1987-02-16

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 of tabling, in both official languages, the Government's response to 87 petitions, Nos. 332-458 to 332-460 inclusive, 332-463 to 332-466 inclusive, 332-468 to 332-477 inclusive, 332-480, 332482 to 332-486 inclusive, 332-489, 332-491, 332-492, 332-494, 332-496, 332-497, 332-500 to 332-506 inclusive, 332-508, 332510, 332-512 to 332-517 inclusive, 332-520, 332-558, 332-559, 332-561, 332-563 to 332-566 inclusive, 332-575 to 332-577 inclusive, 332-592, 332-593, 332-602, 332-603, 332-645, to 332-667 inclusive, 332-672 to 332-675 inclusive and 332-677.



INTERPARLIAMENTARY DELEGATION


Mr. J. R. Ellis (Prince Edward-Hastings):: Mr. Speaker, I have the honour to present the fifth report of the Canada-Europe Parliamentary Association in both official languages.


PETITIONS
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I have the honour and privilege of presenting a petition signed by several constituents and visitors to the National Capital area. The undersigned wish to present a grievance; whereas the decision to close Rideau Hall grounds was made by the National Capital Commission, the Department of Public Works, the Royal Canadian Mounted Police and the Office of the Governor General without prior notice and that 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, recognizing the security concerns that prompted the closure decision, cannot accept a blanket closure of the 120-acre park to public access, wherefore the undersigned petitioners humbly pray and call upon Parliament to open the decision for consultation with a group of citizens, representative of the large and growing opposition, in order that a modus vivendi can be be created that would satisfy the Government and the public.


Jean-Robert Gauthier: I have several petitions with respect to the tariff on books. These are from residents of British Columbia and many of the other provinces across Canada. The petitioners wish to present a grievance common to themselves; 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 little negative effect on the publishing industry in the United States yet penalizes Canada's consumers, book publishers, booksellers, distributors and Canada's culture; and whereas rising book prices have placed a strain on the book acquisition programs and policies of our nation's public and specialized libraries, 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.


Mr. Benno Friesen (Surrey-White Rock-North Delta):: Mr. Speaker, pursuant to Standing Order 106, I have the honour to present a petition which is certified correct as to form and content. The petitioners state that whereas the Conservative Government has recognized at the time of the Annual Conference of First Ministers in November of 1986, that child care is a priority measure, ensuring the support and strengthening of the Canadian family and promoting women's economic equality; and whereas the postponement to March 31, 1987 of the tabling of the report of the Special Parliamentary Committee on Child Care suggests it is possible that the Conservative Government will not set aside funds in its next
Introduction of Bills
Budget for the development of adequate child care services in answer to the current needs of Canadian families, your petitioners humbly pray and call upon Parliament to negotiate and sign by the end of 1987 a federal provincial agreement which provides a detailed framework for a comprehensive child care system. The petition is duly signed by 31 residents.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, I have the honour to present a petition on behalf of a number of electors who call upon Parliament to rescind the funding cut-backs to the National Research Council, including all consequent terminations and cut-backs in research activities and to provide funding for the space program from sources other than the NRC budget, or any presently existing scientific programs, in the development of national policy for research, science and technology, based on a target of 2.5 per cent of GNP devoted to research and development.


Howard Douglas McCurdy: Mr. Speaker, I also have a petition from Winnipeg, Manitoba, which calls upon Parliament to reject amendments to the Patent Act which will increase the costs of prescription drugs for Canadians.	.
I have petitions from Windsor, Ontario which plead that amendments to the Patent Act be rejected by Parliament. There are 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 petitions in total.
[DOT] (UIO)
As well, I have another 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15 petitions from Saskatchewan representing some 3,000 people who voice their anger at the Government for tampering with the Patent Act in a way which will increase the price of patent drugs.



CANADA SHIPPING ACT


[Stage Direction]
Hon. Jean J. Charest (Minister of State (Youth), for the Minister of Transport), moved for leave to introduce Bill C-39, an Act to amend the Canada Shipping Act and to amend the Arctic Waters Pollution Prevention Act, the Maritime Code Act and the Oil and Gas Production Conservation Act in consequence thereof.
Mr. Speaker:: Shall the Minister have leave to introduce the Bill?


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


Mr. Speaker:: Is it the pleasure of the House to adopt the motion.


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the Bill be read a second time? At the next sitting of the House?


Some Hon. Members:: Agreed.



CAPITAL PUNISHMENT


[Stage Direction]
On the Order: Government Notices of Motions.
February 12, 1987-The Deputy Prime Minister and President of the Privy Council:
That this House supports, in principle, the reinstatement of capital punishment and directs that a special committee on reinstatement, composed of 15 members, be established, hold hearings and make its final report to the House no later than three (3) months following the. adoption of this motion, such report to provide recommendations on:
(a)	which offence or offences should carry the death penalty, and in what circumstances;
(b)	which method or methods should be used to carry out the penalty of death, and in what circumstances;
That, pursuant to Standing Order 107(1), this special committee be hereby appointed as the committee to prepare and bring in a Bill no later than three months following the adoption of this motion, founded on the committee's recommendations on (a) and (b) above; such a Bill shall be the object of a separate and distinct report of the special committee, and such a report shall be its final report;
That such Bill, when reported from such special committee to the House, be deemed pursuant to Standing Order 107(1) to have been introduced and stand on the Order Paper, in the name of the special committee chairman, for first reading at the next sitting of the House; and that subsequent House stages of the Bill be considered under "Government Orders", with the Bill standing under the heading "Government Business"; and that, when the said Bill has been read a second time, it shall stand referred to a legislative committee;
That the Striking Committee be empowered to name the Members of the special committee, provided that once the Striking Committee report is laid upon the Table, it shall be deemed concurred in;
That the special committee have the power to sit while the House is sitting and during periods when the House stands adjourned;
That the special committee be empowered to report from time to time and send for persons and papers, and to print such papers and evidence from time to time as may be ordered by the committee and to retain the services of expert, technical, professional and clerical staff;
That the special committee be empowered to adjourn from place to place inside Canada and that, when deemed necessary, the appropriate staff accompany the committee;
That a quorum of the special committee be eight (8) members for any vote, resolution or other decision; and that the chairman be authorized to hold meetings to receive evidence and authorize the printing thereof whenever six (6) members are present;
That any substitution of membership on the special committee be made pursuant to Standing order 94(4); and
[Stage Direction]
February 16, 1987
[Stage Direction]
That, notwithstanding the usual practices of this House, if the House is not sitting when the special committee is ready to issue its final report and the said Bill, the special committee shall present its report and the Bill to the House by filing them with the Clerk of the House provided that the report shall then be deemed to have been laid upon the Table, and the Bill shall then be deemed, pursuant to Standing Order 107(1), to have been introduced at the first sitting of the House thereafter and to stand on the Order Paper in the name of the special committee chairman, for first reading at the next sitting of the House; and that subsequent House stages of the Bill be considered under "Government Orders", with the Bill standing under the heading "Government Business".
Mr. Speaker:: Pursuant to Standing Order 24(2), this Notice of Motion standing on the Order Paper in the name of the Hon. Deputy Prime Minister and President of the Privy Council (Mr. Mazankowski) stands transferred to and ordered for consideration under Government Orders later this day or at the next sitting of the House.
 * *


QUESTIONS ON THE ORDER PAPER
Philip Derek Lewis: Mr. Speaker, I ask that all questions be allowed to stand.


Mr. Deputy Speaker:: Is it agreed?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Friday, February 13, consideration of the motion of Mrs. McDougall that Bill C-38, an Act respecting the reorganization and divestiture of Teleglobe Canada, be now read the second time and referred to a legislative committee, and the amendment of Ms. McDonald (p. 3435).
Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, once again I draw to the attention of Hon. Members the usual delaying amendment put forward by members of the New Democratic Party. I would have thought that the New Democratic Party would have gotten its act together sooner and realized that these delaying techniques of motion after motion really do not accomplish anything in the democratic process.
The Bill before us represents the difference in philosophy between the Progressive Conservative Party and the philosophy of the Liberal Party and the New Democratic Party. It is our
Teleglobe Canada
belief that individuals, in their self interest and the combination of individuals working together in their self interest, will do the most good collectively for the development of all people and the development of our nation. It is the belief of members of the Opposition that the state, representing the citizens, is best able to look after the citizens. We have seen how that works in this country and in others. It is clear that the statism advocated by the New Democratic Party, in particular, and sometimes by the Liberal Party, does not work to create the efficiencies required by a nation.
We believe in market competition. We believe that the market creates the most efficient allocation of the resources of the country.


Mr. Waddell:: Why are you creating a monopoly here, then?


Donald Alex Blenkarn: The Member opposite and members of his Party believe in the state. They believe that the state should look after issues. They believe the state can best control things. They believe that the state, through the bureaucrats in the state, can best direct how the efficiency of the market-place or other efficiencies should be directed. We believe that the market-place, represented by entrepreneurship, giving individuals the opportunity to do what they as individuals want to do, and risking their money, creates the greatest advances in science, technology, manufacturing, distribution and trade. That advance is best for us all.
Members opposite believe that we are somehow in a static society and that the pie will never get any bigger. Members opposite believe that the state is the best apparatus of society to divide the pie more equally. Of course, what happens is that the pie becomes smaller and smaller.
We are now considering the Teleglobe Bill. The Opposition says, "Teleglobe is making all kinds of money, why don't you keep it?" They fail to realize that Teleglobe may be making money today, but it requires the continual injections of new entrepreneurial spirit, new technology, and new investment in order to make it grow and be competitive. If Teleglobe stopped growing and doing new things today, in five years Teleglobe would not make any money and it would be out of business. To a large extent, it depends on its cable. How long will cable for the transmission of messages be valued? When will cable cease to be the method of moving communication? Teleglobe has many new things that it must do. It must be entrepreneurial, and venturesome. There is one thing that the state is not, it is not venturesome. What we have to do today is make sure that Teleglobe is a successful company, and is given the opportunity to take advantage of the new technologies, the new outlooks, and the new ways of handling its mandate.
We believe that that can best be done by individual ownership. That is why in this Bill we have made sure that the employees of Teleglobe can buy into the company at a discount. I do not understand the Opposition's mentality when it says that this part of the Bill is wrong. We believe that if

February 16, 1987
Teleglobe Canada
individuals own the work within the scope of society, they will have an interest in making sure that we have a free society, because they will have something to protect. When the state owns all of the goods, services, property, and companies then there is nothing for the individual to protect because it is not his. Therefore, we say that this Bill is a watershed type Bill between state ownership and individual ownership.


Mr. Cassidy:: You know that you exaggerate.


Donald Alex Blenkarn: We believe it is important to cut down the size of Government, and we have been successful in cutting down its size. Every time we are able to get the Government out of an activity, we say that the Government is better off. We say that we as Canadians are better off to have these activities in the hands of individuals.


Michael Morris Cassidy: Getting out of pensions, getting out of medicare, is that what you want to do? Is that the type of policy that you have? Get Government out of helping people, and get equality in this country.


Donald Alex Blenkarn: My friend says get Government out of helping people, as if Government was important. Does the Hon. Member not realize that people help people? You cannot see Government except in its bureaucracy, its big buildings, its regulations, and its red tape. That is the type of state that they want.


Michael Morris Cassidy: The Hon. Member favours an end to medicare, an end to pensions. He does not think that we should support post-secondary education.


An Hon. Member:: Be quiet, Cassidy.


The Acting Speaker (Mr. Paproski):: Order, please. There will be an opportunity for Members' questions and comments, after the Hon. Member finishes his speech.


Donald Alex Blenkarn: I really do not mind them heckling me, because they know that we are saying some things that are true. They know that we are cutting them to the bone. They are the new dinosaur party. They believe in big Government, big state enterprises, and the collective, not individual freedom, democracy, private ownership, and freedom of the individual.
Since we have taken office we have accomplished a number of things. We have completed the sale of the Northern Transportation Company Ltd. To a large extent, we have sold and disposed of 23 million shares of Canada Development Corporation. I point out that we sold those for $11.50 a share. The market does not believe that they are worth $11.50 a share at this point, but that was a very worthwhile sale for the people of Canada. We have disposed of Canadian Arsenals Ltd. We have sold the CN Route, which was a losing trucking enterprise, to individuals who think that they can make money at trucking. That will keep more people employed, and it will move goods more cheaply. We have sold Pecheries Canada
Inc., a co-operative, for $5 million, subject to some adjustments. We have sold Canadair to Bombardier. We have sold our interest in Nanisivik Mines Ltd. In this Bill we have sold Teleglobe Canada.
Our aim and objective is to get the Government out of the business field to the greatest possible extent. The Government cannot work in business; it has too many conflicting objectives. When it goes into a commercial enterprise it has the objective of trying to make a dollar. On the other hand, its other objective is to try to make sure that some particular social good is accomplished. When a board of directors has those two conflicting mandates, usually what happens is the corporation does not operate as profitably and as aggressively as it might. Our belief is that if we can get Government out of the issue and, on a tender basis, buy from the private market-place those things that are necessary for the development of the social causes and problems of the country, we will accomplish a great deal more than having the state own enterprises involved.
I wish to address this particular deal for a moment. Some people have said that this is a deal where the minnow swallows the whale. In this case we have a situation where a relatively small company is taking over this company called Teleglobe. It is taking over Teleglobe with some pretty impressive backers. It has the backing of the National Bank, some very successful venture capital companies, the backing of the Caisse de Depot et Placement du Quebec, and the backing of competent management.
The offer that was made and was examined independently by Dominion Securities, and by a very capable board in the Canada Development Investment Corporation. That board came to the conclusion that the offer by Memotec that we are considering today is an offer that is a good for Canada.
It is a good offer on a number of grounds. First, the price is a pretty fair price. We could have received more for the asset if we had given it to a consortium of the telephone companies in order that they could have preserved their monopoly. We could have given it to CN-CP and they could have put it together and controlled overseas communication. We could have forgotten about the Competition Act, and about the fact that we need new, aggressive action in technology development. Perhaps we could have received more money that way. The fact is that this was the best offer that falls within the concepts of the Competition Act and it is to an independent, separate, new company that, on a new basis, can handle this sale. It is a good transaction as opposed to one that is transferring the activity over to another regulated body, and extending a monopoly position.
Second, the transaction contemplates some competition in the field of transmission. It certainly contemplates that if the licence is to continue, there will have to be a 13.5 per cent cut in overseas telephone rates and a 10 per cent cut in telex rates by 1988. It also contemplates that the charges which the company will be able to levy will have to be no more than 2 per cent above the average rate charged by Bell and BC Tel. There
February 16, 1987

is some real control on the prices the company can charge for its services.
Aside from that type of control, we must remember that we live in an age of increasing technology. Despite regulation, the company will have to be prepared to compete in that new technology. This is a small world, and it is getting smaller. Other countries in the world have satellites, and satellite communication is possible. No matter how hard we try, we are not able to prevent people from using that technology. The CRTC and some people involved in broadcasting would like to prevent people from using a dish to collect television signals. They have not been very successful in that regard. I suggest that they will not be successful as the technology becomes more readily available and more reasonable in cost.
Looking at the whole picture, despite the present monopolytype arrangement concerning transmission overseas by telephone companies and the like, the company will not be able to maintain that position forever. If the company's rates are not kept competitive, others will install and use communications systems which are more competitive.
The deal must be commended. The Government has been able to ensure that individual employees will be protected, particularly their pension rights. Often we see takeovers of companies where pension arrangements are somehow slithered by and the employees wind up with something very much different from what they had when they were working for their former employer.
Also from the point of view of the employee, this is a situation where in a sense a relatively small company is taking over a relatively large organization. If this were a situation where Bell Canada was taking over Teleglobe, it may well have been a situation where employees could be replaced, or there might be situations of efficiency which would cause the replacement of people. This is a situation where the employees are protected and looked after from a pension point of view and from a job point of view. As I mentioned earlier, even more important, they will be given the opportunity to become more personally involved with the right to buy up to 5 per cent of the stock at a 10 per cent discount.
The Bill should not be delayed. It should be expedited. Is there any reason to hold it up? Is there any real reason to say that the Government must be involved in owning telecommunications? Not at all. Let us get the country back on the free road. Let us get the Bill passed.


Michael Morris Cassidy: Mr. Speaker, I distinctly heard the Hon. Member, who is my colleague on the Standing Committee on Finance and Economic Affairs, saying some things which I think most of his colleagues in the Conservative Party would repudiate. He was saying "the less government, the better; the less government intervenes in people's lives, the better". He became quite agitated when I suggested that he was advocating the Government get out of medicare, that the Government
Teleglobe Canada
get out of providing old age pensions for older Canadians, and that the Government, in fact, get out of being involved in a number of different social services which provide the basis for a humane and compassionate society.
I am really rather concerned. We have heard about the reemergence of a kind of Monday club among back-benchers in the Progressive Conservative caucus. Their feeling seems to be that there is great support out there among the public and that if only these views were to be put to the fore by the Government, somehow their standing in the opinion polls would rise from the current abysmal level of 23 per cent. Perhaps those are the Hon. Member's views. Perhaps he is suggesting or advocating the privatization of medical care insurance and hospital insurance, returning to the situation which exists in the United States where half the people who are homeless are in that situation because they were uninsured and were hit by heavy medical care expenses. This is the kind of dog-eat-dog society about which the Hon. Member seems to be talking.
I should like to ask him to be perhaps more precise and to repudiate those views which I do not think are the views of Canadians as a whole. I certainly hope they are not the views of the Progressive Conservative caucus, even those who subscribe to the punitive Monday club which is being reestablished.


Donald Alex Blenkarn: Mr. Speaker, here he is again, the finance critic of the New Democratic Party. He knows he is wrong on the Teleglobe Bill, so he raises a great big ogre indicating the Progressive Conservative Party will somehow interfere with medicare. What absolute nonsense. We are dealing with a commercial corporation which is profiting or in the business of telecommunications, running a cable system across the Atlantic. Suddenly he says, "By gosh, if you do that, you are going to do medicare next". Let us get realistic.
We have a medical care insurance scheme to which the federal Government contributes. It is run on a provincial basis. It is universal and generally applicable. It works well. It has produced medical care and coverage in Canada at a per centage of cost in GNP at less than that of the United States. We would be foolish to change that.
Running the telex across the Atlantic is not a matter which really affects the life, health, or well-being of Canadians. Accept that we want efficiencies, ownership, privacy, available growth in new technology, and the entrepreneurship which we know will build the country. To say that we cannot have those things because somehow they might interfere with medicare is to stretch the imagination far beyond all realism.


Ian Gardiner Waddell: Mr. Speaker, I have a comment and a question for the Hon. Member. Incidentally, it has been said by many Members in the House that it is always a pleasure to listen to the Hon. Member. Although I do not agree with just about all he said, he is always straightforward and we know where he stands. We all appreciate that.

February 16, 1987
Teleglobe Canada
Let us get down to brass tacks and let me ask him a question to which he can respond very honestly and sincerely. There is an old conservative principle, is there not, that one should not repair something if it is working? The Minister said that the company was well managed and provided good service in an important area. Certainly international telecommunications is an important area in the new kind of world in which we live. It is making $50 million a year for Canadians, which can go toward the deficit. Why are we selling it? What is the reason? In my speech I went through all the reasons which the Minister cited. One was synergy, whatever that is. I concluded that it was some sort of magic. Would he please explain what is this magic? Why is the Government selling a government corporation which is so profitable and well managed? I put to him that it is simply for an ideological reason and that he is the ideologue, not us. We are being practical in this situation. He is supporting the sale of the corporation because he thinks that it is part of the right-wing agenda and that it should be sold on principle. That is ideology, and in this case it is foolish ideology.


Donald Alex Blenkarn: Mr. Speaker, I am glad my friend raised this issue. I think it goes to the essence of the reason for the sale. While it is true that the company presently is earning a return based on an amount somewhere between 8 per cent and 10 per cent on the money, and while it is true that that is now a little less than our long term borrowing rate, it is also true that this company is exposed to the greatest change in technology that we are likely to see as the world develops. In our view it is, therefore, important that we have in charge of that technology the most adventuresome, the most aggressive people that we can get to be prepared to invest, take chances and do the things necessary to exploit the oncoming new technologies.
We could keep the company and continue to get, as my friend mentions, perhaps $50 million a year. That would not last very long unless there were some massive changes in the structure and organization of the company in the future. The way to handle a situation like this is to sell when the situation looks good, when the company is making a profit because that is when it will sell and sell for the best price. If we were to hang on and hang on, we might well wind up not having a company to sell. It is far better to sell a profitable company when all is going well.


Mr. Althouse:: Would the Hon. Member explain to the House, Mr. Speaker, how this new company, which was established at a very high debt-with a very small company buying a company that had something over $100 million in cash, if the business reports are accurate-carrying the kind of debt load it now carries, will be in a better position to adapt to new technology than the existing company? The new company carries a huge debt load into the operation. The existing company had cash on hand. I fail to see how a debt-ridden company will be more able to provide the kind of new technology than was the existing company.


Donald Alex Blenkarn: Mr. Speaker, what my friend fails to recognize is that the short-term borrowings from the National Bank are short-term borrowings in order for the acquisition to take place. The company obviously cannot go anywhere and carry this long-term debt. Indeed, it is not long-term debt but short-term financing to complete the transaction. The Government of Canada is getting cash. What the Member fails to recognize is that the sponsors of Memotec, a venture capital company, are not there to lever the company up, they are there to sell it off and sell shares to the public and others. I suspect that the company will do that as the transaction proceeds. Obviously, in the Government's sale to Memotec of the assets of Teleglobe, we are not specifying how Memotec does its long-term financing. The company has certainly indicated that it will not be carrying on with the large debt basis that appeared to be apparent in the original offer.


Mr. James:: Mr. Speaker, I have a question in connection with something raised last Friday by the Hon. Member for Vancouver-Kingsway (Mr. Waddell). The Member from Vancouver-Kingsway asked a number of times in his speech why sell Teleglobe? I am a little confused because I know the Member is very interested in workers and employees, as are we all. Would the Hon. Member for Mississauga South (Mr. Blenkarn) comment regarding privatization in that it encourages individual Canadians to take part in ownership of companies through equity investment? I wish I were an employee of Teleglobe looking at the kind of profit it has; it would be a tremendous opportunity for me. Memotec is offering Teleglobe Canada employees the opportunity to purchase 5 per cent of the equity at a cost of 90 per cent of the price paid by Memotec with the benefit of interest-free loans repayable in five years. I would be interested to hear from the Member from Mississauga South, with the kind of business experience he has, what that will mean to employees.


Donald Alex Blenkarn: Mr. Speaker, it means they are going to make some money, if employees buy stock at 10 per cent below the original price. But they will obviously have to have some imputed taxes on the interest-free loan because nothing is interest free in terms of the taxman. This though is the way things ought to go. It is important in our society that we have as broad an ownership of production and distribution of goods as possible. The more Canadians who are owners, as opposed to tenants, as opposed to just workers for some large monolithic international or multinational corporation, whatever you might want to call it, the better.


Ian Gardiner Waddell: I will give you my BCRIC shares. 1 have six of them.


Donald Alex Blenkarn: It is imperative in a free society that Canadians have a piece of the action as individuals. In this particular transaction the workers are getting an opportunity directly to have a piece of the action at a discount.
February 16, 1987


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate. The Hon. Member for Gander-Twillingate (Mr. Baker).


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, I have just a few words on this Bill. My interest was sparked a few moments ago when I heard the hon. gentleman across the way refer to the trans-Atlantic cable, that is the cable that runs across the Atlantic Ocean. This cable takes whatever message you feed into it across the Atlantic. When you pick up your telephone here in Ottawa and you want to call Newfoundland or Nova Scotia, the transmission is carried by Bell Telephone and into the provincial telephone networks across the country. But when you want to call across the Atlantic, the transmission not only goes by Bell Telephone and over the lines of the telephone companies as far as Newfoundland, it is taken over by another company altogether. What we are talking about here is the trans-Atlantic link. We are talking about that owner of the cable, of the transmission across the Atlantic, being passed from Government hands into the hands of the private sector. That is as I understand it.
I am trying to pick some sense out of all the gobbledegook that some members are talking about today concerning financial transactions, shares, profits and everything else. It all boils down to the fact that you have private enterprise taking over a cable that is a monopoly. There is no other transmission from Canada across the Atlantic that I know of. There is in the United States, of course. The hon. gentleman is talking about a telex. That is a hundred years ago.
I rise in the debate because Newfoundland is the key link here. All cables go from Newfoundland across the Atlantic. That is the importance of Newfoundland. When you are talking about the telegraph, that is not the telephone. A hundred years ago or so the telegraph went from Heart's Content, Newfoundland right across the Atlantic over to Great Britain-from Heart's Content next to Heart's Desire next to Heart's Delight, and then the next place to that was where I was born, a place called Green Harbour, Trinity Bay. What is important is that the cable starts from Newfoundland and goes right across the Atlantic. What we are talking about today is not the telegraph but the telephone lines that were put across the ocean. The telephone lines went right across the Atlantic in the year 1956, to my recollection. They came into Clarenville, Newfoundland, and went right across the Atlantic to connect up somewhere in Ireland. We know that the Coast Guard has a ship that does checks on the cable across the Atlantic throughout the year. To my recollection, there is one ship, the Sir Humphrey Gilbert, that does that cable check. It has some pretty sophisticated machinery on board including small minisubs to check that particular cable.
We are not talking about anything complex. Hon. Members love to make things complex. When she announces a sale, the Minister wants to complicate matters. She does not even mention what is actually being sold to the private sector.
Teleglobe Canada
I suppose it boils down to whether or not the Government has a philosophy that the private sector should actually control the only communications monopoly between Canada and the other side of the Atlantic. The Bill boils down to whether or not private enterprise should be able, whenever it wishes after five years, to jack up the rates and do whatever it wants. In the Bill there is a 13 per cent cut, or something like that, along with controlled management of the private sector for the next five years. After five years it is open for the private sector to do whatever it pleases. That is what it all boils down to after reading through all the financial speeches we have heard in the House concerning this Bill.
There is nothing strange about the Government's philosophy to sell Teleglobe, a very profitable outfit. It made $80 million or $85 million, give or take $10 million or $20 million last year. It made $110 million, give or take $10 million or $20 million two years ago. It made over $100 million this year, give or take $10 million or $20 million. The question is not only whether the Government should have sold Teleglobe to the private sector, but if the private sector should have control over the one link across the Atlantic. It also boils down to the sale price.
Let me first deal with the monopoly aspect of this matter. Should the Government have sold this company to the private sector and should the private sector be allowed to control the only link across the Atlantic? The Canadians I know best think it is unfortunate that the communications and telephone system in Canada is, to a very great degree, in the hands of monopolies in each province. When I receive a complaint from a lady who says, "I did not telephone London, England, but I have a bill here from Bell or from Newfoundland Telephone or New Brunswick Telephone or Maritime Tel. I did not make that phone call, but I am being charged for it", what am I supposed to do? The telephone company has a monopoly. It says, "You either pay up or we disconnect your telephone, and if we disconnect your telephone you cannot get one back unless you pay up", and that is for something the lady does not owe. It is her word against the word of the telephone company. That is the danger inherent in monopolies.
If a person had oil delivered to his house and said that he did not receive the particular amount of oil the oil company is charging him for, then he would have a choice. He could go to another oil company. With electricity and telephones, it is different. People do not have a choice.
As far as ordinary Canadians are concerned-and by that, I mean people who do not buy RRSPs-the unfortunate aspect of the monopoly of the telephone company is something to be frowned upon. It is sometimes disgraceful to see how the telephone companies in Canada treat people; it is disgusting. The telephone companies need a lesson in something, I do not know what, because what they say goes whether we like it or not.
I found it strange, and I still find it strange today-perhaps Members of the House can tell me why, because I never could figure out why-that when there was a challenge to the

Teleglobe Canada
monopoly of Bell Telephone, the Government refused the challenge. I am talking about CN-CP's application for longdistance charges. It was refused because in the United States, where competition was allowed, rates would eventually go up. There appeared to be some unity here in this House. The Bell Telephone unions said that we could not break the monopoly, because if we did Bell employees might lose their jobs. When I think about that poor lady who did not telephone London, England, day but got charged for such a call, I have to say that the monopoly should be broken or the telephone companies should behave themselves and smarten up.
There is a motion presently before the Chamber for a three-month hoist proposed by a member of the New Democratic Party. As I understand it, the motion would allow the securities people to investigate something that has to do with an increase in Memotec's share cost. At least that is what the mover of the motion put as the reason for moving the motion. As far as I could find out, Memotec's stocks appear to have increased dramatically. I suppose this is because of the prospect of its purchasing Teleglobe, this monopoly that goes across the ocean. I suppose any company's stock would increase if it were to take over Teleglobe. I also notice that Memotec is the owner of a company in the United States, or is it the other way around-I do not know which. It appears as if the company has just as many employees in the United States as it has in Canada. It certainly must be a growing outfit if it has that kind of control.
As far as the Bill is concerned, it boils down to whether or not the Government should have sold the company for $488 million when its profits were running to about $100 million a year. Just imagine, Mr. Speaker, if you were able to purchase a company for $488 million while the profits of the company ranged at around $100 million a year. That is quite a remarkable sales contract. That would be something at which one would really have to jump. This is the sort of thing the private sector wants. It can watch the money roll in. Millions upon millions of dollars of profits are guaranteed because the purchaser will get his money back in four and a half or five years anyway, and then the rest of it, those few hundred million dollars a year, is all gravy.
Why did the Government of Canada do this? There is a very good reason. The Minister of Finance (Mr. Wilson) wants to stand up in this House on Wednesday and announce to everyone that he has trimmed the deficit down to-notice I say "down to"-$32 billion. Not $32 million or $32,000 or $3,200, but $32 billion. Half a billion for this outfit brings it down to $32 billion. That from a Government that was going to decrease the deficit. We have had the highest deficits in Canadian history since that Government came to power. If you add up the national debt since Confederation who is responsible for over half? That Government over there.


Some Hon. Members:: Oh, oh!


Mr. Manly:: He says it with a straight face, too.


Mr. Blackburn (Brant):: He worked on the speech all weekend. Just quiet down.


George Baker: What is true is that if you consider the $32 billion deficit we will hear about on Wednesday. That is the reason for this sale.
The Minister put Fishery Products in the private sector in return for about $100 million. Then we have this sale. In other words, the Government is passing over to the private sector something that should be controlled by the public sector, to some degree. That is the rationale behind the Bill. When Hon. Members are addressing the Bill they should remember that we are talking about communications cables which go across the Atlantic from Newfoundland. That is why this Bill is so important.


The Acting Speaker (Mr. Paproski):: Questions or comments?


Mrs. Collins:: Mr. Speaker, I was not planning to speak now, but some of the comments by the Hon. Member for Gander- Twillingate (Mr. Baker) prompt me to respond. Perhaps we should call him the Hon. Member for Heart's Desire. He made a couple of statements which are just so erroneous that we do not want to leave them on the public record uncorrected.
First, I guess he does not understand how the international telecommunications system works. Teleglobe does not bill the customer, it is done by B.C. Tel or Bell Telephone or the NewfoundlandTelephoneCompany. If it should happen that an individual was charged for a call they had not made their redress is to their local telephone company. I have had that experience myself. Contrary to what the Hon. Member says, I can assure him that I have found the telephone companies' customer service departments extremely co-operative. They will go to the extent of phoning the number that you say you did not call in order to check whether a call was made. They will try to track down who might have made the call. I find they really go out of their way to try and make sure people are not incorrectly billed for long-distance calls. It is extremely unfair to cast that kind of aspersion about employees of telephone companies. They are really trying to give good service to the public of Canada.
As well, perhaps the Hon. Member has not read the Bill and is not aware that after five years Teleglobe will be controlled by the CRTC. There will be control over all the rates it charges. It will not be able to charge unfair rates. In fact, there will be greater control than there is now.
Finally we have the comments made by the Hon. Member concerning the deficit. Those comments are just so far out of line they are totally reprehensible. The Hon. Member knows it was his Government that started the galloping spending which eventually hit the Liberal Government like a plague. This Government inherited that situation and for the first time since the Korean War things have been turned around. That
February 16, 1987

was done by this Government. If you look at the record, we actually have for the first time, on the basis of income and spending, a balanced Budget. We are looking forward to Wednesday and hearing about the excellent efforts our Minister of Finance (Mr. Wilson) is making to bring down the deficit started by the Government of which the Flon. Member was a part. The deficit is certainly not the responsibility of this Government.


George Baker: Mr. Speaker-


Mr. Belsher:: Don't confuse him with the facts.


George Baker: The hon. gentleman says don't confuse her with the facts.


Some Hon. Members:: You!


George Baker: I will try not to. As far as the billing issue is concerned, I understand the situation perfectly. The Hon. Member is correct that you are billed by the local company for trans-Atlantic calls. The cable outfit actually takes about 25 per cent. It is 25 per cent originating, 25 per cent carriage, and about 50 per cent on the other end. As to my remarks concerning the telephone companies, I stand by them. I do not think it should be necessary that someone should have to call a Member of Parliament to try and get justice from a telephone company that will not take the trouble to prove that the person incurred a charge. In the cases I have seen it has been the general public who have been right, not the telephone company. There is a lot to be desired from the telephone companies in these matters. I have the cases to prove it and I am sure other Members do as well. In addition, there are people out there who do not call Members of Parliament about things like this. There are people out there who do not call politicians. I do not know many in my area, but there are some who do not do it, but just accept the situation and pay a charge for which they were not responsible. They just let it rest with one little complaint to the telephone company.
So far as control of Teleglobe by the CRTC is concerned, the Hon. Member is absolutely right. In fact, she should have mentioned there is a reduction of, I believe, 13 per cent in charges for five years. However, after the five years that is it. As things stand now it is a Crown corporation. We have control now if we wish to have it. However, we will not have control after the five years are up. It is a marvellous acquisition for Memotec. The company should be congratulated for getting Teleglobe so cheaply. I notice that the Chairman of the Board of Memotec is a fellow by the name of Eric Baker. I would say he is a pretty intelligent fellow and maybe he is from Newfoundland.


Mrs. Mailly:: Mr. Speaker, I would like to ask the Hon. Member for Gander-Twillingate (Mr. Baker) whether baggage isn't lost as often on Air Canada because it is a Crown Corporation. And I may remind the Hon. Member that a monopoly will be regulated by the CRTC. Is he telling us
Teleglobe Canada
that CRTC regulation of monopoly companies is not a good idea?


George Baker: I believe I understood the first question was whether or not less baggage is lost on Air Canada because it is a Crown corporation.


Mr. Boudria:: So much for eloquence.


George Baker: I do not know. It is an interesting question. The hon. lady is bringing up the whole question of Crown corporations. She firmly believes in the private sector. She is convinced that the Government should have its fingers in absolutely nothing. She believes that everything should be passed over to the private sector.
With regard to the CRTC, as I mentioned earlier, there will be only five years of control by the Government of Canada. After that it is open to the private sector. The Minister would say that it is open to the private sector. In other words, if the costs get too high, Bell Canada or Newfoundland Telephone will put another cable across the Atlantic. I doubt that very much.


Kenneth Albert James: Mr. Speaker, I would like to make some comments with regard to the intervention of the Member for Gander-Twillingate (Mr. Baker). With regard to regulation,
I would like to read him some comments by Jean-Claude Delorme, President and Chief Executive Officer of Teleglobe Canada. He said that for Teleglobe the biggest change arising from the sale is impending regulation of its business by the Canadian Radio-television and Telecommunicaions Commission. He says that although Teleglobe has never been directly regulated by domestic bodies since its creation in 1949, the change does not worry him. The rules of the game will be different, but they are equipped to deal with it. Regulation means Teleglobe will have to stay within an allowed rate of return on average equity, that is, profit after tax, divided by the total sharehold equity. Mr. Delorme expects that Teleglobe will have to lower the rates it charges to domestic telephone companies and will stay within that ceiling which, in turn, will reduce its revenue. He goes on to say that they are in favour of regulating Teleglobe's rate of return because they believe its rate have been too high.
Kenneth Englehart, chief counsel of the Canadian Business Telecommunication Alliance, said they are in favour of regulating Teleglobe's rate of return because they believe its rates have been too high.
Therefore, the Member for Gander-Twillingate may be slightly misinformed on this situation. We are moving toward regulation where there was never regulation before. There will be a reduction of rates, including reduced costs for overseas telecommunications.

February 16, 1987
Point of Order-Mr. McKinnon


George Baker: Mr. Speaker, I do not know Jean-Claude Delorme, but he would, of course, say that. What would anyone expect him to say? He is obviously going to keep his job with Teleglobe. Jean-Claude cannot really say what is on his mind after Teleglobe has been bought by this private company. That is all we would expect from Jean-Claude. Jean-Claude is on good terms with Eric Baker, the chairman of the company.
With regard to the other comments made by the spokesman for telecommunications, he is going to say that because he represents all the telephone companies which have to pay the rates. We can understand why he is saying that. However, I would be interested to know what he will say in five years when all of these restrictions are removed from Teleglobe, as we know it today. Watch where the rates go then.


Don Boudria: Mr. Speaker, I have a question for my colleague, the Member for Gander-Twillingate (Mr. Baker).
I would first like to congratulate him on his very excellent remarks. We always hear this calibre of remarks from him.
The Government has a bent toward privatization. I could disagree with the principle of privatization in all cases, but I have a particular problem with this case. The Member for Capilano (Mrs. Collins) told us earlier that one of the reasons Teleglobe is being sold is to reduce the deficit. What does my colleague think of a Government which not only wants to sell the Crown jewels, but wants to sell them to pay for its maladministration?


George Baker: No comment, Mr. Speaker. I agree with him.


The Acting Speaker (Mr. Paproski):: The period for questions and comments is now terminated. Before I recognize the Hon. Member for Skeena (Mr. Fulton) on debate, I will recognize the Hon. Member for Victoria (Mr. McKinnon) on a point of order.


POINT OF ORDER
Hon. Allan B. McKinnon (Victoria):: Mr. Speaker, I have a point of order which refers to the tabling of petitions. The Member for Windsor-Walkerville (Mr. McCurdy) put on his usual theatrical performance while tabling petitions this morning. He said he was tabling a petition with some 3,000 signatures on it. There were actually 2,049 signatures on it. How long will we have to put up with this gross exaggeration? I admit the NDP are working hard to get these petitions. They are doing a great job of bamboozling everyone and getting them to sign petitions. However, they could be more honest when they table them in the House of Commons. Otherwise, whenever we hear the Member for Windsor-Walkerville quote a figure, we will have to say that he is probably exaggerating by 50 per cent.




[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-38, an Act respecting the reorganization and divestiture of Teleglobe Canada, be now read the second time and referred to a legislative committee, and the amendment of Ms. McDonald (p. 3435).
Mr. Jim Fulton (Skeena):: Mr. Speaker, Bill C-38 is an example of doctrine. It certainly is not an example of good business sense. I am going to uncap some of the arguments which have been put forward by the government side. It must be made clear right off the bat that we are dealing with a monopoly. Teleglobe is a monopoly and under the Tory's proposal it will continue to be a monopoly.
The key argument put forward by Members, such as the Member for Mississauga South (Mr. Blenkarn), is that it is better for a few people to own something than all Canadians. Last year's profit ran close to $100 million. Each of the 25 million Canadians benefited by only a couple of thousand dollars. No one will dispute that. However, the Member for Mississauga and the Government claim that it is better for a few hundred or a few thousand Canadians, who have enough money to buy stocks and participate in a transaction like this, to divvy up $50 million or $100 million among a much smaller and more select group.
That is a doctrinaire argument. It is an argument by the rich for the rich to get richer. It has nothing to do with the significant point that Teleglobe is a monopoly. It was set up, not only to provide cable service, as the Member for Gander- Twillingate (Mr. Baker) said, but to provide satellite communication for Canadians throughout the world. It had set rates.
Government Members are trying to paint the management and workers at Teleglobe as a group of faceless, semi-competent or perhaps incompetent bureaucrats who have no entrepreneurial spirit, do not understand business, do not know how to do anything, and are designed to fail. They say that is why the Government has to get rid of this Crown jewel, one of the most profitable of Canadian Crown corporations.
From time to time we must bare the face of some of the ideologues on the government side. As an example, last week on my way back from British Columbia I met a Tory Member in the airport. I asked whether he was taking the direct flight to Ottawa. He said no, that that was an Air Canada flight and that he only flies CP. I asked him what time he would arrive in Ottawa and learned that he was prepared to spend an extra three hours to get back to work in Ottawa in order to ensure that the money of the people of Canada was spent only in private enterprise.
February 16, 1987 ___________________________COMMONS
We must understand that there are a large number of what I would describe as ideologically nose-ringed reactionaries on the government side. This document is clearly doctrine. It is not good business. Let us look at some of the guts of it. Every document put out by the Government says that the Government will get $608.3 million. The fact is that the Government will not get $608.3 million. At most it will get about $345 million. That is a fire sale price. As my colleague, the Member for Vancouver-Kingsway (Mr. Waddell), has said many times, this is "minnow-tec". In 1983, only four years ago, this little teeny company had 30 employees. That is only four years ago.
What is happening only too often in Canada is little teeny companies using extreme leverage in the market-place. They borrow from the National Bank, and from here and there. The Hon. Member for Mississauga South and others say that because of all this entrepreneurial talent which will suddenly be injected, all of this great self-interest going out and fighting for new technology, we will suddenly be in a better position to buy world leading edge technologies in terms of fibre optics and new satellite technologies and so on. Nothing could be further from the truth. That is why the Tories have given over to "Minnow-tec" in this deal another five years of monopoly. The Tories say they are against monopoly, that they want free enterprise in the market-place. What a lot of ballyhoo. The monopoly is being kept 100 per cent intact in terms of this operation.
Is "Minnow-tec" really going to go out there and garner all of these new technologies and bring us into the forefront and actually benefit individual consumers? Nothing could be further from the truth. Its debt load alone means it is going to have to try to get more out of the consumer and less from technology. I think Members of the Government should be more cautious.
I have watched these kinds of deals coming from the ideologues on the right for some time. In my own Province of British Columbia, the former Premier, Bill Bennett, announced he was selling off the entire B.C. ferry fleet because it will be good for British Columbia. He sold it to a private group and leased it back on a five-year basis. We constructed the fleet, we bought and paid for it. Now we are in our second rollover, wherein every five years we buy the fleet back again through this leasing. That is an another example of these brilliant minds, these great business people the Tories hold themselves up to be. Nothing could be further from the truth. The consumers and real owners of those ferries get dinged time and time again, so this little group of free enterprisers, these great free enterprises, can sit at home and put their feet up. They have homes in Miami, Mexico, Europe and the Far East. They have big cabin cruisers, Cadillacs and so on. They are the smart ones who profit from these private deals, and that is what they are.
Almost no one in my constituency buys stocks or RRSPs. Unemployment in my constituency is close to 40 per cent.
DEBATES ____________________________________________3455
Teleglobe Canada
Members of the Government do not want to talk about that. But where is the Government planning to go? Is it planning to privatize the RCMP, for example, or sell Parliament Hill and lease it back to try to bring down the deficit? Is it planning to sell CN or Air Canada? Where is the Government planning to go? These are the kinds of things which are so important to look at in this debate.
I would like to deal for a moment with the important point made by my colleague, the Hon. Member for Vancouver-Kingsway, about a three-month hoist. There has been some jiggery-pokery in the market. That is pretty clear. Everyone has recognized that and an evaluation is being done. Is it proper for the House of Commons to pass into law a sale transaction when there has been jiggery-pokery in the market? What we are asking for is a hoist so we can look at that. I think it is only proper that the House of Commons, the representatives of the Canadian electorate have a chance to look at what actually went on behind the scenes in this transaction. No Member of the Government is saying, obviously, we should not look at the jiggery-pokery, but what they are refusing to do is deal honestly in this debate with what a bad deal this really is.
I can give another example of where Members of the Government try to use double-speak just a little too often. The big oil companies back in the 1970s price fixed. That was pretty clear. A major investigation took place, not just in western Canada but right across the country. The big oil companies fixed, in terms of billions of dollars, the price of oil and gas and home heating fuels purchased by Canadian consumers. Did the Liberals do anything about that? No. Did the Tories do anything about it? No.
It is vitally important that in various sectors there be government owned and operated systems such as Petro-Canada, not just to have a window on the field but to have a hands-on experience with what is really going on so that the consumers can be protected.
I would like to take a look for a few moments at the guts of Teleglobe and what it really means to Canadians. In recent years, 85 per cent of its revenues have come from overseas telephone calls. I think we should look at what kind of money Teleglobe has been making. The Government turned it over for $345 million when it made close to $100 million in profit last year. Teleglobe has been around since 1949. By 1975 it was making over $10 million a year in profit. By 1982, five years ago, its profits were up to almost $50 million. Now it is skating close to $100 million.
What does it do? It handles all overseas telecommunications entering and leaving Canada. That includes telephone, telegraph, cable and Telex communications. Teleglobe is a joint owner of submarine ocean cables and telecommunication satellite systems. In 1985 Teleglobe's revenues totalled $678 million. In the same year, 1985, the total revenues of "Minnow-tec" were $17 million. Memotec began in 1983 with just 30 employees. I have nothing against Memotec. However, when the Hon. Member for Mississauga South and others talk

February 16, 1987
Teleglobe Canada
about this new infusion of entrepreneurial spirit from a little teeny company and try to paint Teleglobe as being some sort of dozy bunch of dinosaurs who could not possibly figure their way out of their own office space, it is a totally inaccurate and unfair representation. I think Members of the Government would be wise, when talking about Crown corporations and public servants, to remember that some of the people who are working in the public service, if not most of them, are very dedicated and often work for far less than many of their counterparts do in the private sector.
I think I have dealt effectively with the debunking of the ongoing blather from the Government's side that somehow $600 million is coming in. That is simply not the fact. Less than half that amount is coming in. Members of the Government say we need to get these hundreds of millions of dollars in to take down the deficit. From a straight business perspective, nothing could be further from the truth. Bringing in $300 million in one shot to apply against the deficit is nowhere near as beneficial, in bringing down the deficit, as it would be to keep Teleglobe and have that $100 million year after year going into the general revenues of the Government of Canada to use for other worthwhile purposes.
There are a number of reasons why all Canadians should oppose the Teleglobe sale; first, it has been a consistent moneymaker and, second, it is a monopoly, and a monopoly for good reason. Let me deal for a moment with the press release of the Minister of State for Finance (Mr. Hockin) because it makes some preposterous points. For example, the news release states:
Teleglobe Canada will benefit by being able to pursue new business opportunities under skilled private sector management.
It does not bother to add that there will be five further years of absolute and total monopoly. A question which has to be asked when the Government points at Teleglobe and say, "We need new entrepreneurial spirit", is what has gone on for the last two and a half years? The Tories have been sitting opposite for two and a half years and they cannot keep pointing at the Liberals or New Democrats or someone else. The fact is that if there were areas in which efficiency could have been improved, the Government should have dealt with it.
The release goes on to state:
Consumers will benefit from an average rate reduction on overseas telephone calls exceeding 13 per cent in 1988. Of further importance, consumer interests will be protected into the future by CRTC regulation-a protection not currently present under crown ownership.
I suppose it is a fair statement for the Minister to make, but it is totally erroneous and unrelated to the situation. Teleglobe is completely managed by the Government of Canada, or it was until this point in time. For the Minister to say one of the key reasons for selling it off to the private sector is so it can come under some kind of consumer protection, is tantamount to fraud. Ministers should not go around cooking up reasons that have no foundation whatsoever in fact.
I would now like to return to the purchase price. A monopoly is being sold off. Because it occupies the field of communications, in which there is a legitimate public policy interest to be protected, it should continue to be in the public realm owned by the Canadian public.
With respect to share ownership restrictions, the Government continues to crow about the good price that it received. Of course, it said existing domestic telephone companies could not buy into it because they were monopolies. It is good that it is a monopoly now. Members of the Government like the fact that it is staying a monopoly so that it can set whatever kind of price trends and so on that it wants. However, members of the Government do not want the other monopolies in on it. This is the point at which I say this whole debate comes from a doctrinaire position of the Government. It does not come from a position of good business. I think the Hon. Member for Mississauga South would be the first to admit that. This is not good business, whether we are talking about the national debt, how the money will be applied or even about the future leverage of "Minnow-tec" in the future in terms of buying new technologies.
The Government places the following requirements on the deal. Non-resident companies will be restricted to acquiring 20 per cent ownership of Teleglobe. They are not allowed ever to exert control. Foreign telecommunication companies are permanently barred from ownership of the company, and domestic companies can obtain up to 40 per cent in the near future, but ultimately that can never go above 33.3 per cent. Members of the Government make a big deal about the employees being eligible to purchase 5 per cent of the shares. I hope that a few Conservative Members have heard of things such as co-ops. Five per cent ownership at a 10 per cent discount is not a big deal in my view.
With respect to international obligations, there is something Members of the House should be taking a closer look at. I refer to what is happening in the United States. The U.S., in its so-called striving for more communication and more competition in telecommunications, has decided to renege on its commitment to INTELSAT. INTELSAT is dealt with in Clause 8 of the Bill. Both INMARSAT, which is the International Maritime Satellite Organization, and INTELSAT, which is the International Telecommunications Satellite Organization, were set up to try to assist some of the less developed countries of the world to obtain some type of crosssubsidization in telecommunications. A fixed rate was set under this international agreement whereby the same base rate that is applied in those areas of heavy traffic would be applied to areas of lower traffic, such as in most of the developing world. As the U.S. is backing out of this agreement and starting to put up its own satellites we see this "Minnow-tec" deal coming along. What will it mean? It may well mean that before too long-certainly before the end of its five-year monopoly-"Minnow-tec" will find itself in a conflict of interest situation. How will it deal in the most effective
February 16, 1987

manner for its shareholders, which is its primary role, to ensure that its shareholders are receiving the best type of return from the operation versus that of INTELSAT? The agreement that is set up to benefit other parts of the world is a very good idea in terms of communications in a world so often fraught with all types of violence and confrontations. It ensures that wherever possible there is reasonably good and accessible communications.
Down the road where will our domestic telephone companies go? Will they start buying out part of the link to the U.S. satellite system and get out of INTELSAT? What will that mean to a highly-leveraged operation such as Teleglobe? These are questions the Government does not seem to have addressed itself to, certainly not in debate thus far in the House of Commons.
Let us take a look at what other industrialized countries have done, those which have continued to participate in the international agreement and in the field of overseas communications. Australia, New Zealand, France, West Germany, Italy, Norway and Sweden all have totally government-controlled systems just like Teleglobe. They are not planning to make any changes. The U.K., from which the Government adopted this idea, made a share offering and privatized British Telecom but retained just below 50 per cent ownership. The British Government maintained a 49.9 per cent controlling interest in international telecommunications. The only two main players which are outside of all this are, of course, Japan and the United States, which have both gone to their own privately-controlled telecommunications systems.
There are inherent contradictions in selling a company that is a monopoly and keeping it as a monopoly. The arguments that have been put forward by the Government for not allowing the domestic telephone companies to buy into this company fall by the way when one takes a close look at the deal. Denying monopolies the right to buy a monopoly, thus allowing a small group to set up and maintain a monopoly, is a specious argument. Any Canadian who takes a look at this deal will see that this lucrative world-class Crown corporation was sold for a song. It was sold at far below what anyone would consider to be a reasonable price for such a valuable operation.
I see that I am running out of time and will therefore conclude my remarks. The Government is attempting to paint this sale as the sale of a Crown corporation that does not really need to be publicly owned in order to obtain some money to buy down the deficit. The argument is that private enterprise will be able to run it better. As I have pointed out, because of its highly debt-laden position "Minnow-tec" is not in as good a position to be buying into leading-edge technologies. In terms of protecting Canadian consumers that, again, is unlikely since the monopoly continues. The likelihood of rates coming down when a company with such a huge debt load has purchased a particular Crown corporation is unlikely to occur. I do not see any benefits to Canada's deficit, to the country, to the workers,
Teleglobe Canada
to consumers or to Canada's international obligations in terms of setting rates around the world.
I conclude by saying that practical wisdom denies this as being a good route to go. Bill C-38 has to be seen as a type of defective doctrine which I think will get the Government into a great deal more trouble.


Claudy Mailly: Mr. Speaker, the speech by the Hon. Member for Skeena (Mr. Fulton) is typical of the kind of speeches he tends to make, full of exaggerations, and in this case, all Government-owned corporations are perfect and any company that has the misfortune to be a private corporation is rejected out of hand. However, he can hardly deny, and as a Quebecer I am proud of the fact, that Memotec, a young and dynamic company, will finally have a chance to compete with the giants and that Quebec workers, who up to now could not own shares in the corporation because it was a Crown corporation, will now be able to do so. The Hon. Member said that 5 per cent was nothing and that we should remember the co-ops. Granted, there is a co-operative movement, but Teleglobe was not a co-operative, it was a Crown corporation. And now Quebec workers will be able to own shares in that Corporation.
Mr. Speaker, he contemptuously tells us that nobody in his riding owns shares. I think he ought to visit a few co-operatives, these people are shareholders. It is co-ownership, and there is nothing criminal about being a company co-owner. He should not show disdain for private ownership because I am sure quite a few of his constituents are proud to own what they have, including the corner store merchant or the owner of a small trucking firm. There must be many of them in his riding. It is rather unfortunate that he would choose not to speak for his constituents who happen to own their business.
I have a question for him. He tells us that a Crown corporation has everything going for it, that a profit-making Crown corporation ought to stay under public ownership. I might remind him about other Crown corporations which at first were operating in the red and which were bought by the Government precisely to set them back on a sound financial track-and Air Canada is a good example. They were to be resold to private interests because that was the purpose of the whole exercise, but they are still Crown corporations. Is Air Canada service better than CP Air's because it is a Crown corporation? A moment ago I asked the Hon. Member for Gander-Twillingate (Mr. Baker) if Air Canada employees lose fewer pieces of luggage than those of CP Air simply because they work for a Crown corporation, and the Hon. Member for Skeena began laughing and said it was a stupid question. Well, let me ask him this question: Are Air Canada passengers given better service because it is a Crown corporation? Do we really feel like Air Canada owners when our names are taken off a waiting list, because as taxpayers we own the company? No. We are treated like other passengers in a private company. I think the Hon. Member overstates his case because he does not really have strong arguments against this sale, so this is why he exaggerates.

February 16, 1987
Teleglobe Canada


James Ross Fulton: First, I wish to deal with what I said in my speech. The Hon. Member often takes things out of context, twists them around, and claims that there is exaggeration.


Claudy Mailly: Give an example.


James Ross Fulton: In relation to the purchase of shares, and RRSPs, I said that in my constituency there are very few people who are in an economic situation where they are able to buy any shares. In looking at the number of Canadians who participate in purchases in the stock market, it is the absolute minority who are involved in that type of transaction. In regard to the 5 per cent that the workers at Teleglobe will be allowed to buy, if that is the sole reason for Bill C-38,1 think the Government should withdraw Bill C-38. If that is the only thing that the Hon. Member thinks is good in this Bill, frankly I think the Bill should be redrafted.


Claudy Mailly: You know it is not the only point, but it is one.


James Ross Fulton: I see nothing wrong with putting forward a special provision for the workers at Teleglobe at the various sites in Canada to have an opportunity to put forward part of their pension funds, or part of their earnings to participate in the company. As a matter of fact, that is good. It gives an incentive to people who are working anywhere in the country to have some direct participation, particularly economic participation in the work in which they are involved.
As to the Member's question on whether CP Air or Air Canada loses more bags, the Hon. Member should phone them and find out. I do not consider it to be part of my responsibility as an MP to answer a government Member about how many bags are lost on different airlines in Canada. That shows the depth of misunderstanding and misapprehension that many Canadians have about Conservative Members. They participate in an important debate on the privatization of the Crown jewel of Canadian Crown corporations, and they want to know how many bags are lost on different airlines. That is a completely erroneous and unfortunate question from a government Member.


Claudy Mailly: What a cheap reply, just like the speech.
[ Translation]


Ian Gardiner Waddell: Mr. Speaker, I direct my question to the Hon. Member who has the floor. In connection with statements made by union leaders, by Louis Laberge of the Quebec Federation of Labour-

Perhaps I can say it in English. Is the member aware that the leader of Quebec's largest labour federation, the Quebec Federation of Labour, said that he believes that Memotec-I know that the Hon. Member calls it "Minnow-tec"-has bitten off more than it can chew with what Mr. Laberge called the suicidal acquisition of the telecommunications giant
Teleglobe Canada? Mr. Laberge pointed that out, and he further asked how a firm with assets of $83.6 million can make a $608 million acquisition. Memotec earned $3.32 million or 56 cents a share on shares of $31.6 million in the first nine months of 1986 with 750 employees. Mr. Laberge further pointed out that over the same period Teleglobe had 1,200 employees who helped it make $45.7 million. This prompted Mr. Laberge to compare Memotec to a frog that has just swallowed a bull. Mr. Laberge further stated that then the frog burst but the bull is still there.
The vice-president of the Communications and Electrical Workers of Canada also spoke against this takeover. According to Mr. Rene Roy, the union has not yet received written guarantees. Is the Hon. Member aware that some of the big labour chiefs in Quebec are against this takeover?
I wonder if the Hon. Member could tell us a little about what the B.C. Government tried to do a few years ago when it gave all British Columbians five BCRIC shares at $6 each? Could the Hon. Member tell Canadians about that?


James Ross Fulton: First, I wish to deal with the question from the Member for Vancouver-Kingsway regarding the remarks of Louis Laberge, the head of the FLQ. Mr. Laberge pointed out a real concern that he has as a representative of the workers in the Province of Quebec. Last year Teleglobe's revenue was 40 times the gross revenue of Memotec. We truly are talking about a minnow eating a whale, although Mr. Laberge compares it to a frog swallowing a bull.
The point that I made earlier in my speech is that Memotec will find itself in a lower position in terms of further borrowings to buy world leading edge state-of-the-art technology to further its position in the international communications field. We now find ourselves in a lower position, in terms of financing, and getting ourselves into that market, than we were before this Bill was introduced. If that is the type of leading edge thinking coming from the Conservative Party to take us back to the dark ages of telecommunications rather than encouraging a more vigorous entrepreneurial move into international telecommunications, then this surely is not the trademark for it. This is strictly a situation of doctrine.
I do not wish to spend a lot of time on BCRIC. I am sure that coming from Alberta, Mr. Speaker, even you have heard what a disaster BCRIC has been for British Columbians, all of whom got these marvellous five free shares. I would not be surprised if the Government takes a look at that type of option and throws all the Crown corporations into a bag, shakes them up, and calls it the Progressive Conservative-what would it be called-PCRIC?


Ian Gardiner Waddell: Investment gamble.


James Ross Fulton: I hope that day never comes. British Columbians learned the hard way that that type of privatizing for private interests is often not, if not always not in the public interest.
February 16, 1987


Mr. Don Ravis (Saskatoon East):: Mr. Speaker, I am pleased to join in the debate today concerning the proposed reorganization and divestiture of Teleglobe Canada. As the Minister for Privatization (Mrs. McDougall) stated in her remarks, this is but the latest in a series of transactions, part of a process that is an integral part of our comprehensive approach to prudent government management, and one that is now moving into top gear.
When I sought nomination, one of the things that I found most discouraging about what was going on in the Government at that time was that the federal Government had an interest in about 400 private sector activities, not only Crown corporations. With the 400 interests there are 250,000 plus people who work for Crown corporations. I would suspect that many of these people are still working for Crown corporations today.
Others have or will be commenting on the benefits to Canadians which flow from this transaction. I wish to concentrate my remarks on the role of privatization in our economic agenda, and the need to continue this important management process. The privatization policy of this Government has been stated many times. Yet, despite the repetition, the opposition Parties have refused to listen, and they continue to follow their strategy of making privatization a matter of ideology.
In the 10 minutes remaining before the luncheon adjournment I should like to touch on some examples which have nothing to do with ideology but a lot to do with good common sense.
During the 1984 election campaign a poll was taken in Canada. Approximately 60 per cent or more Canadians indicated at that time that they did not want to see the federal Government become involved in more Crown corporations. They wanted to see the federal Government divest itself of those interests.
In October, 1986, not many months ago, there was an election in the Province of Saskatchewan. A CBC poll was taken at the time of 1,600 people in the province. Believe it or not, in the Province of Saskatchewan, with its long history of socialism, 76 per cent of them said that they had had their fill and did not want to see the Government involved in more Crown corporations.
The Saskatchewan Potash Corporation is a prime example to which socialists refer as their flagship. An Hon. Member from British Columbia just talked about Teleglobe being a Crown jewel. Other Members from the Province of Saskatchewan and myself can tell the House that investing literally hundreds of millions of dollars in the potash industry probably resulted in a rate of return to that province in the neighbourhood of 4 per cent or 5 per cent in good times, when in fact the money could have been earning a much higher rate of return for Saskatchewan taxpayers. The Saskatchewan Potash Corporation has turned out to be, not a flagship but a bit of a sinking ship at the moment. It is a very risky business. There
Teleglobe Canada
were days when money was made in that industry. However today, when prices are down and there is a lot of competition in the industry, we will probably lose $150 million because of that Crown corporation.
This is precisely why Governments, whether provincial or federal, should not become involved in Crown corporations. I say that it should be left to the business sector, to private enterprise. If they want to take the risks and reap the rewards, let them do so. We can take the royalties and the taxes.
I should like to refer to another example. On the late news on CTV on Saturday night I watched a clip from China showing an auction of Crown corporations. They were small businesses, but the point I want to make is an obvious one. China is a country which has had decades of socialism. Many of its Crown corporations have been locked up for three years. They were so inefficiently run that their doors were closed. Even China is starting to recognize that they should be sold to the private sector. Many young Chinese businessmen are interested in becoming involved in revitalizing the companies. As it turned out, there were higher bids than the Government expected. That is how eager the Chinese people were to become involved in these small businesses.
I should like to refer to another example. Recently I had the pleasure of visiting East Africa with the Standing Committee on External Affairs and International Trade as part of our ODA review. As a student I had been to East Africa, 20-some years ago. I must say that it was disappointing to see what has happened to Tanzania over those years. Because of the socialistic experiment there, many sectors of its economy have in fact declined. I should like to refer to a story which appeared on the front page of a newspaper while we were there. It had nothing to do with our visit, but it had a lot to do with the restructuring of its Government and its economy. It was made very clear by the new leader of the country that they must divest themselves of some of their"parastatal" corporations, as they call them, because the management had been so poor and productivity had been so low.
Another example can be found in the United Kingdom where Prime Minister Margaret Thatcher has sold off shares in British Telecom and in British Gas. Just the other night there was talk of doing much the same with British Airways. If it were such a bad investment, why are so many people in Britain rushing out to buy shares? It has been a resounding success. The people of Britain recognize that it is a worthwhile venture in which to invest, and I would suggest that our divestiture of Teleglobe is along the same lines.
Socialists like to use two arguments when it comes to selling Crown corporations. First, if it is not successful, they like to say that the Government should hold on to it and protect the jobs. Can we imagine all the years the Government has held on to Crown corporations to protect jobs? It had nothing to do with good business decisions. It meant that the Government would pump in hundreds of millions of dollars. In fact, if we look at Canadair and de Havilland, it was not millions of dollars, it was billions of dollars to try to keep those companies

February 16, 1987
afloat. Surely to goodness we should not run the country in that manner any longer. We cannot continue to hold on to these companies just to keep those jobs.
The second example used by socialists is that if the Crown corporation is successful we should hold on to it and take all the revenue from it to reduce the deficit. That is contrary to the philosophy of the Conservative Party and of the Government. We made very clear during the last election campaign that we would divest ourselves of Crown corporations which have been nothing but a drain on us for many years. I am saying that the socialists are wrong on both counts.
Referring back to the de Havilland example, not many months ago people protested at the airport in Downsview. They said that they would lose their jobs, that the technology would be moved down to the United States, and that the place would be shut down. At that time 4,400 people were employed at de Havilland, and today it employs 5,200 people. It has hired an additional 800 people because the company which bought de Havilland is putting it on an even firmer footing than it was before. Rather than just maintaining the technology which de Havilland had before, it is bringing in new technology. It is now to put the turbo-prop engine into a water bomber which is probably one of the best water bombers in the world. It is to upgrade that technology, and there are 800 new jobs.
The other example about which I want to talk is Canadair. It has certainly maintained all the jobs. In fact, it has probably added a few. I do not have the latest statistics on that, but I am sure it will be very successful as the years go on.
I fail to understand why the socialists rail away about the idea of the Government of Canada, or any provincial Government in the country, wanting to grab all the resources, take risks with the private sector, and risk the money of private taxpayers. I think Canadian taxpayers have just about had their fill with regard to the mismanagement of many Crown corporations.
1 have about another 10 minutes left, but I see that it is almost one o'clock. With your permission, Mr. Speaker, may I call it one o'clock and return to my debate after lunch.


The Acting Speaker (Mr. Paproski):: When Government Orders are called, the Hon. Member will have 11 minutes remaining in debate and 10 minutes for questions and comments.
It being one o'clock, I do now leave the chair until two o'clock later this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in its State of the World 1987 Report, the Worldwatch Institute warns that human use of the air, water, land, forests and other lifesupporting systems on earth may be pushing nature over thresholds beyond which it cannot absorb further use without permanent change and damage. The result has been contamination of the atmosphere, climatic change, a mass extinction of plant and animal species, the long term prospect of a decline in the quality of life. The most threatening of the threshold crossings are the depletion of the ozone layer, climate change, and the loss of biological diversity.
The report goes on to say that so many natural systems becoming unstable within a short period of time could result in economic and political pressures which, in turn, could overwhelm the capacity of governments and individuals to adjust adequately. Tackling environmental problems of global magnitude transcends national differences and policies. Governments and parliamentarians must move these issues to the top of their agenda in search of answers on which our survival depends.



HERITAGE DAY


Mr. David Daubney (Ottawa West):: Mr. Speaker, today, the third Monday in February, is Heritage Day, a day when we have the opportunity to celebrate the achievements and traditions of Canada.
For many years the Heritage Canada Foundation has campaigned for a national heritage holiday. We need such a holiday to draw our attention, to focus our thoughts on our history, our traditions, on those parts of our past which require our attention today. The buildings, streets, and structures of our unique history define our character. Their preservation is in trust to us, as individuals. We cannot depend entirely on government to define what is worth preserving or to tell us what parts of our past must be erased.
Here in Ottawa we have seen in recent days how important can be the voice of individual Canadians when raised in defence of those small but beautiful parts of our history which official bodies sometimes overlook.
The battle to preserve our past will never be over, Mr. Speaker. Let us create a national heritage holiday to remind us that when we lose our past we lose an important part of what it means to be a Canadian today.
February 16, 1987



HUMAN RIGHTS


James Douglas Manly: Mr. Speaker, since 1975 Indonesia has illegally occupied the former Portuguese colony of East Timor. Amnesty International estimates that up to one-third of the East Timorese have been killed by Indonesian forces. Now there are reports that in August of last year the entire population of the village of Fo-Mano was massacred by Indonesian troops, and yet Canada has been very silent about these abuses.
In 1985-86 Canada provided over $77 million of bilateral assistance to Indonesia. We continue to issue permits for the export of military equipment, and we even sponsored an arms bazaar in Indonesia. This week when the Indonesian Foreign Minister visits Canada would be a good time for us to show that we cared for human rights by speaking out against Indonesia's wrongful occupation of East Timor and demanding that East Timorese be involved in U.N. consultations on their future.



HERITAGE DAY


Mrs. Anne Blouin (Montmorency-Orleans):: Mr. Speaker, today we celebrate Heritage Day, and we have been doing so on the third monday of February since 1973, when a proposal by the Heritage Canada Foundation unanimously received the support of the Members of the House of Commons.
The purpose of Heritage Day is to remind us of the riches of our Canadian heritage. It is a day to reflect on the achievements of past generations.
As the Member for a riding that saw the birth of French Canadian culture in North America, and I am of course referring to the Beaupre Coast and the lie d'Orleans, I would like to take this opportunity to remind all Quebecers and Canadians that in 1986, the historic quarter in Quebec City was added to UNESCO's list of world heritage sites. This official recognition has enhanced Quebec City's international standing, confirmed once again by the success of Rendez-vous '87.
Mr. Speaker, we must remember that it is up to each and every one of us to protect and enrich our common heritage for future generations.



FINANCE


Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, the Minister of Energy, Mines and Resources (Mr. Masse) recently indicated that higher consumer taxes on gasoline and other petroleum products are again being considered by the Government. Canadians are already paying too much tax on gasoline. In fact, since the Conservatives took office in 1984, gasoline taxes have risen by 10 per cent.
The price of gasoline is now between 35 per cent and 45 per cent higher in Canada than it is in the United States, taking into account the exchange rate. This enormous price difference is hindering the growth of Canada's important tourism industry which employs over 600,000 Canadians. Considering that 74 per cent of Americans travel to Canada by automobile, it is easy to conclude that the price of gasoline is an important factor in their decision to visit Canada and in the length of time of their visits. I urge the Government to think twice before again raising gasoline taxes: think about tourism, and think about jobs, jobs, jobs.



SCIENCE AND TECHNOLOGY


Mr. John Reimer (Kitchener):: Mr. Speaker, the first meeting of the Prime Minister's newly created National Advisory Board for Science and Technology took place this morning.
Significantly, the board is chaired by the Prime Minister (Mr. Mulroney) and is composed of some of Canada's leading industrialists and scientists. I am pleased that Dr. Douglas Wright, President of the University of Waterloo, is a member of this prestigious board.
The establishment of the board was one of the major initiatives in the October Speech from the Throne. Pursuant to its mandate, this committee will assess national science and technology goals and policies and their application to Canada's economy. The Government has taken an incoherent set of programs left to us by the former administration and has created an organized science and technology strategy. These measures are designed to place Canada on the leading edge of high-technology competition, thereby maintaining and creating many new jobs and giving us one of the finest standards of living in the world.

February 16, 1987



SEARCH AND RESCUE


Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, the Scotia Cape and seven of her crew members remain missing off the West Coast. Last week I drew to the attention of the House the need for improved search and rescue facilities. I renew that call today and draw to the attention of the House the dedication and bravery of those who continue to look for any sign of the ship and crew.
I take this opportunity as well to call on the Government to initiate long overdue safety measures for fishing vessels. It has been 11 years since British Columbia extended Workers' Compensation coverage to fishermen, yet there are still no federal regulations for safety in the workplace.
In consultation with fishermen and Vessel owners, the federal Government should move immediately to establish tests for vessel and load stability, gear inspection, vessel seaworthiness, and other safety regulations. Fishing remains one of the most dangerous occupations in Canada. Federal inspection of vessels and federal safety regulations are long overdue.



SCIENCE AND TECHNOLOGY


Donald Paul Ravis: Mr. Speaker, another one of the major initiatives announced in the Government's Speech from the Throne has become a reality. The National Advisory Board for Science and Technology is holding its first meeting in Ottawa today. I would like to extend my best wishes to the Prime Minister (Mr. Mulroney) who will chair this advisory board. I also congratulate Mr. Alex Curran and Dr. Steve Acres, two members appointed to the board from Saskatoon. They bring with them years of innovative experience in the business and scientific fields.
Saskatoon's advanced technology sector which involves biotechnology, electronics, and telecommunications has gained a reputation for excellence world-wide. Indeed, Saskatoon plays a creative role in contributing to the development of science and technology policies. I would like to congratulate the Government for constructing a new national consensus on science and technology, a consensus which will enhance our economy and build upon Canada's competitive strengths.



CORRECTIONAL SERVICES CANADA


Mr. John Nunziata (York South-Weston):: Mr. Speaker, one of the many, many promises the Prime Minister (Mr. Mulroney) made on behalf of the Conservative Party during the last election campaign was the promise to consult Canadians before taking decisions that would affect their lives. Whether it is a major international fishing treaty or the opening of a halfway house for parolees in Toronto, the record of the Government is an absolute and unmitigated disaster when it comes to consultation.
The Exodus-Link parole supervision facility in Toronto's Parkdale community is a case in point. There was absolutely no prior consultation with the community before the decision was made to locate the centre in Parkdale. For some inexplicable reason, the Solicitor General (Mr. Kelleher) has ignored repeated requests for a meeting with concerned members of the community. As well, very little background information was provided to residents on this experimental correctional project. People in the area are as mad as hell about this facility. They are picketing and signing petitions and threatening sit-ins.
O)
Prior to proceeding with the decision I call on the Solicitor General to go to Toronto, meet with the residents, and listen to their concerns. Consultation would help avoid a needless confrontation.



AUTHORS AND WRITERS


Mary Collins: Mr. Speaker, it gives me great pleasure to rise today and advise the House of the great tribute paid in the United States to our great Canadian novelist, Robertson Davies. On February 24, at a dinner to be held in his honour, Mr. Davies, an internationally acclaimed novelist, will receive the 1987 Medal of Honor for Literature from the National Arts Club of New York City. Mr. Davies will be the first Canadian to receive this prestigious award whose previous recipients are a Who's Who of modern letters, including Anthony Burgess, Saul Bellow, and Norman Mailer.
This is a clear indication that Canadian culture is truly coming of age and is not in danger of being overwhelmed by foreign influences. As Mr. Davies himself recently stated, "The world is telling us loud and strong that Canadians have good writers." Robertson Davies has provided many hours of enlightenment and enjoyment to Canadians from coast to coast and readers around the globe. I am sure all Members of the
February 16, 1987

House will join me in congratulating Robertson Davies on this award.


Some Hon. Members:: Hear, hear!



CANADIAN COAST GUARD


James Ross Fulton: Mr. Speaker, coastal residents have taken the Mulroney Government to task for automating West Coast light stations. Pierre Forand, a helicopter pilot and distinguished recipient of the Medal of Bravery, stated in a letter to the Prime Minister (Mr. Mulroney): "I am speaking from firsthand experience when I say that a manned light station provides this coast with a margin of safety that would be dangerously reduced if automation was to take place." Far from waking up and smelling the coffee, the Conservatives plan a further round of de-staffing for Green Island, Ivory, Lucy, and Addenbrook.
The Government and ministerial pencil pushers ignore the valuable work of light keepers. It appears the only thing they know about navigation is how to get to the parliamentary lounge. They argue for cost efficiency, yet ignore the high maintenance cost and frequent failure of automated equipment. They ignore the search and rescue work of lightkeepers because there is no job description for saving lives.
We hear of marine tragedies because of inadequate weather reporting, yet a Department of the Government denied a lightkeeper's request for weather recording equipment. Enough is enough. We must upgrade service instead of denigrating lightkeepers. Once again I call upon the Government to initiate a full public inquiry into the automation of lightsta-tions.



INCREASED LUMBER EXPORTS TO UNITED STATES

Mr. Ted Schellenberg (Nanaimo-Alberni):: Mr. Speaker, as far as the Canadian lumber industry is concerned, the doom and gloom have become a boom. Just a few weeks ago media pundits and opposition Members were predicting the imposition of the export tax on softwood lumber would mean the loss of thousands of jobs and the closing of hundreds of mills. In fact Canadian lumber sales to the U.S. are more than holding up.
B.C. Forest Products is now predicting that 1987 will be a near record year for earnings. Dominion Bond Rating Service has predicted that "the 15 per cent tax will not be significant relative to over-all earnings through 1988". On top of all that
evidence of boom, not gloom, we learn that forest company shares are among the hottest on the stock market. The American demand for housing is up. The sale of new single homes is up. Export of Canadian softwood products south of the 49th parallel is up. As well, a $600 million windfall of reforestation funding is on its way to the provinces.
We hate to disappoint the Opposition but there is no room for doom and gloom in the Canadian forest industry. All that looms is a zooming boom!



POLITICAL PARTIES

[Stage Direction]
EFFECT OF FORMER NDP/LIBERAL POLICIES ON NORTHERN

Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, this past weekend the Leader of the NDP (Mr. Broadbent) was in the riding of Timiskaming. At a dinner gathering of approximately 100 party supporters he took on the Government's financial initiatives and suggested the riding should return a New Democrat in the next election, mentioning that voters should have long memories. The people of Timiskaming do have long memories. This is the same Leader and the same Party of the late 1970s who supported Liberal policies and created severe economic conditions for the people of the North.
The NDP and Liberals supported policies which raised inflation to 12.9 per cent and the interest rate to 22.75 per cent, a far cry from the current 4.2 per cent and 9.25 per cent. Now they want to take from the North the economic benefits of flow through shares. The NDP obviously do not have the foggiest notion of what is happening in or what is needed for northern Ontario.



HUDSON'S BAY COMPANY


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, on March 31 the Governor and Company of Adventurers of England trading into Hudson Bay will no longer be trading into Hudson Bay or its environs.
In the North it is generally supposed that the initials HBC stand for "Here Before Christ", and during the three centuries since receipt of its Royal Charter from King Charles II in 1670 the Bay has been loathed, cursed, applauded and loved, but most importantly, traded with by generations of northerners.
While the Bay will still remain a Canadian institution, business conditions have necessitated the sale, fortunately to

February 16, 1987
Oral Questions
an experienced management group, of its northern stores department, together with the disposition of most of its fur operations.
It is sad, Sir, to recall the passing of an era, but maybe the new owners will be able to upgrade the northern stores to modern standards, something which has largely eluded the cash-short Bay.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, this is budget week. It is morally repugnant that over 300,000 people in Canada had to line up publicly last year at volunteer food banks across the country for food for themselves and their families.
Does the Minister of Finance intend, on Wednesday afternoon, to announce a plan which will, in the short run, mobilize a fund with the provinces to finance adequately the food banks of Canada? Will he, in the long term, move toward eliminating the need for food banks by, among other things, moving toward a guaranteed national income?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I think the Hon. Leader of the Opposition knows full well that we share his concern about the number of people who have lined up at food banks. We have tried very hard to improve that situation. We have increased the child tax credit and accelerated the payment of it. We have introduced a low income refundable sales tax credit.
We are seeing some results. Two hundred and sixty-three thousand Canadians graduated above the low-income cut-off. That is important progress. It is not enough, but it is progress. We are doing things which will continue this progress, and we hope to see further progress when the results come out this year.
[Translation\


John Napier Turner: Mr. Speaker, the answer is unacceptable. The gap between rich and poor is widening, especially after this Government's last two Budgets.


GAP BETWEEN RICH AND POOR
John Napier Turner: Here is my question for the Minister. Since he increased income tax for individual Canadians by $6 billion in his last Budget, why can't he find enough money to finance the food banks, together with the provinces? And is he going to reverse the trend of his last two Budgets which has been to widen the gap between rich and poor?


Michael Holcombe Wilson: Mr. Speaker, the Leader of the Opposition has identified one possible approach to the Budget. He knows full well, as a former Minister of Finance, that I cannot comment on specifics in a Budget. He has neglected to say that we increased the spousal allowance. We have entered into a joint program with the provinces with federal participation of $100 million a year to help train those low-income Canadians who do not have a job today and are on welfare. He also knows that since we have been in office 677,000 jobs have been created. That is the best way that 1 know of getting people out of poverty.


Some Hon. Members:: Hear, hear!


TAX REFORM INQUIRY
John Napier Turner: Mr. Speaker, if the Minister wants to get specific, he knows that in the last Budget he raised taxes for a person earning $15,000 by an additional $400 per year. At the same time he granted a lifetime exemption of $500,000 to those fortunate enough to earn capital gains.
Is the Minister of Finance really going to wait for a White Paper on tax reform? Is he really going to postpone the issue of tax reform when he should be eliminating the unfairness of the last two Budgets? Is he going to do something concrete on Wednesday afternoon?


Michael Holcombe Wilson: Mr. Speaker, again the Right Hon. Leader of the Opposition is making very selective use of figures. I would say to him that, yes, tax reform is going to be very important. One of the key considerations we are taking into account as we form the proposals for tax reform is how we can improve the position of those people who are on low incomes, over and above the many things we have done to date. I have enumerated those during the course of this Budget. However, we feel we can do more and that tax reform will provide a very good opportunity for that.


FISHERIES
George Baker: Mr. Speaker, this morning 7,000 fishermen in Newfoundland, boat owners, received the following letter: "Fishermen who reside in 2G, 2H, 2J and 3K 3L-" that is all over Newfoundland,"-that have fished groundfish using fixed gear will not be eligible to receive groundfish licences for 3PS in 1987".
In other words, the entire south coast of Newfoundland is off limits to Newfoundland fishermen. They want to know when that area is going to be off limits to the French fleet. I
February 16, 1987

ask the Acting Minister of Fisheries and Oceans, in view of the fact that another French factory freezer trawler was turned away this morning from St. Pierre because of overfishing, when is the Government going to live up to what this Minister said in this House on Friday, that he was going to get tough with the French, not with Newfoundlanders? Is this the Minister the Premier of Newfoundland was referring to when he said he was being leaned on from Ottawa? This Minister is certainly up to it.


Hon. John C. Crosbie (Minister of Transport):: Mr. Speaker, as for getting tough with the French, or France, the hon. gentleman might have noticed over the weekend that the St. Pierre trawler which was brought into port at our direction has pleaded guilty and has been fined for overfishing. That is an example of being tough.
We have advised France of our policy that we will close Canadian ports if it overfishes in the area of 3PS, which we think it is now doing. That is a lot tougher than the French were used to from the previous administration.


Mr. Broadbent:: Holy gee, I can't stand it.


John Carnell Crosbie: The NDP can't stand it, it can't stand the truth. That is what the NDP can't stand.
With respect to the notice, alluded to by the hon. gentleman, to Newfoundland or Canadian fishermen about 3PS, that applies to new entrants. If we want the world to observe what we think are safe conservation limits, then we have to observe them ourselves. Therefore, that applies to new entries in 3PS for this particular year.
With respect to "leaning", I believe it is very difficult to lean on the Premier of Newfoundland, he moves very quickly. The hon. gentleman might think there is some reverse leaning going on here-


Some Hon. Members:: Time.


John Carnell Crosbie: Might the Premier of Newfoundland have made some request of this Government which he thinks might not be accepted, and therefore he is performing a double reverse leap?


FORTHCOMING CABLE TELEVISION PROGRAM IN NEWFOUNDLAND
George Baker: This Minister, who says he is not leaning on Newfoundland, is paying for an advertising campaign tomorrow to advertise a province-wide television program tomorrow night coast-to-coast in Newfoundland, starring none other than this Government's answer to "the Incredible Hulk", the Minister of Transport.


Some Hon. Members:: Hear, hear!


George Baker: Is the Minister by chance going to reveal the results of his investigation during this State of the Union Address as to who was responsible for the signing of the most
Oral Questions
recent Treaty of Paris, to which the Newfoundland Government was not invited?


John Carnell Crosbie: Mr. Speaker, with reference to the television show, it is a cable show, News Focus-it is on Tuesday night at 8 p.m. and next Sunday morning at 11.30 a.m.

in which the facts will be given, for example, that cod stocks permitted to France this year have been reduced by 14,000 tonnes, not increased as some people have been claiming. The truth travels slowly but will reach even hon. gentlemen across the aisle in time.


CANADA-UNITED STATES NEGOTIATIONS-AUTO PACT INQUIRY
John Edward Broadbent: Mr. Speaker, my question is for the Minister for International Trade. The Minister is probably aware that in today's The Financial Post there is an article which states that the United States trade negotiators are preparing a comprehensive package to make changes to the Canada-U.S. automotive agreement, described by one of the spokespersons for the automotive industry in the following terms:
Under what's being suggested, the auto pact would be not much more than a shell.
Is the Minister aware of this? In particular, is she aware of the proposal to reduce the Canadian content requirement from 50 per cent to 35 per cent?


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, we have said in the House on many occasions that the Auto Pact is working well and that we do not propose to put it on the table. We have also said that should the Americans have any plans which would increase employment in Canada and be to our benefit, we would look at them. Is the Hon. Member repeating the argument that he has made in the House before in which he has said that the Auto Pact requires major modification and that a systematic and comprehensive revision of the pact is required? Is he making that point again?


POSSIBLE TARIFF REDUCTION
John Edward Broadbent: Mr. Speaker, if the Minister reads the whole speech to which she has referred she would discover that I was talking about increasing the safeguards, not about reducing them, in terms of Canadian interests. I would like to ask the Minister to deal with the future and not the past in this context.


Some Hon. Members:: Oh, oh!


Mr. Clark (Yellowhead):: That is as clear as you are on NATO.

February 16, 1987
Oral Questions


John Edward Broadbent: I would be happy to debate that issue or any other with the Secretary of State for External Affairs.
Will the Minister check with her U.S. counterparts to see if there is a proposal to reduce the Canadian content requirement to 35 per cent?
Even more alarming, I have learned that one of the related proposals that Mr. Murphy will be putting on the table is to reduce the tariff between Canada and the U.S. in the automotive sector from 9 per cent to 0 per cent. Is the Minister aware of this? If she is aware of it will she comment on the implications of it in terms of investment in Canada?


Pat Carney: Mr. Speaker, Ambassador Reisman is in negotiations today with his U.S. counterpart. I have not been made aware of any of the proposals to which the Hon. Member refers. I can only say that he himself recently said that there is nothing wrong with Ambassador Reisman getting changes to the pact that would increase employment in Canada. Is the Hon. Member changing his mind on that point?


John Edward Broadbent: Instead of reading her briefing notes I wish the Minister would actually listen to the question and answer it.


Some Hon. Members:: Oh, oh!


CANADIAN POSITION
John Edward Broadbent: Mr. Speaker, will the Minister give us assurances that the Canadian content requirements for investment will not be reduced and that the Government will not sanction cutting the tariff from 9 per cent down to 0 per cent because that tariff mechanism ensures that we get Canadian investment?


Pat Carney: Mr. Speaker, I think that if the Hon. Member can read press reports I am entitled to read my briefing notes which, again, specify that the Hon. Member, in the House, has called for a major modification of the pact.


Derek Nigel Ernest Blackburn: Answer the question.


Pat Carney: I am asking him again: Is he against any provisions in the Auto Pact which could increase employment in Canada?


Ms. Mitchell:: Pretty poor, Pat.


Pat Carney: The only people who are bringing the Auto Pact out on the table are members of the New Democratic Party and the Liberal Party.


THE ADMINISTRATION
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, I would like to get back to the parties at $5,000 a head attended by the Minister, the Hon. Member for Joliette. The Prime Minister said that he was informed of the facts in January 1986, that he asked the Secretary to the Cabinet to request an investigation by the RCMP, following which criminal charges were laid against a Member of this House. However, we all know that the RCMP has no jurisdiction over who may sit in Cabinet. I therefore wish to ask the Prime Minister whether he acted responsibly and had discussions with the Minister his investigation to determine whether he was still in a position to perform his duties as Minister of the Crown. Will the Prime Minister finally answer this question?


An Hon. Member:: 
An Hon. Member:: Silence.


Jacques Guilbault: The Prime Minister has systematically refused to answer this question. Even though the Minister may or may not be the subject of an RCMP inquiry, the Prime Minister still has the responsibility to ascertain whether the Minister has broken the rules of ethics that are expected of Ministers.
I wish to ask the Prime Minister if he has done that, and if he can tell us whether the Minister is still fit to remain in the Cabinet?


Right Hon. Brian Mulroney (Prime Minister):: The Hon. Member says that the Prime Minister has systematically refused to answer the question. That is an absolute falsehood. I have answered all of the questions in regard to this matter that were raised on Friday. I indicated then, and I tell my hon. friend now, that pursuant to the complete answers that I provided on Friday, if he has any information other than smear or innuendo that he would like to raise against a Member of this House, let him summon the courage to make a direct accusation and it will be dealt with.


Some Hon. Members:: Hear, hear!

February 16, 1987



Ms. Lynn McDonald (Broadview-Greenwood):: Mr. Speaker, my question is directed to the Prime Minister who ought to know that Canadians want this Government to put an end to every kind of corruption and conflicts of interest.
Can he not find time to broaden the public tender system and eliminate every kind of political pressure on this system? Will the Prime Minister assure the House that the Government will introduce amendments to the legislation and attendant regulations so as to eliminate any possibility of corruption and conflicts of interest?


Martin Brian Mulroney: Mr. Speaker, if the Hon. Member has an example of corruption, let her bring it to the attention of the House. I said Friday that after I was made aware of certain disturbing allegations I immediately launched an RCMP investigation. Should the Hon. Member find this unsatisfactory, let her indicate new evidence and, of course, I will act as quickly.
As to the tender call process, as far as I know it was under public service administration, in accordance with the law and management practices. Here again, if the Hon. Member is aware of new facts which contradict what I have just said, she ought to bring them to the attention of this House and I will launch the appropriate investigations.


CANADA ELECTIONS ACT
Lynn McDonald: Mr. Speaker, I am sorry that the Prime Minister will not bring more contracts under the system of tendering, so that these types of situations would be less likely to arise. But I have a very specific question about another way that we could head off problems by cleaning up the system and avoiding the temptation that companies have to try to get a contract through influencing a political Party. Will the Prime Minister bring in amendments to the Canada Elections Act to forbid all donations from corporations to political Parties?


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: Mr. Speaker, the Hon. Member in her first question began by alleging, and suggesting the existence of some corruption. When challenged to produce any evidence, the Hon. Member
Oral Questions
now shifts the attack to suggest that the corruption is induced by the Canada Elections Act, for which her Party voted in 1974.


Lynn McDonald: My question related to the system of tendering.


Martin Brian Mulroney: If the Hon. Member is now suggesting that contributions should be eliminated for corporations, that is something that I would be happy to look at. Presumably the Hon. Member would also want contributions banned from unions.


John Edward Broadbent: We will look at both right away.


Mr. Hees:: How about that, Ed.


John Edward Broadbent: We will do it tomorrow, both of them tomorrow.


Michael Morris Cassidy: Do it now. You have opened the doors. Clean up your act.


Mr.   de Jong@: Go for it.


Mr. Speaker:: Order, please. I am sure that all Hon. Members will realize that it is the opportunity for the next Member to put a question.


THE ADMINISTRATION
Don Boudria: My
question is directed to the Prime Minister. In the package of information that was given to me last week by the Deputy Minister of Public Works, there is a memo dated March 20, 1986, which states, "As the total annual cost of the submission does not exceed $200,000 the submission does not require Treasury Board approval." This is referring to the Drummond-ville-Brodilaf affair. It further states that because of the sensitivity of this project "would like to see Minister approve the submission".
My question to the Prime Minister is this. Why was the Treasury Board or the political level involved when there was no requirement to do so? Second, is it not true that the sensitivity referred to in the Public Works internal memo is the political interference by several prominent Tories who wrote correspondence and made phone calls that they should not have made concerning this whole contract?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, the reason why the Treasury Board was involved is very simple. The amount of the contract exceeded the limits that were delegated to the Department of Public Works. This was a five-year contract, and the Hon. Member is citing a one-

February 16, 1987
Oral Questions
year number. In looking at the contract over five years, it definitely has to be approved by Treasury Board. It was done so following the normal procedures. There is nothing unusual there.


REQUEST FOR EXPLANATION CONCERNING BRODILAF-HAMA AFFAIR
Don Boudria: Mr. Speaker, the officials who wrote these memos must feel they are being attacked by the Minister who is accusing them of not telling the truth in their papers.
On Wednesday and Thursday last week, the Minister of Public Works said in the House-


Mr. Speaker:: Order, please. I think that the Hon. Member is suggesting in his preamble that Ministers have not told the truth to public servants. I may have misunderstood it, but I hope that is not what the Hon. Member said.


Don Boudria: I am sorry, Mr. Speaker, but that was not at all what I said. I will rephrase the question.

On Wednesday and Thursday last week, the Minister of Public Works said in the House that all things considered, the Brodilaf bid was the best one. How can the Government reconcile this with what was said by the Hon. Member for Joliette in a letter I have here, and I quote:
These costs amount to over $100,000, and if we consider the economic analysis. Brodilafs bid is $13,000 higher per year than the bid by Hama Inc.


Mr.   La Salle@: Insulation costs.


Don Boudria: Who was telling the truth? The Hon. Member for Joliette or the Hon. Member for Halifax?


Hon. Monique Vezina (Minister of Supply and Services):: Mr. Speaker, the Minister of Public Works told the House repeatedly that Brodilaf was awarded the contract because it offered the best value for Canadians. Considering access for the handicapped, the location and parking facilities, the bid was the best value for Canadians.


Mr.   La Salle@: You are talking through your hat.


Mr. Rodriguez:: Watch your heart, Rocky.


REGIONAL DEVELOPMENT
Michael Morris Cassidy: Mr. Speaker, my question is directed to the Prime Minister. Despite the fact that unemployment in seven provinces is higher today than it
was at the height of the recession in 1981-82, the Prime Minister on the weekend was quoted as telling the Sept-Iles Municipal Council, "that the coming federal Budget will be 'thin' in terms of regional development-"
Why are we receiving such a clear signal from the Prime Minister that little will be done for regional development in the Budget when the message that the Government gave in its Throne Speech last October was, "that regional disparity remains an unacceptable reality of Canadian life"?


Martin Brian Mulroney: Mr. Speaker, perhaps the Hon. Member could identify who is alleged to have reported that statement. Perhaps the Hon. Member could tell the House who indicated that. I have often said across the country that one of the problems with our very impressive degree of economic growth where hundreds of thousands of jobs have been created, where interest rates are down, where foreign investment is up, is the fact of imbalance and hence unfairness for some of the regions of Canada. What we are trying to do in the interior of British Columbia, or for eastern Quebec, or Cape Breton, is to equalize opportunities, so that a greater sense of fairness in the distribution of this new wealth and prosperity can be realized.


THE BUDGET AND REGIONAL DEVELOPMENT-UNEMPLOYMENT IN CERTAIN REGIONS-GOVERNMENT POSITION
Michael Morris Cassidy: Mr. Speaker, the source of the quote the Prime Minister referred to, according to which the Budget would be big on regional development, was the mayor of Sept-Iles, Mayor Dion, who said this after a meeting with the Prime Minister on the weekend. I want to ask the Prime Minister: since the unemployment rate in Sept-Iles is over 15 per cent and the unemployment rate in the riding of the Minister of Finance is only 5 per cent, why is the Prime Minister giving every indication that the Budget will meet the needs of Etobicoke and not of the people of Sept-Iles and all unemployed Canadians in this country?


Martin Brian Mulroney: Mr. Speaker, they are attacking the people of Etobicoke, and at this point, Mr. Speaker, I would like to point out, with respect, the monumental hypocrisy of the opposition Parties. They are right when they refer to an unemployment rate of 15 per cent, in some cases 25 per cent, in the riding of Manicouagan. When the Canadian Government intervened to provide relief for the people of Port-Cartier by building federal facilities, the Opposition complained about the Federal Government's intervention. Today, you are asking me to do more. Hypocrisy is rife among the New Democrats and the Liberals. Let them make up their minds, once and for all.
February 16, 1987


REFUGEES
[Stage Direction]
Oral Questions
system. That is being looked at now, and an announcement will be made in due course.

Mr. John Oostrom (Willowdale):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. In an address to West European countries, including Canada and Australia, Switzerland appealed for the implementation of a co-ordinated refugee policy which would prevent false asylum seekers, a situation which is being aggravated by the Tamils, the Turks, and the Ghanaians. Will Canada participate in the Swiss initiative and formulation of a much tighter refugee policy which will prevent the abuse that has taken place? Could he also tell us whether the Department of National Defence has been asked to survey our coast for any other Tamils coming into the country?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Yes, Mr. Speaker, we are now witnessing a very large influx of refugees or people claiming refugee status in this country, not only from Sri Lanka but especially from South America. We are now examining the situation and, hopefully, very soon I will be able to implement a number of measures which will allow us, and I stress this, to review the case, not of applicants who legitimately seek refugee status in Canada, but of others who for all sorts of reasons may be abusing the system. And I maintain, as I have been saying for two months, that we expect to introduce legislation in March which will make it possible to consider the whole situation as it has evolved on the international scene in recent months, all the while respecting our principles concerning refugee acceptance.


RAILWAYS
Mr. Maurice Foster (Algoma):: Mr. Speaker, my supplementary question is for the same Minister. There have been reports that in fact the volumes of grain to be shipped will increase the amount to be charged to farmers for shipping their grain by about 50 per cent, from about $6 to $9 per tonne. Is the Minister prepared to bring in legislation or take other action to ensure that the freeze is maintained at present shipping rates?


John Carnell Crosbie: Mr. Speaker, whatever action we can take-and I do not believe that a legislative change is necessarily needed-to keep the transportation rate for grain down, we will naturally take. As to what it will finally end up at, it is too early to know.


DEPARTMENT OF EMPLOYMENT AND IMMIGRATION
Pauline Jewett: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. At a time when the rate of unemployment in British Columbia is among the highest in Canada at 15.3 per cent in January, and when the unemployed need the services of Canada Employment Centres more urgently than ever, the Government has laid off 105 staff members in Canada Employment Centres in the British Columbia and Yukon Territories region. In view of the tremendous hardships these lay-offs have created, both for the unemployed and for the remaining staff, will the Minister act immediately to reverse this stripping of essential services and staff in the Canada Employment Centres?


GRAIN FREIGHT RATES
Maurice Brydon Foster: Mr. Speaker, my question is for the Minister of Transport. The Government promised to freeze western grain freight rates in the last general election, and this coming year we will be facing some of the lowest grain prices of the last 50 years. Could the Minister assure western farmers that he will keep the freeze on grain freight rates in the coming crop year?


John Carnell Crosbie: Mr. Speaker, the Minister can assure western grain producers that the rates for moving grain will be kept as low as humanly possible in the coming crop year. We have just received the revised report from Mr. Horner on the whole question of rates for moving grain and various facets of the grain-handling


Benoît Bouchard: In the past few months, Mr. Speaker, the Department of Employment and Immigration has set up what we call a revitalization process. Indeed there was a rationalization of resources, but I am not prepared to admit-First we ought to check the figures the Hon. Member gave concerning British Columbia. According to the information I have the rate of personnel replacement is at least 75 per cent in British Columbia and in other provinces. There have been staff reductions, and services have been combined in certain cases. As I said, we will check the figures, if the Hon. Member does not mind. I am certainly not prepared to admit that the quality of services to Canadians might have been affected by rationalization, either in British Columbia or in the other provinces.
3470

February 16, 1987
Oral Questions


EFFECT OF LAY-OFFS
Pauline Jewett: Mr. Speaker, would the Minister look into the enormous number of complaints which have come in about servicing and about the very high degree of overtime work which is required of the remaining staff? Before he comes back to me on this, will he also look into the proposal to lay off 132 more staff members, particularly in connection with claims, in 1987?


Benoît Bouchard: Mr. Speaker, 132 lay-offs do not sound right to me because the Department of Employment and Immigration did not proceed with massive lay-offs, except perhaps to replace what we in the trade call undetermined staff, meaning permanent employees. Contract employees are more directly affected. Working conditions are defined at the outset, and many of those people will be reintegrated within employment centres. We will look into this matter, but I think that generally speaking, on the basis of available resources, employment centres offer the same service quality as before.


EXTERNAL AFFAIRS
John V. Nunziata: Mr. Speaker, my question is for the Secretary of State for External Affairs. It concerns the extradition treaty between Canada and India which was recently signed. Canadian Sikhs have been critical of the fact that there was no prior consultation before the treaty was signed. In view of the general promise of the Government to consult with Canadians before decisions are taken, could the Minister explain why there was no meaningful consultation with the Canadian Sikh community prior to his visit to India to sign the treaty?


Charles Joseph Clark: Mr. Speaker, it has not been the practice under Governments of any Party in this country to conduct consultations of that kind prior to the signing of a treaty of that nature. If there are misapprehensions among members of the Sikh community in Canada with regard to the extradition treaty, I am sure that a careful reading of that treaty will relieve those false apprehensions. That treaty is the first of a new generation of extradition treaties in Canada which incorporate fully the protection set out for Canadian citizens under the Canadian Charter of Rights.


RIGHTS OF CANADIAN CITIZENS
John V. Nunziata: Mr. Speaker, the Minister knows that the Canadian Sikh community is also
concerned about potential abuses of this particular extradition treaty. In view of the Draconian National Security Act of India which permits preventive detention for up to two years without trial or charge, what assurances can the Minister give to the Canadian Sikh community that the extradition treaty will not be abused and that the rights of law-abiding Canadian citizens will be maintained?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, I think two things would help. One, it would be very helpful if all Members of the House of Commons, knowing the sensitivity that might exist with regard to this treaty, troubled themselves to read it and to ensure that there were no false impressions in the Canadian community as to the implications of the treaty. Our duties certainly should be to create and to calm any fears in the country rather than to excite them falsely.
Two, there are a range of quite extraordinary safeguards in that treaty repeating the language of the Canadian Charter of Rights, guaranteeing that a matter must be brought to trial within six months after an extradition takes effect, guaranteeing the right of the Minister of Justice of Canada, even if the Supreme Court of Canada might decide that an extradition could proceed, to make the decision that extradition would not proceed. There are plenty of safeguards. I hope Members of Parliament will assure citizens of Indo-Canadian origin of that fact.


ABORIGINAL RIGHTS
Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, my question is for the Prime Minister who in some five weeks will be chairing the First Ministers' Conference on Aboriginal Rights. He will be aware that at meetings preparatory to that conference aboriginal leaders have expressed the concern that the federal Government may not be taking the requisite leadership with the provinces in this the last scheduled conference.
Will the Prime Minister stand in the House today and assure this House and the aboriginal people of Canada that the federal Government will be taking the leadership position, and specifically outline what steps his Government has taken to ensure the success of this last scheduled First Ministers' Conference on Aboriginal Rights?


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada):: Mr. Speaker, if I may be permitted to answer that question on a very important issue for a great number of Canadians, the Prime Minister's commitment to this process is one which is well known across the country and in the aboriginal community. The Hon. Member will know
February 16, 1987

that we are engaged now in a series of meetings with Ministers and with representatives of aboriginal groups. The next meetings will take place this Thursday and Friday in Toronto, at which time we will want to examine a very full slate of options with respect to getting a constitutional amendment to articulate the proper hopes and aspirations of the aboriginal people. You can rest assured, Mr. Speaker, that the federal Government is giving leadership and will be working hard to accomplish this end.


CONTENT OF PRESS REPORTS
John Edmund Parry: I have a supplementary question, Mr. Speaker. Will the Government assure this House and the people of Canada that press reports are false that the Government has a damage control strategy, if the talks should fail, of blaming aboriginal leaders, and that no such strategy is contemplated by the Government?


Ramon John Hnatyshyn: Mr. Speaker, only a member of the New Democratic Party would talk about damage control in terms of matters that are to happen in the future. I can assure the Hon. Member, and with every justification, that we are working very hard. I want the Hon. Member to remember one thing. In order to have constitutional change in this country it is necessary to have seven provinces representing 50 per cent of the population in accord with respect to an amendment to the Constitution. We have been working day and night in order to accomplish this constitutional change. We will not be deterred from our objective.


EMPLOYMENT PROGRAMS-GOVERNMENT FUNDING
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, I have a question for the Minister of State for Youth. Last week the Minister of State for Youth sent us this fancy booklet entitled Hot 100 setting out various government programs for youth, most of which existed prior to 1984. In the Minister's covering letter he said that the booklet is a "clear demonstration of the Government's commitment to youth". How can the Minister pretend that this booklet demonstrates a serious commitment to youth when the youth unemployment rate is 14.4 per cent, and since 1984 the Government has cut over $200 million from youth employment programs? When will the Minister make a serious and real commitment to youth and re-introduce those moneys for a new First Chance program or Katimavik?
Hon. Jean J. Charest (Minister of State (Youth)):: First, I would like to say that I had the opportunity to show this booklet to many Canadians last week all over the country, in Winnipeg, Hamilton, and Toronto. The book is very popular.
Oral Questions


Some Hon. Members:: Hear, hear!


Jean J. Charest: In fact, on a lot of days I felt like a Liberal selling my memoirs.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Jean J. Charest: I also had the opportunity last week to say that what we are trying to implement is very important and fundamental change, that we are fighting the dinosaurs who are fighting for the past-and the Hon. Member wins first prize today.


Some Hon. Members:: Oh, oh!


REQUEST FOR GREATER EFFORTS TO RELIEVE YOUTH UNEMPLOYMENT
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, do I understand correctly that the Minister is satisfied with a youth unemployment rate of 14.4 per cent and with his public relations program? If indeed the Minister is so concerned about youth problems, why did he slash this year's Challenge '87 budget to the tune of $30 million?
Jean J. Charest: Mr. Speaker, in 1983 when the unemployment rate among students returning to school was about 17.9 per cent, his Government spent-


Mr. Allmand:: Your program today, what is it?


Jean J. Charest: -the Government then in office spent roughly $170 million, whereas we, at a time when the unemployment rate among students going back to school was about 13 per cent last year, will be spending some $180 million this year. There is the difference.
And if my colleague really wants to know, first we did admit in the Speech from the Throne that youth unemployment was too high, despite the fact that it decreased by 4 per cent since we took office and, second, the book was published because a lot of young Canadians have been regularly complaining that federal programs were neither condensed nor accessible. This is the only reason why this extremely popular booklet was published, and I urge all young Canadians to get a copy.


CANADA POST CORPORATION
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, I have a question for the Minister answering for Canada Post. I

February 16, 1987
Oral Questions
have just returned from a small rural community in Alberta called Devon. The people there have a message for the Government, namely, that a post office in a rural community is a part of the fabric of community life and that the planned closures of hundreds of rural post offices will tear up that fabric. When will the Government recognize the role of rural post offices? When will the Government change the post office plan and put a stop to the planned closures? When will the Government stop treating rural Canadians as second-class citizens?


Hon. Bill McKnight (Minister of Indian Affairs and Northern Development):: Mr. Speaker, as a rural Member within Cabinet, I can carry that message to the Minister responsible for Canada Post very capably, and I can assure the Hon. Member that I will do that.


DESIRE THAT RURAL RESIDENTS RECEIVE BETTER ATTENTION
Cyril Keeper: Mr. Speaker, rural Canadians want more than just words. They want action.
Is the Government prepared to ask the Committee on Government Operations to travel across this country and listen to people in rural areas, and is it prepared to put on ice its plan to close rural post offices?


William Hunter (Bill) McKnight: Mr. Speaker, I will pass that representation on to the Minister responsible for Canada Post.


CANADA-UNITED STATES NEGOTIATIONS-AUTO PACT INQUIRY
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, my question is for the Minister for International Trade. In a report that appears in today's Financial Post it is clear that while Ambassador Murphy has had discussions with Ambassador Reisman from our side, Ambassador Murphy does not intend to present formal proposals until sometime in March or April. If it is not the appropriate time today in this Question Period for the Government to state clearly that Ambassador Murphy really should not bother wasting his time presenting proposals because the Government has absolutely no intention to negotiate any aspect of the auto trade, can we have a clear and unmistakable statement from the Minister on that particular issue that we will not negotiate the Auto Pact?


Pat Carney: Mr. Speaker, the Hon. Member has confused two things, both of which have been addressed in the House. He has confused the Auto Pact and automotive trade. We have always said that we
have no reason to open up the Auto Pact and that it is working well. We have always said that if the Americans have proposals that would enhance Canadian production, jobs or trade, we would listen to them, but if they would have an adverse effect on our production, we would not be interested. We have also said that the whole issue of automotive trade, which involves many issues outside the Auto Pact, is of course something that is open for discussion. The Hon. Member cannot straddle the fence on this. He must either ask us to put the Auto Pact on the table or stop raising the Pact in this House.


Lloyd Axworthy: Mr. Speaker, I just want to say to the Hon. Minister that when it comes down to the question of the auto trade in North America, it is the Auto Pact that is at the centre of that trade. If the Minister for International Trade does not understand that, then God help this country in those negotiations.


Mr. Speaker:: Order, please. The Chair tries to be benevolent toward the end of Question Period but I would ask the Hon. Member to put his question and to put it directly.


GOVERNMENT POSITION
Lloyd Axworthy: Mr. Speaker, I would be glad to put the question again. The Minister for International Trade has just made the shocking admission that they are now prepared to discuss the whole issue of automotive trade. Will the Minister clearly reject, here and now in this House, negotiation of the Auto Pact during the Canada-U.S. free trade discussions? Just say yes or no.


Pat Carney: Mr. Speaker, this is clearly a Liberal-NDP coalition. I cannot be any clearer than to say that we will not propose the Auto Pact but, as Ambassador Murphy says, every time the Liberals and the NDP talk about the Auto Pact, they are doing his job for him.


MINES AND MINING
John Alexander Frances MacDougall: Mr. Speaker, my question is for the Minister of State for Forestry and Mines. Last weekend the Leader of the NDP was in my riding. He has always said that he is concerned with jobs, jobs, jobs. Even though members of the NDP are so against flow-through shares and the thousands of jobs they will create and have already created, what representations has the Minister heard across the country from the mining sector and others?
Hon. Gerald S. Merrithew (Minister of State (Forestry and
Mines)): Mr. Speaker, we were certainly surprised by the tone of the debate of the Hon. Member for Ottawa Centre who
February 16, 1987

indicated that flow-through shares seemed to benefit only those people who are rich or wealthy. I can tell the House that from representations we have received from the mining community, people in the exploration field, junior mining companies and town councils in the North, it is seen that benefits accrue to the people of the regions of Canada, and we think that is pretty important.


FEDERAL-PROVINCIAL RELATIONS HIBERNIA PROJECT-FUNDING INQUIRY
John R. Rodriguez: Mr. Speaker, my question is for the Prime Minister and has to do with the appearance of Premier Peckford on CTV's Question Period program yesterday. At that time the Premier expressed concern that Newfoundland might be retaliated against by the federal Government because of his opposition to the France-Canada fish treaty. Can the Prime Minister give the assurance to the House that the federal Government will not hold back federal money for the Hibernia project because of Premier Peckford's opposition to the France-Canada fish treaty?


Martin Brian Mulroney: Mr. Speaker, I am very sorry I missed the appearance of Premier Peckford on CTV yesterday.


John R. Rodriguez: It was very good.


John Edward Broadbent: You can get a re-run.


Martin Brian Mulroney: I will arrange for a re-run this afternoon. Yesterday I was in Cape Breton, the Government having resolved a very important matter for Sysco involving all Cape Breton Islanders, and I was opening the Canada Games. I think my hon. friend would approve of that.



ROUTINE PROCEEDINGS


Mr. Speaker:: It is my duty pursuant to Section 9 of the Representation Act, 1985, Chapter 8, Statutes of Canada, 1986, to lay upon the table a certified copy of the 1987 report of the Electoral Boundaries Commission for the Province of British Columbia.
Pursuant to the Act, this report is deemed to have been referred to the Standing Committee on Elections, Privileges and Procedure.
Tele globe Canada


POINT OF ORDER
Michael Morris Cassidy: Mr. Speaker, I rise on a point of order arising out of Question Period. I just want to draw your attention, Mr. Speaker, to the fact that the Hon. Member for Timiskaming (Mr. MacDougall) and the Minister were using Question Period in order to put on the record some misleading statements with respect to the flow-through share question. I will be happy to talk with them about it outside the House but they should understand-


The Acting Speaker (Mr. Paproski):: I do not consider that to be a point of order.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-38, an Act respecting the reorganization and divestiture of Teleglobe Canada, be now read the second time and referred to a legislative committee, and the amendment of Ms. McDonald (p. 3435).
The Acting Speaker (Mr. Paproski):: When the House rose at one o'clock, the Hon. Member for Saskatoon East (Mr. Ravis) had the floor. Would those who are having conversation please go behind the curtains. The Chair would like to hear the speech of the Hon. Member.


Donald Paul Ravis: Mr. Speaker, I will take only a few minutes to conclude my remarks. This morning, I had just finished reviewing a number of examples of privatization in Saskatchewan, Canada, East Africa, the United Kingdom and China. I would like to conclude on that point.
I believe that a three-month hoist on this particular issue would be absolutely ridiculous, because stalling the privatization process would mean giving up one of the principal tools available to the Government to reallocate resources to those people in need during this time of high deficits. We know that there are many people across Canada today who are asking for assistance in the area of child care. I certainly understand, as I am sure you do as well, Mr. Speaker, coming from Alberta, the dilemma facing the agricultural sector today because of competition from competitors in Europe and the United States. Many, many other people are asking for some assistance from the Government. It seems to me that it is very important that we allocate our scarce resources as best we can.
The three-month hoist would increase the need for the Government to either cut other vital government programs,

February 16, 1987
Teleglobe Canada
raise taxes ever higher or let the deficit become a bigger problem for the next generation. I think it is up to us to face up to the deficit we have today and not to pass it on to our children and grandchildren.
I would like to ask opposition Members where they would cut. Should we allow Crown corporations-and not necessarily Teleglobe which has had a good record-to go on spending more money than they take in or should we call a halt to this process? I would be interested in asking the President of the Treasury Board (Mr. de Cotret) just how many millions the Government has already saved by divesting itself of some Crown corporations over the last two and a half years. I would suspect it is a substantial amount of money.


Mr. Thacker:: Hundreds of millions.


Donald Paul Ravis: Hundreds of millions? That would not surprise me. Perhaps the Opposition's answer is to let the debt spiral continue and forget about deficit control. That would not be surprising because that is the practice they followed for some 15 years when they were in Government. If we followed that practice we know what would happen. The dollar would start to fall like a runaway car going downhill until the brakes were applied. Those brakes would come in the form of higher interest rates which would undo all the good we have achieved to date.
Interest rates are at a 13-year low and the dollar does not need to be propped up as it was during the Liberal years. Then the Government tried to be all things to all people. It tried to keep everyone satisfied by trying to help business corporations who did not make good business decisions. It tried to save people's jobs, not on the basis of sound business practices but very often for straight political gain. I suggest all Canadians want us to stop and think about a new approach to the problems that have developed, at the root of which are the spending and borrowing practices of previous Liberal Governments.
The opposition Parties are being very critical of our divestiture plans. I ask them what is their solution? I am confident that when we hear their alternatives, if there are any, all Canadians will stand behind this legislation and the privatization process.
Thank you, Mr. Speaker, and I look forward to answering any questions from the Opposition or members on the government side.


The Acting Speaker (Mr. Paproski):: Questions or comments?


Ian Gardiner Waddell: Mr. Speaker, I want to ask the Hon. Member a question with respect to the issue of the three-month hoist. The Financial Post reports today that a cloud was cast over the Teleglobe deal when the Toronto and Montreal Stock Exchanges announced they would be investigating the
unusually heavy trading in Memotec's shares in the days preceding the Minister's announcement. On February 5, the very day CDIC recommended to the Minister that Memotec's bid be accepted, trading in the stock was suspended because of a $2.38 price run-up. The company then quickly announced its interest in Teleglobe. Given that those investigations are going on, does the Hon. Member not think it would be appropriate to not hurry this thing through but wait for the three months until the investigation has been completed and the dust has settled on this deal?


Donald Paul Ravis: Mr. Speaker, I certainly am aware of some of the allegations made regarding possible insider trading. At this time no one knows whether information was leaked or whether this trading was purely speculation on the part of some individuals. I would suggest most of those individuals would be traders in the stock market who may have speculated in the other companies who were potential buyers of Teleglobe. I certainly would like to see it cleared up, and the investigation is going on. I suspect it will take a matter of days, not months, until the issue is cleared up. All of these transactions are on computer and I think we will have the answers very shortly.


Ian Gardiner Waddell: Mr. Speaker, I appreciate that answer and I will point out, as the Hon. Member would want me to, that the week before The Financial Post did mention Memotec as a long shot possibility. So people could have speculated on that. However, people are asking me another question, to be quite frank, and I would ask the Member to comment on this.
There are allegations that the Government gave a contract for an employment office in Quebec to its friends, some Conservatives, rather than the Liberal bidder. Quebec businessmen apparently paid $5,000 to attend a party or a dinner around the pool with the Minister who was responsible for giving out government contracts. As a result, as the Prime Minister (Mr. Mulroney) admitted in the House, a Member of this House has been charged. There are allegations with respect to skimming off money in the Oerlikon deal. I want to ask the Member, how do we know-


John Napier Turner: Order. You cannot prove that.


The Acting Speaker (Mr. Paproski):: I would hope the Hon. Member would be relevant to this Bill.


Ian Gardiner Waddell: Yes, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Saskatoon-


Ian Gardiner Waddell: Let me finish the question.


The Acting Speaker (Mr. Paproski):: I thought that was the question.


Ian Gardiner Waddell: No, I was just getting to the end of it.
February 16, 1987


The Acting Speaker (Mr. Paproski):: All right, the Hon. Member for Vancouver-Kingsway (Mr. Waddell).


Ian Gardiner Waddell: Mr. Speaker, the question I am asking is how do we know that there are not some so-called friends of the Government involved in this deal as well? That is the question people are asking me. Would it not be better to have these investigations by the stock exchange completed and the dust settle on this deal so it can be examined, rather than hurrying it through? It was a great surprise to Memotec that they were accepted; would it not be better to wait for three months?


Donald Paul Ravis: Mr. Speaker, I was wondering when the socialists were going to come up with the muck and it did not take very long. The allegations we have been hearing in this House for the last couple of weeks have been absolutely sickening as far as I am concerned. This is another example of the NDP wanting to take advantage of innuendo, do some muck-raking, and try and make it look like something is going on under the table. On Sunday night, I believe it was, I saw a very interesting documentary on the Global Television Network. It looked at a lot of these allegations. Finally there was an objective view of what has been happening. It is one thing to say that there is an allegation against the Government, but it is another thing to come up with proof. Question Period today was a prime example of people being unable to come up with any specifics, and what the Hon. Member has said is another classic example. The Hon. Member suspects members of the Government may have profited from the Memotec deal. That is absolute nonsense. We should not even be considering that. We should let the investigation by the stock exchanges continue and I am sure the results will be provided in a couple of days.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate.


James Douglas Manly: Mr. Speaker, I am pleased to be able to make a few comments on Bill C-38, the privatization of Teleglobe, because this is a very important issue for my constituency. We have the earth satellite station in my constituency at Lake Cowichan. I remember visiting the site a few months ago and was very impressed with the technology which represents Canada's share in international satellite communications. The links with other countries around the Pacific are very impressive and up-to-date and it is all there in the earth station at Lake Cowichan.
However, I also met with employees and they were very concerned about the proposed privatization of Teleglobe. They were very concerned about job security, working conditions, pensions and so on. I was very pleased that the Minister gave assurances on Friday that the pension plan would be protected, that the collective agreement was going to be protected, and that the interests of the workers were being looked after in the sale of Teleglobe. That is very important. I am very pleased that this particular concern has ostensibly been looked after.
Teleglobe Canada
Of course, our representatives on the committee will be studying this protection in some detail when the Bill goes to committee, if the Government pushes it through.
Employee concerns about jobs are very legitimate. There has been a tradition in North America and other western nations of recognizing the rights of capital investment, but we are sometimes rather slow in recognizing the rights of employees to a stake in their jobs. Often their jobs have been sold right out from under them. That has happened in some situations of privatization. It is good that in this particular case the principle that workers have a stake in their jobs was recognized.
While I was pleased that there was that protection for the rights of workers, that does not eliminate my major concern about this Bill which privatizes Teleglobe. It is important to try to see the issue in context, the context basically being the Conservative's ideological fixation with privatization. In the Budget Papers of May, 1985, we read:
In the process of rationalizing its corporate holdings in the future, the government will adopt a new approach based on the premise that a Crown corporation or other equity investment should be sold unless it is fulfilling a public policy purpose. This way, the government will return to the private sector activities that more properly belong there.
I submit, Mr. Speaker, that Teleglobe, which is involved as a vital link in Canada's communications, is fulfilling a vital public policy purpose and that on that basis alone it should not be privatized.
On the next page the paper goes on to say:
Selling corporate interests will have a number of benefits. It will reduce the size of government in the economy and make room for private sector initiatives; it will improve market efficiency and the allocation of resources; it will improve firm efficiency through market discipline and by reducing political and bureaucratic impediments;
I would like to consider those. It says that it will reduce the size of government in the economy. Certainly Teleglobe is not that large a corporation, but selling it will to some extent reduce the size of government in the economy. We are dealing with an ideology that government involvement in the economy is somehow wrong. We have seen no studies which indicate the optimum size for government in the economy. How much does the Conservative Party want government in the economy to be reduced? What are the advantages of reducing government involvement in the economy? Those questions have not been answered. The Government says it will make room for private sector initiatives. I do not know what private sector initiatives will be involved in the sale of Teleglobe. It is being sold to a small company which is having a great deal of difficulty raising the money to purchase it, even at the fire sale price for which it is being sold.
The paper goes on to say that it will improve market efficiency and the allocation of resources. What market efficiency are we talking about here? We are dealing with a natural monopoly. I do not see any possibility of improving market efficiency by privatizing Teleglobe. With regard to the

February 16, 1987
Teleglobe Canada
allocation of resources, I am not sure what that has to do with the sale of Teleglobe.
The paper says that it will improve firm efficiency through market discipline. Again, Mr. Speaker, there is no market discipline in this particular case because we are dealing with a natural monopoly. The Bill itself grants an extension of the monopoly for a further five years, protected by law. Even apart from that protection of law, the nature of the enterprise means that there is not likely to be any competition. Therefore, in effect, there is no market discipline.
The paper also uses the words, "by reducing political and bureaucratic impediments". These are the kinds of code words which the Conservatives sometimes use to talk about the process of regulation. They see regulation as bureaucratic impediment to the proper operation of the market. Yet, at the same time as they are talking about privatizing Teleglobe they say that it will be regulated in the public interest, that it will be under the regulations of the CRTC. On the one hand the Conservative Party is saying that we must eliminate regulations, that they are acting as a strait-jacket for private enterprise, while on the other hand they are trying to assure the Canadian people that although something will be privatized it will be firmly regulated in the public interest. I have some difficulty with that kind of thinking.
As I look at the Government's guidelines, its statement of the purpose of privatization, I see no justification for the sale of Teleglobe, except the ideological one, that they want to reduce government involvement in the economy. It is a straight ideological decision and has nothing whatsoever to do with the pragmatic benefits which would possibly flow from privatization, as they are outlined in the policy paper.
I would like to say a little about the importance of Teleglobe. We are not talking about simply another Crown corporation which we can either have or not have, which does not really matter that much. We are talking about a very important link in Canada's communications industry. Teleglobe has responsibility for all overseas telecommunications entering and leaving Canada. It includes telephone, telegraph, cable and telex communications. It is a joint owner of submarine ocean cables and telecommunications satellite systems. On that basis it has had an effective monopoly on all overseas telecommunications.
Teleglobe has been a consistent moneymaker. It is for that reason that it has been referred to as the jewel of Crown corporations. In 1985 it recorded a profit of $53.2 million. That is money coming into the federal Treasury. The Conservatives are concerned about the deficit, as are we all. In 1985 Teleglobe brought in $53.2 million and that will happen over and over again. The Conservatives are like the rather foolish person in the fairy tale who wanted to kill the goose which laid the golden egg. When we have a revenue producer the Government wants to put it in the private market and let someone else have the revenue rather than allowing it to accrue in the public interest.
In fact, the ideological fixation of the Party which is, unfortunately, in Government at the present time seems to be the mind-set that there is only one thing worse than a Crown corporation that is losing money, and that is a Crown corporation that is making money. We are dealing here with a Crown corporation which is making money, and that is very clearly something the Government cannot stomach. It is something which has to be sloughed off to the private sector at whatever price.
In 1985, Teleglobe's total revenues were $678 million, and I will compare that later with the total revenues of Memotec, the company which is taking Teleglobe over. The former Minister, who had to resign while he is being investigated, was in charge. There was an offer of purchase and sale from British Telecom for $750 million. The Government turned that down, and rightly so. It said it did not want this vital industry to pass into non-Canadian hands, and I agree with the Government there. If it had sold Teleglobe to a non-Canadian company, I would have been very opposed, as would, I am sure, other members of my Party. However, that $750 million was a benchmark of value. It gives us some indication of what other people saw as the value of Teleglobe. But what did we finally receive for Teleglobe when it was sold to Memotec, the minnow which is trying to swallow a whale, as it was referred to by the Hon. Member for Vancouver-Kingsway (Mr. Waddell)? The Government is fudging. It indicates it sold Teleglobe for some $608.3 million, but if we look into it a little more closely, we see this is not the case at all. Of that $608.3 million, $102 million is accumulated cash which the company has on hand. There is an additional $18 million dividend. When that is subtracted from the $608.3 million, it leaves $488.3 million which Memotec is reputed to have paid for Teleglobe. Even the amount of $488.3 million does not represent what Memotec is really paying, because in addition it is also taking over debt liabilities which amount to $143 million. What this means very clearly is that the Government will only receive $345 million for Teleglobe as no actual funds will be paid for the debt. The debt is simply something which will be carried on Teleglobe's books.
The Government talks about receiving $608 million for the sale of Teleglobe when in actual fact it will only receive $345 million. I refer again to the statement I made a little earlier that British Telecom was prepared to pay $750 million. Therefore, we have a sale at approximately half of what the Government could have gotten if it had been prepared to sell at the earlier price. The question is, why is the Government making this sale? We cannot see any justification whatsoever for this except that the Government has an ideological opposition to the very idea of keeping Teleglobe in public hands. It wants Teleglobe privatized. We are very concerned about the purchase price.
In addition, we are concerned about the way in which this whole contract was handled. The previous speaker, the Hon. Member for Saskatoon East (Mr. Ravis), became a little
February 16, 1987

annoyed with my colleague, the Hon. Member for Vancouver-Kingsway, for asking about the fact that trading had been suspended on Memotec. he said that any question of insider trading was pure speculation. Perhaps it is. Perhaps it is pure speculation. We do not have the facts. There is an investigation taking place and I think we all want to see what that investigation will reveal. There are some very interesting facts which are already known. On February 5, the day the Minister was advised that Memotec had won the bid, the stocks of Memotec jumped by $2.38 a share to a value of about $13 a share on the Toronto Stock Exchange. At that point the trading was halted, but it resumed the next day. More than half the number of the total shares traded in 1986 were traded in the next two days. Naturally, there have been questions raised, and not just by members of our Party and the Liberal Party, there have been very serious questions raised in the financial community as to whether or not there was insider trading. We are suggesting that before the Government proceeds with this sale, which we do not think is a very good sale even on the face of it, it should at least wait until the results of an investigation of Memotec trading has taken place. That is why we are moving that there be a halt put to the passage of this Bill, that the Bill be hoisted for a while.
Certainly, there are a number of issues which I have already delineated. We have very serious concerns about this Bill. The Financial Post has indicated there is a cloud over the deal. When trading in stock has been suspended, when the Government has had a series of scandals and near-scandals and allegations, some of which might not be founded in fact but which are putting a lot of pressure on the Government, I would think the Government itself would want to move as expeditiously as possible to clear up the total atmosphere which is undermining confidence in everything the Government is attempting to do. I would think the Government would not want to push through this particular Bill when all the questions which relate to its conduct in other areas leave the Government under a cloud, and there have been serious questions raised about insider training in this particular area.
In conclusion, I am very pleased that the Minister has indicated there are some guarantees for the pension rights and working conditions of the employees of Teleglobe. I think that is extremely important. I am glad to see that this is being looked after. We will be looking at that in committee to ensure that those rights are protected. At the same time, I cannot in any way give my support to a Bill which is selling off a public asset at a fire-sale price, which is taking a vital link in Canada's communications industry and placing it into private hands, when we do not see any justification for doing so. There is no justification in terms of the Government's own strategy and guidelines for what privatization is all about. I am at a complete loss to understand why the Government is proceeding with this Bill at a time when there is so much concern about the possibility of insider trading and all the other questions being raised about the Government's integrity at the present time.
Teleglobe Canada


Don Boudria: What integrity?


James Douglas Manly: The Hon. Member asks: "What integrity?" The Government owes it to itself and to the Canadian people to begin to clear up some of the question marks regarding integrity. The place to begin is with this Bill. It should not proceed with it but wait until all the questions about insider trading have been cleared up. In this way we can get a real sense of what is happening.


Donald Alex Blenkarn: Mr. Speaker, the Hon. Member seems to feel that the price was poor. Why does he feel that a price which is 10 times earnings is so poor? What price does he think a company would normally be sold for? Does the Hon. Member have any evidence from Burns Fry or other brokers or dealers that this price was too low? The after-tax earnings of the company last year were $46 million. For the year ending December 31, 1985, they were $53 million. Why does he think that the price is too low? Has he evidence that says it is too low? Or is it too low because that is the ideology of the New Democratic Party? If that is what we are talking about then why does he not say: "We do not believe in the sale of any company at any time, anywhere. We really believe that the state should own everything"?


James Douglas Manly: Mr. Speaker, the Hon. Member is quite wide off the mark when he suggests that our ideology is that the state should own everything. Of course that is not the situation. We believe that the state should maintain control of vital sectors of the economy, such as Teleglobe, which is an important link in the whole communications industry in terms of Canada's links with other nations.
The Hon. Member asks why I think the price is too low. I pointed out in my speech that there were reports, and I have not heard them denied, that British Telecom was interested in paying some $750 million for the purchase of Teleglobe. That in itself would be some type of a bench-mark of value. That is what a non-Canadian firm was interested in paying for the purchase of the company.


Donald Alex Blenkarn: Let it be owned by foreigners, the Hon. Member would like that!


James Douglas Manly: If the Hon. Member had been here for my speech, Mr. Speaker, he would be clear as to where I stand on that particular issue. I said that I would have opposed the sale to foreigners. Your Honour will recall very clearly that I said that. I underlined the point several times. We would have opposed the sale to foreigners. However, the price that foreigners were willing to pay is an indication of the value of the company.
Another indication of the value of the company is the fact that the Government is fudging the figures with respect to what it is receiving. It says it is receiving some $608 million for the sale of Teleglobe. When that is broken down one sees that Memotec is actually paying some $345 million. It is obvious

February 16, 1987
Teleglobe Canada
that the Government is pretending it will receive $608 million. It will actually receive about $345 million. If the Government thought that $345 million was such a great deal then it would have come out and said: "We have made a great deal. We will be getting $345 million for the sale of Teleglobe". Instead, the Government has tried to maintain that it will receive $608 million, which is just not the case.


Kenneth Albert James: Mr. Speaker, I think it only fair for the Canadian public to understand that the figures thrown around by the Hon. Member from the New Democratic Party are either somewhat mistaken or the Hon. Member is somewhat confused with respect to them. The Hon. Member seems to think that the $143 million in debt is just rolled away somewhere. If the Hon. Member were to look at accounting principles he would see that they do not allow the subtraction of debts from purchase prices. How he developed in his own mind that that can be done is beyond me. Many people in the business must be laughing up their sleeves at that type of comment.
There is also $100 million in cash which will go to the Government in addition to the $488 million. There is another $18 million in dividends which will flow to the Government. Thus there is no windfall to Teleglobe, something about which the Hon. Member did not think. The Government has covered all the bases. These are additional moneys coming to the federal Government. I merely wanted to set the Hon. Member straight in that regard.
I wonder why members of the socialist Party of our country are so far off base in terms of their colleagues in other parts of the world in which socialist Governments are selling off Crown corporations. They seem to have caught on to the idea that they are certainly anvils around the necks of Government and tend to inhibit free enterprise. I read an article in last Saturday's issue of The Globe and Mail which pointed out that in Spain, where there has been a socialist Government in place since October, 1982, small state-run companies are being offered for sale through the Madrid stock market. As the Hon. Member well knows, there are many other socialist Governments in the world which are selling off companies. It seems that the socialist Party of our country is not on the same wavelength.
I would like to comment on something that was said by a member of the Hon. Member's Party on December 1, 1986, with respect to the second reading of the Canadair Bill. He said:
We in the NDP are not necessarily against privatization. We are not saying in every case we should not privatize; we are saying you have to have sound economic reasons for it.
There seems to be great confusion within the New Democratic Party about this whole business. I am also a little bit confused by it all. I think members of the Hon. Member's Party are also a little bit confused by it all. I think they should come clean with the Canadian people.


James Douglas Manly: Mr. Speaker, I do not think there is any confusion in our Party with respect to this issue. The only thing we cannot understand is why the Government is proceeding with this sale at the present time.
With respect to the question the Hon. Member raises about accounting principles, I will admit that I am not an accountant. However, I can do my arithmetic, as can the average Canadian. When the Government says it is selling something and that it will receive in the order of $608 million for it and yet the actual money changing hands is about $345 million, the average Canadian can put two and two together to come up with four, not the figure that some fancy accountant might get. The fact is that Memotec will be putting out about $345 million for this company. I think that the Canadian people are getting hosed on the deal.
As far as the situation with respect to other socialist countries selling off some of their Crown corporations is concerned, I think that any socialist Government worth its salt will want to deal with the situation on a case-by-case basis. There are certainly situations in which Crown corporations, or parastatals as they are called in other countries, have reached the point where they are no longer serving a public purpose. In such cases they should be sold. I do not think there is any question about that among members of my caucus. There is certainly none on my part. We are saying very clearly that in the case of Teleglobe it is still serving a vital public purpose, and it should remain in the public domain. The Government is selling it off at fire-sale prices, and pretending that it is receiving more money for it than it actually is.
There are real concerns about the type of trading that has taken place in Memotec's shares that should not be taking place. While the investigation is taking place, the Government should be prepared to put this on the back-burner.


Mr. Greenaway:: Can the Hon. Member show us proof that British Telecom offered $750 million for Teleglobe? Is the Hon. Member against a small company like Memotec buying it, or is he against small business? Would he rather have had Bell Canada buy it? It probably would have bought it for $700 million. Then I guess the Hon. Member would have said that there had been a monopoly.
First, where is the proof that British Telecom offered $750 million? Does the Hon. Member have a copy of a letter, or what does he have?


James Douglas Manly: I do not have any proof, but I would be interested in receiving all the background documents to see whether there has been that type of offer. It is something that has been reported, that there was an offer of $750 million.


Donald Alex Blenkarn: Where was it reported?


James Douglas Manly: We would like to have all the background information on this matter.
February 16, 1987

Finally, we are not opposed to the fact that it is being sold to a small company. We are opposed to the fact that it is being sold when it should remain in the public domain. That is our basic concern. This is a vital part of Canada's communications link. The public should retain control of it.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 66, to inform the Flouse that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Thunder Bay-Nipigon (Mr. Epp)- Immigration-(a) Minister's broadcast statements, (b) Content of statements; the Hon. Member for Ottawa-Vanier (Mr. Gauthier)-Royal Canadian Mounted Police-(a) Language policy, (b) Request that Government express intentions more precisely; the Hon. Member for Broadview- Greenwood (Ms. McDonald)-Unemployment insurance-(a) Level of benefits, (b) Request that Government categorically reject all benefit reductions.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mrs. McDougall that Bill C-38, an Act respecting the reorganization and divestiture of Teleglobe Canada, be now read the second time and referred to a legislative committee; and the amendment of Ms. McDonald (p. 3435).
The Acting Speaker (Mr. Paproski):: Resuming debate with the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria).


Don Boudria: Mr. Speaker, it is with some hesitation that I rise today to take part in this debate, when I see the Conservatives and the New Domocrats fighting to keep that coveted third place in the public opinion polls. You will agree it is rather interesting to follow this family squabble between the Conservatives and the New Democrats, both of whom want to be second one day, and meanwhile, we Liberals are up front in the polls.
I welcome this opportunity to take part in the debate, especially since the Hon. Member for Argenteuil-Papineau (Mrs. Bourgault) is present, just across the way. I must say it
Teleglobe Canada
is always a pleasure to have the floor when she is there. I would enjoy a chance to listen to her speeches and no doubt that time will come, Mr. Speaker. Nothing is impossible, and I am looking forward to that great moment.
Mr. Speaker, what led to the privatization of Teleglobe? First of all, I think we should recall that on August 1, 1985, the former Minister of Regional Industrial Expansion, the Hon. Member for York-Peel (Mr. Stevens), and I must say, Mr. Speaker, it is rather complicated to keep track of all these former Ministers, with all the scandals and the almost perpetual Cabinet shuffle going on.


Mrs. Bourgault:: Mr. Speaker, on a point of order.


The Acting Speaker (Mr. Paproski):: The Hon. Member for Argenteuil-Papineau (Mrs. Bourgault), on a point of order.


Lise Bourgault: Mr. Speaker, I may remind the Hon. Member, my dear friend and riding neighbour, to speak to the Bill and refrain from mentioning scandals that have no connection with the sale of Teleglobe, and, Mr. Speaker, I would like to inform him that if he wants to hear what I have to say, I will be speaking next.


The Acting Speaker (Mr. Paproski):: I am sure that the Hon. Member will become relevant. The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) has the floor.


Don Boudria: Mr. Speaker, I just heard that the Hon. Member will be speaking afterwards, and I am very sorry for you, Mr. Speaker.
Before I was so rudely interrupted, I was saying that this process of privatization started with the Hon. Member for York-Peel (Mr. Stevens), and that is where it links into the discussion. I had some difficulty recalling, because Ministers do change quite rapidly in the present Government, as some of my hon. colleagues across will know.
In any event, I think that it was the Hon. Member for York Peel at that time who was the Minister.

He stated in this House that his Government would immediately proceed with the privatization of Teleglobe. That is what he said on August 1, 1985.
On September 9, 1985, Dominion Securities Pitfield, the Government advisor, wrote that all bidders would be told by October 30, 1985, whether their bid was acceptable and that a sale agreement would be signed on December 15, 1985. That is what the Government said at the time. Let us go on. On September 11, 1985, Dominion Securities wrote to the bidders to inform them that the date of the sale agreement had been put back to January 15, 1986. You know, Mr. Speaker, that the Conservatives cannot do everything in the prescribed time limits. Then, on November 12, 1986, if you will please note-

February 16, 1987
Teleglobe Canada


Mr.   La Salle@: It is not so bad. We achieved what you never could in less than one year!


Don Boudria: I shall listen later very closely to the comments of the Minister without portfolio and Hon. Member for Joliette (Mr. La Salle), the Minister of the Mirabel land corporation, if I may call him that.


Mr.   La Salle@: Tell me about Mirabel!


Don Boudria: On November 12, 1986, Dominion Securities wrote that the sale of Teleglobe had once more been postponed because of the temporary absence of the Minister responsible. We know what happened at the time, and this brings us back to what I was saying earlier. One of the Ministers responsible suddenly became irresponsible, if I may put it that way, and we witnessed one of the numerous Cabinet shuffles of this government. There you have it!


Mr.   La Salle@: Some Members always act irresponsibly themselves!


Don Boudria: Still nothing in the spring of 1986. On November 19, 1986, the Minister of State for Privatization (Mrs. McDougall) this time and the Minister of Communications (Miss MacDonald) announced the final bidding stage for the purchase of Teleglobe and said that bids were to be submitted before January 9, 1987. Again, on December 19,
1986,	the Minister of State (Privatization) tabled in the House a draft bill calling for the privatization of Teleglobe Canada. On December 30, 1986-I continue with the chronology, Mr. Speaker, because I feel it is important in this debate-the Government turned down an offer from Canadian telephone companies to purchase 40 per cent of Teleglobe Canada. That was not good enough. The Conservatives felt they had to put everything on the block-because you know Mr. Speaker, being so objective and neutral, that they have this extreme right tendency which compels them to get rid of everything the Government owns, except patronage, of course. On January 9,
1987,	Memotec Data made an offer to CDIC for the purchase of Teleglobe Canada. On January 19, in an article, the Financial Post suggested that Memotec could have made an offer for the purchase of Teleglobe.
I am told that it was the first time this dossier had ever been mentioned in public. The House should remember that a few days later, the value of Memotec shares had increased dramatically.


Mr.   La Salle@: Why don't you talk to us about the Petro Canada shares!


Don Boudria: I am not saying there was anything wrong with that, but the Minister opposite has just made a comment which would suggest that there might be something wrong with it. Personally, I could not have made such a suggestion, Mr. Speaker, without being considered overly partisan. But I listen with a certain-


Mr.   La Salle@: Tell us about Petro-Canada!


The Acting Speaker (Mr. Paproski):: Excuse me for one
minute. There will be an opportunity for questions and comments after the debate. I would hope that Hon. Members will wait, and then they can ask the Hon. Member a few questions and comments following his speech. The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria).


Don Boudria: Thank you, Mr. Speaker. I appreciate you trying to keep those Tories quiet. Of course, they need your guidance.
On January 27, CDIC had a meeting. It was examining the offers for the sale of Teleglobe. Then we are told that it was instructed to notify the people who were the successful bidders. We are told by David Torrey of Dominion Securities that a letter was received by the bidders describing how the documents in question had been examined. On February 2, 1987, 11,025 shares of Memotec were traded on the Montreal Exchange, and the closing price was $10.25 per share. Previously I have described this as a rather dramatic appreciation of the value of the shares. Quite apart from the fact that there is an ongoing investigation by the securities people into how the value of the shares rose so rapidly, I will not get into the matter at this point.
However there is a message which indicates that surely the purchase in question was a good one for the company. Had it been a bad purchase, the value of the shares would not have skyrocketed. The fact that the value of the shares increased dramatically tells me that the company got a very good deal indeed.
A while ago the Hon. Member for Mississauga South (Mr. Blenkarn) asked how we knew that it was such a good deal. The proof is in the pudding. When the value of shares increases that fast, everyone who bought shares was of the opinion that it was a good deal. One does not run to buy shares in a company which has just made the worst investment in history. Conversely, one would run to buy shares in a company which just made a real hot deal. Obviously that is what happened in this case. It was a good deal for the company.
I will not deal with the ongoing investigation at this point in time. There are other opportunities to do that, for example, in Oral Question Period and so on. I have been told that the company last year brought a profit of $70 million to the Government and even more the year before. It was sold for a little over $600 million. At first blush that seems to be a rather good deal for the company which made the purchase. Obviously the people who bought shares in Memotec were of the same opinion. Contrary to the Tories who have a bent for selling everything including the Crown jewels, and contrary to our socialist friends who have some difficulty in selling any Crown corporation, we in the Liberal Party are far more pragmatic. We are of the opinion that if a Crown corporation fulfils a
February 16, 1987

policy objective, it should be retained. If we are talking about-


Donald Alex Blenkarn: What is the policy objective in this regard?


Don Boudria: I hear the Hon. Member across the way. We are one of the least densely populated countries on the face of the earth, the second largest country in geographical area. I would think that communications either within the country or with the rest of the world, as they apply to the Teleglobe issue, are important. It is an important issue and an important policy element in order for us, as a society and as a country, to determine how effectively we can liaise and at what cost, and whether or not Canadian taxpayers should have the ultimate right to decide that it should or should not be done.
This morning I listened to the very eloquent remarks of the Hon. Member for Capilano (Mrs. Collins). She asked a question of the Hon. Member for Gander-Twillingate (Mr. Baker), and I listened very attentively to what she said. In her remarks she indicated that the Government had to sell Crown corporations because of the fact that we have some financial difficulty and because of the fact that the deficit is high. She did not quite say that it had to be sold to pay off the national debt, but the implication was clearly there that the Government sees what it is doing, the selling of the assets of Canadians to pay for its mismanagement, as being appropriate. It is a little like someone selling the furniture to pay the rent. It is not the correct approach. Perhaps the Government feels that this corporation does not fulfil an important policy objective. By the way, I have yet to see the Government's communications policy. I would like to know what it is and what are its intentions for the long term. The Government should bring forward a policy and say that it is a policy Canadians have discussed. Then, after it had been discussed and adopted, the Government could say that it feels a particular Crown corporation is no longer required to fulfil that policy objective. If that were the case, we could proceed with the sale, provided that we did not give it away, that it was sold at an appropriate price.
I do not think we sold the company for a very high price, but we did not quite give it away, as was suggested by a member of the New Democratic Party. Obviously when one takes over the liabilities of a company, it must be considered part of the purchase cost. However, even taking that into account, we must remember that it was not sold for a very high price. The point I am making this afternoon is that we should have established the communications policy of the Government. Then we could decide whether or not the Crown corporation fulfilled that policy objective, whether or not it was necessary. If the Government indicated that it had a policy and that the corporation was not required to fulfil that policy, perhaps it would have been all right to sell it off. I do not have a mental block about selling everything or not selling anything. However, there are Crown corporations which should be kept by the Government. We should not sell them all because it is the "in" thing to do.
Teleglobe Canada
We must remember that a Conservative Prime Minister of Canada, Sir John A. Macdonald, and the other Fathers of Confederation inserted the issue of a national railway in the Constitution. We should also remember that having government corporations or national corporations is not something which should be foreign to Conservative Members of Parliament. It is something that has been with us all along, something strongly supported by past Conservative administrations.
My colleagues in the NDP want to sell hardly anything in the way of Crown corporations. I do not know for a fact that they would not sell anything, but generally they are not in favour of the Government divesting itself of any Crown corporation. However, members on the government side generally want to sell everything, whether or not it fulfils an objective, whether or not it is a good price, and so on, just because they have a bent that it is the correct thing to do.
I say to Hon. Members on both sides of the House that the merits of Crown corporations must be looked at individually. I would say, for example, that Petro-Canada is very necessary, and there are many others. I happen to think that our national airline is a very necessary Crown corporation. Nevertheless, until we determine what is needed in order to fulfil the policy objective of the Government, we should not proceed with the sale of Teleglobe Canada. It is being done in a backward manner. What will happen in a year or two? Will the Government decide that because of some new policy objective we have to buy it back? We do not know. Are we to sell it and then realize that we should not have done so? It will be too late then.


Donald Alex Blenkarn: Oh!


Don Boudria: I hear the Hon. Member for Mississauga South making noises.


Donald Alex Blenkarn: I was just looking at Bill C-25 in the last Parliament. Maybe you could explain it.


Don Boudria: I can't explain Conservative Bills-


Donald Alex Blenkarn: How about C-25 in the last Parliament?


Don Boudria: Right now I am being pertinent and discussing Bill C-38. I know Your Honour would not want me to address Bill C-25 of a previous Parliament. It would be out of order. I have high respect for the rules of the House and for your objectivity and neutrality, Mr. Speaker. I would not want to make mention of the Bill to which the Conservative Member has referred at the moment. With that said, Mr. Speaker, I want to end my remarks on Bill C-38 and remind the Government that it was not elected to sell off the Crown jewels. It was elected to provide good and proper administration for the people of Canada. It is high time that the Government be made aware and that its Members be reminded that they are here to provide good, competent administration-

February 16, 1987
Teleglobe Canada


John Napier Turner: We have.


Don Boudria: -and not that other stuff.


Mr. Stewart:: That is why the interest rate is down.


Mr.   La Salle@: Mr. Speaker, I had to rise to comment briefly on such an important issue.
The Hon. Member started by saying that a responsible Minister had become irresponsible. Mr. Speaker, may I point out to you that there are Hon. Members who demonstrate their irresponsibility all the time they are in the House.
What I want to suggest about this sale or privatization is that the Government is fulfilling its commitment to give the private sector the place it deserves, while insuring that it is in the best interests of the Canadian people. Our Government had promised that it would give back to the private sector- that it would eliminate this competition from the State which was already very bad under the Liberal Government and which would probably be even worse under an NPD system.
In the circumstances, I think we are meeting the commitment that was made and that we are giving back to the private sector the position it should have been given long ago, and as a result, this country's economic renewal has now been well underway during the last two years. That is something they fail to mention.
Mr. Speaker, it is a matter of philosophy. I want to make this point, because it is a matter of philosophy. It is the philosophy of a party that respects the private sector, and I think that says it all. For instance, Mr. Speaker, and the Hon. Member from Glengarry-Prescott-Russell may remember what I am about to say and even use it as a striking example. When I arrived at Public Works, Mr. Speaker, the Auditor General condemned the Government for refusing to sell property that had been surplus to its needs for many years and was costing Canadians $22 million. I asked my departmental officials to take steps to make the surplus buildings and property available to the private sector. Developers were lining up to buy the unused buildings, the unused square feet the Auditor General had been criticizing and which were costing taxpayers $22 million. In one year, we sold $75 million worth, which generated-this is very important-$2 billion worth of investment by the private sector, created employment and not only made these buildings attractive for municipalities but also created opportunities for developing a number of building complexes that today are the pride and joy of several municipalities.
That is what it means to let the private sector participate for the benefit of the community. That is exactly the principle we are applying in our privatization approach. Some Hon. Members refuse to understand that, since I assume they do have the ability to do so.
Mr. Speaker, that is the point I wanted to make, especially for the benefit of some of our Members here today.


Don Boudria: Mr. Speaker, the Minister has just given us all the reasons. Why is it all right to privatize in some cases while not in others? For instance, he was referring to the Auditor General who agreed and even recommended that certain properties should be sold since they no longer served any Government purpose, and so forth. And he said that in those circumstances, it was a good thing to get rid of them. I agree, I don't query that at all. I never criticized those sales, as the Minister will recall. I was his parliamentary critic for a while, when he was still Minister of Public Works.


Mr.   La Salle@: Your Government never did.


Don Boudria: I did not criticize the principle of the thing. However, Mr. Speaker, when we are talking about the privatization of a corporation with a major national purpose-


Mr.   La Salle@: I'm all for it.


Don Boudria: -the Minister said earlier that the properties in question served no useful purpose and were thus disposed of. Mr. Speaker, he just told us why we should not dispose of this Crown corporation.


Mr.   La Salle@: We are giving back the private sector its rightful place.


Don Boudria: Mr. Speaker, in the case of a Crown corporation such as Teleglobe, I suggest the Government should have provided us with its plan for the communication industry making it possible for us to determine whether the divestiture of Teleglobe Canada was necessary to achieve these goals. Then, we would be in a position to make a reasonable and sound decision. But no doubt unwittingly, the Minister has just suggested in his reply why it would be illogical to privatize Teleglobe Canada now-


Mr.   La Salle@: I said it would be logical.


Don Boudria: And the same arguments he used to say that it would be logical in certain cases, I can use to demonstrate that it is not in this case, Mr. Speaker. It is definitely not logical.


Mr.   La Salle@: You will be dishonest to the end!


Donald Alex Blenkarn: Mr. Speaker, the Hon. Member indicated that he felt that because Memotec shares on the market went up in value after the transaction was completed somehow this was a bad deal. Does he think the Rotary idea of business that a good deal has to be a good deal for all concerned is in itself a bad deal? Is it a bad deal because it is a good deal for Memo-tec and a good deal for Canada? Or does the Hon. Member think it would only be a good deal for Canada if the Memotec shares had fallen out of bed?
February 16, 1987


Don Boudria: Mr. Speaker, I was not sure whether the Member was trying to get me lost at the seventh or the eighth good deal or bad deal in the preamble to his question. The point I made a while ago, and I will repeat it, is that if there was such a dramatic appreciation in the value of the shares of the company that purchased Teleglobe, then obviously there was a dramatic improvement in the final situation of that corporation because it bought Teleglobe to start with. Obviously if it was such a good deal then one has to conclude that the one selling the company sold it for something less than it was worth. That is only logical, Mr. Speaker.


Donald Alex Blenkarn: Not at all.


Don Boudria: If you buy something that is too cheap it is because someone sold it to you too cheap. That is elementary. It cannot be the other way around. The Government could not have gotten 130 per cent of what a company was worth with the company benefiting at the same ratio. It has to be the opposite. If the purchaser bought a company and it was a good deal, it is because the seller sold too cheap. It has to be that way, otherwise it would not make any sense. The Member across I believe is from the accounting world, so he knows how to count.


Donald Alex Blenkarn: Mr. Speaker, it is clear then that the Liberal Member does not really understand business or how deals work at all. A deal can be an excellent deal for both parties. In this case the deal involved payment to the Government of Canada of about $600 million by the time the transaction was wound down. To the shareholders of Memotec, which is a small venture capital company out to explore the reaches of technology, the transaction is also a good deal. It gives that company a base on which to work and to grow, a dramatically strong base. It is a good deal for both. It is a good deal for the employees, for the country, for communications and for competition. Can the Hon. Member tell us why it is a bad deal because it happens to be a good deal for all concerned?


Don Boudria: Mr. Speaker, we have a "good deal member" across the way.


Donald Alex Blenkarn: You are right.


Don Boudria: He is certainly trying hard to make us believe that the Government sold Teleglobe for every cent it was worth, yet the company that bought Teleglobe got a real hot deal judging by the way its shares augmented in the manner they did after the purchase. If the shares of the company climbed 100 per cent, it tells me that the Government of Canada sold Teleglobe for way less than it was worth, otherwise the shares would not have appreciated to start with. It is elementary mathematics. The opposite is incorrect, to say the least.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate. The Hon. Member for Capilano (Mrs. Collins).
Teleglobe Canada


Mary Collins: Mr. Speaker, I am pleased to participate in today's debate on Bill C-38, the Bill to privatize Teleglobe. It has been very interesting listening to the debate on this particular issue over the last two days. It appears as though the position of the Liberal Party would be privatization if necessary but not necessarily privatization. That would seem fairly consistent with the Liberal Party's position on free trade and NATO. Liberals really cannot make up their minds about their position. Unfortunately, I did not have the opportunity of asking the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) just what the criteria for privatization would be and how the Liberal Party would apply those criteria to the 11 Crown corporations this Government has privatized over the past two years.
I understand that the NDP's philosophy is basically consistent and would appear to be totally against privatization. From listening to the debate, one might feel that it believes that if a Crown corporation is making money, the Government should keep it and should be in the business of making money. As far as the Progressive Conservative Party is concerned, that is just not the purpose of government. We are not in government to run business, we are in Government to govern the country.
Perhaps it would be appropriate to look at the record of privatization. During the 1984 election campaign, I and many of my colleagues heard our constituents say that they felt the Government should get out of many Crown corporations which were more appropriately run by free enterprise. That was certainly my view, and I made a commitment to my constituents that I would work hard to pressure the Government to undertake a program of the privatization of Crown corporations that no longer met a public policy objective.
Indeed, in November 1984, just two months after we took office, a paper entitled A New Direction for Canada: An Agenda for Economic Renewal was published. I am proud to say that this Government has followed that agenda. One of the objectives outlined in it was and remains the improved management of Crown corporation assets.
In the Budget of May 1985, concrete plans were announced for the rationalization and privatization of Crown corporations and other federal investments, such as those mentioned by the Minister earlier including federal buildings, based on the premise that those corporations or investments should be sold or wound up if public ownership is no longer necessary to meet public policy objectives. Our philosophy has been very clear.
In the implementation of that objective, the record is clear. We have already privatized 11 Crown corporations beginning in July 1985 with the completion of the sale of Northern Transportation Company Limited. We have done this in a pragmatic way. In fact, I am sometimes pressured about moving more quickly. We realize, however, that many interests must be met. There are the interests of consumers and there are the interests of employees. That was certainly an issue with

February 16, 1987
Teleglobe Canada
respect to the sale of de Havilland. There is also the interest of the public at large. All of those interests are ones with which the Government must deal.
I know that the Minister responsible for privatization has, with her officials, been undertaking a solid program of evaluating each Crown corporation to see whether or not they meet the criteria which have been set and to see if it is time to seek out private owners. We are making considerable progress in this respect. I think that Teleglobe is perhaps the largest such sale to date.
Why do we think it is important to sell back to the private sector these corporations which, in the view of the Government and in the view of the public at large, no longer serve to fulfil the necessary public policy objective? When we sell something back to the private sector, we free it from many of the constraints inevitably involved in Government. These restraints, I know, sometimes frustrate many of us, but they are there. They are necessary for organizations of the Government because there are many considerations which come into account. Crown corporations cannot respond quickly to market initiatives. Of course, in many cases there is a requirement for new capital. New capital would allow a company like Teleglobe to expand, and the Government itself is not an appropriate source for this kind of capital investment. I do not think that is what the taxpayers want the Government to do.
Once a corporation is sold and if it is well operated and soundly managed, it will be able to raise capital for expansion from individual Canadians, pension funds and investors. It will be able to expand and operate in a much more effective and efficient manner, free of the burden of bureaucracy. That of course is what the Government and our Party believe.
We are not alone in this belief. It has been extremely interesting to learn that over the last two years, the philosophy of this Progressive Conservative Government has been shared by many western European Governments, Governments of a variety of political stripes. In Great Britain, the sale of British Gas was a tremendous success story. It was considered to be a rather staid company, but it has now been sold and it is doing tremendously well. The same is true of British Telecom. Of course, very recently the announcement of the sale of British Airways was made. Last night's Venture program on CBC indicated that this announcement was accompanied by fireworks. It reminded me of Expo 86. The announcement was certainly made in a very outgoing way and there was a tremendous response.
It is also interesting to note that in many cases, when Crown corporations are sold to the public, the value of their shares go up very quickly. I think this was a point made by my hon. friend from Mississauga. When a corporation is sold to the public, the public becomes interested and gets involved. In fact, in Britain they are talking about the people's capitalism, the opportunity for the people of Britain to invest and become involved in companies which were formerly controlled by the Government. It has been a very successful venture.
France has followed a similar course. Under the previous socialist Government of France, as I am sure my colleagues in the NDP are aware, the sale of many Crown corporations was undertaken. Many of the largest corporations in the auto glass, chemicals and telecommunication industries were nationalized in 1982 and are now being offered for sale. The present Government of France is carrying on with that initiative as well and it has been very successful.
As my colleague mentioned earlier today, even in Spain with the socialist Government which has been in office since October 1982, some state-run companies are being offered for sale. It is becoming accepted by Governments on both sides of the political spectrum that the Government should get out of running businesses as these businesses may operate much more effectively in the private sector.
I know that my colleagues in the New Democratic Party of Canada simply are not up to date and in tune with global thinking on these issues. That is not surprising because NDP Members are not even in tune with their NDP colleagues in British Columbia on such issues as the 15 per cent export tax on forestry products. Perhaps they should begin to listen to their colleagues around the country and around the world. They might get updated on these issues.
Having discussed the principle of privatization, I would like to turn to the specific project that is at hand, the sale of Teleglobe. Over the last two days, I have not heard very much about the background of Teleglobe. I have a particular interest in it. I am sure my colleagues are aware that the Canadian Overseas Telecommunications Company which was founded in 1949 acquired the assets of Cable and Wireless Ltd. and Canadian Marconi Ltd., both privately-operated British firms. When my father first came to Canada in the early 1900s after serving in the First World War, he worked for Cable and Wireless Ltd. and I remember as a child hearing stories about that company. My uncle worked for them, too. He was in South America. I remember the stories of the laying of the cables across the Atlantic, so I have a kind of special interest in this issue.
In 1949, the COTC was formed, and in 1956 the first longdistance multi-purpose coaxial submarine cable was laid across the Atlantic Ocean between Scotland and Newfoundland. That brought in a new era of long-distance calling. Then the name was changed to Teleglobe. It has been a very successful company performing important service in long-distance telecommunications, working both with the telephone companies in providing the cable and the system for overseas telephone calls, and the telex systems as well. I thought it was interesting that its assets are spread right across the country. It has three major categories of assets. It shares with a number of foreign entities ownership in a number of transoceanic submarine cables most of which form part of the Commonwealth cable system. It also owns approximately 3 per cent of Intelsat which operates communications satellites around the
February 16, 1987

globe. Earth stations operating with the Intelsat system are located in Nova Scotia, Quebec and Vancouver Island. Those are wholly owned by Teleglobe. It also operates international switching centres or gateways in Montreal, Toronto and Vancouver where overseas traffic is routed to and from the networks of Canada's domestic carriers. The company has certainly expanded its operations and performed a very important service, and I would like to congratulate those involved for the excellent service.
My colleague who spoke before me said that this sale is a good deal. It is. It is a good deal for the seller, the buyer, consumers, and the country as a whole. The Toronto Sun is not often complimentary about this Government but even that paper, in its editorial yesterday, said that Memotec appears to be a good deal for both the seller, which is the taxpayer, and the buyers, which are some of biggest pension funds around. The editorial said it was time to applaud a move that will bring major benefits to just about everyone. I think that when you can manage a situation like that it is almost miraculous.
Let me just reiterate some of the benefits. As Chairman of the Standing Committee on Consumer and Corporate Affairs, the interest of consumers is very near and dear to my heart. This is a particularly good deal for consumers. As you know, as part of the sale of Teleglobe there is an agreement that overseas rates will be reduced by 13 per cent on January 1, 1988, and telex charges will decline by 10 per cent. Those are very significant amounts. Many Canadians call their families and friends overseas. For the average Canadian family who would like to call their relatives or friends on an anniversary, a birthday or even in an emergency, as well as the inevitable long-distance calls at Christmas, this means their 1988 phone bill could fall by around $50. Has anyone thought about that? It is like a tax break. We have many wonderful Filipino Canadians and if they call home the savings will be even greater. These are real savings that Canadians will enjoy as a result of this sale.
That does not even take into account the very positive impact for the small business person operating a telex. I have many business people like this in my own riding, and for them the savings could run in the hundreds of dollars. At the same time we have the assurance for the first time that Teleglobe will come under the jurisdiction of the CRTC. It will be a privately-operated and publicly-regulated company. We know that the company will have to show its costs and will be held to an appropriate rate of return. Consumers will have the opportunity to review those figures at CRTC hearings. Earlier today a Member on the other side of the House said that after five years prices will increase. I would say the exact opposite. For the first time we will have a greater degree of control over long-distance calling and telex rates.
There has been a lot of discussion as well about the sale price. I would like to put the facts on the record. The Hon. Member for Vancouver-Kingsway (Mr. Waddell) said when he spoke on the Bill on Friday that all we were getting was $350 million. That is totally wrong. I am not surprised because
Teleglobe Canada
the Hon. Member is perhaps a bit concerned that his riding is going to disappear under redistribution. Obviously he is trying to make some points in this case. We are getting $608 million cash out of this deal. We are getting the $488 million sale price-


Lynn McDonald: I rise on a rather serious point of order, Mr. Speaker. The Hon. Member is imputing extremely incorrect motives to the Hon. Member for Vancouver-Kingsway (Mr. Waddell). She is suggesting that his opinions as to good policy for Canada are determined entirely by the possibility of boundary-


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


Mary Collins: Mr. Speaker, as I was saying, of the $608 million in cash the Government gets as a result of this sale, $488 million comes from Memotec, $102 million comes from the Teleglobe treasury, plus a $18 million dividend. There has been some question concerning Teleglobe's liabilities. The new Teleglobe is buying those liabilities, and that does not reduce what the Government will receive. I just want to make sure Hon. Members opposite understand that point because it is very important and I am sure none of us would want incorrect information going out across the country.
Another point made earlier in the debate really concerned me. That was made by the Hon. Member for Cowichan- Malahat-The Islands (Mr. Manly). He said that Memotec, a very innovative and exciting company, did not have the funding in place. I want to assure him that the funding is certainly in place. As I am sure he is aware, the partners involved are the National Bank, McLeod, Young & Weir, Richardson-Greenshields, and Geoffrion Leclerc, four very sound financial institutions. I can assure him that the Government would not have proceeded with even looking at the offer to purchase unless all of the funds were firmly in place. Therefore, it is not appropriate to suggest that the company did not have the funding in place. I am sure it would be very upset to hear that.
I would like to close with some comments on how this deal is good for the employees. We know that when the sale of de Havilland went through there was a lot of moaning and groaning around the House about its impact. What happened? Five hundred new jobs have been created since that Crown corporation was privatized. I hope the same thing will happen here. I do not know, but we have ensured that the employees will be well looked after. Their pension plan has been established. In fact, the employees will be given the opportunity to purchase 5 per cent of the equity at a cost of 90 per cent of the price paid by Memotec. That is a very good deal. Interest-free loans repayable over five years are available. That is an excellent part of the arrangement. It will give the employees a chance to participate in the management of the company. I am sure it will help the company become even more productive and profitable than it has been in the past.

February 16, 1987
Teleglobe Canada
In fact, as we have said before, this is a good deal for all concerned. My hope is that with the new initiative and the new private owners we will indeed see the company grow and prosper. I am sure there will be new investors and new purchasers of stock. We will be able to look back in another year, two years or five years and say what a marvelous decision it was to put this Crown corporation back into the hands of Canadians. I ask that we move quickly to ensure that this Bill is passed and the sale proceeds in order that that new era can commence.


Lynn McDonald: Mr. Speaker, I have a comment to make and a couple of questions to ask of the speaker. On the issue of the treatment of employees the member has said how well protected the employees will be. I certainly concede that there has been considerable improvement as a result of a great deal of protest. I wonder whether the member realizes that the pension provisions as set out in the original terms of the sale would have disadvantaged the employees considerably. I wonder whether she will give a bit of credit to the opposition Parties and the unions for speaking up.
The Member referred to rate reductions. The cost of making overseas calls and telex calls will be reduced. Does the Member not realize that Teleglobe had already planned rate reductions? The company was told to keep that information quiet so that it would look like a benefit resulting from privatization which would make the deal look better.
On the more general point of the rates that are being charged, American companies are presently charging even lower rates for overseas calls. If the Member really wants these rate reductions to be consistent with that, would she not agree to routing all overseas calls through the American companies and not have a company at all? That is one option. In dealing with that question, she will have to come to terms with the fact that if that were to be seriously considered the company would disappear.
The only way in which the company can survive is with a measure of protection. We are not talking about some free enterprise company in the private sector beating all the competition, but about a highly protected company. This makes it quite different from what she is talking about, a thriving private sector as opposed to the public sector. This area will have to be protected if it is going to survive at all. You cannot have it both ways. You cannot talk about the virtues of business competing and bringing rates down, and also about ensuring the company's survival by giving it protection through regulation.


Mary Collins: Mr. Speaker, on the first point, the Government does listen to all groups. That is vital to governing. We listen to representations made from all quarters. We listen and respond in an appropriate manner. The final arrangements with respect to the protection of pension benefits are improved from what was originally proposed. That is a credit to all who have been involved.
I was a little surprised by the Member's last comment that the alternative would be to leave the market totally open to the U.S. I know of my hon. colleague's very great concern about the protection of Canadian culture and Canadian industry. As my hon. colleagues know, there was a possibility of selling this company to a foreign-owned company. However, we rejected that possibility because we felt that it was in the best interests of Canada that the company remain in Canadian control. In fact, the legislation requires that not more than 20 per cent of the shares can be owned by foreign operations. We think it is important to keep it in Canada.
As the Hon. Member may also be aware, there is also provision that for a period of five years Teleglobe will continue to have sole control of the operations within its area. After that time applications may be made by other companies to enter into this field. The CRTC and the Government will obviously have to make a decision at that time as to whether further competition will be allowed in this field.


Michael Morris Cassidy: Mr. Speaker, I would like to make a couple of comments and ask a question of the Hon. Member. I think she may be guilty of making some statements which disturb me and could leave misleading impressions with people viewing these debates. I suggest that she should get her facts straight.
I am disturbed by her comments and some of those of her colleagues about the lumber deal. She knows perfectly well that members of the New Democratic Party in British Columbia have been saying for years that it is about time that B.C. started to charge adequate stumpage rates on its forests. They have taken that position consistently for a long time. However, they agree with us that Canada should not be forced into a situation of imposing a lumber tax because of American actions. In effect, we should have the right to be wrong in this country. My colleagues in British Columbia happen to agree with that.
However, now that the Conservatives have fallen into third place in the polls, they seem to be directing their fire toward the New Democrats. I guess they cannot forgive us for moving into the number two position. We are going to go a bit higher, too. That was, perhaps, a digression.
My specific point is that the Hon. Member reiterates that this is a $600 million sale. First, $102 million of the proceeds which the Government is drawing from this sale is money which it has drawn from Teleglobe Canada by means of a cash distribution without the need to sell the company at all. The Hon. Member will, of course, agree with me that that figure is outstanding on the balance sheet of the company. It was cash reserves or reserves in short-term investments and there was no need to sell Teleglobe, but the Government wanted $100 million to bring the deficit down for the Budget of the Finance Minister (Mr. Wilson) later this week.
In addition, as the member knows, there is an $18 million dividend which is also being paid just prior to the sale being consummated. The real question is that of the $142 million in debt liabilities. We have talked to the President of Memotec
February 16, 1987

who has confirmed that as part of the purchase price Memotec is assuming Teleglobe's debt liability which amounts to $143 million. This means that the Government will only receive $345 million for Teleglobe as no actual funds will be paid for the debt. It is simply a transfer of responsibility for the debt from the present owner, the Government of Canada, to the new owner, Memotec. I would like the Hon. Member to confirm that that effectively means that all the cash Memotec has to come up with is approximately $345 million. There is room for misunderstanding here. I would not want the Hon. Member to be guilty of promulgating misunderstanding.


Mary Collins: Mr. Speaker, I am not going to get into debate on the lumber deal. There are other venues for discussion on that. I might check with my cohort out in British Columbia to get his view on it.
With respect to the other issue, I have checked with the officials of the Department and they have assured me that what Memotec is doing is buying the shares. They are not buying the assets. They are paying the $488.3 million. That is the actual amount it will be paying for the shares.


The Acting Speaker (Mr. Paproski):: The period for questions and comments has now terminated. Debate.


Michael Morris Cassidy: Mr. Speaker, I want to make a few comments on this Bill. I would say quite honestly that I am open to stand corrected op this particular point. I think it is something which will have to be looked into in some detail because the difference of $ 140 million between what the Hon. Member contends is being paid for Teleglobe and what we think it is, after conversation with the President of Memotec, is a very substantial difference. In fact, it is a very material difference indeed. It concerns me that in the process of privatization, the Government, a bit like its predecessor in office, one might say, is more concerned about the PR value of this particular act of Government than about the real facts.
I have just taken the trouble to look through the information kit which was distributed by the Minister of State for Privatization (Mrs. McDougall) in order to try to get an answer to this particular question. I was concerned when I looked at the notes of my colleague, the Hon. Member for Vancouver-Kingsway (Mr. Waddell), who, I assure the Hon. Member for Capilano (Mrs. Collins), will definitely be back in the House of Commons after the next election. He may not have the pleasure of her company, but he will be back.
This question is very serious. I was involved as the critic with respect to the privatization of both Canadair and de Havilland, and when we analysed the obligations which were being assumed by the Government, we found in fact that we effectively paid the private sector to purchase and take over those two particular corporations. Then, of course, in the case of Canadair, the Government, by the awarding of contracts, has taken effective action to ensure a better employment base for Canadair. That is good in terms of the aerospace industry
Teleglobe Canada
and the region of Montreal. However, the Hon. Member's suggestion that this is the virtue of private sector management is a bunch of hogwash. The fact is that government action, in terms of awarding a very important defence contract, has been the key action in securing the fortunes of Canadair, and it is quite possible that if that contract had been awarded to Canadair prior to the privatization taking place, the market value of the company, on its being privatized, would be considerably greater than it was at the time the company was sold.
We are going to have a lot of debate on these issues over the course of the next year or two. I might perhaps just say to those people who have come home from work, or those students who are watching the House of Commons for a few minutes before they turn to their homework or to watching Much Music, that when they hear members of the Progressive Conservative Party talking about the free market system, they should be aware that they are talking about something which makes them feel warm and cuddly. Given their status in the polls these days, the Conservatives have need of something which makes them feel good about themselves. There has not been a lot of good news for them over the course of the last four or five weeks.
The facts are that Teleglobe in being privatized, is certainly, and by no means, going into the free market system. This is a leverage buy-out in which a small company, which has only been listed on the Toronto Stock Exchange a couple of years, is paying a substantial price in terms of its resources in order to take over Teleglobe, but in doing so is being guaranteed by the Government a number of things which will ensure it will not have to function in the free market for at least the next five years, and possibly for some lengthy period of time beyond that. Teleglobe is the only international carrier of communications such as telephone, telex, and those kinds of communications, with Canada. It is a part of international treaties which give Canada access to the Intelsat satellite network. That status will continue for at least the next five years.
Teleglobe will be regulated in its profits. That means two things; first, it will be regulated in terms of not earning too much and, second, it will be permitted to have profits to ensure it does not earn too little. Therefore, in that sense it will not be in the free market. The telephone companies, which I think reacted perhaps irresponsibly, suggested they might find means of bypassing the services of Teleglobe Canada. They have been warned that legislation will be presented and adopted by the Government, presuming it maintains its majority, which will prevent the private sector companies from bypassing Teleglobe and routing overseas telephone calls through the United States. The American Government has effectively sought to break the internationally agreed to monopoly on international telecommunications through Intelsat and is setting up its own satellites in its place, if it can get them up in the air. Teleglobe Canada is also being told it has to maintain its role as Canada's participant in Intelsat so,

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Automotive Strategy
therefore, it is being maintained in a very much regulated environment.
There is a strong case for Teleglobe staying as a regulated entity. Let us consider the situation in other countries. When the United Kingdom privatized British Telecom, it kept about 49 per cent ownership and a controlling interest in government hands. Then there are countries such as Australia, New Zealand, and France, which now have a Government which is friendly to Prime Minister Thatcher and President Reagan. West Germany also has a Government which is on the right rather than the left of the spectrum. There is Italy, Norway and Sweden. All of these countries with Governments, some of which are to the right, some of which are to the left, have in fact maintained their international telecommunications systems in government control. The British Government has kept British Telecom under government control as well, although just under 50 per cent has been privatized in terms of control. Why is that? I suggest it is because they have seen that there are good and proper reasons, and reasons which must be seriously considered, why one cannot have a totally free market in terms of international telecommunications.
If the Government really wanted to go that route, then Canada should have notified the other signatories that we are withdrawing from the Intelsat Treaty which, among other things, would have meant that we would be contributing, as the Americans are,to a very large increase in the cost of telecommunications for developing countries around the world which benefit from the Intelsat arrangements. We should have decided that we would have given free range to the telephone companies to route their calls through the United States, or through any other means they could find available, to use private sector or pirate satellites as they begin to get thrown up into the ionosphere. That is what the free market would be all about. The Government knows, as we know in this Party-but the Government will not say it and we will-that that kind of situation would have wreaked havoc in terms of any kind of reasonable and fair access to telecommunications for an awful lot of Canadians. Once we did that internationally, very quickly we would face the same kind of pressure to do it nationally as well. The result would be that my constituents in Ottawa Centre would find that their telephone rates to Vancouver, to Toronto to Montreal and abroad might drop quite drastically. They would benefit. However, the people living in Inuvik and up in the riding of my colleague, the Hon. Member for Kenora-Rainy River (Mr. Parry) and my colleagues from northern Quebec, would have found an enormous increase in the cost of their telecommunications.
We do have cross-subsidization in this country and we need it if we are going to deal equitably in terms of access to communications for every Canadian. I think the Government surreptitiously recognizes that fact but publicly tells us that this is all for the free market. I am suggesting that that is a code word. It is designed to please the people of the National Citizens Coalition. This privatization stuff is only limited privatization and I want to suggest, as my colleagues have
suggested, that a company which is earning $50 million a year in profits could be making a substantial ongoing contribution to the cost of government services rather than selling the Crown jewel as we have in this case, for what may be as little as $350 million.
I may wish to continue my contribution to this debate when debate resumes tomorrow.


The Acting Speaker (Mr. Paproski):: When the Bill is called tomorrow the Hon. Member will have 10 minutes left on debate and there will be 10 minutes for questions and comments.
It being 5 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   AUTOMOTIVE INDUSTRY ADVISABILITY OF ESTABLISHING AN AUTOMOTIVE STRATEGY
Mr. Steven W. Langdon (Essex-Windsor) moved:: That, in the opinion of this House, the Government should consider the advisability of introducing legislation in order to establish an automotive strategy for Canada based on the policy derived from "An Automotive Strategy for Canada", a report by the Federal Task Force on the Canadian Motor Vehicle and Automotive Parts Industries, which would not change the terms or spirit of the Canada-United States Automotive Products Trade Agreement, but would continue to limit the importation of certain motor vehicles and ensure that all motor vehicle manufacturers, who sell motor vehicles in the Canadian market, provide employment and create value within that market, commensurate with the benefits that they derive from it, and be required to produce Canadian content equal to at least sixty per cent (60%) of their sales in Canada.
He said: Mr. Speaker, it is a pleasure to bring this motion before the House today. However, it gives rise to extreme disquiet and concern in the automotive communities right across the country. That is what motivates my bringing it forward.
In 1983 we received a report which represented the views of both the unions and the companies within the industry. The report set out the serious future prospects and problems of the auto industry. The report was not acted upon by the previous Government. It went to the next Government, which also refused to act on it. I bring the motion before the House today because, first, it seems to me urgent that the House have a chance to debate what is a dire crisis emerging for the auto industry and, second, because it is a potential solution for the crisis.
We have just finished a series of hearings with representatives from the various parts of the auto industry, including the workers, as well as the Minister of Regional Industrial Expansion (Mr. Cote) who appeared before us this afternoon.
February 16, 1987

In the Standing Committee on External Affairs and International Trade we have begun to get into the debate. This motion comes at a particularly opportune time in response to some of the feelings and divisions which have arisen in the debate as reflected in the committee. It is now in order to bring it to the floor of the Elouse of Commons.
It is essential that the House and the country understand that we are talking about a crisis, an economic crisis which could cost the country, we have been told in testimony, up to 40,000 direct jobs. The reason for this is that we have created one set of conditions for those companies which have traditionally produced cars in this country. Under the Auto Pact they produce at a value of 60 per cent Canadian content.
However, there is a second set of companies, a set of Japanese and Korean companies, which have not made a commitment to that 60 per cent Canadian value added. If there is a shift in purchases from one set of companies to the other and if there is a set of increased imports by the year 1990, we are likely to see a tremendous over-capacity, perhaps up to three million cars in North America, which will inevitably force companies to start shutting down their operations. This will happen not just in the United States, where Chrysler recently took action, but increasingly so in Canada.
The crisis is there. It is there with respect to the people who talked to us from St. Catharines and from St. Thomas last week. Specifically, they suggested that a shift could be eliminated to the St. Thomas plant and cost within the next three to four months something up to 1,500 jobs just in the one community.
There are solutions. This motion tries to set out some of the solutions, drawing on the 1983 report. First, we must obtain a commitment from the Asian producers so that we have some type of balanced playing-field. We need a commitment to 60 per cent Canadian value added from their plants as well as from the Big Four. Second, in order to reach this commitment we have to be prepared to use, with force, the quotas which are quite legitimately in place for us to use under the GATT. We have to be prepared to say to the Japanese and the Koreans: "If you are not prepared to accept these commitments, which have been accepted by the other companies, then we will have to impose quotas on you".
We have to commit ourselves to the maintenance of the safeguards in the Auto Pact as it stands at the moment. There are many ancillary parts to the auto trade upon which it is impossible to sit down and talk on a bilateral basis with the United States. However, if we get ourselves into a position in which we are prepared to negotiate away that 60 per cent safeguard, then we are committing economic suicide so far as central Canada is concerned.
It is not just central Canada which is concerned. This is a point I want to stress. Throughout the country there are at this stage something close to 450,000 workers who depend on the auto industry. They do not live just in central Canada. They are spread out across the country. They come from all the
Automotive Strategy
different sectors of the economy, including the steel, petroleum, plastics, chemical and tire sectors. They form the heart of our economy as it exists across the country. This is not an Ontario issue, or an issue that belongs to Quebec. It is an issue that cuts right across Canada.
In conclusion, we are a small country that faces a very tough world today with respect to automotive competition. In order to succeed in that tough world, we need to have a strategy which is tough and effective, and a strategy which we have tried to outline in this motion today.


Mr. David Kilgour (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, the motion of the Hon. Member who just spoke could be fairly summarized by saying that it calls for an automobile strategy for Canada. It also states that all motor vehicle manufacturers should be required to produce Canadian content equal to at least 60 per cent of their sales in Canada.
The Government is fully aware of the immense contribution that has been made by the Canadian automobile manufacturing industry to the economy of Canada. We know how many men and women work in the industry, and as the Member said, not only in southern Ontario but in other parts of Canada, including Quebec. Indeed, in western Canada we wish we had more manufacturing in that industry.
Our support for an efficient and internationally strong automotive industry has been unwavering. I wish to take the opportunity to tell Members of the House that over the next several months the Minister of Regional Industrial Expansion (Mr. Cote) will be consulting with representatives of the auto industry and labour to examine current and important issues which bear upon the future viability of the auto sector.

As a matter of fact, he has already met with representatives of the Automobile Parts Manufacturers Association, the Canadian Auto Workers, and the Motor Vehicle Manufacturers' Association to begin discussions and explore possible solutions to different concerns identified by the industry. During these consultations, the Canadian content issue in the automobile industry is likely to be raised.
The Government's policy has always been to encourage a higher Canadian content rather than to set a definite percentage based on the automobile industry output. At the international level, any legislation requiring a precise Canadian content would go against our multilateral commercial commitments under GATT. Beside these trade related arguments, to require a certain level of Canadian content would not necessarily guarantee additional permanent jobs which is our main concern. That is the essential. Several factors seem to indicate that such measures would result instead in a reduction of Canada's competition in this industry. The gains made recently by the Canadian Automobile Industry in the areas of productivity and competition stem to a large extent from the

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individual reaction of each corporation to international competition. The increased competition within the industry has resulted in significant changes in the area of production and finished products, thereby improving Canada's competitive position.

The industry is undergoing immense structural changes. Around the globe automobile manufacturers and markets have become exceedingly competitive. I regret that the fierce level of world competition has meant that North American manufacturers have lost some of their traditional market share to imported vehicles. The new Asian manufacturers that are now establishing on this continent are bringing additional competitive pressures to bear on the domestic industry.
The Government has taken the position that the automobile industry must adopt new manufacturing technologies which are basic to world cost competitiveness. Therefore, the government policies are meant to encourage the adaptation of the Canadian automotive industry to meet those demands. For its part, the Government negotiated export restraint arrangements with Japan in order to provide the North American producers with a "breathing space". That action also served to prevent the diversion of Japanese vehicles through the United States and into the Canadian market.
The second step, the duty-free status which applies to vehicles currently imported from countries such as Korea and Mexico, was eliminated in the May 1985 Budget. That measure became effective January 1, 1987. The Government has also made efforts to ensure that Canada receives its proportionate share of Japanese investment in North America. Until recently, the majority of North American Asian investment has been made in the United States. Without our share of this new investment, as the Hon. Member for Essex- Windsor (Mr. Langdon) knows, the Canadian industry would have been faced with the prospect of lagging technological development and, as important, Japanese companies would have been able to import vehicles from their new United States plants, increase their penetration into the Canadian market, and yet make no significant contribution to our economy.
Since 1982, Japanese companies have made large investments in the North American assembly facilities. In Canada, Honda and Toyota have announced Canadian assembly investments amounting to $600 million. The GM/Suzuki project will add a further $500 million of direct investment, and Hyundai is planning to invest $300 million in an assembly plant near Montreal. These projects, and similar ones in the United States, will result in an additional annual production capacity in North America of 2.1 million units, of which some 480,000 units will be produced in Canada. These planned investments in Canada should result in an estimated 5,000 new direct jobs, and at least an equal number of indirect jobs.
In our discussions with Japanese and Korean automobile investors, the Government always stresses the importance of the objectives and performance requirements of the Auto Pact
and our desire to have companies that participate in the Canadian market contribute to the Canadian economy. Joining the Auto Pact is not mandatory, but all new entrants including Toyota, Honda, and Hyundai have publicly indicated that they plan to achieve Auto Pact status. It is expected that the GM/Suzuki joint venture will achieve Auto Pact status virtually from the start of production.
Nevertheless, the Government recognizes that, at the start, Asian assembly operations will require less labour and will be more dependent on parts supplied from offshore companies than is the case for the domestic vehicle manufacturers. For this reason, from the beginning, the Government has worked to ensure that these companies maximize Canadian value added in assembly operations with the objective of meeting Auto Pact status within a reasonable time frame.
Developing sound, long-term relationships with suppliers requires a determined effort. Over time, we believe that exciting opportunities for Canadian auto parts companies will arise. Canadian parts companies are well positioned to supply the new assemblers, and the Government is actively supporting Canadian manufacturers in their efforts to identify products and develop links with Japanese, European, and Korean assemblers. Opportunities also exist for foreign assemblers and suppliers to establish parts facilities in Canada either independently, or through joint ventures with Canadian producers. Although actual direct parts investment remains small, Toyota has constructed an aluminum wheel plant in British Columbia. As of this time, Japanese and Canadian parts manufacturers have formed 10 joint venture companies to produce a range of automotive components ranging from instrument panels to seat belts. Canadian companies have also entered into joint ventures with European partners to produce a range of sophisticated parts and components.
It is important to recognize the contribution that North American producers have made to our economy. Over the past five years, these companies have made massive capital investments to improve process technology, and to introduce new product lines while continuing to reduce costs. From 1980 to 1985, domestic vehicle assemblers averaged over $550 million annually in capital expenditures in Canada. American Motors is well advanced in the construction of a $760 million state of the art vehicle assembly plant in Brampton. That plant will have a world product mandate to produce 150,000 intermediate size cars per year. General Motors has chosen Canada as the site for one of its most significant investments- the Autoplex project. This $2 billion investment will produce a new line of GM-10 front-wheel drive cars. Of course GM is also undertaking the $500 million GM-Suzuki project to introduce a new line of small cars. Chrysler and Ford have also made impressive investments in their Canadian operations, directed mostly to robotics and plant automation. These companies are either producing or will produce very competitive products such as the Chrysler Van from Windsor, the Premier from Brampton, and General Motors new GM-10 car from Oshawa.
February 16, 1987


Hon. Herb Gray (Windsor West):: Mr. Speaker, the auto industry is central to the health of the Canadian economy. One job in every seven is dependent upon the auto industry in Canada. This means that there is no part of Canada which can accept with equanimity any weakness or deterioration in the Canadian auto industry. No matter how remote any part of the country may think it is from those parts of central Canada where most of the automotive assembly or parts plants are found, its health and well-being are in fact linked with the auto industry.
Whether we are talking about the mining of iron ore, the manufacture of steel, textiles, or even forest products, to a very major degree their health and well-being are linked to the health and well-being of our auto industry. This is why it is essential for the Government to have a clear and definite strategy to preserve and strengthen the Canadian auto industry.
One element of the strategy must be to ensure that the Auto Pact and its safeguards are not allowed to be up for grabs in the current United States-Canada free trade negotiations. In spite of questions posed to the Government in the House very regularly, there is still an area of doubt about its real intentions, created by the lack of firmness and precision in the answers given by government Ministers to these questions about whether the Auto Pact is or is not, will or will not be on the free trade negotiating table.
Last Friday, speaking at a University of Windsor seminar, Gordon Richie, chief deputy trade negotiator to Simon Reisman, Canada's representative at the free trade talks, said the following, as reported in the the Windsor Star.
-the Auto Pact isn't excluded by the Canadian Government, as cultural sovereignty and national security matters are.
Everything else, he said, is on the bargaining table, and of the Auto Pact he said: "We're always open to suggestions".
But when asked to state the Government's intentions, Richie replied: "I can tell you my clear understanding, and the mandate governing us in the talks, is we have not raised the Auto Pact, the Americans have not raised the Auto Pact. Neither the Americans nor Canadians have raised the Auto Pact, and for our part we don't see any pressing need for it to be raised".
I repeat, however, Mr. Richie said the Auto Pact was not excluded in advance from the free trade talks in the same way that the Government claims cultural sovereignty and national security matters have been excluded.
The lead story in today's edition of The Financial Post reported that U.S. trade negotiator Peter Murphy appears to be readying himself to propose major changes to the Canada-U.S. Auto Pact, and that he intends to put these changes on the table this coming March. Therefore, we need a clear declaration by the Government, which we have not as yet received, that as part of its strategy to preserve the auto industry, so fundamental to the well-being of the Canadian economy, the Auto Pact will not be on the table and that its safeguards will not be on the table no matter what Mr. Murphy intends to bring forward in March.
Automotive Strategy
There is a risk that the Auto Pact is up for grabs in the free trade negotiations, that the Auto Pact itself or its key safeguards will be traded off, perhaps with the best intentions on the part of the Government, to get something else it considers important to the economy. The risks are there so long as the Auto Pact is on the table, along with everything else which is allowed to be on the table in the free trade negotiations.
There seems to be some pressure growing in the United States for changes to be made to the Auto Pact. These pressures are based upon a very fundamental misconception. Some people in the United States seem to think that the problems they have and the problems they foresee with their auto industry are linked with the operations of the Canada-U.S. Auto Pact.
As part of the strategy which the Government must have to preserve the health of our auto industry, it must make it clear to the United States and its people that any problems they have or they foresee in their auto industry have nothing to do with trade between Canada and the United States in the automotive sector. Instead, that trade, developed and enhanced under the Canada-U.S. Auto Pact over the past 20 years, has helped to build and strengthen the United States auto industry.
We must ensure that the Americans understand that hundreds of thousands of jobs in that country are dependent upon the continued existence of the Canada-U.S. Auto Pact and its safeguards in their current form. If the safeguards and that pact are allowed to be weakened in the free trade negotiations or otherwise, those hundreds- of thousands of American jobs are in peril. Their future existence cannot be ensured.
We must also remind the Americans that for 13 years of the 20 years the Auto Pact has been in existence the Americans had a surplus. It is only in the last four or five years that the balance has shifted in the other direction. Surely it is not the American definition of a fair deal to be one in which only the American side can ever benefit. Surely any deals we have with the Americans and with other countries in the world must be deals where both sides win. Surely that is the experience of the Canada-U.S. Auto Pact.
We must ensure that the Americans recognize-and we must recognize it as well-that if there are problems emerging in the auto industries in both countries, they have nothing to do with the Canada-U.S. Auto Pact which, as I said, has worked to strengthen those industries. Instead, they have arisen out of the problems created by the import of cars from Japan and Korea. These problems are also developing, strangely enough and paradoxically enough, from the investments by Japan and Korea in Canada and the United States in new assembly plants. These plants will not be creating the same number of jobs as have equivalent plants built by North American producers, for a simple reason-Japanese and Korean producers in Canada with one exception, have not been compelled by the Government to meet the requirements of the

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Canada-U.S. Auto Pact when it comes to assembly and Canadian content.
This means that a car produced in one of the new Japanese plants in Canada will be made or assembled primarily from parts imported from offshore, and therefore will not have the same job-creating potential as the same kind of car assembled in a plant built and operated by one of the Big Four.
A pillar of the strategy which the Canadian Government needs for its auto industry is that all those who wish to sell cars in Canada, above perhaps a certain very minimum level, must play by the same rules, whether they are the Big Four North American producers, the Japanese producers, or the Korean producers. They must meet the same requirements in respect of assembly in Canada and of Canadian content. This means basically the rules under which the big four North American producers operate the Canada-U.S. Auto Pact. Those are simple requirements, straightforward requirements and proven requirements, but so far only one of these new Japanese investors is subject to a clear binding commitment to meet those Auto Pact rules, and that is in the General Motors- Suzuki joint venture because of the commitments extracted from Suzuki by the Ontario Government.
This House should agree that our Government insist by force of law that the Japanese and Korean manufacturers, which are building automotive assembly plants here, meet, within a very short and reasonable deadline, the Auto Pact commitments regarding Canadian content and production ratios. If that does not happen, then surely they cannot be allowed to operate in the same way as the North American producers.
We need to have an automotive strategy in Canada. It must have two pillars. First, the preservation of the Auto Pact and its safeguards; second, to all those who wish to sell cars in Canada the extending of the requirements presently imposed only on North American producers for assembly and Canadian content. Failure to do that this will put at risk 40,000 jobs, something we cannot afford to do. Equally important, it will put at risk what I have said is a cornerstone of the Canadian economy, and we cannot allow this to happen. We need a strategy. The elements of that strategy are clear. We must insist that our Government get on with it, put that strategy in place, and make the Japanese and Korean producers play by the same rules as the North American producers in the interests of the workers in the automotive industry but equally in the interests of the entire community, of our country and all those in it.


Mr. Richard Grise (Chambly):: Mr. Speaker, I am grateful for this opportunity to take part in a debate on one of Canada's basic industry, the automotive industry.
The Canadian Government has clearly indicated its support for maintaining a strong and competitive automotive industry
in Canada. Indeed, assembly operations and the manufacture of parts and related components rank as the foremost manufacturing sector in Canada, and I am very pleased to represent certain groups, certain regions of the riding of Chambly that are directly involved in manufacturing either parts or related components for the automotive industry. Incidentally, these firms are doing extremely well these days.
In 1985 this sector shipped various products valued at over $42 billion and employed about 129,000 people. According to Canadian steel manufacturers, the North American automotive industry absorbs roughly 35 per cent of their output. The Conservative Government is very much aware of the fact that North American auto plants make a major contribution to Canada's economy and Canadian consumers. The Government is also aware of the fact that the auto makers are becoming part of an ever more international and competitive industry. As a result, unfortunately North American car manufacturers have lost a share of their market to imported products. What is more, new Asiatic manufacturers who open their plants in North America are increasing the pressure on our domestic industry.
However the North American industry is now undergoing major structural changes. Since the industry's evolution has growing international implications, the Government believes that Canada's auto makers must adopt new manufacturing and management techniques if they want to remain competitive on international markets. This is why we tried to give them time to make the transition. Since 1981 we have maintained an export restriction agreement with Japan, and in the May 1985 Budget we announced measures which were to come into force on January 1, 1987 and which were designed to eliminate provisions under which such countries as Korea and Mexico were allowed to export duty free automotive products.
North American companies are adjusting under this pressure, yet they continue to make huge investments to improve quality and introduce new products while reducing costs. From 1980 to 1985, their capital expenditures in Canada averaged $550 million dollars a year. Let us look for instance at General Motors. We are all aware of the important fact that its Boisbriand plant, in Quebec, is still operating at full capacity. General Motors therefore invested in a number of projects, of which the most important is the $2 billion Auto-plex program for the manufacture of a new line of front wheel drive vehicles. Chrysler and Ford also invested recently in their Canadian plants, mostly to automatize. Because of this, Canada will be in a good position to manufacture highly competitive cars, such as the American Motors Premier, the General Motors GM-I0, and naturally, the Chrysler van which is manufactured in Windsor and already very popular.
As concerns foreign investment, we have tried to guarantee that Canada will have a fair share of Japanese investments in North America which, until quite recently, went for the most part to the United States. Without these investments in Canada, Japanese companies could import vehicles from their
February 16, 1987

new assembly plants in the United States and increase their share of our market without contributing to the Canadian economy.
Since 1982, the Japanese have been spending a lot of money on assembly plants in North America to strengthen their market and minimize the effects of possible trade restrictions. Honda and Toyota plan to invest $600 million to build an assembly plant in Canada. The GM/Suzuki partnership will invest $500 million and Hyundai will spend $300 million for an assembly plant at Bromont, in Quebec. Mr. Speaker, I had the privilege of attending the sod turning ceremony for this Hyundai plant in Bromont. Some 480,000 vehicles will be manufactured in Canada. These investments should create some 5,000 jobs directly, as well as a great number of indirect jobs, especially in the Chambly constituency. If a number of other projects go forward, thousands of additional jobs could be created in Canada.
We recognize that, in the beginning, these plants will use fewer workers and rely more on foreign parts suppliers than their North American competitors. However, we shall try to ensure that these new Canadian companies maximize the Canadian added value of their products and that, by so doing, they get gradually closer to compliance with the Auto Pact. There will be more openings for Canadian parts manufacturers. We know that they will try to determine which products could be supplied to these newcomers and we shall co-operate closely with them in this regard. Until now, certain Japanese and Canadian firms have gone into partnership to manufacture a whole range of products including instrument panels and rubber products. In addition, several Canadian and European companies have co-operated in joint ventures to produce sophisticated parts and accessories.
During our talks with Japanese and Korean car manufacturers, we insisted on the importance of the Auto Pact's goals and performanced requirements. It is important to stress that companies choosing to comply with the Auto Pact derive significant tariff benefits. Although they are under no obligation to comply, financial benefits cannot be ignored in a highly competitive climate. In fact, all new entrants, including Toyota, Honda and Hyundai have announced plans to comply with the Auto Pact.
Up till now, Mr. Speaker, the Government has been applying the general principle of encouraging rather than requiring the establishment of performance levels in Canada. We are not a dictatorial government, Mr. Speaker. Clearly, if we were to enact Canadian content legislation, we would be violating our multilateral trade obligations under the GATT. Not to mention eventual reactions by our trade partners, there is no indication that increased protection would improve the Canadian industry's competitive position or guarantee job creation. In fact, recent productivity and competitivity gains obtained by the Canadian industry largely stem from deep changes companies have been making in manufacturing methods and products, in the face of strong international competition.
Automotive Strategy
Mr. Speaker, we are not convinced that increased restrictions will encourage North American and foreign manufacturers to invest in this country. Rather, the Canadian Government, in co-operation with provinces, will encourage significant automotive investments by creating a stable economic climate and implementing appropriate monetary and fiscal policies.
However, Mr. Speaker, the Government recognizes that the automotive industry is facing new problems that call for novel solutions. In that context, I would like to take this opportunity to inform Hon. Members that the Department of Regional Industrial Expansion has agreed to consult industry and labour representatives on a wide range of matters of importance to the automotive industry.
In conclusion, Mr. Speaker, the Minister recently met representatives of the Automotive Parts Manufacturers' Association, Canadian Automotive Workers and the Society of Motor Vehicle Manufacturers, to examine industry matters, including the one now before the House, and to look for solutions.
It is my belief, Mr. Speaker, that together we can establish policies that will ensure the industry's long-term viability and its contribution to the Canadian economy.


James Douglas Manly: Mr. Speaker, I do not think anyone can sit in this Chamber for very long, regardless from what part of Canada he or she comes, before beginning to realize the importance of the auto industry in the Canadian economy. Before very long, he or she will also come to the realize that the auto industry is in somewhat of a crisis.
The importance of this afternoon's debate is that the Hon. Member for Essex-Windsor (Mr. Langdon) has suggested some ways to resolve this crisis and has pointed to potential solutions. His motion calls for legislation in the spirit of the Auto Pact, legislation which would apply to all automobile manufacturers who wanted to access the Canadian market. For vehicles that would be sold in the Canadian market, there would be a requirement that the manufacturers would have to reach a basic 60 per cent equivalent of Canadian content.
In the last few years, there has been a great deal of legitimate concern about the flood of Japanese and Korean imports. At present, more than 30 per cent of all automobiles purchased in Canada come from these two countries. It is expected that if current trends continue, this figure will increase to between 35 per cent and 40 per cent in two years. These are good cars. They are reliable and serviceable. The problem is that they do not produce Canadian jobs. In fact, as they replace cars that are made under the Auto Pact, they displace Canadian jobs.
Coming from British Columbia where there is an exceedingly high unemployment rate today, I must admit that I am slightly envious of members from central Canada where the

February 16, 1987
Automotive Strategy
unemployment rate is considerably lower. Certainly the Auto Pact has had a good deal to do with the prosperity central Canada is enjoying right now. The motion we are discussing today, however, opens up the possibility that some of this prosperity could be shared by western Canada. Hon. Members who spoke previously already mentioned the wheel assembly plant Toyota is building in British Columbia, but this is minuscule in comparison to the number of cars sold in British Columbia and in comparison to the number of jobs that exist in the auto industry. We would like to see more jobs in western Canada. As a western Canadian, I do recognize the need of people in central Canada to protect the jobs that already exist.
The Hon. Member for Essex-Windsor pointed out that while we are in a surplus relationship with the United States, our over-all automobile trade is in a deficit position because of imports from Japan, Korea and Europe. Many of these companies have production facilities in Canada, but these facilities do not reach Auto Pact levels. Although some of them plan to reach Auto Pact levels, there have been no guarantees. It is expected that they will grow to only approximately 25 per cent to 30 per cent of Canadian content by the end of the decade rather than the 60 per cent of Canadian content required.
The combination of productive over-capacity with a rather flat demand will lead to ever-increasing competition in automobile sales. The share of the market covered by companies included in the Auto Pact could shrink to as little as 40 per cent by 1990. That means that an estimated 40,000 direct jobs could be lost. If we include the ancillary industries, it could mean that as many as 130,000 jobs in related industries could be lost. This is something Canada cannot afford, whether those jobs are lost in central Canada, western Canada or wherever.
The answer we have often heard from whatever Party is in power is that voluntary restraints are being negotiated. However, voluntary restraints have not been very helpful in the past. Under voluntary restraints, Japan's share of the market has gone from 18 per cent two years ago to 21 per cent today. Hyundai, a company from Korea, under duty-free access which was in effect a $ 100-million tax break, now has 8 per cent of the market in Canada. Imports have grown from a value of $332 million in the first half of 1981 to $2.6 billion in the first half of 1986. This gives us some idea of the rapid increase in the problem with which we are dealing.
We need to remember that the automotive sector is the most important part of Canada's manufacturing industry. There is a basic need to ensure that it is not destroyed. A good deal of Canada's economic health depends upon the extraction of raw resources, and in many ways we have a resource-based economy. However, in western and northern Canada, we are seeing the weakness of that kind of an economy. As resources become depleted, world markets become glutted or certain resources become obsolete, the economy that is dependent on those resources will become weak and have little flexibility.
There is a need for a strong manufacturing sector that will be able to diversify.
The motion put forward by the Hon. Member for Essex- Windsor provides that if companies want to have access to the Canadian maAet, they will have to pay for it. They will need to pay for it by making a commitment to Canadian content. Sixty per cent of the value of everything sold in Canada will have to have the equivalent of 60 per cent Canadian content value added. This is a way to protect jobs we already have. It is a way to ensure that the prosperity we see in central Canada will remain and also to ensure that some of that prosperity will go to other parts of Canada like western Canada where there are very great needs indeed.


Mr. Bill Kempling (Burlington):: Mr. Speaker, I will speak for a few minutes and then my colleague, the Hon. Member for Simcoe South (Mr. Stewart), will conclude. When speaking of the Auto Pact and the auto industry, Hon. Members seem to view it as a static situation. When the Auto Pact was put in place in 1965, Studebaker and Hudson were in the market. In fact, at one stage Renault had a manufacturing plant in Montreal and Toyota had one in Nova Scotia. They are gone and Toyota of course has recently opened a new plant in the Cambridge area.
The perspective I want to bring to this debate is that we are talking about a global industry. General Motors recently made an agreement with Volvo to produce certain models of trucks and buses in a joint venture. The Chevrolet division of GM imports Suzuki trucks from Japan and sells them through its dealer network. General Motors also sells two or three other automobile models by way of joint venture or direct import from Japan. Everyone is very familiar with the recent deal they made with Suzuki to produce that vehicle in southwestern Ontario. From their perspective it is a global industry. Ford Motor Company recently announced a joint venture with Volkswagen in Brazil. I do not know whether some of that production will come to Canada but I understand Volkswagen will run the plant, Ford will sell the production and have some engineering say so. Ford has a model in its line which was designed by Mazda. It is being produced in Taiwan, shipped to Canada and sold under the Ford name. Ford also brings in a sports car from Germany. Ford is a substantial investor in Mazda, which the Hon. Member for Windsor-Walkerville (Mr. McCurdy) will be pleased to know.
Chrysler Corporation has an array of automobiles which are either imported from Japan or have Japanese components. American Motors is controlled by Renault. Renault owns Mack trucks, which a lot of people do not realize. White Motor Company is controlled by Volvo. Freightliner is owned by Mercedes Benz. Discussions are under way between a Japanese truck manufacturer and some of the few North American truck manufacturers still in business.
All of these deals have come about for a variety of reasons. Some have to do with development, some with production, and
February 16, 1987

some with service facilities in some parts of the market. Others have to do with common components. By way of example, some European manufacturers are using a common engine block and machining it to their own requirements in order to achieve economies of scale in the casting of engine blocks. Japan is experimenting with a ceramic engine block. There are manufacturers working closely together to produce a common automatic transmission which can be used in small vehicles.
The Auto Pact, when it was crafted by our two Governments, had a little different form than some people believe. On the American side it is a bilateral agreement, while on the Canadian side it is a multilateral agreement. That is why we were able to bring in four cylinder engines from Germany, along with various other components from Brazil, Mexico and other places, to be used in Canadian production. We put them through our manufacturing process, added Canadian content, and then used them domestically and exported them to the U.S.
In my constituency, Tridon Manufacturing has just signed a licensing agreement with a Japanese company to produce windshield wipers. Degguse makes catalytic converters and has just signed a licensing agreement in Japan and Korea, I believe, to produce the ceramic cores for catalytic converters. So as the industry develops it is becoming more and more global in nature and I would not recommend that at this time we put any restrictions on that evolution.
I will stop at this point and yield the floor to my colleague.


The Acting Speaker (Mr. Paproski):: I would like to recognize another member on the other side, so 1 will give the Hon. Member three minutes or so if he does not mind. Allowing everyone time in one hour is very difficult. I will recognize the Parliamentary Secretary to the Minister of Supply and Services (Mr. Stewart).


John B. Stewart: Mr. Speaker, it is a pleasure to take part in the discussion of this motion. My friend from Windsor West spoke about the Auto Pact and freer trade with the U.S. I just want to say that remarks like that only play into the hands of Peter Murphy, the American negotiator. The more we talk about the Auto Pact, the more bad publicity we get on the Canadian side. If he was paying attention to what the Minister said earlier he would know that she said the Auto Pact is working well and will not be put on the table. It is as simple as that.
We are well aware of how important the automotive industry is to Canada, particularly Ontario where some 88 per cent of the vehicles are produced. Employment in the industry is at an all-time high with 129,000 workers, compared to about 98,000 in 1982. This Government has made significant progress in increasing productivity and reducing costs. Canadian workers have adapted to the new challenges and are building better cars than ever before.
Automotive Strategy
I agree with my learned friend from Burlington who probably knows more about the automobile business than anyone in this House. It is a global business. The Japanese have made large investments in North American assembly facilities recently, one of which was the new Honda plant in Alliston, Ontario, in my riding. It now employs hundreds. As well, there is a huge Volkswagen plant which was sitting almost idle and it is now going to employ 150 new people. I know the manager of that plant very well and he and the president of the company have vowed to fill that plant with equipment to produce parts in Canada. Mention has also been made of Toyota and the GM/Suzuki project.
This Government recognizes that Asian assembly operations will be more dependent on parts supplied from overseas than our domestic manufacturers, and we hope they will quickly increase the Canadian content both in assembly and through local parts purchase, and do so without legislation.


Howard Douglas McCurdy: Mr. Speaker, I very much appreciate the opportunity to say a few words at the end of the hour set aside for this debate. It is clear that I rise to support the motion of my colleague from Essex- Windsor. I come from a community where half the jobs are related to the automobile industry. There are four plants in my riding and it is natural that I should rise to support a motion in defence of the jobs which are so important in my constituency. However, we should not overlook the fact that the automobile industry is largely responsible, far more than the Government, for the degree of economic improvement we have experienced in the last couple of years. While 50 per cent of the employment in my community depends upon the automotive industry, some 130,000 jobs in total depend directly on it, and indirectly some 430,000 jobs across Canada are dependent upon it. It is perfectly clear that Canadians generally benefit from jobs in the automobile industry which, as was shown earlier, is largely attributable to the effects of the Auto Pact signed some 20 years ago.
I was also pleased to hear the intervention of my colleague from British Columbia who recognized that this motion is of benefit to Canadians generally as well as to his own province. If these measures are adopted then not only Ontario and central Canada will benefit, so will the rest of Canada.
Some have called attention to the fact that there was a time when the importation of Japanese cars meant the availability of a high quality, innovative and attractive product at low prices in comparison with the American product. One of the reasons that we have benefited is that in the last couple of years the North American producers who are signatories to the Auto Pact have improved their technology and product to the stage of being of equal quality to Japanese cars. Most important, the manufacturers of those automobiles in this country produce a lot of jobs. They produce three to four times more jobs than the assembly plants now being established here by offshore producers.

February 16, 1987
Adjournment Debate
The time has come, not to give North American manufacturers any advantage, but to ensure that they will be operating on a level playing field. The Japanese manufacturers, which are establishing assembly-only plants in North America, must be required to play by the same rules. If that is done, Canadian consumers will have good products, whether produced by the big four or the Japanese manufacturers, and Canadian jobs will be maintained. I understand it to be my responsibility and the responsibility of Parliament to act in the interests of the Canadian people.


The Acting Speaker (Mr. Paproski):: The hour provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 42(1) the Order shall be dropped from the Order Paper.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, I appreciate the opportunity to say a little more this evening about a very unfortunate matter which occurred in January and which questions in the House have not resolved. On January 23 The Montreal Gazette published an article quoting a paragraph from a speech given by the Minister of Employment and Immigration (Mr. Bouchard) a few days earlier. The speech included the following paragraph:
A lot of pride, a lot of pride.
That is in reference to his home area. It continues:
Because it's-a protected francophone enclave. Three hundred thousand- undisturbed by immigration, by the presence by other realities in the country. So it has a purity at the demographic level, at the ethno-cultural level, at the ethnocultural level especially.
That paragraph aroused enormous reaction in various quarters in this country, to which I can testify. I know that the Canadian Ethnocultural Council has protested this to the Prime Minister's Office and has urged the withdrawal of these words and an apology to those who make up the other realities in the country to which the Minister referred in this political statement.
The intensely regrettable fact is that this was pressed upon the Minister himself. I can say that advisedly. It was pressed upon him to withdraw the statement and recognize how contentious and objectionable it was to many Canadians. That has not been done. For that reason I felt compelled again, after having raised the matter on January 29, to press the Deputy Prime Minister (Mr. Mazankowski), in the absence of the
Minister, to have him withdraw this statement in order to have this expunged from the record. That has not been done.
The Minister of Employment and Immigration should be conscious of the words that he uses, what they evoke, and what the dangers are. I want to address that briefly in underscoring the urgency of such a withdrawal. In the process, I want to demonstrate that this is a shallow view, even of the Minister's own region and of the people of whom he is justly proud.
To talk of a protected francophone enclave is to take a very limited view of the Lac St. Jean-Saguenay region. This is, after all, a region in which British and Anglo Canadian trading interests and forestry interests long had a very, very large role. There was a day when William Price was regarded as the uncrowned king of the Saguenay. With that kind of a reality, surely there are realities to consider in asserting that this is a protected francophone enclave. To talk about it as undisturbed or untouched by immigration involves the question of how to translate deranger.
Surely to speak of it in those terms is to ignore what is true for Canadians generally, that we are first a nation which has grown from immigration. The Minister of Employment and Immigration failed to recognize that fact in talking about an area "untouched by", suggesting that here was a native element, a protected francophone enclave, which was not touched by these other realities. That is exactly what has aroused the fear of so many Canadians as to what the Minister actually meant.
To speak about "pure in population and in culture", if I could paraphrase slightly what the Minister actually said, is most assuredly to talk in terms of race. The intensely regrettable thing is that the Minister had pointed out to him that this was precisely the language which in the Third Reich in Germany was the language of Nazi race legislation to be applied to population as a basis for extermination of the Jews and others.
We do not talk about being pure in population and culture. We want to celebrate the richness of culture. As a sort of concluding note on this plea to the Government and to the Minister himself, I note the fact that the Minister responsible for Multiculturalism in the very week this came up in the House was launching an advertising campaign in which he wanted Canadians to realize that Canada is no longer a nation of two solitudes and the others, but rather a family of all of us. There is the most grievous failing of the Minister of Employment and Immigration.
Surely a precise description of one of the solitudes is a protected francophone enclave undisturbed by other realities. It is in the most parochial terms, the worst terms of regional penny politics, to talk about one's home region in that way, especially when one is the Minister responsible for Immigration, instead of celebrating the diversity of the country and enjoying the fact, that "francophonia", if I can use that kind of
February 16, 1987

new word for French-speaking Canadians, has been enriched by immigration to this country. In fact, the City of Montreal and the Province of Quebec have had French-speaking elements added to their population and this has enriched society. To ignore that, even if it is in the Lac-Saint Jean- Saguenay region, was an incredible oversight from our Honourable Minister of Employment and Immigration.


John B. Stewart: Mr. Speaker, I regret the Hon. Member for Thunder Bay-Nipigon (Mr. Epp) has chosen such a distasteful approach to such a sensitive matter. I regret that he seems to place the partisan business of trying to score political points above any careful consideration of the matter.
The Minister of Employment and Immigration has already made it perfectly clear to all Hon. Members of the House that the characterization given to his words was not only completely contrary to his intention, but completely contrary to his meaning. What is most important here is that such a characterization of his words is also completely contrary to the Minister's demonstrated beliefs, which all of us on this side of the House know. The Minister's meaning was not misunderstood by any who know him or his work. The Minister also said:

Because of a wrong choice of words, this may and does happen. If I thereby insulted anyone, I am deeply sorry.

That was clearly understood. The sincerity and convictions of the Minister are beyond question. All of his actions as a Minister of the Crown gives solid support to his words, which I quote from Hansard of January 29 at page 2879:
-I have the highest regard and respect for all immigrants and refugees who have at last reached a country where they can enjoy freedom.
I think all Hon. Members of the House know this to be true and nothing more needs to be said.


ROYAL CANADIAN MOUNTED POLICE-(A) LANGUAGE POLICY. (B) REQUEST THAT GOVERNMENT ASSERT ITS POSITION
Jean-Robert Gauthier: Mr. Speaker, in this adjournment debate, I would like to pursue with the House the issue of equitable representation within the Royal Canadian Mounted Police and the manner in which the Official Languages Act is implemented within a national agency that also has a responsibility to reflect the regional interests of this country.
Mr. Speaker, the House will recall that on December 18, I asked the President of the Treasury Board (Mr. de Cotret) when the Government intended to take a firm and public stand on equitable representation, and to quote the wording of my question: "The Government has adopted a passive attitude in this matter, preferring to do nothing. Delighted with this lack
Adjournment Debate
of action and leadership, the RCMP is still bent on its decision to reduce from 20 to 14 per cent the proportion of francophones among its regular officers."
Mr. Speaker, in the fall of 1986, in a monthly publication called the Pony Express, RCMP Headquarters announced its decision to reduce from 20 to 14 per cent the proportion of francophones among its regular officers. Mr. Speaker, this 20 per cent figure is not something I dreamed up. In fact, it was set in 1982 by the RCMP and Treasury Board in accordance with the requirements of the Official Languages Act, as a target for 1996. It was a policy agreed on by Treasury Board and the RCMP.
In the fall 1986 issue of Pony Express, we read that this figure would be reduced to 14 per cent, and according to documents we received, this was done with the approval of Treasury Board. When I asked my question, the House will recall that the Minister replied: No, certainly not. There will be no relaxing of the implementation of the Official Languages Act, and these agreements are only preliminary agreements, discussions among officials. There have been no concrete decisions, and no decision will be made without our being involved.
I waited, and the fact is that the Committee on Official Languages to which many Members of this House belong asked the RCMP to appear before the committee, and we had an opportunity to question Commissioner Simmonds of this national police force. It turned out to be a rather tumultuous confrontation, as Hon. Members may recall. It all began with the tabling of a unilingual English document, and one might say the situation was somewhat tense because we had the impressison that it might have been a way to humour us or to challenge us. But I think the commissioner just made a mistake and, finally, the meeting got under way, although the proceedings were not fully productive because the answers were not forthcoming. We could not get the commissioner to say whether or not the RCMP was intent on reducing staff from 20 to 14 per cent, which would create difficulties with respect to fair representation on this police force. It would also eliminate forever the possibility of having a sufficient number of employees and officers which would give Canadians an opportunity not only to work but also to be served in their own language whenever they may have dealings with this police force, the RCMP.
Well, the meeting was not an unqualified success, as we recall. Rumour has it that certain members and the Minister himself was heard to say in public after the meeting that he was getting impatient and wanted the problem to be settled. So I asked him a question here in the House on December 18: What is going to happen, when can we expect to have results, and can you give us dates, some kind of time-frame? The Minister replied the following, as shown on page 2263 of Hansard for December 18, 1986:
I wrote my colleague the Solicitor General on October 22 to ask him to submit to Treasury Board at his earliest convenience the plan which the RCMP meant to follow to implement the Treasury Board guidelines. I was told that it would take a few weeks, and I can accept that.

February 16, 1987
Adjournment Debate
This was four months ago, Mr. Speaker. When I raised this issue recently in the House, I was told to be patient and that the report was forcoming. We are still waiting for this famous report and we are really impatient to see what will come out of this.
Early in January, an internal note of the RCMP written by Commander J.E. Julien, of Division C in Quebec, to Commissioner Simmonds related certain points and commented on this established policy to reduce francophone participation from 20 to 14 per cent. In this document, Commander Julien wrote, and I quote, that the RCMP was violating the rights of francophones and that francophone officers felt rejected by the anglophone majority. In other words, Mr. Speaker, this document confirmed everything that we already knew, namely that the RCMP was very reluctant to keep its commitments under the Official Languages Act.
We did not have long to wait for all this to be confirmed. The management of the RCMP appeared before the committee and confirmed in reply to my questions to the commissioner that its established policy was still to reduce its francophone personnel from 20 to 14 per cent and even to 12 per cent and that it had no intention of changing the existing training program, in other words, that nothing would change and that, if it did, the change would be to reduce further its commitment under the law.
Mr. Speaker, we advised the Government of the problem last September. Nothing was done. We restated our concerns and expressed our fears publicly, but still nothing was done. Meanwhile, virtually irreversible policies are being developed and we urgently ask the Government to publish as soon as possible the report of the Solicitor General (Mr. Kelleher) which will give us the components of this policy so that we may put an end to this controversy and know exactly where this Government is going after two Throne speeches in which we were promised that something would be done in relation with our official languages. We were told that two years ago and nothing has happened yet. I am asking this Government to act, to do something positive and to publish this long-awaited report.


Mr. Frangois Gerin (Parliamentary Secretary to Minister of Justice and Attorney General of Canada):: Mr. Speaker, first of all, I must say that we have no lesson to learn from the Liberals as far as the use of French is concerned. One good example is the use of French in the House of Commons. Under the Liberal Government, in 1983 and 1984, only 8 percent of our proceedings took place in French. Under our Government it has gone up to 20 percent, a meaningful improvement which is not due to the Liberals. That is the result of unrelenting efforts by our Government in this regard.
Mr. Speaker, on behalf of the President of the Treasury Board (Mr. de Cotret), I would like to clarify tonight the matter raised by the Hon. Member for Ottawa-Vanier (Mr. Gauthier). First of all, as the President of the Treasury Board
already said, the language policy applying to federal institutions is set by the Government and in particular by Ministers of the Treasury Board. One of the purposes of the federal language policy is to ensure the full participation of members of both the French and English speaking communities in federal agencies.
Pursuant to the measures approved by the Treasury Board in order to reach that objective, the affected departments and agencies submit to the Treasury Board annual reports on the progress of implementation of the Official Language policy within their organizations. When the participation rate of one or the other language group departs too much from the percentage of that group in the workforce or the general population, the departments or agencies must state how they intend to reach a more acceptable balance in order to conform to their terms of reference as far as language is concerned.
Mr. Speaker, since language is not a discrimination factor under the Human Rights Act, one cannot use the provisions of Section 15 of that Act, such as the Affirmative Action Program, in order to restore a better balance. In that case, staffing procedures followed by departments must be in line with the Public Service Employment Act and the merit principle must be the determining factor in staffing decisions.
One of the measures Treasury Board would consider acceptable would be for instance for a Department to determine a long term quantitative participation objective. Yet, a set of goals or numerical quotas indicating the number of francophones or anglophones to be appointed to a number of positions over a specific period of time would be considered unacceptable. Likewise, members of an official linguistic group could not be promoted by a department or an organization by means of arbitrary identification of the linguistic requirements of the positions or by imperative staffing methods in order to achieve their long term participation objectives.
Finally, concerning the Royal Canadian Mounted Police, as already mentioned by the President of the Treasury Board (Mr. de Cotret), Treasury Board has neither considered nor approved any reduction in the participation objectives of regular officers who have indicated French as their first official language. In this connection, the Treasury Board President has asked his colleague the Solicitor General (Mr. Kelleher) for changes which the RCMP would like to make to its plans regarding the implementation of the official language policy and more specifically concerning Francophone participation. That was in December last.
In conclusion, Mr. Speaker, may I indicate that the President of Treasury Board wants to assure the House that the Government is aware of the need to readjust the participation of minority official linguistic communities in certain departments where there are shortcomings. This aspect, like others, is currently under consideration in the framework of the comprehensive review of official language policies. Thank you for granting me extra time, Mr. Speaker.
February 16, 1987


UNEMPLOYMENT INSURANCE-LEVEL OF BENEFITS. (B) REQUEST THAT GOVERNMENT CATEGORICALLY REJECT ALL BENEFIT REDUCTIONS
Lynn McDonald: Mr. Speaker, on December 3, I raised an extremely important question regarding the recommendations in the report of the Forget Commission, particularly the fact that women especially would be disadvantaged by the implementation of those recommendations. I asked for an undertaking from the Government that neither Canadian women nor men would be disadvantaged in the implementation of any of the recommendations of the Forget Commission.
The main way in which people will be disadvantaged if the recommendations are acted upon is by the ending of the so-called regional extended benefits part of the program and the replacement of the benefit calculations by the use of the so-called annualization principle for calculating benefits.
The idea is to establish eligibility for unemployment insurance after 10 weeks of work, but the earnings for the payment of UI would be based upon earnings over 52 weeks. Of course that would be very disadvantageous for people in areas of high unemployment, especially Atlantic Canada.
The total savings to the unemployment insurance scheme if these recommendations are acted upon are in the order of $3 billion, or about the amount of money spent for regionally extended benefits and for fishermen's special benefits. Of course this money comes from consolidated revenues, from taxpayers' dollars, not from employer-employee contributions.
Specifically there would be losses of $1 billion to Quebec, $540 million to Ontario, $660 million to Atlantic Canada, and $600 million to the west. All parts of the country would certainly be adversely affected.
Let us look at how people would be hurt if there is action on the recommendations. Benefits would go to 66.6 per cent of the last year's earnings or maximum insurable earnings. Therefore, a person who had worked the entire year before would be fairly well off on unemployment insurance. However, for someone who was unemployed for most of the previous year and only worked 10 weeks, the unemployment insurance benefit would provide only 13 per cent of income replacement. That is very little money. For the worker earning $400 per week with 52 weeks worked in the past year, the UI would be $277 per week. An employee in an area of high unemployment with only 10 weeks of work would only be receiving $52 per week. We are not talking about much income replacement. We are talking more about a welfare scheme in terms of its actual impact. Over 75 per cent of UI claimants have worked fewer than 52 weeks before filing a claim. They are the ones who will be hurt, and there are many such people.
Annualization, even with the 66.6 per cent benefit rate, would actually mean that half of Canada's unemployed would
Adjournment Debate
have less than 40 per cent of their week's income replaced by unemployment insurance. These changes mean a starve-out policy for depressed regions and a starve-out welfare program for workers with the least access to new jobs.
Another area of real concern is that women would be hit under annualization. Ironically, while women are supposed to be brought into the system increasingly by including part-time workers, most part-time workers are also seasonal workers. They would be hit as well. The National Action Committee, which wants to speak to the proposals, has been denied access to the committee. It will not have a chance to raise these extremely important issues, and I would hope that would be reconsidered.

We want to see changes which would improve the unemployment insurance scheme and extend its coverage to many more Canadian men and women workers. The NPD wants the inclusion of more workers, especially in areas of culture including the theatre, dancing and music. Artists' associations have been asking for a long time for the inclusion of their members into the unemployment insurance scheme.
The Standing Committee on Communications and Culture has proposed amendments to the tax legislation which would indirectly promote this objective. Unfortunately, neither the Forget Commission nor the Government has directly addressed these concerns, namely, the implementation of measures to give a greater number of Canadians unemployment insurance coverage. In fact, the answer is no. It is not an overly generous system. The measures provided by the vast majority of western industrialized countries are better. The priorities of the NDP are clear and they have been for a long time, since the Party's inception.
In our view, job creation is preferable. Canadians would rather work than collect unemployment insurance. However, an unemployment insurance scheme is absolutely necessary in the present situation. Nevertheless, Canadian men and women have had to wait a long time, for decades, because of resistance on the part of the Conservatives and the Liberals, who have refused to enact such a scheme.
The unemployment insurance scheme is relatively recent, having been established in the forties, and it has been under persistent attack by the private sector since the beginning.

At the very least the Government ought to respond to the concerns I have raised to ensure that any changes to unemployment insurance are to improve the system, not to cut benefits to workers who still need that unemployment system.


John B. Stewart: Mr. Speaker, on behalf of the Minister of Employment and Immigration (Mr. Bouchard), I would like to elaborate further on the question asked by the Hon.

February 16, 1987
Adjournment Debate
Member for Broadview-Greenwood (Ms. McDonald) on December 3, 1986.
As the Minister indicated, the Government has stated in this House that the purpose of any UI reform would not be to save money on the backs of Canadians. Rather, any reform to the UI program would have as its objective to make the system better. In this regard, it is both reasonable and responsible to consider carefully all recent studies that have reviewed the UI program, such as the Macdonald Royal Commission, the House Commission in Newfoundland and the Commission of Inquiry on Unemployment Insurance.
It is evident from the reactions to these reports that unemployment insurance is important to all Canadians. However, the recommendations of these several studies are not compatible in many instances. In fact, the Commission of
Inquiry was not able to arrive at a consensus. For all of these reasons the Government considers it premature at this stage to give assurances on any specific part of the report. I repeat that the Government will be reviewing UI with the objective of improving it, simplifying it and making it fairer. In this regard, the Government is committed to return to the House by May 15 with its plan to modify and improve on unemployment insurance.
[ Translation]


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


[Stage Direction]
The House adjourned at 6.29 p.m.
[Stage Direction]

Tuesday, February 17, 1987