1987-05-20

Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I rise today to express my frustration at the lack of action being taken by the Government of Canada and the Province of Nova Scotia in regard to the continued operation of the Hawker Siddeley Trenton Car Works in Pictou County, Nova Scotia.
Since the company gave notice some weeks ago, the Government of Nova Scotia and the federal Government came together to try to find a solution to this very difficult problem. Unfortunately, since that time meetings have taken place but indeed there has been no action. In fact the Minister of National Revenue (Mr. MacKay) indicated to the House that a solution would have been found within weeks. Unfortunately, there is no solution.
All we are receiving from the national Government as well as the provincial Government is more delays. I suggest that these delays are very harmful to the people of that particular community. It is frustrating to the workers at the Hawker Siddeley plant in Trenton, Nova Scotia. Equally, the uncertainty of a lack of a decisive decision with regard to the future of that operation is causing havoc throughout Pictou County.
I call upon the Government to stand up and be counted, and to make a decisive, positive decision on behalf of the workers and community in that area.


CANADIAN BROADCASTING CORPORATION
Mr. Albert Cooper (Peace River):: Mr. Speaker, dare I stand here, a back-bench government MP with no defences against
my colleagues, to extend a compliment to the CBC? But indeed I must! Last week, the CBC entered into serious negotiations with Carling-O'Keefe to work out a solution to broadcast the Campbell Conference and Stanley Cup series of the NHL in remote areas of Canada. CBC was successful in its deliberations and I would like to extend my thanks at this time.
In particular, I would like to thank Mr. Tom Curzon of press relations at head office, CBC Toronto, for updating my staff on an ongoing basis as proceedings developed.
I am now pleased to say that all of Canada can sit back, relax, and watch the Edmonton Oilers take the cup.


Some Hon. Members:: Oh, oh!


LABOUR RELATIONS
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, many Hon. Members of the House will be aware of the situation which now exists between Canada's rail unions and the railways with respect to contract negotiations and the intransigent way in which the railways have been dealing with the rail unions, demanding a five per cent wage roll back. This is something which has always been unacceptable, in my view, but it is even more unacceptable when we realize that CN, for example, turned a profit in the first quarter of this year largely at the expense of its employees, yet still insists on a five per cent wage roll back, which is entirely unacceptable.
Something I think the Government could do to help the situation, if it is at a point where it can still be helped, is to make clear its intentions with respect to at least one item on the table, and that is the whole question of the CN pension plan. The Government set up a special committee, recommendations were made, yet it has basically put this on the shelf. Something it could do to help matters along, even in just a small way, is to make clear its intentions in that regard.

May 20, 1987
[Translation\


REGIONAL INDUSTRIAL EXPANSION
Mr. Clement M. Cote (Lac-Saint-Jean):: Mr. Speaker, I am pleased to draw attention to the presence in this House of the industrial commissioners of my region.
Mr. Speaker, I take this opportunity to commend Canada's industrial commissioners for their excellence and their expertise which has been the mainstay of regional development. Their work enables each region to take its rightful place within the Canadian Confederation.
As we all know, Mr. Speaker, Canada's wealth rests primarily on regional diversities. Our Government is proud to acknowledge this fact and is committed to promote this concept by eliminating any disparity. The best example of this is that the Saguenay-Lac-Saint-Jean industrial commissioners are given an opportunity to appear before the committee today.


CONSUMER AFFAIRS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, the Consumers' Association reports that sales of bottled water have doubled since 1982. The average Canadian now drinks four litres a year. In Quebec the consumption is twice a much as the average. At the same time, using standards set by the United States Environmental Protection Agency, the Consumers' Association tested 15 brands of commercial bottled spring water for 79 substances and concluded that bottled water is not purer or safer to drink than tap water.
The Consumers' Association's tests showed that all the brands tested contained dissolved metals, inorganic chemicals and other suspended particles often at higher levels than tap water in seven Canadian cities. What lesson can we draw from all this?
It is becoming more obvious every day that what we do in our environment eventually affects water, even spring water. Everything in the environment is connected to everything else. What we do above the ground ultimately affects ground water, even if it is hundreds of metres below the surface. The first step we must take to reverse this trend is to abandon the dangerous mindset, the "out of sight-out of mind" attitude.


TRIBUTE TO MEDICINE HAT TIGERS-MEMORIAL HOCKEY CUP CHAMPIONS
Mr. Bob Porter (Medicine Hat):: Mr. Speaker, I would like to take this opportunity to extend congratulations to the 1987 Memorial Cup winners, the Medicine Hat Tigers. The Western Hockey League champions defeated the Oshawa Generals 6-2 in a sudden death final on Saturday, May 16.
There are many former Medicine Hat Tigers now playing in the National Hockey League. This year's team, which placed five players in the six all-star positions at the Memorial Cup, will continue to be well represented in the NHL.
This year's edition of the Tigers had a lot of class, presented themselves well on and off the ice, and were an outstanding representation of junior hockey.
Best wishes for continued success to the team, George Maser, Russ Farwell, coach Brian Maxwell, and team announcer Bob Ridely.
The Memorial Cup will be at home in Medicine Hat this year. The team, management and fans of that city will see that it stays there.
Canada's national sport is alive and well in Medicine Hat.


HAZARDOUS SUBSTANCES
Mr. Simon de Jong (Regina East):: Mr. Speaker, studies conducted in the past several years show that Saskatchewan has the highest levels of radon gas in the country. According to news reports 27 per cent of homes surveyed in southern Saskatchewan have radon levels four times the normal level. This means that occupants of those homes are exposed to radiation equivalent to more than 200 chest X-rays a year. The same surveys show Regina and Winnipeg as the cities with the highest radon levels in the country.
Most of these surveys were done during the summer months. A survey during winter would show even higher levels. These results of high radon gas levels are of grave concern to us and reveal an urgent need for action.
What is needed are more surveys, especially during winter months. The results of these surveys should be made public immediately rather than years later. Home owners should also be given an opportunity to monitor radon levels in their homes. More public information is also needed. Home builders, local building and health authorities, as well as individual home owners, have got to know what they can do to reduce the radon gas to acceptable levels.
May 20, 1987

I urge the federal Government to provide leadership that will make the homes in the areas of high radon gas emissions safe homes in which to live.


CANADIAN LABOUR CONGRESS
Mr. Rob Nicholson (Niagara Falls):: Mr. Speaker, I was shocked and disappointed this past weekend to hear comments made by Shirley Carr, President of the Canadian Labour Congress. In a speech praising the New Democratic Party she launched an attack against the Premier of British Columbia, Mr. Bill Vander Zalm. What was most troubling was her comment that Mr. Vander Zalm as "a new Canadian" should remember who helped liberate his country during World War II and that he had no right to bring his fascist ideas to this country.
I reject any distinction being made between native born and new Canadians. She should remember that, with the exception of our native groups, we were all new Canadians. As a nation we have never placed any limitation on a person's right to speak based on his country of origin, nor should we.
This kind of intolerance is unacceptable, un-Canadian, and I am sure is repudiated by the membership of the Canadian Labour Congress.


PENITENTIARIES
Mr. Fernand Robichaud (Westmorland-Kent):: Mr. Speaker, I would like to draw to the attention of the House an action by the Government which my constituents find totally unacceptable.
We have learned through access to information that the Government has cancelled an $18 million upgrading and expansion project at Westmorland Institution in southeast New Brunswick. While the Government cancelled Westmorland, and other important projects across Canada, it approved the construction of a $68 million penitentiary in the Prime Minister's (Mr. Mulroney) riding, a facility which most everyone agrees is not needed.

The Government's decision to build a new institution in the Prime Minister's riding, at the expense of other regions, is entirely unacceptable, especially when you consider that the unemployment rate in my own riding is 17.5 per cent, which is outrageous.
How do we explain this to the people of New Brunswick? We can only say the Government has decided to forget they exist!


EMPLOYMENT
Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, last week, Alcan announced it was investing $750 million in its future aluminum plant at Laterriere, in the riding of Jonquiere.
Mr. Speaker, it sounds like good news. Unfortunately, with the new plant and the new technology that will be used, Jonquiere will suffer a net loss of nearly 750 jobs. Add to that the loss in taxes and the good news becomes rather alarming for the community of Jonquiere.
Mr. Speaker, over the years, Alcan has made billions of dollars thanks to our hydro-electric and human resources. Alcan cannot go on investing all around Jonquiere while abandoning a community that has served it so well. We need more than the 4 or 5 million invested in SOCCRENT for our community. The company's directors are in the big league. They can afford to attract other investment to our region to diversify the local economy and maintain job levels in Jonquiere.
The community of Jonquiere is very worried, Mr. Speaker.


LABOUR RELATIONS
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, protest rallies will take place across British Columbia today, in opposition to proposed Draconian changes in the labour laws of British Columbia.
A work-to-rule campaign and an overtime ban by the B.C. Federation of Labour will go into effect today.
On April 3 last I drew the attention of this House to the drastic changes to the labour laws proposed by B.C.'s Social Credit Government. The proposals are ill-considered, confrontational, undemocratic, and unnecessary.
The Vancouver Sun has called Bill 19 "perhaps the most radical legislation introduced by the provincial government in the past decade".

May 20, 1987
Oral Questions
I urge Premier Vander Zalm, in his meeting with the B.C. Federation of Labour tomorrow, to agree to withdraw both Bill 19 and Bill 20; and I once again urge the B.C. Government to study carefully and consult fully before proceeding with any further labour laws.


LABOUR CONDITIONS
Mr. Reginald Stackhouse (Scarborough West):: Mr. Speaker, unemployment is not only a regional problem, it is also an age problem. Unemployed Canadians 45 years of age and over are more likely to suffer permanent long-term unemployment than any other age group.
This is only one example, Mr. Speaker, of actual age discrimination in Canada, in spite of federal and provincial legislation against such discrimination.
For that reason the Human Rights Committee of this House will begin a study on age discrimination today, and we hope to visit western Canada next week to receive testimony from that region. For that, we need the approval of the House. I hope that the Opposition will not thwart the opportunity for western Canada to participate fully in this vital study.


Some Hon. Members:: Hear, hear!


RAILWAYS
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, many Canadians in the riding of Glengarry- Prescott-Russell and elsewhere in Eastern Ontario are concerned about CN's decision to close down about 265 miles of track between Montreal and Sudbury, Ontario. These decisions will have a very serious impact on the riding I have the honour and the privilege to represent in this House.
A company in my riding, Alexandria Mouldings, has decided to postpone a S25 million expansion plan as a result of CN's budget cuts. The Minister of Transport (Mr. Crosbie) must take immediate action and tell CN representatives to stop these tactics immediately and provide full service to all customers in	Glengarry-Prescott-Russell, Renfrew-
Nipissing-Pembroke and elsewhere in Eastern Ontario.


EXTERNAL AFFAIRS
Mr. Guy St. Julien (Abitibi):: Mr. Speaker, every year, for 19 years, Le Tour de TAbitibi has organized a junior cyclists meet, the biggest in the world. In connection with the Sommet de la Francophonie in Quebec City, which will be held from September 2 to 4, Le Tour de TAbitibi will receive a $10,000 grant, which will make it possible for the president, Mr. Andre Babin of Val-d'Or, and organizers to invite representatives from Canada and several European, African and Caribbean countries, to talk about their respective cultures and sports disciplines.
In so doing, the Government of Canada wants to stress the fact that La Francophonie is not just a matter of heads of state and governments. In fact, it is unique as an assembly of individuals and agencies that in many cases initiated the concept of mutual aid and co-operation among francophone peoples throughout the world. Mr. Speaker, the Abitibi and Temiscamingue region appreciates the work done by the Minister for External Relations (Mrs. Landry) who is responsible for the Francophone Summit, and who saw fit to support a region far removed from our urban centres.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, it was hard to believe the performance of the Minister for International Trade on television last night. She refused to say whether or not the Cabinet had rejected the American demand for unlimited American takeovers of Canadian industry.
The Americans obviously want the right to buy up to 100 per cent of our oil and gas industry, lumber, fish, our farms, financial institutions-the whole country, including 24 Sussex, for all I know. And yet the Minister-


An Hon. Member:: They already have it.


John Napier Turner: Somebody is suggesting to me that they already have 24 Sussex.


Mr. Hees:: Don't worry, John; you will never need it.


John Napier Turner: Yet the Minister would not say yes or no last night on television.
Did the Cabinet reject yesterday the absurd American demand for unlimited takeover of vital Canadian industries?
May 20, 1987


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, it must have been a tough caucus this morning. The tougher the caucus, the greater the demagoguery from the Leader of the Opposition. It must have been a real tough one.
I am surprised at the anti-American attitudes coming from the Leader of the Opposition, he who supped at their table so long and so well.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: I will tell you, Mr. Speaker, that it will come as a hell of a surprise to Bechtel to find out that he is antiAmerican.


Mr. Nunziata:: Cheap shot.


Ms. Copps:: You are the Prime Minister. Act like it.


Mr. Speaker:: The Right Hon. Prime Minister.


Martin Brian Mulroney: Mr. Speaker, Liberals talking about cheap shots!
If the question is, is this Government inviting foreign investment into this country, the answer is yes. We stand for foreign investment, investment of all kinds which will result in jobs for Canadians. We campaigned on that. We indicated it very clearly.
With regard to a foreign investment policy which may or may not come under the free trade talks, that is for Cabinet to decide. We believe that trade and investment will create greater jobs and wealth for Canadians.
Our obligation is to reduce unemployment, the moral obligation to the country, to the extent humanly possible to provide everyone with a job. In large measure, in substantial measure, that must be done by investment of all kinds, including foreign investment in Canada.


Some Hon. Members:: Hear, hear!


John Napier Turner: The Prime Minister ducked that one again and did not answer the question.


PURCHASE OF CANADIAN FIRMS BY FOREIGNERS-PRIME MINISTER'S POSITION
John Napier Turner: The
Prime Minister has been approving takeovers at a rate of $1 billion per month. Ever since this Government came to power, not one takeover has been turned down. I am not talking about new investment but about takeovers.
So my question for the Prime Minister is: Doesn't he care that foreigners can buy up the whole country?


Martin Brian Mulroney: Mr. Speaker, the question lacks both dignity and realism. The question is: Don't I care about the fact that foreigners can buy
Oral Questions
up the whole country? The question is hardly not worthy of an answer and the Leader of the Opposition knows this perfectly well.
We had an unemployment rate of 11 per cent, which we inherited. We managed to get it down to 9.3 per cent. We have also succeeded in creating 770,000 new jobs in this country, which I think is an impressive performance. However, it is not enough, because we still have 1.2 million Canadians who are jobless, and to find jobs, we have to seek out new investment as well. Not at any price and regardless of the circumstances, but we have made it clear, unlike others, that as far as we are concerned, investors are welcome in Canada, provided they create jobs, provided they produce employment here in Canada.


John Napier Turner: I do not think anybody in the House needs to take any lessons from the Prime Minister on a dignified performance.
I want to say that the question was perfectly relevant when he has been selling off the country at $1 billion per month through Investment Canada, to such an extent that no one can take seriously the Government's record on protecting Canadian sovereignty, and certainly the Americans do not take it seriously.


Some Hon. Members:: Hear, hear!


ACCESS TO INVESTMENT IN CANADA
John Napier Turner: Now the Government is apparently contemplating a trade deal which would allow, in an unfettered way, the Americans complete access to investment in Canada, Mr. Speaker. How can the Prime Minister even contemplate that type of a deal? Is the Prime Minister on the road to having Canada become the 51st State? That is what the issue is?


Martin Brian Mulroney: Mr. Speaker, my right hon. friend knows that the answer to that really quite silly question is, no, in terms of contemplating that kind of a deal. We have indicated in this House, I think quite fairly, on a number of occasions the kinds of deals with the United States that would be acceptable to Canada.
I point out, for example, in regard to the question of trade raised by my right hon. friend, what the Hon. Donald Macdonald, a very distinguished Liberal, recently said about his position.


Sheila Maureen Copps: Get a new speechwriter.


Martin Brian Mulroney: "Some of' the Liberals, "they don't even know anything and you can't tell them anything. I think there's a low level of understanding on trade on the part of members of' the Liberal "caucus". I agree 100 per cent with what Donald Macdonald said.

May 20, 1987
Oral Questions


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


INSTRUCTIONS GIVEN TO CANADIAN NEGOTIATOR
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, now that the Prime Minister is in an agreeable mood, I would like to ask him whether he would confirm the following statement. Peter Murphy, the U.S. trade negotiator, wrote a memo to U.S. Congressmen in which he said:
Investment is another critical component for any agreement... The
Canadians are finally getting the message but are holding it out as bait to get
some progress on their key issues, such as contingency protection.
In the meeting held yesterday between Mr. Reisman and the Cabinet, did the Government, in fact, confirm directions to Mr. Reisman that it is prepared to give full and open access on investment, in return for making some modification to trade remedy laws? Are those the instructions on which Mr. Reisman is presently working?


Martin Brian Mulroney: Mr. Speaker, Ambassador Reisman, who is held in very high regard by the Leader of the Opposition, is operating under entirely appropriate instructions, instructions that are consistent with my statement to the House on September 26, 1985, statements by the Secretary of State for External Affairs and by the Minister for International Trade.
May I say with affection, to the Hon. Member for Winnipeg-Fort Garry, that he too was referred to by Donald Macdonald.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: Donald Macdonald-this is important- said: "I've debated on platforms with Axworthy across the country and I don't think he's got a-grasp of the issues".


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: Then, in the unkindest cut of all, he said "I think he's engaged in purely political posturing".


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Lloyd Axworthy: Mr. Speaker, I would say in return to the Prime Minister with great affection that he might enjoy more affection from the Canadian people if he were prepared to come clean when asked questions of direct public interest to Canadians.


Some Hon. Members:: Hear, hear!


GOVERNMENT POSITION
Lloyd Axworthy: Let me put
the question in a slightly different way, Mr. Speaker. Yesterday, Senator Lloyd Bentsen, who is Chairman of the powerful Finance Committee which will decide on the question of a free trade agreement with Canada, said quite categorically that any attempt to make major changes to trade mechanisms will be rejected by the Congress.
Why is the Government prepared to sell out this country by giving totally open access to investment to try to get a deal with a trade remedy law to which the U.S. Senate will not even agree? Is the Prime Minister prepared to tell us what kind of curious, strange, perverse logic is working in the minds of this Government when it is prepared to give away Canada to get nothing in return?


Martin Brian Mulroney: Mr. Speaker, I think the House and the country have just been treated to an exhibition of the reasons why Donald Macdonald, a very distinguished parliamentarian and Canadian, says that the hon. gentleman conducts himself like a sophomore who does not know what he is talking about. This is exactly what is going on. This is shameless-


Lloyd Axworthy: Are you afraid to answer the question? Yes, you are. Answer the question.


Martin Brian Mulroney: I will be happy to try to answer the question, Mr. Speaker.


Lloyd Axworthy: Answer it. We are waiting.


Martin Brian Mulroney: We are seeking a trade agreement, which we believe is very much in the national interest, the chief component of which would be the creation of new jobs, new employment opportunities for all Canada, particularly in those regions of the country that need investment and need job creation.
We have indicated very clearly, and most specifically the Minister for International Trade has spelled out the terms and conditions under which this kind of trade agreement would be entered into by Canada. Clearly the trade resolution mechanism is part and parcel of that. I have spoken to the issue directly. I have conveyed that to the President of the United States, and to Senator Bensten, distinguished Chairman of the Senate Committee, and others.
It is my hope and my judgment that this kind of mutually beneficial trade arrangement will emerge. It is consistent with the challenges of the 1990s and the 21st century and it is consistent with our obligations to create jobs. But we will only bring forward for the consideration of this House a trade arrangement which we believe is very much in the national interest. We are working toward that. If and when we achieve it, we will bring it forward, and I know my hon. friend will be the first to applaud it.
May 20, 1987


INVESTMENT RESTRICTIONS INQUIRY
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I would like to pursue this issue with the Prime Minister. Yesterday Simon Reisman was quoted as saying that he had a clear idea of what the United States wanted in the way of investment freedom in Canada. The Minister for International Trade was quoted as saying that Cabinet has not yet decided whether to permit negotiation over those demands. In short, the Government continues to let the initiative be taken by the United States rather than by Canada.
Why did the Government not, right at the start, say no to demands that would tie our freedom so completely, demands with respect to holding restrictions on investment which are crucial to jobs in Canada?


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, the Prime Minister has made it very clear that the kind of disaster and scare scenario members of the NDP are formulating is not being considered in any form in the current talks. I do not know why he is scaremongering like that but I can assure him that the kind of scenario he is suggesting is not the scenario being considered.


REQUEST THAT GOVERNMENT REJECT U.S. PROPOSAL
Steven W. Langdon: Mr. Speaker, Canadians heard the Minister say very clearly on television last night that the Government had not yet decided on this issue. I will ask her what I asked yesterday, and we still cannot get an answer.
Why has the Cabinet not said a flat no to the attempt of the United States to widen this discussion about investment beyond trade related investment? Why has there not been a flat no said in order to protect jobs in this country?


Pat Carney: Mr. Speaker, I will try to indicate, like the Prime Minister, that the kind of question the Hon. Member is suggesting has never been put to us. It would never be acceptable to us and it has never been put to us. What is clear is that the Americans do not want the kind of investment policies followed by the previous Government, policies which involved expropriation and the theft of other people's property. That is what the Americans do not want.


MINISTER'S POSITION
Steven W. Langdon: Mr. Speaker, given that in 1986 actually more investment went out of this country than came into it from the United States, how can the Minister maintain that free investment policies with the United States would benefit Canada in any way whatsoever?


Pat Carney: Mr. Speaker, a couple of questioners on the opposition side have referred to my remarks on television yesterday. I may point out that the remarks that were on television were the remarks I made in the House yesterday and I can only repeat them.
Oral Questions
I said yesterday and I repeat now that, unlike the previous Government, we have an open investment climate. We have Investment Canada. We have attracted record-breaking levels of foreign investment, creating jobs in Canada. I have made it very clear that the negotiator's mandate is not beyond that which I stated in this House. Again, they are scaremongering and raising issues that have not ever been advanced at the negotiating table.


FISHERIES
Mr. George Baker (Gander-Twillingate):: Mr. Speaker, President Mitterrand said today, when questioned about his trip to Canada and the fishing dispute:
It is my intention to raise the issue with the people I will be talking to.
Someone may be right and someone may be wrong. I hope reason will prevail.
I would ask the Secretary of State for External Affairs if it is not time the Government informed the French that, if reason is to prevail, the French should at least be reasonable and that it is completely unreasonable to demand a 200-mile zone around St. Pierre and Miquelon while they demanded and received, only 10 years ago, a six-mile zone around the Channel Islands because those islands were off their coast. Now that the shoe is on the other foot, they are trying to give us the boot.


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, when I saw the Hon. Member rise with his bright red puff in his pocket, I thought we were going to be treated to another of his dramatic shows. We instead heard
a-


Mr. Crosbie:: He poufed.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, I cannot do better than my hon. colleague, the Minister of Transport. Nor would the kind of attitude the Hon. Member adopts, an attitude of playing to the grandstands, help us in the negotiations under way with France over a matter that we know and will be treating in the discussions with the President of France as highly important to Canada.
The Hon. Member can take assurance in the fact that in the discussions we will have with the President of France during his historic visit here next week, the Government of Canada will be vigorously, assertively and consistently defending the interests of Canadian fishermen and other Canadian interests.


ISSUANCE OF LICENCES TO CANADIAN FISHERMEN
George Baker: Mr. Speaker, for the first time this year the Government has outlawed Canadian

May 20, 1987
Oral Questions
fishermen from a portion of the Grand Banks of Newfoundland where the American fleet can fish all it wants without fear of being arrested. For the first time, the Government has removed fishing licences from Canadians on the South Coast of Newfoundland and issued them temporary permits only last month. Yet the French can fish all they want out to 200 miles.
If this is to be the laissez-faire attitude of the policy toward the French and the Americans, will the Government now give back the licences that were removed this year to Canadian fishermen so they can at least fish where the French fish and the Americans fish without fear of being arrested? Our fishermen are being French-filleted and Yankee-doodled.


Charles Joseph Clark: Mr. Speaker, I suppose that's better than being poufed. The Minister of Fisheries is not in the House at the moment. I will take that question as notice and will get back to the Hon. Member.


EXTERNAL AFFAIRS
Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, I don't want to pouf and I don't want to puff, and 1 don't really care about the question of the Hon. Member from Gander- Gleason-Twillingate. Seriously, to the Minister for External Affairs, is there on the agenda with the President of France in his most important visit any suggestion at all that it is time France got rid of the last relic of its empire and that there be some devolution of St. Pierre and Miquelon to Canada under the proper processes so that we do not have to worry about fishing quotas or mineral resources and we will get back to what is properly ours?


Charles Joseph Clark: Mr. Speaker, that is not on my agenda and I would be considerably surprised were it on the agenda of the President of France.


Mr. Waddell:: I suppose we could trade the Turks and Caicos with the French.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: I know Hon. Members are interested in these novel suggestions but a lot of Members want to ask questions. I ask that questions be put clearly, succinctly, and that the answers be appropriately framed.


PROPOSED PURCHASE OF DOME PETROLEUM BY AMOCO CANADA-POSSIBILITY OF OTHER BIDS
Ian Gardiner Waddell: Mr. Speaker, my question is directed to the Minister of Energy. He is quoted as saying on Monday that other companies can now bid for Dome. Is this position not now inconsistent? He is now getting involved in this matter as he should have been all along. If he is serious about this is he prepared to take positive measures to ensure that other Canadian companies can bid for Dome without prohibitive lawsuits from Amoco?


Hon. Marcel Masse (Minister of Energy, Mines and Resources):: Mr. Speaker, it happens that I read the press as the Hon. Member should do himself. It is all over the country. I am sure those corporations have good lawyers and they can answer the question.


POSSIBILITY OF CERTAIN CANADIAN COMPANIES OFFERING TO BUY DOME-GOVERNMENT POSITION
Ian Gardiner Waddell: I have a supplementary for the Minister of Energy, Mines and Resources.
A number of Canadian companies including TransCanada PipeLines, Imperial Oil, Husky and Petro-Canada may be making a bid to purchase Dome. Is the Minister prepared to consider such a bid and is he prepared to help these companies? We want a Canadian solution. Does the Minister also want a Canadian solution?


Marcel Masse: Mr. Speaker, first of all, I don't think the Minister of Energy owns Dome, so I fail to see why these companies would make any proposals about Dome to the Minister of Energy. They know perfectly well where to go if they want to make a bid for Dome.
As for the future of such proposals, it is entirely up to the people in charge of Dome to decide whether they like them or not.


NARCOTICS
Mr. Bob Horner (Mississauga North):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. In September of 1986 the Prime Minister said we had a drug epidemic in Canada. I did not agree with him at that time but shortly thereafter the principal of a Mississauga high school told me that 50 per cent of the students I spoke to that day were using drugs.
May 20, 1987

I know $50 billion from the sale of illegal drugs is laundered each year in North America. I have since found out there are many drug-related gangland slayings around the city of Toronto. As a former member of the RCMP and on behalf of many concerned parents I would ask when is the Government going to do something about this abhorrent situation, and what is it going to do?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, it is essential that all Members understand the importance of this issue, the importance the Prime Minister placed on it, and the public profile he gave to it. Since that statement was made I and other Members of the House have been confronted on this issue by parents and people who work with youth. There has been very close co-operation between the federal Government, the provinces, and those agencies working on drug and alcohol addiction. We believe that is a good plan. We intend to unveil it across the country next week.


NATIONAL DEFENCE
David Charles Dingwall: Mr. Speaker, my question is directed to the Minister of National Defence. I am certain he would agree that the union and management at the Saint John Shipyard ought to be congratulated for their good and efficient work on the first phase of the frigate program. Can he indicate to the House, and particularly to the people of Saint John, whether or not the Government is still committed to the second phase of that program whereby six additional frigates will be built in Canada by Canadians, and that the decision will be made before October, 1987?


Hon. Perrin Beatty (Minister of National Defence):: Mr. Speaker, I certainly join with my hon. friend in congratulating the workers at Saint John Shipyard on the fine work they are doing. I have heard directly from them, my colleague the Minister of State for Forestry and Mines, the Premier of New Brunswick, as well as the Mayor of Saint John. They all made the case that the Saint John Shipyard is capable of doing superb work.
We will be announcing the architecture of the new Canadian Navy in the defence White Paper which will be coming out very shortly. My hon. friend will have his answer at that time.


REQUEST THAT SECOND PHASE BE AWARDED TO SAINT JOHN SHIPYARD
David Charles Dingwall: Mr. Speaker, there is high unemployment in Atlantic Canada. The Saint John Shipyard has the human and technical resources, as well as a cost advantage that other bidders do not have. Given that, does the Minister not think it in the best interests of Canada and regional equality that the entire second phase
Oral Questions
of the frigate program be awarded to Saint John so that the industrial benefits are distributed more equally throughout Canada?


Henry Perrin Beatty: Mr. Speaker, as I indicated we will be giving a clear indication of our intentions with regard to SRP II when the defence White Paper is released in a few days. I simply want to underscore again the appreciation we have for the fine work being done in Saint John at the present time.


REGIONAL DEVELOPMENT
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Deputy Prime Minister. Yesterday in the House the Prime Minister said the western diversification initiative would be announced at the earliest possible moment. I have here a leaked letter from the Minister of DRIE which he was planning to send out to some business people in western Canada to start consultation, with 30 key business leaders. The letter has not yet been sent out, but there are supposed to be consultations between April 22 and June 12 according to another leaked document I have.
Since this letter has not yet gone out and the consultations have not yet started I want to know why the unacceptable delay? Why has this important project been stalled? Does he not know we have very serious economic problems in western Canada? Why are you pushing us around like that? We want action now.


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, the Hon. Member would agree that it is not customary for a cabinet Minister to comment on a so-called leaked letter that was planned to be sent out by anyone.


Lorne Edmund Nystrom: Maybe the Government should develop the custom of at least answering the questions put by the Opposition.


John Carnell Crosbie: Give us a sensible question.


CONSULTATIONS CONDUCTED BY GOVERNMENT
Lorne Edmund Nystrom: Mr. Speaker, I also have a copy of a western diversification report or questionnaire used by public servants when they conducted a survey of western Canadian businesses. I understand a questionnaire of several pages is now being completed with about 24 different sector groups.
Perhaps the Deputy Prime Minister could answer the first question and at the same time tell us why, during this round of consultations, the Government is planning to consult only with the business community in western Canada? Why not consult

May 20, 1987
Oral Questions
as well with provincial Governments, municipalities, the farm sector, trade unions and others across the west? Why only with the business community at this stage?


Donald Frank Mazankowski: Mr. Speaker, I find the Hon. Member's question appalling. This Government has consulted with provincial Governments on a continuing basis. As a matter of fact, we are criticized every day from across the way for consulting too much with provincial Governments. Some have suggested we are giving away too much federal power to the provinces. The fact is that consultations have gone on.
As to responding to questions, if the Hon. Member put a thoughtful question I would certainly answer it. Hypothetical questions are not the kind of questions that I or any Minister, or even the Member I am sure, would like to answer.


SUPPLY AND SERVICES
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, in the absence of the Minister of Supply and Services, perhaps I might direct my question to the Minister of Public Works. It has to do with certain regional industrial development aspects which 1 raised yesterday. I should like to ask the Minister why Quebec firms specializing in this field-newspaper articles refer, among others, to Matrox, DIL International, Technogram-were not invited to bid on the software contract concerning the teaching of French in the Department of National Defence. I should like to know why they were not even invited to bid on this major contract valued at more than $700,000.


Hon. Stewart Mclnnes (Minister of Public Works):: Mr. Speaker, yesterday the Hon. Member raised a question about this matter and it is now being investigated by the Minister of Supply and Services. She will make the information known to the Hon. Member when she has it available.


REQUEST THAT GOVERNMENT PROVIDE JOBS AT LEVIS-LAUZON SHIPYARDS
Raymond Garneau: Another question, Mr. Speaker, again related to regional development. The Minister responsible for this Department being absent, perhaps I might direct my question to the Prime Minister because it concerns the important Levis-Lauzon region. I learned over the weekend that there are only 400 workers left
at the Lauzon shipyards, and that half of them are going to be laid off very soon. If we go back a few years to early September 1984 when this Government came into office, 1,500 Levis-Lauzon region workers had jobs at the shipyards.
I should like to ask the Prime Minister what the Government is waiting for to award a contract and begin work on the Caribou II ferry, which might provide employment for these Levis-Lauzon workers?


Martin Brian Mulroney: Interestingly enough, Mr. Speaker, the unemployment rate in the Levis-Lauzon region is now lower than it was on September 17, 1984, much lower. I should think my friend would agree with me that this is due mainly to federal contract award initiatives in the greater Quebec City metropolitan area, and particularly in that region. The federal Government will be taking action in a number of cases precisely to lower even more the unacceptably high unemployment rate in that region and maintain wide-ranging activities on a regional basis. We will be making statements to that effect in the not too distant future.


VIA RAIL
William Alexander (Bill) Blaikie: Mr. Speaker, my question is directed to the Minister of Transport. It concerns his statement in the House yesterday when he said, in response to a question by the Hon. Member for Papineau with respect to VIA Rail:
We will continue with new maintenance facilities, including facilities in
Winnipeg, Vancouver, and Halifax.
Does this statement mean that the postponement of those new facilities in Winnipeg, Vancouver, and Halifax has ended and the building of these facilities will commence? If so, when?


John Carnell Crosbie: Mr. Speaker, I think the statement means exactly what it says, that because of the additional funding which we are now providing for VIA Rail, VIA Rail will be able to go forward with its plans to construct maintenance facilities in Winnipeg, Vancouver, and Halifax. It will have to produce a plan for my approval and it will have to be part of its fiscal and annual plan. All those procedures will have to be followed.
It means that we are giving VIA the financial wherewithal to go forward with these maintenance facilities, including the completion of the construction of the facilities at Toronto and Montreal.
May 20, 1987


CONSTRUCTION OF FACILITIES-LENGTH OF TRAINS
William Alexander (Bill) Blaikie: Mr. Speaker, I would appreciate the Minister giving us a bit more detail about the timeframe he envisages for beginning these projects because it is certainly something that would be economically significant for western Canada as well as Atlantic Canada.
Perhaps the Minister could elaborate on that and, while doing so, tell us whether the Government intends to give any instruction to VIA with respect to its plans to shorten its train this summer, at the very time when there is increased demand for passenger rail service in Canada? We are told that VIA is planning to have a 14-car train instead of its usual 21-car train. Will the Government do anything about that?


John Carnell Crosbie: Mr. Speaker, I cannot give any more details in connection with the construction of maintenance facilities until I have met with VIA Rail and received its latest plans and schedule. The additional funding we are providing is over a five-year period and VIA will have to bring forward a plan which indicates where, when, and how they will proceed.
With respect to the second part of the Hon. Member's question, it is not that VIA Rail plans to shorten its trains this summer; it plans not to lengthen them. It will not add cars to its train services. What I am saying is 100 per cent accurate: it is not shortening the trains, it will simply not lengthen them.


EXTERNAL AFFAIRS
Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, my question which is directed to the Secretary of State for External Affairs concerns the Middle East. In 1985 the Government designated May 6 as Canada-Lebanon Day. During recent celebrations with the Lebanese community here in Ottawa, strong pleas were made for the Government to reopen its embassy in Beirut.
We all recognize the terrible tragedies that are still occurring in Beirut and in the Middle East. However, is the Government giving any consideration to reopening our embassy in Beirut in order to allow Canadians of Lebanese origin more easily and effectively to reunite their families here in Canada?


Charles Joseph Clark: Mr. Speaker, I thank the Hon. Member for that question and for the constant interest that he and the Minister of Public Works and others in the House have shown in the matter of our situation in Lebanon. We took the decision to close our embassy there because we thought it was not safe to maintain it open. Circumstances in Lebanon have not changed since that decision was taken.
Oral Questions


IMMIGRATION LIAISON OPERATION PROPOSED
John Barry Turner: Mr. Speaker, in light of the Minister's response, would it be possible for the Government to consider setting up an immigration liaison operation with the British Embassy or another embassy in Beirut in order to make it easier for Lebanese people who want to come to Canada to join Canadians of Lebanese origin?


Charles Joseph Clark: Mr. Speaker, I am naturally prepared to consider that. I would not want my remarks to be taken as any more commitment than to consider that proposal. However, we will look at that as a means to supplement the service that we now try to extend to a city where it is not possible for us to maintain an embassy.


REGIONAL DEVELOPMENT
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Deputy Prime Minister. He knows that northern Ontario has faced a very difficult time in the last couple of years with losses in the steel, forestry, and the mining industries. Will he explain why the Government is making the situation worse by transferring and cutting out hundreds of federal government jobs which not only take away wages in northern Ontario but take away services? Why has the Province of Ontario been able to transfer 1,200 jobs, with whole departments of government, into northern Ontario while the federal Government is transferring jobs out?


Donald Frank Mazankowski: Mr. Speaker, as I have indicated in the House before, the northern Ontario initiative is in its final stages of preparation. I have indicated on previous occasions that, in close co-operation with the Solicitor General, a program will be announced very soon which I believe will do much to establish a firm economic foundation for northern Ontario, which is something that had been sadly lacking during the previous administration.


TIMING OF RECOVERY PROGRAM ANNOUNCEMENT
Maurice Brydon Foster: Mr. Speaker, will the Deputy Prime Minister assure us that the Government will change its policies in this recovery program because we have lost some 450 jobs as a result of the Canada-U.S. export tax deal, lost hundreds of jobs in the steel industry at the tube mill at Sault Ste. Marie because of the energy policy of the Government, and our service industry has been hurt because of the cut-backs in the Small Craft Harbours Program? Will the Minister tell us today the date of the recovery program so that northern Ontario can begin to improve rather than decline as it has in the last two and one-half years?

May 20, 1987
Oral Questions


Donald Frank Mazankowski: Mr. Speaker, let me draw to the attention of the Hon. Member that 46 per cent of the new jobs have been created in the Province of Ontario since we became the Government.


Maurice Brydon Foster: Southern Ontario.


Donald Frank Mazankowski: I agree that a number of them have been created in southern Ontario. The fact is that we recognize that there is this regional imbalance to which the Prime Minister has referred on many occasions. We are addressing that.
I should also remind the Hon. Member, and perhaps he might advise his colleagues, that one of the best ways of securing a stable and durable future for northern Ontario is to obtain a bilateral trade arrangement with the United States to ensure that we would have-


Lloyd Axworthy: Like softwood lumber.


Donald Frank Mazankowski: -to ensure that we would prevent the kinds of actions as the Hon. Member for Winnipeg-Fort Garry suggested with regard to the softwood lumber issue. We need in place an equitable and workable dispute resolving mechanism, together with all the other components of an agreement which would enhance and secure our trading relationship with the United States. That would be in the best interests of northern Ontario and that is what we are trying to pursue.


LAPRADE FUND
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I have a question for the President of the Treasury Board, as Minister responsible for the Laprade Fund.
Last week, when I was in Victoriaville, I was told that although last November it was announced that the assets of the Laprade Fund were no longer frozen, there had been no grants from the Fund in the past six months.
Could the Minister give a reason for the delay and inform the House when the Government intends to start using the $87 million in the Fund to promote investment and job creation in the regions concerned?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, first of all, I would like to inform the Hon. Member that the Minister responsible for the Laprade Fund is the Minister of Regional Industrial Expansion, since the Fund comes under his department.
As a regional Minister, however, I welcome the opportunity to answer this question. As I said before, there are still $87.3
million in the Laprade Fund. The Department of Regional Industrial Expansion has prepared criteria that have been accepted by the Treasury Board. It seems that the Department has already received about 80 applications that are now being considered, and as I said at the time, the Laprade Fund being a supplementary fund, it has been possible to accommodate a number of these applications through existing programs.


UTILIZATION OF FUND-GOVERNMENT POSITION
Michael Morris Cassidy: Mr. Speaker, I have a supplementary. The Minister has failed to explain the six-month delay. Could he give the House the assurance that the Laprade Fund will not, as was the case under the previous Government, be used to provide election goodies but will be spent now, to create jobs and to provide for regional development, now, and not in 1989?


Robert René de Cotret: Mr. Speaker, I can assure the Hon. Member that first of all, there has been no unnecessary delay. In fact, we have been very concerned about avoiding the excesses of the previous Government and its wasteful spending, which did not go towards creating permanent jobs but jobs that disappeared after eight, ten or twelve weeks.
We want to create permanent jobs in the region and involve the region in its own economic development.


Mr. Speaker:: I would like to advise Hon. Members that, unfortunately, there is only room for one final question. The Hon. Member for Parkdale-High Park.


HUMAN RIGHTS
Mr. Andrew Witer (Parkdale-High Park):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. During his most recent visit to the German Democratic Republic, the Minister called upon East Germany to relax family reunification restrictions and to pay compensation for properties seized by the Nazis during World War II.
As the Minister will know, many eastern Europeans including Ukrainians, Poles, Czechs, Slovaks, Hungarians, Croations, Lithuanians, Latvians, Estonians and others were the victims of genocide and property liquidation in their respective countries at the hands of the Nazi regime and the Soviet Union.
Is the Minister prepared to make similar demands on the Soviet Government to relax restrictions barring family reunification and to provide compensation to Canadians for
May 20, 1987

crimes committed against them in their homelands during World War II?


Charles Joseph Clark: Mr. Speaker, I have raised those questions with representatives of the Soviet Union including, most recently, when Mr. Shevardnadze was here. I want to make clear a distinction of which the Hon. Member and some other Members of the House will be aware. This Government does not recognize de jure the annexation of the Baltic States by the Soviet Union. Nonetheless, without prejudice to that legal position, we have raised the question of claims and compensation with the Soviet Union. To this stage there has been no positive reply by the Soviet Union.


Mr. Speaker:: I would like to share with Hon. Members the observation that both yesterday and today we have been well under the usual number of questions we are usually able to deal with. I am considering what we can do to improve that, but I would ask Hon. Members to consider the matter between now and tomorrow and we will see if we can do a little better tomorrow. I ask for the indulgence and co-operation of Hon. Members.



ROUTINE PROCEEDINGS


Hon. Gerald S. Merrithew (Minister of State (Forestry and Mines)):: Mr. Speaker, under the provisions of Standing Order 67(2), I have the honour to lay upon the table copies, in both official languages, of The Mineral and Metal Policy of the Government of Canada.


PUBLIC ACCOUNTS
Miss Aideen Nicholson (Trinity):: Mr. Speaker, I have the honour to present the Sixth Report of the Standing Committee on Public Accounts.


Mr. Speaker:: The Hon. Member is presenting a committee report. 1 know that all Hon. Members would want to listen carefully to her presentation.


Aideen Nicholson: This report deals with the trade function of the Department of External Affairs.
In view of the importance of international trade to the Canadian economy and the assistance provided to exporters by the Department of External Affairs, the committee considers it
Petitions
essential that trade officers respond effectively and comprehensively to requests from the business community. The committee is concerned with the department's ad hoc approach to defining levels of service and has recommended clear definition and costing of the levels of service at each post abroad.
The committee is also concerned with the high turnover of senior managers and notes that in the last two years there have been four Deputy Ministers for international trade. This kind of rapid turnover cannot fail to interfere with accountability and sound management. The committee has recommended that the Prime Minister (Mr. Mulroney) give consideration to this practice.
The relationship between the Department of External Affairs and other departments is critical to promoting Canadian exports. Departments such as the Department of Agriculture and the Department of Regional Industrial Expansion can provide sectoral and technical expertise. The committee notes there have been difficulties in interdepartmental working relationships and recommends that this situation be urgently addressed.
Pursuant to Standing Order 99(2) the committee requests a comprehensive Government response to the recommendation in paragraph 13 of the report.


PETITIONS
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, I have a petition from hundreds, if not thousands, of Canadians in British Columbia, Nova Scotia, New Brunswick and Saskatchewan, to point out a few of the provinces. They say that the proposal of the federal Government to seek financial self-sufficiency by 1988 for Canada Post will result in cutbacks, deterioration of service, and consequently will be at the expense of service to Canadians.
These proposed measures have already resulted in the closure of many rural post offices, the cancellation of routes in rural communities, which means a drastic reduction in service for many Canadians.
Postal rate increases affect all Canadians while basic services are not being improved. The federal Government has not enabled Canada Post Corporation to pursue revenue generating services.
The undersigned, your petitioners, humbly pray and call upon Parliament to instruct the Government to make improved service the highest priority of Canada Post Corporation and to abandon its policy of closing rural post offices and cancelling rural postal routes.

May 20, 1987
Petitions


Mr. W. R. Bud Jardine (Northumberland-Miramichi):: Mr. Speaker, I have the privilege to present a petition on behalf of a number of constituents who call upon Parliament to restrict the fishing of bass in the Tabusintac River.


Mr. Dan Heap (Spadina):: Mr. Speaker, I have the honour to present a petition from a number of residents of Toronto who request the Government to take note of the fact that we have in place better refugee legislation than that which is being proposed. They ask that Parliament direct the Government to ensure that universal access is available to all refugee claimants who come to Canada, and also a fair hearing of an appeal. In duty bound the petitioners will ever pray.


Daniel James Macdonnell Heap: Mr. Speaker, I also have a petition from a number of residents of Toronto concerning the low-level flight training base at Goose Bay, Labrador. They point out that it not only disrupts the way of life of many of the native people there but that it is also a provocative and aggressive war-fighting action that intends to endanger world peace. The petitioners call upon Parliament to ensure that the Prime Minister (Mr. Mulroney) will end those flights and stop negotiating for a NATO base.
[Translation)


Mr. Gabriel Fontaine (Levis):: Mr. Speaker-


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


Gabriel Fontaine: On a point of order, Mr. Speaker. During the Oral Question Period the Hon. Member for Laval-des-Rapides (Mr. Garneau) said there were-


Mr. Speaker:: I will of course hear the Hon. Member in a few moments. I would ask him to wait until we finish Routine Proceedings.


QUESTIONS ON THE ORDER PAPER
Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: I suggest, Mr. Speaker, that all questions stand.


Mr. Speaker:: Shall all questions stand?


Some Hon. Members:: Agreed.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: About questions on the Order Paper, Mr. Speaker, I should like to ask the Parliamentary Secretary whether he might not give us the assurance that, when a Member asks that a question be answered within 45 days, that question will indeed be answered. I noticed that five questions have now been on the Order Paper for more than 45 days, and I know the Hon. Member will do his utmost to try to obtain the answers. It would be greatly appreciated if, when Members ask questions requesting an answer within 45 days, every effort were to be made to answer them. Otherwise there is no remedy, there is no grievance, and the Standing Orders are not very helpful.
Mr. Speaker, I would urge the Parliamentary Secretary to hold his Department officials responsible-and I am very serious about this-for providing adequate answers to the questions. Otherwise the Order Paper will again become loaded with questions and, as you know, we have managed to cut down the number of questions since the new Standing Orders came into force, to the great satisfaction of everybody concerned.


Philip Derek Lewis: Mr. Speaker, the provision for answers by the Government within 45 days was one of the provisions which we brought in under parliamentary reform. We think it has worked reasonably well up until now. I realize that there are two or three questions on the Order Paper that have not been answered within that period of time. I can tell my hon. friend that I have been involved in trying to obtain these answers.
Part of our problem with respect to these questions occurs when the answers come from a range of departments; when we try to get an answer from one department it seems to be easier than when we try to get it from a range of departments. However, I will take a specific look at those five questions and try to get back to my hon. friend.


Mr. Speaker:: I thank the Hon. Parliamentary Secretary.


Philip Derek Lewis: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Shall all notices of motions stand?


Some Hon. Members:: Agreed.
May 20, 1987



POINT OF ORDER


Gabriel Fontaine: A point of order, Mr. Speaker. During Oral Question Period the Hon. Member for Laval-des-Rapides (Mr. Garneau) said that there were 400 employees at the Lauzon shipyards. He misinformed the House, there are 750 employees at the Lauzon shipyards today. It is a mistake of 100 per cent, Mr. Speaker. I would like to have it corrected.


Mr. Rossi:: Mr. Speaker, I believe the Hon. Member for Levis (Mr. Fontaine) should have raised his point of order at the appropriate time. In my opinion, it is a little bit late to raise a point of order following Oral Question Period. He could have done so at the appropriate time, and the Hon. Member for Laval-des-Rapides (Mr. Garneau) who was here then could have properly responded to the Hon. Member who is taking this opportunity to set the record straight. I think he should have risen right after Oral Question Period, as provided under the Standing Orders, Mr. Speaker.


Mr. Speaker:: The Hon. Member has suggested that there was a more appropriate time for the Hon. Member for Levis (Mr. Fontaine) to raise this matter. The Chair may have been in error, but the Hon. Member did try to raise it earlier. I asked him to withdraw his application until the end of Routine Proceedings, which is a custom we follow. If I have made an error and caused any difficulty or embarrassment, then I am very sorry.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, May 13, consideration of the motion of Miss Carney that Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, be read the third time and passed.
Mr. Speaker:: When the House last considered this motion the Parliamentary Secretary to the Minister for International Trade (Mr. McDermid) had the floor.


Mr. John McDermid (Parliamentary Secretary to Minister for International Trade):: Mr. Speaker, when we last examined Bill C-37 I was talking about some of the concerns that were raised in committee. I covered some of the issues at that time. However, there are still other issues which I wish to cover.
As those who have been following the debate will know we spent a considerable amount of time in committee on this Bill.
Softwood Lumber Products Export Charge Act
In fact, we spent some six weeks. We listened to a number of witnesses from across Canada who are affected by the Bill.
One of the areas of most concern raised in committee is that of certain anomalies in the Canada-United States Memorandum of Understanding. Several groups, particularly the remanufacturers, have pointed out, and rightfully so, that some of their products are not included in Appendix "B" of the Understanding and are therefore subject to the export charge on the final value added price of the product, rather than on the value of the softwood lumber content alone.
The Memorandum of Understanding specifically provides for the subsequent addition of further manufactured products to Appendix "B", with the agreement of both governments.
The Government has acted quickly under this provision in consulting with a wide range of industry representatives in developing a list of additional products for inclusion in Appendix "B".
The original list included in Appendix "B" was the result of consultation with the solicitor for the Remanufacturers' Association. It obviously was not a complete list. We all agree on that. However, it was the list presented to the negotiators by the solicitor for the Remanufacturers' Association. The solicitor's letter, containing that list, was filed at the hearing and made public.
With 20-20 hindsight vision, I guess it could be said that they could have consulted on a much wider basis; but, they took this list as the list presented from the Remanufacturers' Association, through their solicitor.
Just to follow along on this particular problem, and it is a problem, on February 13, Canadian officials asked the U.S. administration to agree to the addition of these remanufactured products to Appendix "B". Since that time the Secretary of State for External Affairs (Mr. Clark) and the Minister for International Trade (Miss Carney) have continued to press for a favourable response to what we consider to be a legitimate request, one that is in full conformity with both the spirit and the letter of the Memorandum of Understanding.
The Minister for International Trade raised this issue in some detail during her meeting with U.S. trade representative Clayton Yeutter in Ottawa on April 6 last, and the Government, of course, has been continuing since that time to make all efforts to obtain accommodation for Canadian companies unfairly penalized through the lack of a positive response by the U.S. administration. However, I might say that at their latest meeting, a meeting held in Europe on other subjects, this matter was again raised by the Minister for International Trade with Mr. Yeutter, and the indications we had from the United States were positive. The negotiations are ongoing through the course of the debate on the motion for the third reading of the Bill and its eventual passage, which hopefully will come today, though that still remains to be seen.

May 20, 1987
Softwood Lumber Products Export Charge Act
The Government has also moved quickly to address, as far as possible, the concerns expressed over the fact that only 20 companies granted exclusions by the Commerce Department in the preliminary countervail decision of October 16 last are specifically excluded from the export charge as well.
In the discussions I have already mentioned, between U.S. trade representative Clayton Yeutter and the Minister for International Trade, as well as discussions between the Secretary of State for External Affairs and his counterpart in the U.S., Mr. Shultz, we have asked that the list of exempted companies be expanded by including a limited number of companies that made timely requests to the U.S. Commerce Department during the countervail investigation, which companies, we believe, would have received exclusions but for want of a small amount of additional information.
We have also taken up the question of Canadian lumber . products processed from logs or lumber imported from the United States. These were all requests presented to the committee. At the end of the committee hearings the committee made requests of the Minister on certain subjects, and she has followed through on every one, and is continuing to press for the appropriate changes in the Memorandum of Understanding-and the Memorandum of Understanding allows for that type of negotiation.
I might say that arriving at an exemption for the 20 companies listed in Appendix "B" was a difficult negotiation. The Americans did not want any companies excluded. They wanted all companies to be subject to the export tax. Had all companies been excluded, there would not be quite the controversy we have today. However, because of the regional disparity question in eastern Canada, something which this Government is extremely concerned about, the inclusion of these 20 companies on Appendix "B" was pursued.
The companies that were eventually excluded account for about 92 per cent of the export lumber into the United States from the Maritime region. Because of that, we insisted that those 20 companies be included on Appendix "B", and that was agreed to in the negotiations. We insisted too that the other companies be included, but could only reach agreement on those 20.
Not all of those companies are located in eastern Canada; they are located all across Canada. But those that are located in the Maritime region account for some 92 per cent of the exports coming out of that region, and that fact was taken into consideration in arriving at that decision.
Bill C-37 provides the regulatory authority to implement changes of the nature that I have discussed, changes which the committee has requested of the Minister, as soon as they are agreed upon.
Certain groups feel that additional products or regions should be entirely exempt from the export charge, and the Maritime region is one region that has been discussed as an area that should be totally exempt.
During the original negotiations, we did in fact press for additional exclusions, not only of companies, but also of products and regions. This did not prove to be negotiable, however, and there are no signs that it would be any more negotiable now.
Industry groups have also expressed their views on a wide range of administrative issues; that is to say, how the Department of National Revenue will administer the legislation. All groups have noted the excellent co-operation received from government departments in consulting with industry to develop administrative guidelines. To my knowledge, most of the administrative concerns have been addressed to the satisfaction of both the Government and the industry. The Government intends to continue this consultative process, as the system moves along.
The net proceeds of the export charge will of course be remitted to the provinces which, it is hoped, will invest in the future of Canada by ploughing some of the money back into reforestation, silviculture, worker training, and other related areas.
I have touched on some of the important issues raised by concerned Canadians. As can be seen, the Government has been sensitive to these concerns and has moved quickly to rectify or reduce inequities where it has been able to do so. As I noted earlier, many of the anomalies, such as exclusions and listings in Appendix "B", will no doubt become less significant as provincial replacement measures come on stream.
The effect of this tax is difficult, as yet, to judge. Lumber shipments to the United States in the first quarter of this year are up 15 per cent. However, there are many factors that go into that, as those who have a greater knowledge of the industry than I will be aware-and I look across the House to my hon. friend.
I know that the strike had some effect. The strike was settled in December, and what the figures show is that February shipments were higher than January shipments, with March shipments being down. It depends, of course, on housing starts in the United States. If the current level of housing starts is maintained, we will see lumber shipments into the United States continue at a high level.
It is interesting to note that the American lumber interests felt that we had too much of the U.S. market and that this tax might curtail it somewhat. However, according to the reports, the users of lumber in the United States prefer Canadian lumber. They consider it to be far superior in quality, with far less wastage than experienced with U.S. lumber. Even with the added cost, the preference seems to be for Canadian lumber. It is considered to be a far superior product, and in many instances the builders in the U.S. are continuing to use it. I think it is a little unfair to say that this has had little effect, no effect, or a lot of effect on the particular industry shipping softwood lumber to the United States.
May 20, 1987

In all fairness, I might say that some sawmills have closed down, especially in northern Ontario. However, of the mills which have closed down I am somewhat suspect of one that closed a week after the announcement, one which has been wondering for the last two years whether to keep its doors open. The situation involving another was much the same and it closed a month later. It found this to be a very easy excuse to use to close down what was an unprofitable operation before the tax ever came in.
In conclusion, I say in all sincerity that we have had good debates on the issue. I have learned a tremendous amount about the lumber industry in the last six to seven months. I think we have given it a very good airing. We had a long debate on second reading and spent a considerable amount of time in committee. They were good meetings. We now have a Bill before us which is ready for passage. As a matter of fact, the industry is now encouraging us to get the Bill through as soon as possible.
However, if I think of the much broader scale, the softwood lumber dispute is a graphic illustration of why we need better rules governing our trade with the United States. Protectionist pressures are strong down there. The trade Bills which they are passing in Congress are frightening to a country like Canada which does not have a large domestic market to absorb its products. Thirty per cent of everything we produce in Canada is exported, and it is frightening to see some of the legislation coming out of our largest trading partner. As a matter of fact, the largest trading bloc in the world today is that of Canada and the United States.
It is our resolve in these very difficult ongoing negotiations to try to create an instrument which could handle these disputes in what we consider to be a much quicker, much less expensive, and much fairer way than is the case now. That is one very important part of the ongoing trade negotiations and that is why I feel it is critical that they succeed. However, I repeat what has been said many times right from the start. If it is not a good deal for Canada, then we do not sign the deal.
We have seen this particular action coming along in a number of commodities. Either today or in the not too distant future we will be dealing with amendments to a Bill on steel. As Canadians we should all be concerned about these actions and support negotiations where we can put into effect a comprehensive trade agreement which will allow us to maintain the markets we have and in fact enhance them.
I thank Hon. Members for the co-operation they have shown in this particular matter. As I say, I am hopeful that sometime today the Bill will receive third reading.


Mr. Fulton:: Mr. Speaker, I should like to ask a question.


Mr. Deputy Speaker:: There are no questions.


James Ross Fulton: Could I seek unanimous consent to ask a question?
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Mr. Deputy Speaker:: Is there unanimous consent for the Hon. Member to ask a question of the Parliamentary Secretary?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, my question relates to one of the remarks the Parliamentary Secretary just made in terms of the corporations which are exempt in the Maritimes. The Hon. Member said that those companies which are exempt in Atlantic Canada produced 92 per cent of the softwood exported into the United States from the Maritimes area.
In passing Bill C-37, as it is now, would the Hon. Member not agree that what it really means to hundreds of small producers, many of whom appeared as witnesses before the committee, those who produce about 10 per cent of the Maritimes wood going into the U.S. market, is that the product which they have historically been shipping into the U.S. will now, in all likelihood, be milled and sold by corporations which have the exemption and that in fact the dozen or so in Atlantic Canada which have the corporate exemption will simply pick up that other part of the market because there is no way the smaller producers will be able to compete against the 15 per cent advantage of those companies?


John Horton McDermid: Mr. Speaker, that is precisely why the Council of Forest Ministers is working right now on replacement measures to this particular Bill so that those companies, as quickly as possible, will not be affected.
As the Hon. Member knows, the Maritimes area was not an offending area according to the preliminary findings in the United States.
The Council of Forest Ministers is meeting. I believe its next meeting from which there will be a report will be in June. I cannot give the exact date, but I think it will be in early June, if I am not mistaken. It is making progress in that regard. We are hoping the replacement measures will take place as quickly as possible so that those industries will not be too adversely affected.


James Ross Fulton: Mr. Speaker, I have a supplementary question for the Parliamentary Secretary. Should the Bill pass today and become law, what bargaining equipment will there be for dealing with the U.S.-for dealing with Clayton Yeutter, the U.S. administration, the U.S. coalition, and in fact the President on this issue-in terms of remanufactured products, in terms of logs coming from American lands to be milled in Canadian mills and sent back, in terms of wholesalers who are acting as middle people for wood moving from exempt companies on its way to the United States, and in terms of all other problems which have been raised since the MOU was signed on December 30?
What is left? I believe Mike Apsey was the one who was quoted as saying that obviously the Americans will be looking for a pound of flesh every time the Minister for International Trade (Miss Carney) tries to use Clause 15 of Bill C-37, goes

May 20, 1987
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down to the U.S. and says that she would like a particular corporate exemption, a regional exemption, a particular remanufactured product added, U.S. logs exempted, or wholesalers exempted.
On what ground can the Minister or the Government of Canada stand in getting the U.S. to agree? I have always assumed that the reason we have waited four and one half months since December 30 to come to third reading of the Bill was that the Government had some grand strategy to straighten out the terrible errors which occurred on December 30.
What can the Hon. Member, on behalf of the Government, give us on this side of the House? What about those tens of thousands of Canadian workers and companies drawn in under the 15 per cent export tax in a way which was never meant, either by the original action of the U.S. coalition, or in the October 16 preliminary determination, or in the period leading to December 30? They were sort of corralled in with B.C., Alberta, Ontario, and Quebec. What bargaining initiatives are there? How likely are we to see Clause 15 used to remedy the incredible unfairness toward so many parts of the forest sector?


John Horton McDermid: Mr, Speaker, I am not privy to the ongoing negotiations, as the Hon. Member knows full well. We have some very capable people who are doing that. It is their feeling that some very positive results will be coming out of the negotiations, the discussions which have been going on over the last number of months. We have not been sitting back and waiting for things to happen. They have been happening all along. I think the Hon. Member will be pleased with the results of the negotiations which have gone on over the last period of time. They have not come to fruition for one reason. It is that the Bill has not yet been passed. That is part of the ongoing negotiating process.
Let me just say a couple of other things. I do not want to take too much issue with the Hon. Member's preamble, but there were some things in it that were very NDPish, very pointed. The Hon. Member says that a disaster happened on December 30. I cannot look at it in that way. I think a disaster would have happened had we let it go to final decision in the United States after the preliminary decision was handed down; that would really have been a different kettle of fish.
I feel that we have kept the money in Canada, we have kept the management of our resources in Canada and that is very important. That was a major reason that the negotiations took place and that the decision was made to go this route.
To say that the Bill was held up for four months as a result is a little unfair as well. We had second reading in January and into February. We had six weeks of committee hearings which went on until near the end of March. As you know, Mr. Speaker, and as any Member of this House knows, the parliamentary legislative schedule of this Government is a
heavy one. To get space for a Bill to be debated on the floor of the House is somewhat difficult.
If the Hon. Member for Skeena (Mr. Fulton) were fair, he would also admit that I postponed third reading of this Bill a couple of times to accommodate him on his trips to his constituency, or wherever, and also to accommodate my friend, the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), who asked that the Bill not come up on certain days because he would be away from the House of Commons. There were a number of reasons that it has taken this long to get the Bill to the floor and debated. Opposition days are another reason. Let me say this to my hon. friend; now the Bill is here, we should get it through as soon as possible.


Lloyd Axworthy: Mr. Speaker, third reading is always a somewhat curious time in parliamentary annals. It is the time when battles have been fought, amendments presented, won or lost, and all the heat of confrontation is over. As the Parliamentary Secretary to the Minister, intimated, obviously in kindly contemplation of the incongruities of being a Parliamentary Secretary to the Minister for International Trade (Miss Carney), it is time to take a philosophical approach to all of this. God knows, there is no point in taking a practical approach, because it does not work.
I will attempt to follow in the same vein and use third reading debate to draw some lessons from the softwood lumber case to try to examine this matter in the longer term Canadian perspective. I want to ask some serious questions about the meaning of our trade relationships with the U.S. and the rest of the world. What does it mean in terms of the fundamental issue we debate almost every day in this House, namely, the ability of this country to maintain a degree of control on decisions over our own resources and economy, and ultimately the judgment that we can expect from this Government when it comes to crucial, economic and social matters?
I am reminded when I think back to December 30 of the famous statement uttered by the Minister for International Trade upon her return from Hawaii, having had tough negotiations, that "This is a good deal for Canada". I think that statement will go down in the annals of history, along with the statement that it was a good deal when Manhattan Island was sold for 30 pieces of trinkets or beads. The Minister's statement is probably almost comparable in impact to the statement of the general manager of the Boston Red Socks who sold Babe Ruth to the Yankees because he did not think Babe Ruth could pitch any longer, and it is probably almost as significant in consequence as the contract entered into by the people of Canada with the Conservative Government in 1984. I suppose we could even elevate it to the whole question of the sacred trust.


John Horton McDermid: You are still smarting.


Lloyd Axworthy: One of my colleagues has reminded me that the statement probably even equates with that all-time
May 20, 1987

consummate deal-making which Nevil Chamberlain entered into in 1939 when he returned to England and said, "I have won the peace". Our Minister for International Trade unquestionably has a quieter place in history as having been one of the great all-time negotiators when it comes to making deals for Canada.
As we have gone through stage by stage of this Bill, second reading, committee hearings, we have seen a whole series of pratfalls, beginning with perhaps the most serious-maybe it was the beginning of the end-when the Minister and this Government summarily dismissed the consultation and involvement of the lumber industry in trying to arrive at a deal. Surely to get an understanding of trade matters it would be wise to draw upon the advice, knowledge and information of those being attacked by their American counterparts. But the Government went ahead and negotiated a deal totally and completely without any form of discussion or advice from the industry itself.
One only has to read the quotes upon quotes given to us by various representatives of industry at committee to recognize all the problems we tried to correct in the Bill; the problem of exemption in the Maritime industries, the problem faced by the remanufacturing lumber industry, the definition of what is a subsidy and the whole problem of stumpage fees. These are all the consequence of that negotiation being carried out in isolation, without participation.
The paradox is that the Government said, "We are the friends of the industry. We are the friends of the private sector". Yet when it comes to a crucial deal affecting a multibillion dollar industry, the Government cannot quite get together with the industry to work out a common approach. That was mistake number one, Mr. Speaker.
Mistake number two, which is still being recorded, and to which the Parliamentary Secretary alluded in his opening remarks a week ago, was that the Government felt it had no choice. That again has become a famous political cliche in the history of Canada, "I had no choice." The Government did have a choice when it came to dealing with the countervailing initiative by the United States. It had a choice not to knuckle under and surrender to the blackmail and intimidation of the United States and its lumber industry. The Government had the choice to pursue the matter through the U.S. trade forums and through the international trade forums. We have been told time and again that the Government's decision was made on the best advice of some unknown group of invisible advisors- not the industry because the industry said the Government should go through the trade forums-hidden somewhere in the Lester B. Pearson building, that we could not win. That shows indomitable courage and spirit; giving up before trying. If they had looked at the record they would have discovered that there was a very clear possibility of winning the battle by using already existing trade remedy measures.
I remind Members opposite that we have taken some 10 countervail cases to the GATT in the past seven or eight years and we have won seven of them. The experts to whom I spoke
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said this case was the best we could ever have taken to the GATT. It had the best possible argument because what the United States was doing was claiming that a domestic policy, clearly initiated by legally elected governments of Canada, was unfair, as interpreted by the U.S. administration. That particular precedent, which the Americans were establishing, would have ramifications for all resource industries, not just Canada's but all other countries. That was contrary to a subsidy definition under the General Agreement of Tariffs and Trade in the international trade rules.
This Government, for reasons it only attributes to its faceless advisers, refused to take that route. The Government refused to go to GATT and bring the matter before a trade panel drawn from countries not involved in the case. Instead the Government said, with an incredible sense of irony, that we have won a victory because Canada is now imposing a $600 million tax on itself. No wonder no one was out dancing in the streets with that announcement. We were putting a tax on ourselves in order to save the victory while we refused to follow other alternatives.
What is even more tragic about that is that the Minister for International Trade (Miss Carney) said we chose that course because we did not want to acknowledge that there would be a precedent set. The Memorandum of Understanding contains a portion, written in some kind of legal language, indicating that it is without prejudice and that this will not be accepted as being a legal precedent showing that the United States has a right to tell Canada how to run its resources. However, the U.S. trade Bill that is presently being passed by the House of Representatives and debated by the Senate uses this softwood lumber countervail case and Canada's surrender to it as justification for introducing in the trade Bill new measures dealing with domestic subsidies.
Rather than winning a victory, our surrender has in fact confirmed in American eyes that we admit that we were wrong and that stumpage fees are in fact a subsidy. Now, U.S. legislators are using that as a clear rationale for writing a new trade Bill applying to all resource industries. That was some victory that was won on December 30. We have only confirmed, substantiated and underlined the American position.
One need only read the statements of Sam Gibbons, Senator Lloyd Bensten and all those distinguished American legislators who are managing the trade Bill through Congress. They are saying that the Canadians have admitted they were wrong, that Canadians have given in and, of course, the Americans were right. Therefore, we now face from the U.S. Congress a trade Bill that will have a devastating impact on all Canadian resource industries because we refused to stand up to them and because we did not use the alternatives available to us.


John Horton McDermid: You mean to tell me that the Bill wouldn't have come in?

May 20, 1987
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Lloyd Axworthy: Just for the sake of the record, I will repeat what the Parliamentary Secretary said. He asked if I thought the Bill would not have come in. Yes, it would have come in, but would the particular subsidy provisions that are now in the Bill have been as easily won and accepted in Congress if we had not already conceded the fact back on December 30?
We made Sam Gibbons into a great prophet of trade. We have turned Sam Gibbons and Lloyd Bensten into great wisemen in their own Congress. They are saying, "We told you so," because the Canadians have already admitted guilt on this issue. Rather than providing any antidote to the American position, we in fact have ended up endorsing it.
When the Parliamentary Secretary says on behalf of the Minister that the softwood lumber case is a clear example of why we need to negotiate a free trade deal in order to protect against this contingency, I think it can be excused if women and small children rush into their homes in fear that this is the Government that will be negotiating a free trade deal. If this is what it succeeded in achieving on the single issue of softwood lumber, then we should all be down on our knees praying to God that it does not negotiate the same way when it comes to free trade. Simply giving it all away is not negotiation. That is not skilful trade diplomacy, that is simply submission.
The fact is that we see in the softwood lumber case one of the clarion reasons why Canadians have every right to be deeply concerned about the broader negotiations. It points out that there will be a price to pay. Free trade with the Americans does not come without a price tag. It does not come cost-free.
It was mentioned today in the House of Commons during Question Period that we have seen the Government acceding to U.S. demands for open investment policies in order to get a free trade deal. We have seen the Government surrender on the Patent Act in order to get a free trade deal. We have seen the Government surrender on cultural matters in order to get a free trade deal. We are seeing the price we have to pay, and that is only the beginning of the price that will be exacted in dealing with those trade remedy laws which Senator Bensten, head of the Finance Committee, says will not be changed anyway.
We are weighing the table down with all the give-aways. I think the Prime Minister (Mr. Mulroney) has become the Vanna White of Canada. We are in a great big quiz give-away game-turn the wheel and take what you want. I do not know who is advising the Government on trade. Maybe Monty Hall is saying, "Let's make a deal". I do not know where the Government is getting its advice from, but it sure as hell is not going the best way, from our experience, to defend Canadian trade interests against contingency action and against unfair trade initiatives, and that is to ensure that we have an effective, strong, international trade system with rules negotiated by all countries and defended by all countries, rather than back away as we have done. That should be a lesson etched deeply in the memories of Members of the House.
We do have a choice. There is an alternative to Canada-U.S. free trade, just as there was an alternative to the U.S. softwood lumber Bill. However, the Government refuses to use those alternatives and is trying to sell us a bunch of hocus-pocus about what is going on.
Sure, it hurts. The Hon. Member from Calgary is not going to like what I am saying, but he is going to sell out his oil and gas resource industry because of the precedent set by this Bill. He will be answerable to his constituents for that. Under free trade or anything else, no one wants to provide for the kind of give-aways that we are providing for in our resource industries.
Let us test this to see if it really is what I say it is. In committee, we proposed an amendment that, when voted upon, would determine the sincerity of this Government. We had before us a letter written by the Secretary of Commerce and the chief trade negotiator to Stanley Dennison, the major lobbyist for the lumber industry in the United States. In that letter, Mr. Baldrige and Mr. Yeutter said quite clearly that they wanted to confirm that any moneys acquired by the Governments of Canada as a result of this tax could not be used for certain specific functions, silviculture, recreation and the building of roads on a direct-grant basis. We raised questions about that and we asked if this did not in fact become a limitation on the sovereignty of Parliament to determine how its tax moneys would be spent.
We were debating the imposition of a major tax on a major industry and surely Parliament must retain the sovereign right to determine how that money should be allocated.
Therefore, we proposed an amendment giving the provinces the authorization to spend the money in exactly those areas where the Baldrige-Yeutter letter said they could not spend it, just to clearly outline and ensure that there was no mistake or ambiguity and that if the provinces want to spend the money on silviculture, recreation or roadbuilding through direct grants to industries, which is done in many jurisdictions, they could do so. We felt that if the Government were serious, it would accept the amendment. It would not hurt, it would only clarify the situation and clear up any ambivalence. The Government defeated that amendment. It rejected it.
What should that tell Canadians and provincial Governments? What does that tell the users of this program? First, it says that we have indeed implicitly accepted a limitation on our sovereignty and that provincial Governments are not free to spend that money in the forest industry as they see fit, but that there are limitations. There are limitations. They know if they contravene the terms then the U.S. President has the right to apply a trade penalty to Canada within 24 hours. It is part of the deal. Why? Because one singularly brilliant part of the negotiations was that we abdicate our right to further recourse to international forums. We said we would not take the softwood lumber case any further. Yet the U.S. President retained the right to use Section 301 and slap a trade penalty on this country any time he sees fit.
May 20, 1987


James Ross Fulton: Published on January 5.


Lloyd Axworthy: As my friend says, the President confirmed that in a letter he sent to Mr. Baldrige.
Let us just put this deal in perspective for a moment. We have limited our spending power. We have given up our right of redress. We have acceded to the application of an American shotgun penalty any time they see fit. What that adds up to, as we said from the day the agreement was signed on December 30, is a clear and compelling reduction in the freedom of action of Canadian Governments. Once again an unholy precedent has been established.
Let me move to another matter which is still totally unresolved. We know from very extensive committee hearings that another catch-22 in the agreement and in this Bill itself is the proposed transition from a direct tax collected by the federal Government to stumpage fee increases in the various provinces involved. We had conflicting evidence about that.
B.C. being the largest lumber exporter by far, their forest industry officials told us that we will require the Government of British Columbia to increase stumpage fees to a level equivalent to the 15 per cent tax, but this would not be a $500 million or $600 million drop in income, it would be a $800 million or $900 million drop, perhaps as high as $1 billion. You cannot apply stumpage fee increases to exports to the U.S. and not apply it to exports to Japan, or even for the domestic market. The increase will apply to all wood products.
Not only are we penalizing the lumber industry, we are penalizing the Canadian home owner who will have to pay an average of $700 or $800 more for housing. We will be applying a penalty to our export of lumber products at a time when we are getting stiff competition from the Swedes and others. In other words, we are making our lumber industry less competitive. Yet the council of Ministers is going ahead.
That also involves a curious kind of negotiation. The Government is negotiating with provincial Ministers who are under pretty clear instructions, I would think, from their Ministers of Finance to make as big a tax grab as possible. Unfortunately, those seated around that negotiating table will not include the Canadian home buyer, the lumber industry or others in the export business. Yet they will be paying the additional freight. I would suggest that kind of negotiation is fraught with incredible complications and conflict.
Another side effect, clearly admitted when we discussed it in committee, is that this will begin to have a push-pull effect on the lumber industry in other parts of Canada. British Columbia, with a very powerful and productive industry, is going to start seeking markets which would normally be supplied by sawmills in Manitoba, northern Ontario and perhaps the East Coast. Those sawmills are much smaller, perhaps a little inefficient, but they provide employment in the regions. That was pointed out several times by my colleague from Algoma and my colleague from Cochrane-Superior.
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We already know of the lay-off of 450 or so people in northern Ontario. Once the effect of this legislation works its way through the system those smaller companies are going to be displaced from the market and bumped out of business. Once again we have a whole series of ramifications which no one predicted on that fateful day, and Canadians will be paying a very big price.
I also want to refer to the still unresolved problems of remanufacturing. The Parliamentary Secretary indicated in debate today that he hopes for positive results. So do I. Yet hundreds of companies have been caught up unintentionally in the web of this Bill. They will be forced out of business or forced to move their facilities across the border unless the situation is resolved very soon.
Again I point out that when the U.S. brought in its preliminary decision on October 15, secondary or value-added manufacturing was not subject to the countervailing duty. Yet somehow, by December 30, that part of the industry was roped in. A $500 million industry has become hostage to this agreement. We may be able to work our way out of it, goodness knows, but I raise the same question as the Hon. Member for Skeena (Mr. Fulton). Once the Bill is passed, what leverage do we have? It is clear that we have been caught in a conundrum; if we do not pass the Bill the Americans will not negotiate, but if we do they are going to ask for more.
1 can read to you from the statements of Mr. Dennison, the chief lobbyist for the U.S. lumber industry. He said nothing would be done until the legislation is passed. There are things that his coalition wants as well. According to him there are companies completely excluded from the tax who do not deserve to be. Some of them are just wholesalers and he wants them taken off the list. Mr. Dennison is a powerful man. He is the author of this whole business. What are we going to be faced with if he has his way?
Yes, we may be able to provide exclusion, we hope, for some companies in the Maritimes and some remanufacturing companies in British Columbia, Alberta, Manitoba and Ontario. Once again, however, we will have to pay a price. The negotiation is not over and the ante will simply be increased to more than they received on December 30. It is another unintended consequence and another lesson we should learn about those negotiations.
I suggest we can also learn from the odyssey of stumbling throughout this process, that in the negotiations dealing with this area we will find ourselves caught up in a series of impacts, influences and consequences that are not immediately visible to the naked eye at the time the document is signed. In the days, weeks and months after the document is signed we will become aware that the price we are paying is that for which the Government had bargained.
That is why I say to Members of the House that we should pay attention to this Bill.

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The day the Prime Minister initials a free trade agreement with the President of the United States we will see one of the biggest public relations extravaganzas this country has ever seen. The $12 million slush fund in the Minister's Department will be used in extensive public relations to spread the propaganda that this is a wonderful deal. However, Canadians will learn that the price they will pay is not the one on the agreement, but a price which will become apparent from its consequences.
The primary consequence of such an agreement, as we have seen in this Bill, will be the loss of power and authority of this Parliament and the provincial jurisdictions to make decisions. Our ability as a country to decide on our own economic management will be restricted. We will be giving up our ability to look after our resources, to deal with our environment and to manage our own affairs.
I hope Members of Parliament and all Canadians will consider this Bill very carefully, because there are some very profound and tragic lessons to be learned from the negotiations that led up to this legislation today. One lesson we have learned is that Canadians are in real danger of losing control of their own country.


James Ross Fulton: Mr. Speaker, while I do not intend to spend all my time berating the Government, I must say that 1 find it discouraging and somewhat unusual that the Minister for International Trade (Miss Carney) did not appear as lead-off speaker in the third reading debate on this Bill. However, perhaps we should not be too disturbed, considering that last December during the most important period of negotiations in Washington, the Minister was in Hawaii. During the final days of our committee hearings where we had important amendments that I believe the Minister, if anyone, would have understood and accepted, she found it an opportune time to be in New Zealand. Now she has found some other and more pressing place to be than here during this debate to stand up for Canada's largest industry and source of balance of trade.
The entire process in the last three years has demonstrated to me, and I believe those million Canadians who are directly and indirectly involved in Canada's largest industry, the kind of blindness and political naivety of governments when they are dealing with industries that they do not really understand.
It has been pointed out during the debate at second reading and today that a great deal of Canadian sovereignty has been given away.
In the last three years I have travelled throughout the continent to attend meetings in relation to the forest issue. I want to spend a few moments reviewing the history of how we have arrived at this stage today, in placing a 15 per cent export tax against Canadian softwood exported to the United States.
In 1983 we won the case against exactly the same kind of countervail action brought against us by the same coalition from the United States, from the U.S. southeast, from Washington, Oregon, Idaho and California. We won that case
because there was a de minimis finding. The U.S. authorities could find no injury of a countervail nature.
By the fall of 1984, a small handful of Members in the House became aware of just how serious and pressing this was when we travelled to the United States and began speaking with American legislators in both the Congress and the U.S. Senate.
Let me take a moment to quickly go through the chronology and evolution of protectionism in the United States and why we should have taken much stronger action in dealing with it back in 1984.
By July 2, 1985, we began to see the real tidal flow of protectionist legislation. The first was Bill 1088 from the House of Representatives, introduced by Mr. Weaver of Oregon. It was a proposal to impose a five-year restriction on lumber imports from Canada, to a maximum of 25 per cent of the U.S. market. Historically, we have had approximately one-third of the U.S. market.
By February 19, we had already seen the House of Representatives Bill 1139 introduced by Mr. Schulze, to impose a 20 per cent duty on all imports from countries restricting trade. That was directed against Canada.
On March 17, at the Shamrock Summit, we saw the Prime Minister (Mr. Mulroney) and President Reagan in Quebec City, agreeing to place the highest priority to finding mutually acceptable means to reduce and eliminate existing barriers to trade. As a first step they said, "We commit ourselves to halt protectionism in cross-border trade in goods and services". Neither the Prime Minister nor the President took much action to live up to that commitment in terms of trade.
Before this legislation, which is at third reading stage today, we had a half century of absolutely unrestricted free trade in softwood and all wood products with the United States. We are the two largest trading partners in the world, and since the days of the Great Depression and Smoot-Holley, we have had absolutely unrestricted free trade in those products.
Protectionism began to accelerate and by March 21, Mr. Bonker of Washington introduced Bill 1648 to redefine "subsidy" to include stumpage. Protectionist Bills began to proliferate. On March 4, Bill HR 1950 was introduced by Guarini of New Jersey, which was later replaced by Bill HR3777, the Labour Industry Coalition on International Trade Bill containing natural resource subsidy provisions. Senate Bill S982, the Senate version of Bill 1648, was introduced by Max Baucus. On February 5, Resolution 136 was introduced by McKernan, subsequently followed by Bill 2345 which was introduced by Moore, and Bill HR2451 which was introduced by Sam Gibbons. That is the natural resource subsidy Bill which is still proceeding through the U.S. system.
As pointed out by the Member for Winnipeg-Fort Garry (Mr. Axworthy), that Bill would affect not only resource pricing in terms of wood products in this country, but potash, oil and gas, as well as our aluminium industry, particularly in
May 20, 1987

Quebec and British Columbia in terms of the availability of water supply for cheap hydroelectricity. Clearly, the Americans are very interested in levelling the playing field to their advantage.
Subsequently, Senate Bill 960, the Foreign Assistance Act, was passed, and on April 24 Senate Bill 1224 was introduced by Mr. Jim McClure. That was the Senate version of a House Bill.
Finally, the Congressmen visited Vancouver on their way to Japan and attended a meeting at which I was present. We had a first-hand opportunity to hear from the United States Subcommittee on Trade and listened to the preposterous views they held in terms of the subsidy on Canadian lumber and the steps they were planning to take in an attempt to level the playing field. As I said, a small handful of us had gone down to Washington and listened to Ambassador Gotlieb and our forest industry representatives who, by then, had spent almost $10 million fighting this battle alone in Washington. We had a chance to really start to understand how quickly things were moving in the United States.
That was a window of opportunity which this House, not just the Government, should have pursued with great vigor in opening trade consuls in the United States and getting information out to U.S. consumers. U. S. consumers did not know, and probably still do not, that the cost of a home in the United States is going to go up hundreds and thousands of dollars, depending on whether it is modular or contract built to certain specifications.
The Hon. Member who just spoke pointed out that we had evidence from the lumbermen from the Province of Quebec who said that as a result of the export tax plus the flow through provisions which will be brought forward sometime in June, a house in the Province of Quebec will cost $600 more to Canadians. American consumers are paying more, Canadian consumers are paying more, and anyone who honestly believes that the number of housing starts in either Canada or the United States will stay where they are, is simply not looking at the figures and at the increasing costs which will be brought about because of this unfair legislation. In other areas of the country the costs will go up much more.
Finally, on July 24, 1985, we took an interparliamentary group back down to Washington to meet with all the members of the U.S. House and Senate who had protectionist legislation before the House. We again brought a strong message back to the Secretary of State for External Affairs (Mr. Clark) that serious action had to be taken at that time to get information out, not just to the L.A. Times and the New York Times, in which an occasional editorial was run saying the Americans were wrong, but actually to the American consumers. That action, unfortunately, was never taken.
That one window demonstrated blindness on behalf of the Government. There simply were not any Members in the
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Cabinet at that time who understood how delicate and dangerous a dilemma the Canadian forest industry was facing. No action was taken. There was the 10-10 tie vote on April 23, 1986, in the Senate Finance Committee to start the fast-track negotiation on free trade in which Mr. Reisman and Mr. Murphy are presently involved. Just a few days after that there was the famous "Dear Bob" letter which came out of the White House. It is perhaps something a lot of Members of the House have forgotten or did not really want to understand.
On May 8, 1986, President Reagan wrote a letter to Bob Packwood. The President viewed him as one of the Senators who had managed to do some arm twisting with a Senator from the State of Hawaii to bring about a 10-10 tie vote to give this enormous momentum and propulsion to the free trade process which is supposed to wind up sometime next month, if it is to stay on track and get through the U.S. House next fall. The letter from President Reagan to Mr. Packwood reads as follows:
Dear Bob:
Thank you again for your forceful efforts in preserving our fast-track proposal for a Canada free trade agreement. Once again, I want you to know that I am committed to finding a rapid and effective solution to the Canadian softwood lumber problem which restores for the American lumber industry a fair opportunity to compete.
To this end, I intend to press for an expedited resolution to this problem, independent of the comprehensive negotiations.
If this cannot be achieved through bilateral negotiations with Canada, then I will take such action as may be necessary to resolve this problem consistent with U.S. law.
We fully realize that lumber and other pending trade irritants must be resolved before we submit to the Senate the results of the comprehensive negotiations.
Sincerely,
Ronald Reagan
It seems that the Cabinet and the Government of Canada heard about it but did not really want to take any action to try to deal with it.
I think we have to reflect for a moment on what happened on October 16 of last year. The Minister harped about it for a few days in the press. It caused a bit of a hiatus here in the House. But the 15 per cent preliminary determination which came down from the International Trade Commission was illegal. It was absolutely wrong. It added together two different ways of computing value. It added the stumpage on one hand and the imputed value on the other hand. The maximum it could have come up with legally was a 7.5 per cent tax against Canadian softwood. That is the most it could have come up with under U.S. law. It cheated. It committed an illegal act in putting that preliminary determination out.
What does the Government do? We had two trains of action. The Minister for International Trade was going down one rail line, and out in British Columbia we had the highest level of political incompetence in terms of this whole action with the Minister of Forests for that province, Mr. Kempf- fortunately, he is now no longer there-and Premier Vander Zalm, launching what is widely known among people who

May 20, 1987
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know the forest sector as the "blink". There are B.C. blinks and Ottawa blinks.
I will deal with the B.C. blink first because it did probably the most damage of any single act which took place at that time. The Minister responsible for forests, and Members from both sides of the Elouse had been arguing vigorously, honestly and forthrightly with both Republicans and Democrats south of the border that what they were pursuing with the protectionist legislation and what the U.S. coalition was pursuing was absolutely hogwash, that it had no basis in law and no basis in fact. Then the B.C. Minister of Forests publicly said that the B.C. industry in that year had subsidized the industry by $150 million, that the cost to run the forest programs in British Columbia was $250 million and that the Government had only collected $100 million in revenue from stumpage. For the Minister to say that in British Columbia sent an immediate signal to the most vigorous protectionists in Washington who immediately forged ahead, pointing out that the largest producer of softwood in Canada for export to the United States-B.C. sends half of the wood exported into the United States-had admitted openly that the Government of British Columbia was subsidizing the industry.
That Minister is not in the Cabinet any longer but the political incompetence continues. Just a few weeks ago he publicly stated that over $ 1 billion was foregone in tax revenue in 1976 from the forest sector in British Columbia thereby clearly indicating to the United States again that in fact the subsidy as defined by a Social Credit Government of British Columbia is much larger than the Americans had ever imagined.
The B.C. blink went even further. The Premier of British Columbia was a defeatist from square one. In fact, on January 2 he was quoted as saying, "I have said all along we could not win so certainly this is the best way". Vander Zalm is quoted as saying, "The agreement is terrific".
We have to look as well at what happened during that fateful period of time while the negotiations were being carried on by our former Minister for International Trade. Just prior to those ludicrous statements by the Minister of Forests from B.C., on September 30, we found the Minister for International Trade saying in terms of the 10 per cent dollar equivalent offer, "It is our only offer. It is done on a without prejudice basis to our legal case and it is not open to negotiation".
Sure, it was the only offer at 10 per cent. The Americans knew pretty quickly that there were going to be other offers, as we found out just a matter of days later. On April 10 the Vancouver Sun quoted the Minister as stating, "we would look like bloody fools if we kept upping the ante. It is not an unlimited pot of money". Another eight days passed and suddenly the ITA affirmed the preliminary determination of 15 per cent and the Minister for International Trade said, "I deplore today's preliminary determination which cannot be justified either under U.S. law or GATT rules". In the House the Minister vowed to "fight this all the way". It was only a matter of days, as we know, before the Minister decided that
even though she found the methodology wrong and stated publicly that the U.S. position was fundamentally wrong, she would agree to move forward with 15 per cent settlement. In fact, she proposed that on November 19, 1986, in a letter to Secretary Baldrige.
At the same time-in fact, on the same day-Minister Kempf of B.C. announced that the B.C. Government had been given legal advice that it could cut its own deal with the U.S. That was followed up by an announcement from Premier Vander Zalm, who later backed off.
I would now like to sum up the blinks in order to keep them in perspective. While Members of the House, a very small number, were working hard in the United States with the U.S. forest people and with the protectionists, both Republicans and Democrats, trying to get the information and the disinformation out of the U.S. political system, on the Canadian side we had incredible political incompetence coming from the Premier of British Columbia, the Minister responsible for forests in that province, and the Minister for International Trade (Miss Carney) here in Ottawa. She never really put an oar in the water to deal with this issue, something one would have expected from a Minister holding a senior portfolio such as she does.
There was an admission by the Minister for forests of a subsidy starting at $150 million. That figure is now almost all the way to $1 billion. We had the Premier saying that the deal was terrific, and so on. He said that while listening to his rocket radio in the legislative buildings. He said that a deal had been cut when it had not been cut. He gradually skated Canada's position right off the ice.
We then found ourselves going all the way into that horrible period during the last few days of December when the negotiations actually got under way. So much that should have been dealt with, once the Government had made what I believe was an incompetent, improper and naive decision to go the route it went, was not dealt with. It did not even handle those negotiations well at all.
We know of the dozens of products which I listed during the debate at report stage in terms of remanufactured products that should have been in the Memorandum of Understanding but were not, and why. We know now that the American negotiators had enormous access to knowledgeable people from the U.S. coalition who were right there camped out in rooms next to the negotiation rooms constantly feeding information in. So rather than the softwood lumber that was coming from those provinces named in the countervailing applications, those provinces being British Columbia, Alberta, Ontario and Quebec, Saskatchewan and Manitoba were dragged in, as were the maritime provinces. Dozens and dozens of corporations which had been given excluded status earlier on in July, those that had been given that status, only those 20, were put into the Memorandum of Understanding. All the others which should have been included were not included.
May 20, 1987

I have said this before, but I think it is worth stating again. The situation now in place is that there are corporations on one side of the street which harvest wood, mill it and export it to the United States, while right across the street companies in exactly the same tax status which should be excluded under the rules by which the other 20 were excluded are not excluded. What does that mean? As I pointed out in my question to the Parliamentary Secretary, it means that in some areas of the country some corporations automatically have a 15 per cent competitive advantage. They will pick up either those smaller companies or they will pick up the market.
The Parliamentary Secretary said that he is hopeful. Well, I am hopeful, too, that those who are duly eligible will receive the corporate exemption and that we will see all of the Maritimes excluded, as we were trying to do in committee.
There are a great many other bits of unfairness in the Bill, and I have pointed them out before. There are logs from the United States which are grown in Vermont, New Hampshire and other areas that are brought into Canada and milled on the Canadian side of the border, particularly in the Quebec border mills. That wood is being hit with the 15 per cent export tax when it is returned to the United States. Exporters and wholesalers, such as Ron Pelton from Ontario who simply middles and handles wood as a wholesaler coming from exempt corporations on its way to the U.S. market, are being driven out of business because they are having to pay the 15 per cent export tax on wood that is cut and is exempt at its site. However, for reasons unknown to anyone-


Mr. Deputy Speaker:: I regret to interrupt the Hon. Member at this time. However, even though the Member's time would have expired by now according to the rules, it has been the custom, with unanimous consent, to allow a Member from the New Democratic Party time to complete his speech at third reading. Is there unanimous consent?


Some Hon. Members:: Agreed.


James Ross Fulton: Mr. Speaker, I do not know what the House has opened up for itself. I could go on at some length. However, I will try to be fair to other Hon. Members.
As has been pointed out by other speakers, remanufacturing is a $500 million industry. Products from that industry have now been dragged in and are being taxed. They are products which were never even being chased after by the U.S. coalition. Thus we have a $500 million industry and wood which is grown in the United States coming into Canada. If the Americans are now claiming that their trees are subsidized, then that is an interesting way for them to go about it.
We have the wholesalers and the unfairness with respect to some corporations being exempt while ones across the street are not. We hear from the Parliamentary Secretary that the negotiations are going well in Washington. However, I fail to see why, once we have passed the Bill, the U.S. coalition will suddenly soften up and the International Trade Commission, or the Department of Commerce, will suddenly become so
Softwood Lumber Products Export Charge Act
much more co-operative when they have already grabbed so much of our sovereignty and our opportunity to run our own programs.
One of the things that both opposition Parties tried very hard to do in committee was to obtain some clarification from the Government in relation to the Dennison letter. I will not read that letter into the record. Those who want the wording of it can refer back to previous days' debates when it was mentioned many times.
It was fundamentally important to demonstrate to the Americans that we were not swallowing in any way, shape or form the contents of the Baldrige-Yeutter letter that was sent to Mr. Dennison which stated that we could not spend the money gathered under this export tax on reforestation, conifer release, road construction, seedlings, nurseries or whatever in terms of reforestation programs. Both opposition Parties moved what I can only describe as very tender amendments. In fact, in one case the wording from the Dennison letter was used to try to make it clear to the U.S. prior to passage of this Bill during second reading and in committee, at report stage and during third reading, that Members of this House stand united in making it clear that we will not allow the Americans any jiggery-pokery on how we handle our forestry programs. This is something which I feel the federal Government should have done for the protection of the provinces prior to introducing the legislation.
I must say that I have not agreed with much that the Minister for International Trade has done in relation to all of this. However, one thing she did have to say during the hotter moments after Christmas was that British Columbia has become a silvicultural slum. There is no doubt about that. In this respect we have seen the recently released Pearse report on coast wood supply for the Queen Charlottes, the north coast, Vancouver Island and the Vancouver harvesting tree farm licence zones. There are only 14 years of harvestable wood supply left there. We have also seen the Ewing report, which was just released in relation to the greater Prince George and northern interior forest districts. There is not a sustainable harvestable supply to take us even to the turn of the century in that area.
British Columbia is truly a silvicultural slum, and that province, for whatever reason, has decided that none of the $300 million gathered in the coming year under Bill C-37 will be applied to reforestation in our province. In fact, the province has cancelled the $30 million that was promised last fall for this coming year.
I would like to put on the record what the exports of softwood lumber to the U.S. by province during the past year have been. It will give some idea to Hon. Members what parts of the country will be impacted the hardest by Bill C-37. Last year we exported to the U.S. 34 million cubic metres of softwood lumber. Some 19.8 million cubic metres of that, or 57.2 per cent, came from British Columbia. Ontario was the next largest exporter at 20 per cent of the market, or 7 million

May 20, 1987
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cubic metres. In third place was Quebec with 14.6 per cent of exports, or 5 million cubic metres.
We then had Alberta, with 1.1. million cubic metres; Manitoba, with 726,000; New Brunswick, with 556,000; Prince Edward Island, 1,699; Nova Scotia, 4,750; Newfoundland, 946,000; Saskatchewan, 152,000; and Manitoba, with 726,000 cubic metres.
As can be seen, our lumber exports to the United States are very substantial, to a value of several billions of dollars, and this added tax is certainly not going to do anything good for the industry.
There have been various estimates as to what the effects are going to be, ranging anywhere from the loss of a few thousand jobs, as reflected in the major study done by the IWA, to a high of over 17,000 according to the study conducted by Widman and Associates, with the Ontario Lumbermen's Association putting the figure at 15,000.
The pipeline to the United States is now filled with wood from British Columbia, now that the strike is behind us, and as the pipeline has filled, we have seen some tremblings in the market. As the Parliamentary Secretary pointed out, prices were up in February and down in March. We do not know what we will be facing over the long term. Certainly, those who appeared before the committee during February and March are deeply concerned about the effects of Bill C-37 come September, October, November and December, when the construction season in the United States winds down, as it usually does. They are anxious to see whether or not Canadian lumber exported to the U.S. will continue to fill the niches that it has historically.
Let me remind Members of this House, and Canadians and Americans generally, that Canadian lumber, for half a century, has been preferentially purchased in the United States. Canadian SPF is recognized by builders in the United States as being of such quality that one does not have to double-joist, one does not have to double-rafter, one does not have to double-stud. Its quality is such that single-plate construction can be utilized.
In terms of the construction activity itself, smaller teams are required when Canadian lumber is used. It is more bug, weather and bacteria resistant than is southern yellow pine.
The Americans will eventually come to recognize their error. On December 23, 1986, the International Trade Commission itself came out with a report pointing out that Canadian lumber exports into the U.S. were not injuring U.S. producers. That report came out seven clear calendar days before we entered into the famed Memorandum of Understanding on December 30, 1986.
Had we collectively taken the opportunity two and a half years ago to have gone through window number one, we would not be involved in this debate today. Had we convinced the American consumer of what the long-term cost of this would
be, the protectionists within the U.S. system would never have got away with what they have.
This sets a dreadful precedent for our relations with the United States. We have forgone our opportunity to go to GATT on this issue. The President still has the unfettered opportunity to use his registered 301 action, which he filed five days after we signed the Memorandum of Understanding. The filing of a 301 in that way represents a unique step by the President of the United States.
We should not have backed down, Mr. Speaker. We had a good case; we have a good case. It is just unfortunate that we had the B.C. blinks, the Vander Zalm/Kempf team, which did an enormous amount of damage to the forestry sector and to the case that had been put together.
It is unfortunate that the Minister for International Trade (Miss Carney) took so little interest in this issue, being away at every single opportunity during the time this was being negotiated and dealt with in Washington. The B.C. blinks put the final coup de grace, one might say, to our case. Making a 10 per cent one-time-only offer and then, in a matter of days later, increasing that to 15 per cent did us no good at all.
Increasing your offer by 50 per cent when negotiating demonstrates, at best, a fickle mind, if not outright political incompetence.
In the forest sector, the companies have remained remarkably silent. I suppose they have been humbled by this experience, knowing that once the Government got involved, everything went off the rails so quickly.
We have reached the point, Mr. Speaker, where the Government has not accepted amendments put forward in good faith by the Opposition, some of which were drafted by myself-amendments in relation to exchange rates to protect the remanufacturers, to protect the wholesalers, to protect regions of the country that never should have been affected, to protect those who are milling wood that comes from outside the country.
I am sorry that the Government did not take the opportunity to accept any of those amendments, nor has the Minister for International Trade taken the opportunity either to write back to the chair of the committee or to committee members to outline what-


John Horton McDermid: We made the commitment today.


James Ross Fulton: -what kind of progress there has been since March 12 last. One would think that, in eight or nine weeks, the Minister might have had something on which to report back to the committee, the members of which spent so much time and effort in dealing with this subject matter in committee.
It is interesting to note that while the Government is crowing about free trade from one coast to the other, the largest industry in Canada, the largest contributor to the balance of trade situation, an industry employing one million
May 20, 1987

Canadians, is the first to be pushed over the edge, and this coming just one month before Mr. Reisman moves to put his initials to some kind of an agreement with Mr. Murphy.
I hope Canadians are listening and are aware of the kind of carnage that can be brought about by the Minister for International Trade.


John Horton McDermid: A point of order.


Mr. Deputy Speaker:: On a point of order, the Hon. Parliamentary Secretary to the Minister for International Trade (Mr. McDermid).


John Horton McDermid: Before the Hon. Member for Hamilton East (Ms. Copps) speaks, I would like, on behalf of the Government, to officially designate tomorrow as an allotted day.


Mr. Deputy Speaker:: The Hon. Member for Hamilton East (Ms. Copps), on debate.


Sheila Maureen Copps: Mr. Speaker, I think it is particularly appropriate that literally when the Government is crowing, as the Member for Skeena (Mr. Fulton) has said, we are eating crow here in the House, and specifically so with the passage of Bill C-37. In fact, it is an embarrassment, it seems to me, to Members of the House, and in particular to Members on the government side of the House, to be called upon to pass a piece of legislation which is actually going to invoke punishment on the Canadian softwood lumber industry.
At the same time as we are eating crow here in the House of Commons, we have seen the Prime Minister (Mr. Mulroney) himself, in Question Period, laughing and deriding the Opposition in its attempts to get some answers on the free trade question.
Specifically, he challenged us yesterday to bring forward examples of where we have been on the losing end of the big stick of the American free trade initiative, and in fact we responded by citing the example of shakes and shingles, the example of the softwood lumber industry.
It seems to me that in imposing on ourselves a 15 per cent export tax on softwood lumber, we are admitting that we are in a losing position with respect to the American softwood lumber industry, and indeed on the weak end of the scale with respect to the free trade discussions with the United States.
The long-term ill effects of this legislation have been cited by members of the Opposition. In fact, it is so poorly conceived and so poorly thought out that the Minister for International Trade (Miss Carney), after telling the country that a 10 per cent export tax was our final offer, that we would not be upping the ante in any way, shape or form, came back with a 15 per cent offer, ignoring the fact that, under a previous Liberal Government, when similar American allegations of unfair trading practices were levied against Canada, the Government of the day was prepared to take the issue and fight it out, and in fact won. We were able to prove that
Softwood Lumber Products Export Charge Act
Canada's softwood lumber industry was not engaging in unfair trade practices and that the stumpage fee issue was in fact a red herring.
In this instance, the Minister brought forward a hastily drawn agreement, an agreement which does not take into consideration the effect of an increase in the value of the Canadian dollar.
Since Bill C-37 was originally tabled in the House, we have seen an increase in the value of the Canadian dollar, an increase which is going to cost Canadians more in the way of export taxes.
The Government has not seen fit to take it into consideration in drafting legislation which gives up our sovereignty and tells Americans that they have that right. We saw it in respect of the Memorandum of Understanding.
I see the Hon. Member for Brampton-Georgetown (Mr. McDermid) shaking his head. He will remember that he and his Party were not even aware that the Memorandum of Understanding was not included in the original piece of legislation. In the Memorandum of Understanding we see that the Government is prepared to say to the Americans that they have the right to inspect our books, that they have the right to come into our softwood lumber companies and establish exactly what is going out and what is coming in. Quite clearly softwood lumber has been sacrificed on the altar of free trade.
The Prime Minister (Mr. Mulroney) and the Government are so bent on seeking an agreement that by the time any agreement is reached-and they are talking about this fall- what will we have left to offer? We gave up the National Energy Program because the Americans did not like it. We gave up the Foreign Investment Review Agency.
We heard questions in the House today indicating that Canada is being sold off piece by piece by members of the Conservative Party who are ideologically bound to the notion that somehow anything in which government is involved is intrinsically bad. That was not the position of the Liberal Government. That is why we established the Foreign Investment Review Agency in the first place.
If we look at the downside of the sale of Dome in respect of the Canadianization of the petrochemical industry, I think we will see in five years or ten years from now the ill effects of the policies and the politics of the Conservative Government. To date the Conservative Government has not turned down any foreign takeover of any Canadian company. Foreign takeovers which are not necessarily creating jobs are being approved holus-bolus, wholesale. Investment Canada might as well be entitled "Abandon Canada" for all the good it does in terms of the Canadianization of the petrochemical and other industries.
Softwood lumber is another example of the Prime Minister being prepared to bow down to the Americans because he so desperately wants and needs a free trade agreement. He desperately wants and needs that agreement so that Canadians

May 20, 1987
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will forget about his other excesses, so Canadians will forget about the number of Gucci shoes he has in his closet.
We have a famous Prime Minister. I should like to refer to an article which appeared in the Bangkok Post on Monday, February 16. Elis legend is legion and it is travelling across the world. The article is entitled "Scandals shake Canadian Government".
Are they talking about the free trade agreement in the Bangkok Post? No, they are talking about scandals shaking the Canadian Government. I must admit that whoever wrote the article seems to assess the political situation in Canada quite accurately, because he says:
Prime Minister Brian Mulroney swept to power in 1984-


Robert Nesbitt Horner: Who wrote it?


Sheila Maureen Copps: It was written by Jeff Bradley of Associated Press, and appeared in the Monday, February 16 edition of the Bangkok Post. It reads:
Prime Minister Brian Mulroney swept to power in 1984 with promises of clean government and Ronald Reagan-style conservatism.


Mr. Dick:: What does that have to do with softwood lumber?


Sheila Maureen Copps: That is what it has to do with softwood lumber. It continues:
But half-way through his five-year mandate, Mulroney already is being talked about as a one-term premier.
He has been demoted as well. He is referred to as a premier. I think in the States they call him Muldoon, but in this article he is referred to as a premier. In any case, it continues:
Two new scandals grabbed headlines in Canada last week as Mulroney tried to fend off charges of influence-peddling and corruption among cabinet members and their advisers. And an opinion poll said last week that support for Mulroney's party has sunk to 23 per cent.
I could go on, but the article is available for Hon. Members. Mr. Nunziata: What is the title of the article?


Sheila Maureen Copps: "Scandals shake Canadian Government".
My point is that the Prime Minister is so desperately seeking a free trade agreement that he will do anything to bow down to the Americans, including a complete sell-out on softwood lumber.
In Bill C-37 we have the first step in a sell-out of our Canadian resource industries. We have seen it in softwood lumber. We have seen it in shakes and shingles.


John Horton McDermid: Slow down, Sheila. The Americans put a tax on them.


Sheila Maureen Copps: We have seen it in fish. I understand that the Hon. Member for Brampton-Georgetown has a little time available which he could use if he would like to add to the discourse by standing and speaking instead of shrieking from his chair.


An Hon. Member:: He has.


Sheila Maureen Copps: I am sure he has and he will have another opportunity at third reading, so he can make his comments and I am here to make mine.


John Horton McDermid: I have already spoken on third reading.


Sheila Maureen Copps: I have already spoken, also, on the Memorandum of Understanding. The Hon. Member will no doubt remember that heated debate in the House when he insisted that the Memorandum of Understanding was included in the draft Bill, but it was not. The Government does not even know how to write up a Bill. It botched the thing so badly that it did not even include the Memorandum of Understanding on this self-imposed, self-flagellated 15 per cent tax on softwood lumber exports.
Time and again we have heard from a number of Members who outlined the long-term negative impacts on the lumber industry, including the potential for the loss of thousands of jobs. We have heard that a million people are directly and indirectly employed in the lumber industry in Canada.
We also know that many Canadians are hoping and dreaming that they might buy a home at some time. In fact, it is estimated that this particular tax will add about $800 to $900 to the cost of a new house in Canada. The direct effect of the Government buckling down to the Americans on the softwood lumber industry will be to increase the cost of housing in Brampton-Georgetown, among other places across the country-


John Horton McDermid: It went up $50,000 in the last six months.


Sheila Maureen Copps: I am sure the Hon. Member is very happy with the rise of real estate in Metro Toronto and in the Toronto area. He says that it has gone up $50,000 in the last few months. Perhaps some of his constituents do not aspire to buying homes, but they do in my community. They are concerned because $800 or $900 extra on the cost of lumber will be an added cost to real estate, which is already going up sky-high in southern Ontario and for many families bringing beyond reach the possibility of buying a home.
The most important point in the whole issue is the dangerous precedent that has been set by the Government and by the Prime Minister, the dangerous precedent which probably had its historical origins in the so-called Shamrock Summit when we all got together and watched the Prime Minister sing for his supper with the President of the United States on March 17, 1985. He said: "Mr. President, we will get you a deal. We will back off on patents, on pharmaceutical drugs, raise the prices, and the consumers will pay; let the poor pay". The pharmaceutical industry was sold down the river. The patent industry was sold down the river-


Robert Nesbitt Horner: Are you a Liberal or a Marxist-Leninist?


Sheila Maureen Copps: Am I a Liberal or a Marxist-Leninist? In Hamilton-


John Horton McDermid: Where is Judy Erola when you need her?
May 20, 1987


Sheila Maureen Copps: In Hamilton Liberals fight to keep prices down for consumers. I hate to be accused of being Marxist-Leninist, just because I would like to prevent an increase in further profits to a sector which in the last fiscal year experienced the most profitability of any other sector, that is, the pharmaceutical sector.
The pharmaceutical sector in Canada is doing very well. As a result of the Shamrock Summit and the promise of the Prime Minister on bended knee to the President, we have a decision to turn around and give blanket monopolies to pharmaceutical multinational companies to gouge Canadian consumers. If I have to apologize for that-and I am certainly not a Marxist-Leninist-as a Member of Parliament I am going to fight for that.


John Horton McDermid: On a point of order-


Sheila Maureen Copps: I was responding to a heckle.


Mr. Deputy Speaker:: On a point of order, the Hon. Parliamentary Secretary to the Minister for International Trade (Mr. McDermid).


John Horton McDermid: Mr. Speaker, I always enjoy the bombastic presentation of the Hon. Member for Hamilton East (Ms. Copps). However, we are discussing softwood lumber on third reading-and the drug patent Bill was passed some weeks ago-and it might be apropos for her to get back to the subject matter of which she knows a great deal.


Mr. Deputy Speaker:: On the same point of order, the Hon. Member for York South-Weston (Mr. Nunziata).


John V. Nunziata: Mr. Speaker, my balding colleague across the way persists in his interruptions of the Hon. Member for Hamilton East (Ms. Copps). I would ask that you, Sir, exercise your good judgment and discretion and request of the Hon. Member for Brampton-Georgetown (Mr. McDermid) to refrain from his heckles so as to allow the Hon. Member for Hamilton East to continue with her most interesting discussion of this particular issue.


Mr. Deputy Speaker:: The Parliamentary Secretary on the same point of order.


John Horton McDermid: Mr. Speaker, I do not need lectures from a rookie, bald-headed friend of mine across the floor.


Mr. Deputy Speaker:: On debate, the Hon. Member for Hamilton East (Ms. Copps).


John V. Nunziata: I just have a high forehead.


John Horton McDermid: I will remember that, cue ball.


Sheila Maureen Copps: Mr. Speaker, I think this whole discussion is patently absurd. I was responding to unsolicited heckles from the government side of the House. It was suggested to me that,
Softwood Lumber Products Export Charge Act
because I was concerned about the precedent being set by the Government, I was somehow a Marxist-Leninist.
The Hon. Member for Brampton-Georgetown claims perhaps that there is not a precedent. I think Clause 6 of the Memorandum of Understanding provides a very dangerous precedent. The Government of Canada will take no action. Here we are promising the Americans on bended knee that we will take "no action" and we will take all reasonable steps to ensure that no other government Party in Canada takes any action directly or indirectly which has the effect of offsetting or reducing the export charge or replacement measures. Further, if we do not live up to our Agreement, Mr. Ronald Reagan promises in writing that "I will take action if Canada does not live up to the terms of agreement". What that means to the average lumber worker is that jobs supported by the Employment Support Act, which was introduced in 1971 to support almost 22,000 jobs, would no longer be supported by that Act because we have guaranteed we will not intervene in any other way to offset the effect of this particular tax.
In legislation being considered for passage here today we are suggesting that we make promises to the United States of America that what we do with our employment programs and our lumber industry has first to be vetted through the White House and through Washington. If we do not get the Good Housekeeping Seal of Approval from Ronald Reagan, then he can step in and revoke the Agreement at any time. If Canada does not live up to the Agreement, the President can move in immediately and invoke a 15 per cent tariff within 30 days.
Where is the fairness in GATT if Canada is imposing an export tax of 15 per cent on products only going to one country? What about the notion of a level playing field for all the countries covered under GATT? Instead, what we are seeing is another example of the Canadian Government and the Prime Minister being so wedded to Washington that they are unprepared to launch a Canadian sovereign policy in lumber which would save Canadian jobs and which would protect the ability of the Canadian Government and provincial Governments to act in our best interests when it suits Canadians. We should not have our policy on export tax dictated by Washington. It is as simple as that.
My Leader today asked the Prime Minister what he was prepared to sell out. Who is speaking for Canada, Mr. Speaker? I think it is pretty clear that my Leader's suggestion that we are moving toward a 51st state was not an unreasonable one when you examine the sequence of events over the course of this Government. We have said goodbye to the Canadianization of the petro-chemical industry, to Canadiani-zation of most of our major multinationals because FIRA has been neutered and left with absolutely no power under the rubric of so-called Investment Canada. What about our major resource industries, softwood lumber, fisheries? Perhaps steel and the petro-chemical industry will be next. We are so bound and determined to get this Agreement with the United States that we are making all kinds of sacrifices along the way.

May 20, 1987
Softwood Lumber Products Export Charge Act
We heard the Minister for International Trade (Miss Carney) saying that she had no choice, that she had to move with this particular 15 per cent tax even though she had stalled at 10 per cent and said she would absolutely not negotiate anything higher than 10 per cent. She had no choice, because the potential for the levying of a 25 per cent tax was a question she was considering. If we look back to past Liberal Governments when similar ugly threats were raised in the United States concerning unfair stumpage fees in Canada, we went to court, fought the case and won. In the Liberal Party we are certainly not afraid to get out and fight if we believe we have a case, and we have a good case. We do not necessarily have to cut a deal by the back door which is not going to be good for Canada. That is a deal that is good for Washington and good for the Americans. Frankly, as a Member from a highly industrialized riding, the most industrialized riding in Canada-


Robert Nesbitt Horner: Hold it. That is not quite true.


Sheila Maureen Copps: Hamilton East is the most industrialized riding in Canada. I am very proud of it. It is the most industrialized riding in Canada.


John V. Nunziata: And it is well represented.


Sheila Maureen Copps: According to Statistics Canada, I have more steel mills per square foot-would he like to visit? I will set up a tour and allow him to go through all the steel mills in our riding.


John V. Nunziata: Mr. Speaker, I rise on a point of order. The Hon. Member has just made an extremely derogatory remark about Hamiltonians. He suggested that if anyone were to visit Hamilton, one would require a gas mask. I would ask the Hon. Member-what riding is he from, Sheila? Wherever, Mr. Horner-


John Horton McDermid: Order.


John V. Nunziata: -to stand up and apologize to the people of Hamilton.


Mr. Deputy Speaker:: On debate, the Member for Hamilton East (Ms. Copps).


Sheila Maureen Copps: Mr. Speaker, I must seek the judgment of the Chair. To suggest that to come to Hamilton you have to wear a gas mask is offensive. The Member may think it is funny and in the context of Parliament it is a big joke, but we get sick and tired in Hamilton of having these stereotypes reinforced. I know the Member is a very reasonable person and he will want to take that back. He will not want me to pursue the matter in a question of privilege. The Member would like to pursue, wouldn't he?
Hamilton is a beautiful city. It happens to have one of the most beautiful views coming down from the mountain of any city. I have travelled in Vancouver and other places across the country. Do you think he can apologize, Mr. Speaker?


Mr. Deputy Speaker:: The Chair would prefer not to get involved in this matter. The Hon. Member for Hamilton East.


John Horton McDermid: You forgot the botanical gardens.


Sheila Maureen Copps: There are only two gardens in Canada that are blessed by the Queen-


John V. Nunziata: Remind the voters in the by-election.


Sheila Maureen Copps: -the Royal Botanical Gardens is one of them.


Mr. Deputy Speaker:: Questions and comments on the speech by the Hon. Member.


Paul Wyatt Dick: That was not a speech.


John V. Nunziata: Mr. Speaker, 1 would like to take this opportunity to thank my good friend and colleague, the Hon. Member for Hamilton East (Ms. Copps). I am very offended by the comments made by the Conservative Member to my right.


Mr. Deputy Speaker:: The Hon. Member knows, of course, that the comments he makes must refer to the speech made by his colleague from Hamilton East.


John V. Nunziata: During my colleague's speech, Mr. Speaker, certain comments were made by a Conservative Member. I will not comment any further. We know that a by-election will be held in Hamilton Mountain on July 20. As you know, Mr. Speaker, Elizabeth Phinney is the Liberal candidate there. We are very proud of her credentials. She is a local and lifelong resident in the Mountain. She is very concerned about the people in Hamilton Mountain.
We know that the New Democratic Party-


Mr. Deputy Speaker:: The by-election is a long time away. Could we please get back to the speech made by the Hon. Member for Hamilton East?
Is the Hon. Member for Essex-Windsor (Mr. Langdon) rising on a point of order?


Steven W. Langdon: Yes, Mr. Speaker. I hate to interrupt this paid political commercial, but it did seem to me that equal time should be given to the magnificent candidate, Marion Dewar who will win that seat for the New Democrats-


Some Hon. Members:: Order.


Steven W. Langdon: -and be another important addition to our caucus in the House.


John V. Nunziata: You cannot find one of your own in Hamilton.


Mr. Deputy Speaker:: The Hon. Member for Hamilton East will reply to the comments made by the Hon. Member for York South-Weston (Mr. Nunziata).
May 20, 1987


Sheila Maureen Copps: I am responding to questions and comments, Mr. Speaker. That is what I call one parachute propping up another parachute, a Windsor parachute propping up a Hamilton parachute and they are both destined for a fall. Nonetheless, I would like to respond to the question and comment raised by my colleague, the Hon. Member for York South-Weston (Mr. Nunziata).
Government Members have been casting aspersions on why I should be interested in the softwood lumber issue. I am interested not only because it is an issue of national sovereignty but also because what happens in the lumber industry portends very ill for what will happen in other industries in Canada. Being from a riding which is the most industrialized riding in Canada which depends upon the steel industry for bread and butter-


Mr. Gustafson:: And foreign investment.


Sheila Maureen Copps: Foreign investment? Canadian made and Canadian built steel industry is the best in the world. We do not need foreign investments. Look to the south to talk about lack of competition.
In the steel industry, we are watching what is happening very closely in the lumber industry. We are concerned that if the Canadian Government is prepared to put up the lumber industry on the chopping block, what resource based industry will be next? We are very concerned about saving Canadian jobs in the steel industry in Hamilton.


John V. Nunziata: Mr. Speaker, seeing that no other Hon. Members are rising to ask a question of the Hon. Member for Hamilton East, I will take this opportunity to put a question to her. The Prime Minister (Mr. Mulroney) and the chief trade negotiator, Mr. Reisman, have indicated that a draft comprehensive agreement will likely be ready some time in the fall, notwithstanding the fact that there has not been a national debate of any significance on the subject of free trade. There was a one-day debate in the House of Commons but there was no general national cost benefit study. I would like the Hon. Member for Hamilton East to comment on the impending draft agreement and what she perceives to be the likely result of the negotiations that are taking place.


Sheila Maureen Copps: Mr. Speaker, the Hon. Member for York South-Weston (Mr. Nunziata) will no doubt recall that the press and the Opposition had to apply under freedom of information for the background documentation on what was happening in free trade discussions. In fact, my colleague, the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), brought a whole stack of documents received through application to freedom of information, and we in the Liberal caucus thought we would finally have a chance to look at the Government's agenda for free trade discussions. Lo and behold, to our great chagrin, when we opened up this package of documents, which stood about a foot high, we found that every second page was censored because the Government does not even trust
Softwood Lumber Products Export Charge Act
the Parliament of Canada to deal with one of the most serious questions facing it that has been launched by the Government, the sell-out of the country.
We did not see the cost benefit analysis and we did not get the full story even in the documentation we received through freedom of information. It is quite clear that the Prime Minister wants to negotiate a cosy little deal, possibly have the House rise at the end of July and not sit until October so he can come out with trumpet and much fanfare in September or October with this terrific deal. We Canadians will be paying in consequence through lost jobs, lost sovereignty and lost integrity for many years.
We want to fight that and in order to fight it, we need to have all the facts on the table, but we are not getting the facts. The facts we are getting like the legislation before us, Bill C-37, simply show us that what is coming in free trade for Canada does not bode well for Canadian citizens.


Steven W. Langdon: Mr. Speaker, my speech will devote itself to this Bill because it is a very important Bill which Canada should look at carefully. The precedent which has been set in this case is a sad and unfortunate one which the country should consider carefully. There are still many aspects of what is taking place in these negotiations that must be treated in a serious manner and not simply used for partisan purposes.
To begin, I must say that I am disappointed that while debating a Bill as important, controversial and full of ramifications for the sovereignty of the country as this one before us, we have not heard speeches from either of the Ministers who have been so vociferous in defending the Bill during Question Period, the Minister for International Trade (Miss Carney) and the Secretary of State for External Affairs (Mr. Clark). I must say as well that the Prime Minister (Mr. Mulroney), who took his share of the defence of this indefensible set of actions, is someone, I believe, who should speak to us to explain as we wind up our consideration of this piece of legislation why it is that the surrender was made.
This is a surrender which affects a great many people. It affects people right across the country. In northern Ontario, 90 per cent of all wood cut is softwood and 6,000 people are directly employed in the industry. In British Columbia, over
40.000	people are employed in this industry. In Alberta, over
5.000	people are employed by 220 lumber companies. One would not perhaps think of Saskatchewan as a crucial contributor, but one nevertheless finds that there are over 8,500 people there directly affected by this Bill. In Manitoba, there are close to 13,000 affected by it. In Ontario itself, something like 19,500 people in total are affected and in Quebec, over
27.000	people are affected. New Brunswick employs 3,500 people in the industry, Nova Scotia employs close to 1,900 people in the industry, and even in Prince Edward Island, something like 140 people are employed in the industry. In Newfoundland, over 11,000 people are directly employed in forestry jobs.

May 20, 1987
Softwood Lumber Products Export Charge Act
I am quite prepared to state that there was a genuine effort on the part of the Government to find a solution to the problem, but sadly, that effort went badly off the rails at many points throughout the process. As my colleague explained earlier, we ended up with an agreement that is very, very detrimental to the people of Canada.
The agreement is also detrimental to our sense of propriety. A cabinet Minister in the British Columbia provincial Government actually bargained behind the back of the federal Minister while these discussions were taking place. What is more, as Mr. Kempf has now admitted, Premier Vander Zalm himself was aware of this and had approved of it. That kind of behind the back under-cutting of our country's efforts must be recognized. Frankly, I am sure everyone in the House, including British Columbia Members and the Minister for International Trade, would join in condemning that kind of lack of solidarity at a time when serious negotiations are taking place.
After some years have gone by and we are looking back at this piece of legislation and this episode in our trade history, what will strike us most is not so much this behind the back dealing in British Columbia nor the job risks which were taken by the Government but the broader implications that cut right across the concerns of Canadians for our freedom and our future sovereignty.
I think it is necessary to read into the record yet again exactly what U.S. Commerce Secretary Malcolm Baldrige and U.S. trade representative Clayton Yeutter say is their understanding of this export tax. They said:
The U.S. government will monitor closely the operation of this agreement to ensure that the amounts collected through the export charge or replacement measures are not returned to or otherwise used to benefit producers or exporters of Canadian softwood lumber.
How can a country possibly accept that kind of incursion on its sovereign right to shape future policy governing its forest industry? They continue:
-it is the understanding of the U.S. Government that the U.S. Government would have to approve any changes in the export charge or calculation of the value of any replacement measures. Any changes made without U.S. Government approval would be considered a violation of the Understanding.
Let us just stop and recognize what we have here. This is a statement that a foreign Government-and regardless of our friendship with the U.S. it is a foreign Government-will have an effective veto power over our future policy towards replacing this export tax. If this Parliament chooses to do something which runs counter to that U.S. understanding, the U.S. will be able to say that it is a violation of the agreement and it considers the agreement null and void. That, of course, would have terrible consequences for Canadian lumber producers. We have, therefore, succeeded in putting a very large axe over the heads of Canadian lumber producers.
This action also affects remanufacturing firms right across this country, including my own constituency. The number of
jobs has gone up and down in those companies as a direct result of what one can either consider ignorance or a direct sell-out of their interests by the Government in response to U.S. demands. As we all know, in the final stages of negotiation of this agreement many parts of the remanufacturing industry which had been excluded were suddenly included. That has to be seen, unfortunately, as one more of far too many examples of trade failure on the part of the Government. We have had trade failure with respect to the oil industry, the steel industry, the potash industry, the fish industry, indeed covering a whole range of products including shakes and shingles, raspberries, and pork, which again is of importance to my constituency. Yet this sorry record is nowhere surpassed than in the course followed with respect to softwood lumber. On the basis of their failure to speak I can only conclude that those Ministers who have the responsibility for this exercise share that sense of inadequacy and shame over the course of action which was followed in this case.
This was a case where, in 1982, American lumber companies unsuccessfully brought countervailing duty action against Canadian softwood. At that time the International Trade Commission ruled that any subsidy which might be found was so small as not to warrant tariff action. American lumber producers were not satisfied and made another effort. If at first you do not succeed, try again. Before the ITC had an opportunity to even rule on the petition, Ottawa offered a 10 per cent tax surrender on September 13. On October 16 the ITC made a preliminary ruling involving a 15 per cent duty. I hope we all know the way U.S. trade law works. It requires agreement between the ITC and the Department of Commerce with respect to damage to a given industry. On December 23, 1986, the ITC reported that lumber prices were rising, as they have continued to rise for much of the time since then, and that Canadian industry was not hurting the U.S. industry severely. That was the conclusion reached by the ITC report at that stage. That led anyone who followed the case closely to conclude that it was likely that we would win the ultimate ITC decision on whether or not there was damage being done to the U.S. industry. The Canadian lumber industry was unanimous in saying it wanted to reach that stage in trying to fight the issue. That was the stage at which it wanted to confront and at which it felt very strongly it could be successful.
Before that stage was reached, on December 30, 1986, a Memorandum of Understanding was signed which accepted the 15 per cent export tax which this Bill puts into law.
I do not know how any thinking Canadian could conclude other than that this has been a story of surrender and giving up before necessary, dare I say a Tory story of giving up before it was necessary?
It is the story of a path that should not have been followed. However, the Government followed it, took these steps, and now we are beginning to pay the price. The United States building industry was buoyant for the first period of this year
May 20, 1987

but has begun to lose some of that buoyancy. Consequently, we are beginning to see this 15 per cent tax cut into margins, cut into reinvestment hopes and therefore ultimately cut into jobs.
We must conclude that it has been a disaster but one that I hope will never be repeated in this country. I hope it will lead Canadians to draw the conclusion that the Government's trade policy is fundamentally bankrupt and unacceptable to Canadians who believe in Canada, and fundamentally unacceptable to those who care about full employment in the future.


Mr. Deputy Speaker:: Is the House ready for the question?


Some Hon. Members:: Question.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the motion please say yea.


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the Members.


Mr. Deputy Speaker:: I declare the motion carried.
Bill read the third time and passed.


Mr. Deputy Speaker:: It being six o'clock, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 5.59 p.m.
[Stage Direction]

Thursday, May 21, 1987
[Stage Direction]
Prayers