do it by themselves.
Earlier today the Hon. Member for Papineau asked another Member in this House whether he had been in touch with the various transportation firms in his constituency. This was really a good question, because it is something we should all do when we want to deal with that matter. I myself, today, had an opportunity to have a talk with GTL, Glengarry Transport Limited, in my constituency of Glengarry-Prescott-Russell.
Glengary Transport has 2,000 employees. It is by far the largest single employer in the constituency that I represent. Not all of its jobs are located in my riding. As a matter of fact, a larger number of them are located in the City of Montreal than in Glengarry, strangely enough. However, this company with its 2,000 employees has 5,000 different vehicle units. It is the seventh largest trucking company in Canada. It is a family-owned busienss. It is not a multinational or anything like that and belongs to the Lefebvre family of Alexandria. We are very proud of the fact that there is such a company located in the constituency that I represent.

I learned from Mr. Pierre Vaillancourt and Mr. Paul Poirier, of Glengarry Transport, today, that 20 to 30 per cent of all their employees could in the end lose their jobs because of Bill C-19. I do not know if you realize it, Madam Speaker, but that is a lot more jobs than were lost for instance in other industries in the Montreal area and elsewhere, and that gave rise to much concern in this House. When I say 30 per cent of 2,000 employees, this means 600 people, whether in the Montreal area, in Western Canada or in my own constituency. We know how much concern was shown in this House when the Gulf refinery employees for instance lost their jobs and

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Members from all parties rose to comment. I find it rather interesting today to see that Opposition Members rise, but contrary to what happened on other matters, Government Members keep to their seats today, although they could themselves face job losses in their own constituencies because of this legislation.

One thing Glengarry Transport told me was that according to that company, large U.S. trucking companies would be able to come into Canada under Bill C-19 and lower prices in a predatory fashion, taking over the largest paying runs and abandoning the rest. Of course, many of the small communities would lose altogether the transportation services they have been using.
I find it interesting to note that four trucking companies in the United States have greater revenue than all of the trucking industry in Canada. Those four companies are Roadway Express Inc., Consolidated Freightways, Yellow Freight System Inc. and United Parcel Service which is commonly known as UPS, and together they are larger than the whole industry in Canada. Needless to say, there is a giant of an industry across the border. Other Hon. Members have referred to it this afternoon and it is not just rhetoric, it is fact and well known to all of us.

Considering the many facts brought to light by several Members of this House, including the Hon. Member for Papineau (Mr. Ouellet), Madam Speaker, we wonder why the Government is proceeding so quickly with deregulating this industry; one reason is that the Government published earlier this year a working paper and decided right away to translate into a legislation the contents of this document.

The consultation document to which I referred was known as Freedom to Move. The Government produced this paper and sent it off to a parliamentary committee. The committee met briefly, and I say "briefly" because when dealing with something this important we needed to have hearings in all the regions of Canada. Yet we know that the Provinces of Newfoundland, Prince Edward Island, New Brunswick, Quebec, Ontario, Saskatchewan and Alberta were not even visited by the parliamentary committee, and neither was most of the North. One really must wonder what difference it would have made to the Government if it had let the committee sit another three or four weeks to ensure that the members of the committee were well apprised of all the regional interests and of the opinions of people living in the provinces I named only moments ago.
It is also interesting that the country just to the south of us has recently experienced deregulation. There are some who claim that that was a great thing, but I am not one of them. Surely if it was so great, we should have been able to see what they were doing. Why could we not spend time seeing what they did there in order to gain whatever benefits there were, if
there were any, without copying the mistakes, and we know that there were some of them because no legislation is flawless. What would have been wrong with that idea? No, the Minister of Transport (Mr. Crosbie) wanted a report immediately so that the Conservative Party could say to those people in Canada who are very conservative that it has freed private enterprise. Conservative Members wanted to be able to say that, even though a very large segment of that so-called free and private-enterprise sector did not want to be freer than it was at the time. However, that was the view of the Government.

Madam Speaker, I do not mean to say that it would be impossible to deregulate in any way the trucking industry in this country. Obviously this industry, like others, is changing and from time to time legislation must be amended to reflect these changes.
I am sure that Members from all parties in this House agree that such changes should be included in the legislation passed by the House of Commons. However, why is it so important to proceed that fast?
I think, Madam Speaker, that the Government has passed those bills or has tried to pass them as quickly as possible in order to satisfy a small number of Conservative supporters who definitely wanted to deregulate whatever they could and then brag about having done so.

I spoke moments ago about the issue of predatory pricing practices that could occur on the part of U.S. trucking companies after deregulation under Bill C-19. It is interesting to note that when the trucking association presented a brief to my colleague, the Hon. Member for Papineau (Mr. Ouellet), and others on the committee, it stated:
Competition Act provisions relating to predatory or discriminatory pricing have limited application to transportation.
Bill C-19 is silent on the question of predation, meaning that the Canadian for-hire trucking industry is being thrust into a continental marketplace increasingly dominated by a handful of Sbillion U.S. general freight carriers with absolutely no safeguards and certainly no assurances that those dominant continental truckers will provide a significant number of jobs in Canada while tapping key industrial markets.
Those are not my words, those are the words of people who are in the business. Those are the words of people the Conservative Party is pretending to defend in this House and elsewhere.
If Conservative Members are indeed such defenders as they pretend to be, why do they not realize that this Bill, along with Bill C-18, must go back to a parliamentary committee so it may receive a thorough airing right across Canada? That way, we will know about its possible ill effects and we will be able to improve the legislation and provide a transition period that will ensure that whatever deregulation occurs is done in such a way that it would not harm the industry, the safety of Canadians
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and the security of Canadian jobs. Surely that is not too much to ask.
In a recent address, the Minister of State for Transport assured the industry that the Government would not sit idly by and allow the industry to go to hell in a hand-basket should the deregulatory process prove to be overly disruptive. If that is the case, why did the Minister or Ministers of Transport not listen? Sometimes we have two Ministers of Transport and sometimes we have only one, depending on whether or not Ministers of State for Transport happen to get fired that particular week. Whether we have one or two such Ministers, the fact remains that they should be able to listen to those concerns and to practise what they preach. They should be able to adhere to the statements attributed to the Minister of Transport.
In conclusion, this Bill in its present form would result in severe damage to the largest employer in the constituency I represent, Glengarry Transport. It would result inevitably in similar damage to other industries as well. I ask the Government to listen to the advice given to the House by the Hon. Member for Papineau who has been speaking very eloquently to us for the last number of days on both transportation Bills. He has been telling us how it should be done and how to do it the right way the first time without listening to idle rhetoric from Ministers who are telling us not to worry because, if the industry goes to hell in a hand-basket, they will pick up the pieces. That is not what the industry or Canadians want to hear. They want us to do it right the first time. Surely that is what we were sent here to do. That is what I ask of my colleagues in this House and surely it is not an unreasonable request.


The Acting Speaker (Mrs. Champagne):: Questions or comments.


Joseph Lloyd Reid: Madam Speaker, I listened with interest to the comments made by the Hon. Member and I sometimes wonder whose book he is reading. In an earlier day the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), as Minister of Transport, was prepared to introduce legislation almost identical to that proposed in Bill C-19. Indeed, he went so far as to say to the provinces that if they did not agree with regulatory reform we must act unilaterally. Something has to be done about the trucking mess we have in the state of Canada today.


Mr. Robichaud:: State?


Joseph Lloyd Reid: The Minister said it was a necessity. Yet now we hear different from Members opposite. If they feel as strongly as they seem to, would they be kind enough to explain the inconsistency?


Don Boudria: Madam Speaker, I must say I found it interesting to hear the Hon. Member inadvertently refer to our country as the state of Canada. There is something symbolic in that. I am sure there must be some kind of a subliminal
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Republican wish on his part; it is not just that his Leader is acting as though he was the president.


Mr. Rossi:: The best Prime Minister the United States ever had.


Don Boudria: Yes, that could very well be true.
The Member asked me whose book I am reading from. Contrary to most Conservative Members, I usually try to speak what I have on my mind instead of what some speech writer wrote for me. I was sent here to speak for my constituents.
The Hon. Member asks why we do not want any change. I bring to his attention the question of why it is necessary to deregulate so quickly. The Canadian Trucking Association said it is not simply a question of whether U.S. truckers would have a long-term cash flow advantage over Canadian truckers. If the disparity is as great as it appears, Canadian truckers who are serious about long-term participation in serving an integrated continental transportation market-place will increasingly be persuaded to relocate their international operations in the U.S., operating back into this country using U.S. equipment and U.S. employees. The implications of that scenario go far beyond the immediate interests of truckers. I ask the Hon. Member, if it is so great why does the industry not want it?


Joseph Lloyd Reid: Madam Speaker, I would just like to point out that the state we live in is a state of democracy and we all have the opportunity to express our opinions and take the pulse of the nation.
It is not so long ago that the former Liberal Minister of Transport said that the trucking industry in this country is in a state of turmoil, using the word "state" in a different context. He said the former Government was somewhat inclined to make an investment in a Canadian trucking industry which was operating in major parts of the U.S. It is a two-way street.
The Hon. Member asks what is our hurry. His former Minister of Transport found the trucking industry in such a mess that we have to act and clear it up as quickly as we can. That is what we have been doing ever since we took over the responsible role of Government.


Don Boudria: Madam Speaker, if we hear the word "state" mentioned any more often in this House the statue of Mr. Diefenbaker outside is going to start moving and it will not be in a way complimentary to the Hon. Member.
The Hon. Member talks about a two-way street. I wonder if it ever occurred to him that when there is a two-way street both sides should be the same width. That is certainly not the case right now. Surely he knows that depreciation and operating costs in the American trucking industry are different. Their laws are not the same. Yet we want to create a climate in which we will ask the Canadian industry to compete

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Motor Vehicle Transport Act, 1986
against that. The industry has said it cannot do it. It will have to move across the border and truck back. Surely that is not what we were sent here to do. We are not here to represent the U.S. trucking industry, we are here to represent the Canadian industry. Not too many U.S. truckers voted for me in the last election. As a matter of fact, not all that many voted against me either. There are none in my riding that vote, or most of them do not.
The point is that we have to go back to the drawing board, as the Hon. Member for Papineau said. Let us have hearings across the country. Let us listen to what the people of Canada want and then do what is right the first time instead of messing it up and picking up the pieces the way the former Minister of State for Transport said in his speech not that long ago.


Mr. Cochrane:: Madam Speaker, there are two or three parts to my question and the Hon. Member may want to make a little list. He is fairly good at that so he may want to do it that way. This will be sins of the past Government, although I know he does not list those very well.
In 1982 the U.S. Government issued a moratorium on granting licences to Canadian truckers to operate in the U.S. That action was taken because of a lack of reciprocity between the U.S. and Canada. They were issuing licences to Canadian truckers but we were not doing the same thing for their truckers. The moratorium existed for six months and was only lifted when the Brock-Gotlieb agreement was signed. Under its terms the Liberal Government agreed to provide full, fair and equitable opportunities for truckers from both countries to compete for the carriage of international traffic.
Are the Liberals now saying we should go back on that agreement and again keep Americans from getting Canadian licences? If so, what would they suggest be done when the American Government again issues a moratorium and Canadian truckers lose the American business they are now enjoying? What does he suggest be done about the 2,000 licences which U.S.-based carriers have received since 1982? Surely he is not suggesting that we retroactively revoke those licences and ruin those businesses, not to mention the harm that would come to those Canadian shippers relying on those truckers, or the effect it would have on Canadians employed in the industry.


The Acting Speaker (Mrs. Champagne):: The Hon. Member may want to leave a minute for a reply.


Don Boudria: Madam Speaker, I thought it was a filibuster for a while.
The Hon. Member speaks of the 1982 moratorium and he is quite correct. It was interesting to note that it was lifted when an agreement was signed with the full accord of the trucking industry.
I return to the point that I raised with the Member. If this Bill is so great, why is the industry not in accord? The industry is against it. I am not saying that the status must always
remain the same. Of course there must be changes. However, we are going at this too quickly and deregulating too much. We are going about this in the wrong way without consultation with and agreement of the industry. We should send it back to committee as the Member for Papineau suggested so eloquently not too long ago.


Mr. Dan Heap (Spadina):: Madam Speaker, Bill C-19 is an Act respecting motor vehicle transport by extra-provincial undertakings. There are several points I would like to make in this debate. As has been pointed out by several speakers, including our own critic on the matter, there are some very serious flaws in this Bill which were created because the Government cut off hearings and would not listen to many people in our country who have knowledge of the transportation industry. The Government insisted on pushing this Bill into Parliament over the objections and unheard arguments of people who are responsible for many sectors of the transportation industry in Canada, particularly the trucking industry.
If this legislation is enacted, it will dismantle a great deal of the legislation that has been built up through generations of often bitter experience. It may well benefit a few shippers or truckers in the short run. However, in the longer run the result will be chaos, rising costs, and the decline of the Canadian industry. Once the Canadian industry has been destroyed we will be at the mercy of a foreign-owned industry, to a far greater extent than we are now.
This Bill needs substantial reconsideration through consultation with those who work in the industry, such as the Canadian Truckers Association. The first aspect is the rather simplistic, even foolish, emphasis on changing immediately from the concept of public usefulness in a crowded jurisdiction to the principle of reverse onus, that is, that you must prove it is not needed, or anyone who can get in. Eventually, if you have a truck and a licence you will be in business.
Roads are provided at public expense and there is a limit to what can be done on them. In Toronto, roads are being continually repaired and sometimes widened to accommodate the growing traffic. If the traffic is allowed to grow without constraint, governments will not be able to keep up with the repair and maintenance of the roads.
The test of public utility has already failed. About 10 years ago the then Conservative Government of Ontario donated to Greyhound Bus some of the gravy runs which had been built up by a publicly owned corporation, Grey Coach, a subsidiary of the Toronto Transit Corporation. Without having done any of the spadework, Greyhound was allowed to take the runs between Windsor, Toronto, Buffalo and Sudbury. It does not have to serve the towns in between. It cut into the best revenues of Grey Coach, which built those runs through public employment and the fares and taxes of the public over several decades. Grey Coach is still obliged to serve the small towns, at a loss if necessary. Greyhound receives the benefit and Grey Coach pays the cost. Canadian workers, farepayers and
February 5, 1987

taxpayers are subsidizing an American corporation due to the generosity of former Premier William Davis to Greyhound Buslines.
We do not want such foolishness to become widespread, as it would through the passage of this legislation. U.S. truckers would have much greater use of Canadian roads than they now have. U.S. trucks would be able to take goods from Toronto through the United States, re-entering at Halifax, Winnipeg, or Vancouver. They would be able to use roads which cost less to build and maintain because of more favourable weather. They would be able to use fuels which are priced lower than the Government prices fuel in Canada. The taxes which they would have to pay would, in many cases, be lower than the taxes charged by provincial Governments in Canada for the maintenance of roads.
In other words, they can travel more cheaply east and west between Toronto and Winnipeg by using American roads. Canadian truckers are not allowed to do that. This Bill gives American truckers freedom to haul Canadian goods over American roads. Canadian truckers, however, have no corresponding right to use American roads and will be at a disadvantage.
As has been pointed out by those concerned with the industry, domestic and cross-border trucking should be dealt with separately rather than with one quick breath, as is attempted here. We should also study what is happening in the United States before we leap into their pattern. Some of the states are having second thoughts about the wonderful dream of deregulation. Their experience has been a sharply rising accident rate since regulations have been weakened. Several states are considering the reintroduction of regulation to a much greater extent than they thought they would need a few years ago. Before plunging into this, we should study what the Americans are doing. We should invite them to come and tell us what they are doing.
My Party wanted to bring experts from the United States, not to tell us what to do, but to tell us what their experience is. The Government, in a curious burst of anti-Americanism, refused to allow an American transportation expert to come to Canada to tell us what is happening in the United States. This anti-Americanism is very curious from the Government of a Prime Minister (Mr. Mulroney) who professes to be such a close friend of the American President. Many people are wondering what uncomfortable truths would have been presented to the committee if American representatives had been allowed to speak. What fear of the truth caused the Government to shut them out? I believe we must look into that.
There are other matters we should consider before allowing such an open door to American trucks to operate in Canada. There must be some system of monitoring the arrangement, yet nothing adequate is provided for monitoring differences or disputes. Nothing is provided for arbitrating disputes. There is no effective declaration of jurisdictional. The Government is in enough trouble over codfish and the question of jurisdiction in
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the waters off the east coast of Canada. This question could give us the same kind of jurisdiction squabble all along the border with the United States. Nothing is provided to guard against that.
I want to refer to the matter of safety. I believe Members of the House should take very seriously the experience in the United States as reflected by a recent article written in The New York Times. The dateline is December 6 in Atlanta. It points out that there have been 16 deaths in Atlanta as a result of truck related accidents on the freeways in the metropolitan area, which is up from 12 last year. A one-third increase in truck related deaths is cause for concern and something we should not ignore.
The article by Mr. Schmidt goes on to say:
Partly as a result of deregulation of the trucking industry in 1980, not only are there more trucks but also much larger trucks plying the nation's roads and interstate highways.
Not only more trucks, but bigger trucks will be coming here if we do not pay attention to the experience. He goes on to say:
Safety experts also say that as competition has increased among trucking companies and independents, so has the tendency among truckers to save time and money by ignoring speed laws, cutting corners on vehicle maintenance schedules and circumventing rules on the number of hours drivers may work without resting.
Deregulation has killed people in the United States. Last year four people were killed who would not have been killed but for the growth of carelessness, negligence and bad maintenance that was promoted by deregulation. They are not the only ones who were killed, but an example of what has happened. The article goes on to give the national picture. The number of accidents in the United States involving interstate trucks rose 23.4 per cent in 1985, from 31,628 to 39,030. In other words, there were 4,500 more accidents involving trucks. Do we want this rate of increase here, by copying their deregulation and allowing those unmaintained, unsupervised trucks free entry into Canada?
Regulations for the training of drivers vary from state to state. They are now belatedly trying to introduce in Congress regulations that will control the competence and the standards expected of truck drivers across the United States. However, that is not yet in place, and in the meantime many untrained drivers could be bringing these 18-wheel rigs into Canada, onto our roads. We should not allow anything so uncontrolled and foolish as that. In fact, before these general safety regulations are put in place the federal Government should exercise its constitutional authority and, in fact, constitutional obligation for safety on extra provincial travel.
There are a number of safety concerns that the trucking industry has asked us to execute. Experience tells us that we cannot expect a busy industry to operate safely on the roads without some rules enacted and maintained by the Government. The trucking industry is asking for such things as audit and inspection criteria nationwide, a procedure for audit of

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Adjournment Debate
employers' records and record systems which include operator profile and driver profile. It recommends hours of service regulations. This was mentioned in the story in The New York Times from Atlanta. There is insufficient control over the hours of service. Of course, tired drivers are not as safe as well rested drivers. The industry recommends commercial vehicle maintenance standards. Improperly maintained vehicles will come from the United States until some standards are enacted. There should be roadside vehicle inspection. Some provinces provide such inspection more than others. We need a nationwide system of roadside vehicle inspection.
There should be a dangerous goods trainer inspection course. Cities like Toronto are being put seriously at risk by the trucking through of dangerous loads such as toxic wastes and explosives. Many types of dangerous loads are being trucked close to if not right through residential areas in Metropolitan Toronto. We need stronger regulations to protect people in those residential areas and others. That was shown last year on the Trans-Canada Highway in western Ontario where there was a spill of quite a poisonous substance because there is not adequate inspection and control over the use of our highways by trucks. That is an obligation of the federal Government and Parliament.
Finally, there is absolutely nothing in the Bill to respond to the urgent demand, not only of the trucking industry but many other industries and Candaians for protection against predatory pricing. These mammoth companies in the United States can raid the trucking industry in Canada, cut prices for a year, run Canadian companies out of business, then charge any price they like because they will have what is, in effect, an oligopoly, with the rule of a few large companies.
There is nothing in this legislation that resembles the antidumping legislation for manufacturing. That is necessary because experience in the United States shows that predatory pricing destroys the smaller companies. They are the sorts of companies that the Government says it wants to encourage. Small businesses and new entrepreneurs will be wiped out by the big companies if there is no legislation to protect against predatory pricing, rate cutting, or dumping as it is called in international manufacturing.
Many Canadians want to raise these matters in the Standing Committee on Transport. What they have to say is more urgent than ever because of the experience in the United States. They also want the Government to be open enough to the truth to allow witnesses to come from the United States and tell us their good and bad experience with deregulation and let Canadians judge what we want to copy and what we want to avoid.
Canadians want to say a great deal more to this Parliament. They want improvements in transportation legislation. They want, particularly, proper safety legislation and proper protection of Canadian companies against predation from across the border. It is not true that Canadians do not want change. However, they want this Bill to go back to the
Committee for hearings throughout the country so that we can get a truly workable transportation Bill.



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

Don Boudria: Madam Speaker, I am pleased to participate in the adjournment debate today. You will no doubt recall, Madam Speaker, the famous words written for us by the Prime Minister (Mr. Mulroney) in the Throne Speech of October 1:
My Government shares the expectations of all Canadians that public office holders maintain the highest standards of conduct, especially in the area of conflict of interest. It will be considering proposals which reflect the essential considerations of fairness to the office holder and the protection of the public's interest.
They are very nice words which were said in Parliament some four months ago, but nothing has happened. However, that is not the reason I rise today. On October 10 I asked a question in the House. The reason I asked the question was because I was shocked at what I heard in the Speech from the Throne. Only a year before the Prime Minster, in introducing new conflict of interest guidelines, had said: "These guidelines are the best in the western world". Mind you, that was one of the Prime Minister's more humble days. He could have said they were the best in the galaxy. Be that as it may, if they were the best in the western world, why was it that a year later we needed new guidelines?
I asked that question in the House of Commons.

And I ask the following question: "Mr. Speaker, what is at issue here is the credibility of this Government. It certainly is not a joke. If the Prime Minister is unwilling to answer, will the Deputy Prime Minister give us his assurances that the new rules will include punitive measures so there is no repetition of what we have seen so often is the past coming from this Government"?
I was precisely asking the Government to include in the conflict of interest guideline some punitive measures so that Parliament may be assured of the integrity of the system. And punitive measures are necessary, especially with the Tories in power, Madam Speaker.

On September 9, 1985, the Prime Minister read from a document in the House, which he tabled with a blue ribbon
February 5, 1987_____________________________COMMONS DEBATES________________________________________________3173
around it. I am sure you remember the day, Madam Speaker. He said:
It is a great principle of public administration-I could even say an imperative-that to function effectively the Government and Public Service of a democracy must have the trust and confidence of the public they serve. In order to reinforce that trust, the Government must be able to provide competent management and, above all, to be guided by the highest standards of conduct.
Is that not beautiful, Madam Speaker? He also said:
We have taken great pains to ensure that the new Code leaves no doubt that the ultimate responsibility for the ethical standards of the federal Government rests with the Cabinet and, more particularly, with me.
He said: "with me", Madam Speaker. He said as well, and perhaps that is where the truth is:
Many of these steps are long overdue, and heaven knows, this Government has had cause to regret their absence. But now they are in place, or in the process of being put in place, and we can look forward together to the dawning of a new day of trust and confidence.
I ask Hon. Members opposite, is it the new day we saw during the last two weeks when we heard of all the sordid affairs? Clearly, the question I asked in this House on October 10 deserves a real reply, not the insignificant nonsense of the reply of the Deputy Prime Minister (Mr. Mazankowski).


Philip Derek Lewis: Mr. Speaker, I welcome this opportunity to address the matter of conflict of interest which has been raised by my hon. colleague. He will know that the conflict of interest guidelines which were instituted by this Government were far tougher than any guidelines instituted by the previous Liberal administration. For comparison, the Hon. Member might want to discuss the matter with Madam Caplan, a former Minister of the Ontario Legislature or perhaps Mr. Fontaine, another former Minister of the Ontario Legislature who had to resign under rather unfortunate circumstances.
When the Hon. Member was in the Ontario Legislature, he succeeded in holding back the Liberal Party from Government. When he left, they formed the Government in Ontario. I think that should be put into the hopper too. The new guidelines do not ask with what law firm your brother-in-law is employed. Perhaps they should, in view of the events during the recent week.
I wish to discuss the Hon. Member's question and response. These guidelines require all federal government public office holders to review their personal interests, and their activities, within the standards of public interest required by the Code, and to file statements indicating their compliance. In addition, those in the most senior and sensitive positions may be required to divest themselves of the interests which they hold through a sale at arm's length, or to give them over to the controlling management of a trustee through a blind, frozen, or retention trust arrangement.
It is up to public office holders to review their assets, activities, and interests on an annual basis. At such time as a
Adjournment Debate
new position is accepted, or there is an important change in their personal situation which might have a possible impact on their duties and obligations under the Code, it is up to them to adhere to the strict guidelines in the Code.
I see nothing in conflict with what the Deputy Prime Minister (Mr. Mazankowski) has said in his answer, nor do I see any conflict when, in the Speech from the Throne, the Government said it was considering new conflict of interest rules. That is something that is in the interest of all Members of Parliament to look at and see how they can be improved. The standards that are asked of us are being widened considerably.
I say without any hesitation, and as a personal statement, that after 10 years of practising as an accountant, and 10 years of practising law, I had no difficulty during any of those 20 years with conflict of interest guidelines, rules, or laws. They were very clear. I say at the same time, and this also is a personal comment, that the net of conflict of interest guidelines which impact on members of the Opposition, members on the government side, and cabinet Ministers is gradually being widened by the media. In this day and age, it is difficult for any Member of Parliament, or any elected representative at the municipal, provincial, or federal level to determine exactly where that conflict of interest line is. It is not black and white any more. I think that is good, and it is healthy because it is in the public interest.
When the Hon. Member calls for an answer to whether we are considering brand new ones-


Don Boudria: Sanctions.


Philip Derek Lewis: There is a sanction. The ultimate sanction for any member of Cabinet is to be asked to resign. That is the political sanction, and it is a sanction which we all understand. It is not easy to live with if you do not know exactly what the guidelines are. I think all Members of the House endeavour to live within whatever guidelines are laid down, or the guidelines that the public expect of us.


EXTERNAL AFFAIRS-UNITED STATES MILITARY SUPPORT FOR SALVADORAN GOVERNMENT
Daniel James Macdonnell Heap: Mr. Speaker, on January 29 I raised a question relating to this Government's policy toward El Salvador and to the refugees from that war-torn country. I have received no answer regarding El Salvador.
On Monday of this week the New York Times reported the death of seven civilians in the village of Laguna Seca. They were killed by the Salvadoran air force carrying out that Government's policy of bombing areas where rebels are said to be. They were using, of course, American equipment.
That bombing is part of a recent strategy change by the Duarte Government, and its American advisers. For many years, former Governments relied on death squads and ground-based attacks to attack the rebels, and anyone else who dared to disagree with the Government.

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Adjournment Debate
The human rights violations were so blatant and prevalent that Canada ceased bilateral aid in 1981. The election of Duarte as seen by our Government is supposed to mark a return to democracy and to bring a serious decrease in human rights violations. Therefore Canada resumed bilateral aid last year over the objections of many non-governmental organizations and Canadian churches which have experience in Guatemala.
A delegation of prominent Canadians visited El Salvador in November and December to investigate the current situation and to evaluate the role that Canada is playing through its aid and its political support. The report of that mission for peace was not encouraging. It indicated;
The present reality in El Salvador stands in sharp contrast to the hopes raised with Duarte's election promises, including the now notorious and bankrupt social pact, with its commitment to dialogue, democratic growth and social economic justice. Instead the Government has refused to proceed with dialogue and negotiations, continued repression, reduced social services, and increased pressure on workers and peasants to pay for the war.
They and many other reliable observers report that human rights violations are again on the rise, with assasinations of civilians, captures, disappearances, and the taking of political prisoners all increasing. They point out that selective and deliberate attacks have taken place on human rights organizations through 1986. They point out that the nature of the conflict has changed.
The civil war is now prosecuted under the United States doctrine of low intensity conflict which, in El Salvador, combines a variety of tactics ranging from physical violence, through psychological violence to individuals, to pervasive social control.
Death squads have been replaced by the bombing of villages in an attempt to dry up the sea in which the guerrillas swim. Thousands and thousands of villagers have been uprooted from their homes by the Salvadoran army and herded into refugee camps near the capital city.
Low intensity warfare uses foreign aid, such as Canada's, as one part of the psychological warfare program. Those who watched the CBC show "Man Alive" last night saw the kind of psychological warfare I am talking about-the army dispensing food in villages to the people who are captive there and not allowed to return to their homes, all to the accompaniment of propaganda and American band music. That is the new kind of human rights violation in El Salvador.
That war and the horrors it brings with it are funded by the Reagan administration which provides El Salvador with the highest per capita aid of any country in the world. That aid pays for both the traditional warfare of planes and bombs and for the new psychological warfare. The U.S. provides military advisers, U.S. piloted reconnaissance flights, and advice on how to market the image of the Duarte Government, but behind that image little has changed.
That is the message brought back by many concerned Canadians visiting that country, but the message that this Government gives is one of approval. That is how this Government helps the United States in its psychological warfare, and that is what the proposal to resume bilateral aid would do.
There is a related issue that concerns us as Canadians. The United States has been deporting Salvadorans who fled their war-torn country at a rate of more than 1,000 per year. Some 3,700 Salvadorans await deportation, with 2,300 being coerced into so-called voluntarily returning and another 1,300 awaiting their sentences.
We Canadians like to think of ourselves as a humanitarian people. We have expressed that time and again through our willingness to aid and to assist those in need. Our programs which are run by non-governmental organizations, churches, and other private groups are second to none in the world. We also like to think of ourselves as a peace-loving people, as people who advance the cause of peace wherever possible. Our Government now has the opportunity to recognize and act on those sentiments to act in accordance with the wishes of the great majority of Canadians who have taken the trouble to inform themselves about what is happening in Central America.
There are three things particularly which Canadians are asking the Government to do. First, and most immediate, it should reaffirm the policy of accepting Salvadorans at the border of the United States when they come to Canada to claim refugee status and of examining them according to our laws to see whether we find they are genuine refugees or whether there is any other humanitarian reason for allowing them to stay in Canada. Rather we should do that than to force them to return to the United States in the hope that the United States might not deport them to El Salvador, a country where many of the deportees from the United States have been murdered, according to American evidence.
Second, the Government should publicly tell its special friends in the American administration that Canadians do not support the American war in Central America, that that war should come to a negotiated end.
Third, the Government should end its aid program to El Salvador, the bilateral program, or better, should direct the aid to the people of El Salvador through Canadian non-governmental organizations with experience in the area under terms and conditions that guarantee that there will be no connection, no control, by the Government of El Salvador, no approval of projects by Duarte and no necessity for people in El Salvador to choose sides in this civil war in order to receive aid.


Mr. Michel Champagne (Parliamentary Secretary to Minister of Agriculture):: Madam Speaker, as concerns military support and intervention by a third party in Central America, the position of Canada is well-known not only to
February 5, 1987

Members of this House, but also to the governments of the United States, the Soviet Union and Cuba, as well as the countries of Central America. As the Prime Minister (Mr. Mulroney) has stated, we deplore the fact that East-West disputes have spread to Central America and we do not approve of any country providing weapons to any faction whatsoever in the region.
In the case of El Salvador, Canada does not favour a military solution to the internal conflict. We promote a dialogue between the Salvadorian Government and the insurgents and regret that the expected third series of discussions between the two parties did not take place last September. However, we hope that these meetings can be held in the near future. On the other hand, we do not believe that legitimacy is equally shared between both parties. The Duarte Government received the support of the population in the 1984
Adjournment Debate
elections which are considered by both Canadian and international observers as reflecting the will of the people.
The issue of the American policy on refugees concerns only the United States. As for our own policy, as explained by the Minister of Employment and Immigration (Mr. Bouchard), it is determined by the particular concerns and needs of Canada. In the past, there have been consultations between the two Governments on this issue and there is no doubt that the process will continue.


The Acting Speaker (Mrs. Champagne):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 o'clock pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6:18 p.m.
[Stage Direction]

Friday, February 6, 1987

purchase of prescription drugs on an ongoing basis. Therefore, they request that the Government changes its mind.