1987-03-02

Hon. Robert de Cotret (President of the Treasury Board):: A message from Her Excellency the Governor General transmitting Estimates for the financial year ending March 31, 1987 and, in accordance with Section 54 of the Constitution Act, 1867, recommending these Estimates to the House of Commons on February 27, 1987, was presented by the Hon. Robert de Cotret (President of the Treasury Board) and read by Mr. Speaker to the House.
He said: Mr. Speaker, I also would like to table the Government Expenditure Plan, Part I.
Furthermore, on behalf of my Cabinet colleagues, I have laid upon the table Part III of the Estimates which includes the expenditure plans of 74 departments. These documents will be distributed to members of our standing committees who will be examining the spending authorities being sought in Part II of the Estimates, and since I have the floor, Mr. Speaker, here is another message from Her Excellency, the Governor General, bearing her signature.


SUPPLEMENTARY ESTIMATES (A), 1987-88
Robert René de Cotret: A message from Her Excellency the Governor General transmitting Estimates for the financial year ending March 31, 1987 and, in accordance with Section 54 of the Constitution Act, 1867, recommending these Estimates to the House of Commons on February 27, 1987, was presented by the Hon. Robert de Cotret (President of the Treasury Board) and read by Mr. Speaker to the House.


PETITIONS
Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour of tabling, in both official languages, the Government's response to the following 40 petitions: 332-490, 332-519, 332-612, 332619 to 332-622 inclusive, 332-626 to 332-642 inclusive, 332790, 332-822 to 332-829 inclusive, 332-835 to 332-837 inclusive, 332-839, 332-841, 332-843 to 332-868 inclusive.


Mr. Gauthier:: Mr. Speaker, on a point of order or on a question of privilege, whichever is appropriate. I did not hear the bells ring this morning. I know our party's official critic who is supposed to reply to the Minister's statement very shortly is not in the House because he did not hear the bells either.
I wonder whether the Government could get things organized so that all Members could be notified.
The Minister is to make an important statement. . . There is our critic . . . Thank you, Mr. Speaker, my point of order no longer stands.


Robert René de Cotret: Mr. Speaker, I am pleased to table today the Main Estimates for 1987-88, this being the third set of Estimates that I have presented on behalf of the government. These Main Estimates, which amount to $110.1 billion in budgetary spending, are yet another example of the success of our sustained efforts to curb uncontrolled growth in public spending.
I have also tabled today a special Supplementary Estimate for 1987-88 in the amount of $700 million, to provide for the balance of the payments committed to grain farmers under the special Canadian Grains Program. This item was specifically not included in these Main Estimates because the government has undertaken to disburse this money well before full supply will be available on these Main Estimates. The Supplementary Estimate will provide for appropriate parliamentary review as well as the voting of full supply on this item by the end of this month.

March 2, 1987
Statements by Ministers
Mr. Speaker, the 1987-88 budgetary Main Estimates are 2.9 per cent higher than those tabled for 1986-87. However, you will recall that when I tabled the 1986-87 Main Estimates last year, I pointed out that a $500 million expenditure reduction, announced by the Minister of Finance the day before in his Budget, was not reflected in those Estimates. Thus, after making an adjustment for this item, as well as for the increase in the special Canadian Grains Programs, the year-over-year growth in these Main Estimates amounts to 3.8 per cent, slightly lower than last year, lower than the rate of inflation, and lower than it has been since 1962.
[DOT] (mo)

This marks the third year in succession that this Government has tabled a set of Main Estimates where the growth rate has declined. No Government has been able to make this claim in almost two decades. We can be justifiably proud of this record as it demonstrates clearly our sustained commitment to controlling spending and reducing the deficit.
The extent of this commitment is illustrated by an examination of major elements of these Main Estimates. Seventy-two billion, three hundred million dollars representing two-thirds of the total, will be spent on statutory programs; that is, spending governed by separate legislation. They include, for example, payments to the elderly by Health and Welfare Canada which will amount to some $14.6 billion in 1987-88, the largest single item in these Estimates next to the public debt charges. They also include family allowances, the Canada Assistance Plan, fiscal transfers to the provinces, municipal grants, and a variety of agricultural and transportation subsidies. Over all, statutory estimates are $2.8 billion, or 4 per cent, higher than last year. The remaining $37.8 billion, or one-third of total Main Estimates, represent expenditures which Parliament will be asked explicitly to authorize for the upcoming year.
The Government can in general exercise greater discretion over these latter voted expenditures. Indeed, it is this category of spending on which Government has focused many of its expenditure restraint measures. As a result, the annual increase in the voted portion of Main Estimates will be 3.4 per cent over last year. This is the third year in a row in which this growth rate has been less than inflation. Over the past three years the rate of growth has averaged only 1.3 per cent. This is the best performance since the three-year period at the beginning of the 1960s.


Some Hon. Members:: Hear, hear!


Robert René de Cotret: Despite this continued commitment to expenditure restraint the Government has made provision in these Estimates for increases to such important priorities as programs for aboriginal peoples, veterans, defence, external affairs and foreign aid. Included in these Main Estimates is some $2 billion to fund programs for our aboriginal people in such areas as education, social development, capital facilities and community services. In addition, $700 million is to be transferred to the territorial Governments to assist them in providing services to residents of the North. Veterans' pensions
and allowances and health services purchased on behalf of veterans amount to $1.4 billion in these Main Estimates. The increase in the Main Estimates allocations for these social programs total almost $300 million, an increase of over 7 per cent from a year ago. There is also significant growth in external affairs and aid expenditures, reflecting increases in bilateral development assistance, increases in payments to international financial institutions, and contributions towards the cost of development assistance undertakings by Canadian and international non-governmental organizations. Altogether the increase in voted estimates for these activities is $290 million, or 10.6 per cent.
The Main Estimates allocation for defence is $10.3 billion, 92 per cent of which is voted expenditures. This portion is fully one-quarter of the total voted estimates. Personnel costs represent about 44 per cent of defence spending, with another quarter of the defence budget earmarked for capital spending for such items as the CF-18 fighter aircraft, the Canadian patrol frigate, the North American air defence modernization, and the Tribal Class update and modernization programs. Over-all spending on defence, external affairs and aid increases by over $700 million in these Main Estimates, reflecting the priority assigned to international commitments in these areas. These increases in priority areas of spending have been achieved through internal reallocation which has allowed the Government to limit the growth rate in voted appropriations to 3.4 per cent for 1987-88.

As Hon. Members are aware, Mr. Speaker, prudent fiscal planning requires that a government set aside reserves within its overall fiscal plan to accommodate unanticipated requirements that may arise in the course of the year. To the extent these reserves are allocated, they will appear in the form of Supplementary Estimates items which are presented to Parliament for review and approval. As part of its restraint effort, the government has reduced and more rigorously controlled access to the reserves set aside for contingency purposes. The impact of this will be demonstrated later this week when I table the final Supplementary Estimates for 1986-87. At that time it will be noted that total Supplementary Estimates for the current year will amount to less than 2 per cent of 1986-87 Main Estimates-the lowest percentage since 1968-69.
Members will recall that from the very beginning this government has committed itself to the pursuit of productive management in the federal public sector. Disciplined management has been a consistent theme of the government's various restraint measures and Budget statements. Through the introduction of productive management policies and actions we have sought to create an environment and institutional momentum within the Public Service which stress efficiency, innovation and value for money in the delivery of federal programs and services.
March 2, 1987

The fruit of these efforts are reflected in the 1987-88 Main Estimates, Mr. Speaker. An examination of the payment distribution of these Estimates shows that the non-defence operating and capital spending is marginally lower in the 1987-88 Main Estimates than it was in 1984-85. Taking inflation into account, this is a reduction of just over 12 per cent over this period.
This is a significant achievement, Mr. Speaker, especially if one notes that spending on wages and salaries, the major portion of these costs, is in large part governed by collective agreements, and that the increased costs of negotiated wage settlements have averaged approximately 3.5 per cent per annum. I might also note that the open approach taken by this government to labour relations in the Public Service, including the introduction of Master Agreements and the negotiation of responsible and fair wage settlements, has greatly facilitated the government's efforts to contain expenditures while maintaining essential services to the public. These efforts have also meant that Public Service managers are being continually challenged to deliver government programs with fewer human and financial resources, and to accommodate and expanding clientele and rising workload through efficiency gains, productivity improvements and imaginative use of alternative production and delivery techniques.
I just mentioned that public service managers are employing fewer human resources in program operations. You will recall that in his May, 1985, Budget statement, the Minister of Finance (Mr. Wilson) announced the Government's intention to reduce the size of the public service by 15,000 person-years over five years beginning with the 1986-87 fiscal year. Consistent with this commitment, the 1986-87 Main Estimates tabled last year showed a reduction of some 5,500 person years compared to the previous year. The Main Estimates I tabled today show a further reduction of almost 3,100 person-years. I can therefore report that the Government is squarely on track in achieving its five-year target with more than half of the planned reductions already obtained.


Some Hon. Members:: Hear, hear!


Robert René de Cotret: Indeed, measured on a comparable basis, the number of authorized person-years reported in these Main Estimates is the lowest since the 1980-81 Estimates. With the completion of this program in 1990-91 the number of person-years will be comparable to that of pre-1975 levels.
At the same time the Government's innovative work force adjustment policy, strengthened in 1985 in consultation with the public service unions, has been vigorously applied in a concerted effort to minimize the impact on individual employees affected by the person year reduction measures. In
Statements by Ministers
May, 1986, I announced that the Government was confident that the majority of affected employees could be redeployed within the public service. I also forecast that no more than 500 public service employees would be laid off as a result of the first year of the person-year reductions. With the fiscal year drawing to an end, I remain confident as to the accuracy of that forecast. I will be reporting more fully to Parliament when the final results are available in April. Hon. Members can be assured that the same strong effort to minimize layoffs will continue throughout 1987-88 and in future years.
I have referred in my remarks to the notable contribution made by public service managers to the Government's restraint efforts. When I tabled the 1986-87 Main Estimates last year I stated that a productivity bonus was being developed as a new feature of the Government's management compensation package. Such a feature would serve to reward managers for meeting or exceeding expenditure reduction targets while still achieving their other program and policy goals. A final decision on implementation of the productivity bonus had obviously to wait for an assessment of 1986-87 performance.
As the Minister of Finance reported in his Budget last month, the Government's record on expenditure management has been exceptional. The full $500 million expenditure reduction announced in the February, 1986, Budget has been identified and implemented. As I have already noted, person-year reduction goals have been fully achieved and, in some cases, are ahead of schedule. Steady progress has been made in other key government initiatives such as improved cash management, increased cost recovery, continued privatization of Crown corporations, and reduced overhead and administrative costs.
The Treasury Board has concluded that senior public service managers have been instrumental in the realization of these improvements and has approved a productivity bonus for its senior management of from 1 to 1.5 per cent of salary for the fiscal year ending March 31, 1987. The total estimated cost of this bonus is $4.5 million.

To further demonstrate its commitment to management excellence, the Treasury Board has also authorized an increase, to $10,000, of the maximum value of the Outstanding Achievement Award. This Award, which consists of a citation and a Canadian work of art, can be given annually to up to five senior level public servants who are selected by a six-member panel of Canadians appointed from outside the Public Service. The award was first introduced in 1966. The increase in this award is another clear signal of the importance the government attaches to fostering and rewarding exceptional performance by Public Service managers.

March 2, 1987
Statements by Ministers
In summary, Mr. Speaker, I believe that the Main Estimates tabled today represent a further significant contribution to the government's record on expenditure management.
First, this is the third consecutive year that the growth rate in Main Estimates has declined. Second, the rate of growth in 1987-88 Main Estimates is the lowest increase in 20 years. Third, the size of the Public Service in 1987-88 will be at its lowest level since 1980-81.

In summary, Mr. Speaker, I believe that the Main Estimates tabled today represent a further significant contribution to the Government's record on expenditure management. This is the third consecutive year that the growth rate in Main Estimates has declined. Second, the rate of growth in the 1987-88 Main Estimates is the lowest increase in a quarter century. Finally, the size of the public service in 1987-88 will be at its lowest level since 1980-81.


Some Hon. Members:: Hear, hear!


Robert René de Cotret: This track record clearly reflects the Government's strong commitment to sound management and to the operation of an efficient and effective public service while maintaining and expanding programs which serve the real needs of all Canadians.


Some Hon. Members:: Hear, hear!


Mr. George Baker (Gander-Twillingate):: Mr. Speaker, let us start at the Minister's last point; that is, the bribery payments. Let us start with the new system which the Government has brought in, effective March 31, to pay $4.5 million to senior public servants. According to the Minister, it is for good management in cutting back person years and keeping expenditures down. What is the job of these senior public servants and why are they being paid, if not for good management? The definition of senior management is everyone from the Deputy Minister down. The Government says there is some $4.5 million and, presumably at the end of the month, it will issue cheques up to 1 per cent and 1.5 per cent of the levels. That means the top of the salary scale to which that manager is entitled.
[DOT] (U30)


Mr. Berger:: What does that mean?


George Baker: The Hon. Member asks what that means. I do not suppose anyone knows what it means, but the managers will know when they receive their hand delivered cheques. They will receive $1,000 or $1,500 for ensuring that person years are reduced, according to the Minister.
It is no wonder that the Government exceeded its predicted lay-offs of 2,500 this coming year. It is eliminating 3,100 person years. There are well paid employees in our society who are receiving cash bonuses for eliminating people in jobs on the lower end of the income scale.
The Government brags about the elimination of 3,100 people. If the Minister read the mail we are receiving concerning this matter he would know that people are being laid off throughout the country, with no job prospects in the private sector. People who have 25 years experience in the public service are being laid off with the stroke of a pen. Those people know as a result of this announcement that they are being laid off because a senior manager will receive a lump sum payment at the end of this month as a result of that lay-off.
This incredible system which the Government brags about affects engineers who are being laid off in Public Works, employees in the federal Department of Fisheries and Oceans, people who work in employment offices across the country and those at the scientific research group at the Bedford Institute which will be closed at the end of this month. Someone will receive a $1,000 cheque at the end of the month for accomplishing these lay-offs.
There will be an average payment of $1,000 to highly paid public servants, including Deputy Ministers, at the end of this month. This $4.5 million in bribe payments will result in some 6,000 cheques being issued. One wonders what country would follow such a plan. Obviously the Treasury Board had quite a problem devising the guidelines because it had no other country to use as a model. The system announced by the Minister today does not exist in any other democratic country. We believe these payments are being made for a job that the managers were supposed to do in the first place. We regard it simply as bribery cheques being paid to managers in the public service in this country.
The Minister's statement could be summed up by saying that he is trying to give Canadians the impression that government spending is down. Yet spending has risen considerably. When the Government took office it assumed a national debt of approximately $189 billion. The Minister of Finance (Mr. Wilson) is predicting that national debt to be up to $300 billion this year. Governments of Canada built an accumulated debt of some $189 billion since Confederation, but this Government has increased that debt to $300 billion in some two years.


Some Hon. Members:: Oh, oh!


George Baker: The truth hurts, Madam Speaker. The Minister of Finance said that while spending is up, revenues have also increased. Government revenues have increased to match the increases in the selective spending the Government has undertaken. Recently a Cabinet Minister stated: "-they were only within 10 per cent of the lowest bid and I directed the contract to go to them because they were from my province".
Not all of the information is contained in the Estimates tabled today. We learned that lesson last week when we discovered that a $1 million cheque was given to the County of Pictou in Nova Scotia to build a courthouse. That grant does not come under any federal government program.
March 2, 1987

Every tendering process includes a stipulation that the contract will not necessarily be given to the lowest bidder. The Government should come clean and delete the word "necessarily" so that the stipulation states that the contract will not be given to the lowest bidder. We have seen the Government awarding contracts not only to the second lowest bidder, but the third, fourth and so on.
People should not only concern themselves with the small contracts that are awarded throughout the country, because there are large government contracts being made available and we can see where the money is being spent.
It is true that revenues are up. Last Sunday on CTV's Question Period, the Minister of Finance was asked a question by Mr. John Ferguson in which he said:
I think that the figures from the Fraser Institute in Vancouver suggest that you have been the taxingest Finance Minister in history, that taxes have gone up more, personal income taxes have gone up more under your period of finance than in any other period.
The Minister responded:
What we have been doing here, John-
Referring to John Ferguson, the writer:
-is to bring the level of taxation back to where it had been in the middle 1970s. Previous Ministers of Finance had let go of the tax reins and the level of taxation as a per cent of income had gone down and down-
Who are these former Ministers of Finance whom the Minister said let go of the tax reins in the mid-1970s? The Minister says we must grab the tax reins and bring taxes to their levels before the mid-1970s and make people pay through their taxes. It is as if former Tory Finance Ministers from 20 or 30 years ago are saying: "To you we throw the reins of taxation. Be yours to hold them high". That is why revenues are up in this expenditure package, as well as expenditures.
How does the Minister take hold of those tax reins? He taxes potato chips, corn and cheese-based puffs, brittle pretzels, salted nuts, popcorn, granola bars, frozen snacks, popsicles and ice cream bars. That is what the Minister of Finance does to grab the reins of taxation, to rein in the taxes from the ordinary people of Canada. And who does he pick on? He picks on children. There never was such a tax prior to the 1970s. The Minister of Finance is reining in his taxes from the children.
My Party, the Official Opposition, and I find the Minister of Finance to be way off track in his priorities on taxation. The Minister who tabled the Estimates here today is just as much off track in offering a bonus to public servants and bragging about 3,100 people being laid off. We find it passing strange that Departments such as the Department of Fisheries and Oceans should have a continual decrease in funds since the Government took office. It is down to $551 million this year. Other Government Departments have followed the same route. We have seen, on the other hand, the Government toss money at the Prime Minister's Office to increase his number of staff, and to the Ministers of this Government so they can have all
Statements by Ministers
the staff they want to award contracts, not to the lowest bidder but to the second and third highest bidder, and to give special grants for their own pet projects in their own constituencies which do not come under any program.
Where were the increases in these Estimates today? They were very markedly in the Prime Minister's Office and the Office of the Privy Council. When we look at the percentages we wonder in what direction the Government is going. I am sure the general public will look at the Budget and these Estimates and see we have slight increases in the expenditures of Departments of the federal Government, but they will also see the 18.9 per cent increase in the Budget of the Department of External Affairs for last year and a 15.6 per cent increase this year, amounting to over $3 billion. They will also see family allowances under these Estimates held down to their expenditures and the cuts made to reduce it by three percentage points. They will ask where the equality is of having the budget of the Department of External Affairs 50 per cent higher than the entire budget for family allowances. They will wonder where the justice is behind these kinds of Estimates. The Government will not last its entire term after tabling Estimates such as these.


Mr. Mike Cassidy (Ottawa Centre):: Madam Speaker, I would like to make a few comments on these Estimates. A year ago when the Estimates came down I said that the President of the Treasury Board (Mr. de Cotret) and the Government had produced another set of spending Estimates which would suit Wall Street and Bay Street and, in the words of Ronald Reagan, "There you go again", because that is exactly what we have again this year. These Estimates indicate that the Government intends to continue pleasing the bond market, the financiers and the investment analysts, but it does not relate to the real situation Canadians face.
May I say in parenthesis, Madam Speaker, that I feel extremely distressed at suggestions just made by my hon. colleague from the Liberal Party that his Party is no longer committed to foreign aid. It is an important service and Canadians are prepared to share some of the wealth we have in our country in addition to giving justice to our own people. We can, I believe, do both.
I want to point out to the President of the Treasury Board, and to his colleague, the Minister of Finance (Mr. Wilson), what we pointed out two weeks before the House rose for a week at the time of the Budget debate, that over the course of the past year, between January 1986 and January 1987, we have had an increase of 132,000 jobs in Ontario and an increase of only 5,000 jobs in the rest of the country. At the present moment there are 1.25 million Canadians out of work. It was clear from the Budget and clearer still from these Estimates that the Government has no strategy and no intention to do anything about that particular problem.
Regional Development spending is down by $3 billion from the year the Conservatives came to office. That has meant cuts in transportation, in the fisheries, in agriculture, apart from
3694

March 2, 1987
Statements by Ministers
the special grains program, cuts in the Department of Energy, Mines and Resources and in the Department of Regional Industrial Expansion. In fact there has been a further $1 billion taken out of DRIE in order to pay for the special grains project.
The Government is fighting the deficit this year on the backs of the unemployed and on the backs of the provinces. I remind the President of the Treasury Board and his colleagues that today there are seven provinces which have unemployment rates higher than at the time of the height of the recession in 1981-82. Yet the fact is that the moneys which are being transferred to the provinces are not going to the provinces with the greatest unemployment rates but to the Province of Ontario. Of the total amounts going to the provinces, in terms of tax payments and transfer payments, a total increase of $550 million is going to that poor suffering Province of Ontario. It is a good province which I represent. However, in southern Ontario there has been some economic recovery, and Ontario receives $550 million compared to the $600 million which will go to nine other provinces.

And in particular, Madam Speaker, I want to stress the fact that the Province of Quebec is especially hard hit by the Government cut-backs with respect to transfer payments and payments in terms of tax point transfers. Madam Speaker, we can see that despite the fact that the unemployment rate in Quebec is about 10.8 per cent, the increase in these equalization or transfer payments to Quebec amounts to only $7 million, up 0.1 per cent. By comparison, Ontario's unemployment rate is 6.6 per cent, yet the province will benefit from an increase in equalization and fiscal transfer payments of $50 million, up 7 per cent.

Where are the priorities of the Government which would permit that kind of situation and then turn around to the Province of Quebec and tell it, as it has as recently as the last couple of weeks, that the federal Government is not prepared to deal on the same basis with equalization with Quebec relative to other provinces which received certain forms of revenue guarantees.
Manitoba has an unemployment rate of 7.9 per cent. It will receive an increase of only $1 million or a 0.1 per cent increase in terms of payments for post-secondary education, hospital insurance, medicare and its general transfers which come from the Government of Canada. British Columbia, which has an unemployment rate of 13.8 per cent at the end of January, will see an increase of only 2 per cent in terms of the payments under the shared cost programs with respect to fiscal transfers from the Government.
I want to say that the priorities of the Government are reflected not just in these Estimates but in what is happening on the tax side. The Government has played around with a little here and a little less there in terms of spending estimates. At the same time since the Conservatives came to power they
have increased personal and sales tax revenues from individuals by 52 per cent and have decreased corporate tax revenues by 18 per cent. That is despite a very sharp increase anticipated this coming year in terms of corporate profits. Those are the priorities of the Government.

Another point I want to emphasize, Madam Speaker, is that in these estimates the Government has decided to consolidate the unemployment insurance fund accounts. Indeed the Government sees this as a way to show that unemployment insurance benefits paid to Canada's unemployed come from all Canadians, while in fact it is an insurance fund from which Canadian men and women are entitled to draw benefits if they are out of work, if they suffer from the economic policies of this Government. But at the same time as it consolidates the unemployment insurance fund accounts, Madam Speaker, it is not doing anything to make sure that the estimates will cover payments for tax expenditures.
According to the Auditor General, tax expenditures are estimated at about $30 billion a year. But in spite of that we have no idea which companies will get these huge payments. Who will benefit from these payments? There is no indication whatsoever in the Government estimates.
On the one hand the unemployed are included in such a way that if the Conservatives were to stay in power-which is very unlikely-then they would begin to take away unemployment payments directly from the unemployed. That is the reason the Government has consolidated these accounts. On the other hand, the Conservatives refuse to put in any listing at all of the tax expenditures which are benefiting, in the main, large corporations and wealthy Canadians.
I note that the Government has left a substantial chunk of $2.4 billion for pre-election hand-outs to be made over the course of the fall and next spring.
In terms of priorities, the Government is decreasing corporate tax and increasing personal tax because of its priorities, while doing nothing about tax expenditures which are so costly to Canadians.
I represent a Public Service riding. Once again, public servants will be distressed over the news received in this year's Estimates. Some 3,000 jobs will be cut despite the assurances of the President of the Treasury Board. This means that individuals will be disrupted and forced to move from one community to another in order to save their jobs. They will be pressured out of the Public Service by means of various golden handshakes and other inducements which they will be given. Some of them will, as a number did last year, become too discouraged and will go down on the Treasury Board's lists as being no longer interested in government employment. They
March 2, 1987

are no longer interested because of the nature of the employment they will be offered and because of the adjustments to which they will be compelled to adjust.
If the Government insists on achieving this down-sizing of Government it can and should be achieved without any individual public servant being forced to lose his or her job. If it were possible again to manage it to the point at which only a few hundred people will be fired, as happened last year, then the statement I made last year that no civil servant need ever lose his or her job could have been amply fulfilled for the expenditure of perhaps $4.5 million. That is the sum which is being given as a bonus to senior managers in the Public Service for their work in cutting and chopping heads in the departments for which they are responsible. I suggest that the President of the Treasury Board stand up now and undertake that not one single man or woman working for the people of Canada will be compelled to leave his or her job. That would be a change of heart for the Government which now has a heartless policy of wanting to show the people on St. James Street and Bay Street a few limp, wretched bodies of public servants who have been forced to walk the plank.
Once again this year I asked Treasury Board officials what proportion of the 3,000 people who are to be displaced will be women. I asked what measures will be taken to monitor the situation to ensure that women and minority groups are not further disadvantaged by these cuts. I raised this same question during the response to the Estimates last year and no response was given at that time. I have not received a response this year either. I have been told that they will try to get the figures to me later today. But they do not have the figures because there is no awareness of the fact that women employees are particularly vulnerable to these cuts. There is no awareness and no program to ensure that not just scientists and senior managers will receive extra training or placement in order to save their jobs, but that secretaries, clerks and people doing important support jobs for the Government will also have access to the same type of retraining opportunities. Then they too should be able to save their jobs. They should not be forced out of the Public Service by means of what the Government is doing right now.

Madam Speaker, I should like to add a congratulatory note and point out the fact that, despite the 1985-86 cut-backs, the Government is still on the right track in terms of payments and budgetary estimates concerning funds available for foreign aid.

In terms of foreign aid, there has been a substantial increase this year. As a New Democrat, and I think Canadians will agree with me, I believe that Canada can and should be playing a very vigorous role in terms of providing aid to Latin America, Africa and Asia. We can do that and also do justice
Statements by Ministers
to people in depressed regions suffering from high unemployment. We can and should have a full employment policy. We are not doing justice to Canadians; but we should not seek to do justice to Canadians by doing injustice to people in the Third World.
I note the continued confusion of the Government with respect to Canada Post. I welcome the fact that it has drawn in its horns, to some extent. I deplore the fact that the Government has dithered now for a year and a half in terms of coming up with a clear policy. Canadians want to be assured of adequate postal services. That is a priority which comes before the need to reduce the postal deficit, if those are the choices which are to be put forward.
Once again the Government has cut funding for the Canadian Jobs Strategy at a time when we have 1.25 million unemployed. The Government has cut $154 million from its payment to the Jobs Strategy after having cut $100 million one year ago. I note a cut of over $100 million in payments for the loans and investments under Canada Mortgage and Housing Corporation. This is a sign that the Government lacks a real commitment in terms of adequate social housing.
Under regional expansion and investment the Government has cut $50 million from the Cape Breton Development Corporation, presumably because of its great success, a success about which the people of Cape Breton are certainly not aware. The Government's commitment in terms of economic development is so strong that, apart from the Defence Industry Productivity Program, it has cut the available funds through the Department of Regional Industrial Expansion.
The Government has come up with an increase of 2.5 per cent in funding for the National Research Council, which brings the total up to about $400 million, down by $100 million from two-and-one-half years ago. That is how the Government has so miserably fulfilled the promises it made at the time of the 1984 election. It promised then that Canada should be a world leader in terms of research and development and in terms of science and technology.
I conclude by pointing this out.

The unemployment rate in this country is nearly 10 per cent, and 1,250,000 Canadian men and women are unemployed. The Government's policy seems to be to go on tolerating an intolerable situation where the unemployment rate will remain above 9 per cent across this country and, in some provinces, will be even higher than during the 1981-82 recession.
That is the Conservative Government's economic policy. That is its spending policy. Obviously, Madam Speaker, that is why Canadians have decided to say no to this Government for the next election, since the polls showed the lowest rate of support ever enjoyed by a Government in this country.

March 2, 1987
Petitions



Mr. Guy St. Julien (Abitibi):: Madam Speaker, I have the honour and the privilege of presenting, pursuant to Standing Order 106, a petition signed by 41 residents of Val-d'Or in the Abitibi area, who contribute to the Superannuation Plan of the Public Service of Canada and are employed by the Departe-ment of Employment and Immigration.
In their petition they mention three further changes to the Public Service Superannuation Act as amended by Bill C-33. Their position is:
THAT public service pensions should continue to be fully indexed so that present and future public service pensioners will be protected against inflation.
THAT employees contributing to the Public Service Superannuation Plan should have the right to make decisions with respect to the way the Plan is managed.
THAT interest credited to the Public Service Superannuation Account be set at realistic levels to ensure sound management of the Plan.
They are therefore asking the Government for full indexation of pensions, participation by contributors in decisions and for realistic levels of interest to be credited to the fund.


Mr. Fernand Robichaud (Westmorland-Kent):: Madam Speaker, it is my duty to present to the House a few petitions from citizens of Bayfield, Cape Spear, Cape Tormentine, and Port Elgin. Most of these are small fishing villages along Northumberland Strait.

Your petitioners humbly state that Canada Post's new Corporate Plan is creating and will create two classes of citizens and that closing post offices in rural areas deprives Canadians of a unique federal presence and reduces vital postal service in rural areas. They humbly pray and ask Parliament to reject Canada Post's Corporate Plan.


Mr. Rod Murphy (Churchill):: Madam Speaker, I have the honour under Standing Order 106 to present a petition signed by residents of Pukatawagan, Pikwitonei, Thompson, Flin Flon, Wanless, and The Pas, Manitoba. The petitioners humbly call upon Parliament to reject the proposed changes to the Patent Act which they believe will increase drug prices for Canadian consumers and will severely restrict the ability of average Canadians to buy necessary prescription drugs. The petitioners also believe that these measures proposed by the
Government will unfairly hurt those Canadians whose health needs require the purchase of prescription drugs on an ongoing basis. Furthermore, the petitioners express the opinion that this is another example of the Canadian Government making concessions to the United States at the expense of average Canadians as a result of the free trade negotiations.


Mr. Maurice Foster (Aigoma):: Madam Speaker, I have the honour to present six petitions signed by constituents of Bruce Mines, Sault Ste. Maria, Goulais River, Massey, Elliot Lake, Mindemoya, and Manitoulin Island. The petitioners call upon the Government to rescind its legislation concerning the Patent Act which will increase the cost of drugs to ordinary Canadians, and put an unnecessary burden on our health care system while penalizing the poor, the weak, the unhealthy in our society. It is my honour to make this presentation.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam
Speaker, it is my pleasure to present a petition under Standing Order 106 signed by residents of Whitehorse, Yukon, Kamloops in British Columbia, and Edmonton, Alberta who are indicating that the Government's proposal to change the Patent Act relating to prescription drugs will increase drug prices for Canadian consumers, and it will severely restrict the ability of average Canadians to buy the necessary prescription drugs. The petitioners are asking that the Government reconsider its plans to proceed with this legislation, and ask that it reject the legislation before it goes any further.


Philip Derek Lewis: Madam Speaker, I have two motions to present both of which have been reviewed with the opposition Parties.
Therefore, I would like to move pursuant to the provisions of Standing Order 82(15), and Standing Order 83, seconded by the Hon. Member for Simcoe South (Mr. Stewart):
That the Main Estimates for the fiscal year ending March 31, 1988, laid upon the Table earlier this day, be referred to the several Standing Committees of the House as follows:
There is a detailed allocation of the various committees. The listing has been reviewed with my colleagues from the Liberal Party and the New Democratic Party. I would ask that it be printed in Hansard at this point without being read.


The Acting Speaker (Mrs. Champagne):: Is that agreed?


Some Hon. Member:: Agreed.
[Editor's Note: List referred to above is as follows:]
To the Standing Committee on Aboriginal Affairs and Northern Development
Indian Affairs and Northern Development, Votes 1, 5, 10, 15, L20, 25, 30, 35,
40 and 45
March 2, 1987

To the Standing Committee on Agriculture Agriculture, Votes 1, 5, 10, 15, 35, 40, 45, 50, 55 and 60 To the Standing Committee on Communications and Culture Communications, Votes 1, 5, 10, 25, L20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80 and 85
To the Standing Committee on Consumer and Corporate Affairs Consumer and Corporate Affairs, Votes 1, 5, 20 and 25 To the Standing Committee on Elections, Privileges and Procedure Privy Council, Vote 10
To the Standing Committee on Energy, Mines and Resources
Energy, Mines and Resources, Votes 1, 5, 10, 15, L20, 25, 30, 35, 40, 45, 50
and 55
To the Standing Committee on Environment and Forestry Agriculture, Votes 20, 25 and 30 Environment, Votes 1,5, 10, 15, 20, 25 and 30 To the Standing Committee on External Affairs and International Trade External Affairs, Votes 1, 5, 10, 15, 20, 25, 30, L35, L40, 45, 50 and 55 To the Standing Committee on Finance and Economic Affairs Finance, Votes 1, 5, LI0, 15, 20, 25, L30, 40 and 45 National Revenue, Votes 1, 5, 10 and 15 Privy Council, Vote 20
To the Standing Committee on Fisheries and Oceans Fisheries and Oceans, Votes 1, 5 and 10 To the Standing Committee on Government Operations Consumer and Corporate Affairs, Votes 10 and 15 Governor General, Vote 1 Parliament, Vote 1 Privy Council, Votes 1, 5 and 25.
Public Works, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 55, 60, L65, L70, 75, 80, 85 and 90
Secretary of State, Vote 15 Supply and Services, Votes 1 and 5 Treasury Board, Votes 1,5, 10, 15, 20, 25 and 30 To the Standing Committee on Human Rights Justice, Vote 10
To the Standing Committee on Justice and Solicitor General Justice, Votes 1,5, 15, 20, 25, 30, 35, 40 and 45 Solicitor General, Votes 1,5, 10, 15, 20, 25 and 30 Privy Council, Vote 30
To the Standing Committee on Labour, Employment and Immigration Employment and Immigration, Votes 1,5, 10, 15, 20, 25 and 30 Labour, Votes 1,5, 10 and 15
To the Standing Committee on Management and Members' Services Parliament, Vote 5
To the Standing Committee on National Defence National Defence, Votes 1, 5 and 10 To the Standing Committee on National Health and Welfare National Health and Welfare, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, 55, 60, 65 and 70
To the Standing Committee on Public Accounts Finance, Vote 35
To the Standing Committee on Regional Industrial Expansion
Questions on the Order Paper
Regional Industrial Expansion, Votes 1, 5, 10, 15, L20, L25, L30, 35, 40, 45, 50 and 55
To the Standing Committee on Research, Science and Technology Science and Technology, Votes 1, 5, 10, 15, 20, 25, 30 and 35 To the Standing Committee on Secretary of State Secretary of State, Votes 1,5, 10, 20, 25 and 30 To the Standing Committee on Transport
Transport, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45, 50, L55, 60, 65, 70, 75, 80, 85 and 90
To the Standing Committee on Veterans Affairs Veterans Affairs, Votes 1,5, 10, 15, 20 and 25
That Privy Council Vote 15 be referred to the Standing Joint Committee on Official Languages and that Parliament Vote 10 be referred to the Standing Joint Committee on Parliament.
That a message be sent to the Senate to acquaint Their Honours thereof.


[Stage Direction]
Motion agreed to.
Philip Derek Lewis: Madam Speaker, pursuant to the provisions of Standing Order 82(16), and Standing Order 83, I move, seconded by the Hon. Member for Simcoe South (Mr. Stewart):
That Supplementary Estimates (A) for the fiscal year ending March 31, 1988, laid upon the table earlier this day, be referred to the Standing Committee on Agriculture.


The Acting Speaker (Mrs. Champagne):: Is that agreed?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Philip Derek Lewis: Madam Speaker, the following questions will be answered today. Nos. 67 and 69.


Mr. Althouse: For the fiscal years 1985-86 and 1986-87, were any program, funding and person-year cutbacks imposed on the vital in-house animal production and food safety research programs of Agriculture Canada and, if so, what were they?

March 2, 1987
Canada Shipping Act


Hon. John Wise (Minister of Agriculture):: The animal productivity research and food research programs were cut back by means of funding and person-year reductions as follows:
(SOOO's)
	1985-86	1986-87
Animal Productivity Research		
Funding	1,011.3	4,744.1Person-Years	-	13Food Research	Funding	1,507.5	1,249.3Person-Years


Mr. Althouse: Is there a project to replace the poultry barn at the Kentville, Nova Scotia, Agriculture Canada Research Station and, if so (a) what is its present status (6) what amount was budgeted for it (c) at what time will it be completed?


John Wise: (a) Agriculture Canada does not have a project to replace the poultry barn at Kentville. Departmental officers are presently having consultations with the Province of Nova Scotia, the poultry industry and universities to determine the nature and scope of poultry research in the Atlantic provinces. The question of construction has not yet been decided.
(b)	Unknown at this time.
(c)	Unknown at this time.


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


The Acting Speaker (Mrs. Champagne):: Questions as enumerated by the Hon. Parliamentary Secretary have been answered. Shall the remaining questions stand?


Some Hon. Members:: Agreed.


The Acting Speaker (Mrs. Champagne):: I wish to inform the House that because of the ministerial statement, Government Orders will be extended by 47 minutes beginning at one o'clock p.m.



GOVERNMENT ORDERS


Hon. George Hees (for the Minister of Transport) moved: that Bill C-39, an Act to amend the Canada Shipping Act and to amend the Arctic Waters Pollution Prevention Act, the Maritime Code Act and the Oil and Gas Production and Conservation Act in consequence thereof, be read the third time and passed.


Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, indeed it is a pleasure to speak on behalf of the Minister of Transport (Mr. Crosbie), who is gainfully employed otherwise in parliamentary business on the West
Coast today, on third reading stage of Bill C-39. As Your Honour said, this is an Act to amend the Canada Shipping Act and to amend the Arctic Waters Pollution Prevention Act, the Maritime Code Act, and the Oil and Gas Production and Conservation Act in consequence thereof.
The Canada Shipping Act is the principal legislation covering the shipping activities of foreign ships in Canadian waters and Canadian ships anywhere in the world. It is primarily concerned with safety of life at sea and protection of the marine environment.
Improved safety is a major objective of the Government. It is recognized, for the first time, in the new National Transportation Act which has just been referred to the Standing Committee on Transport. The Government has introduced many measures for the safety of the travelling public. To name a few, the Aeronautics Act was amended in 1985, and regulations on the transport of dangerous goods were implemented in the same year. A national safety code is included in the Motor Vehicle Transport Act, which is now before the House. As Hon. Members know, rail safety legislation is under development, and legislation for a multimodal accident investigation board is being seriously considered. The Bill respecting the Canada Shipping Act is another piece of the comprehensive plan for safety in the transportation system. Hon. Members will recall that the Bill was introduced in the House in the fall of 1985, and that debate on it was ongoing when the House recessed in June and subsequently prorogued in August last year. At that time the Bill was known as Bill C-75.
I believe the purpose of the Bill was supported by all Parties in the House, that is, safety at sea. However, the mechanism of cost recovery was not supported. The Bill before us now does not include the cost recovery clause.


Some Hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: Bill C-75 was extensively discussed at second reading stage in the House of Commons and in the legislative committee. I compliment the then Parliamentary Secretary to the Minister of Transport, the Hon. Member for Dartmouth- Halifax East (Mr. Forrestall), who really had the carriage of the Bill before the legislative committee. I also compliment several members of the Opposition, including primarily the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) and the Hon. Member for Thunder Bay-Atikokan (Mr. Angus), on their very active and constructive interventions at the time. They were very vigorous in their presentations before the legislative committee. It was very interesting to be a part of that process. I compliment that committee and of course its chairperson, the Hon. Member for Brant (Mr. Blackburn), who discharged his very challenging task with unexpected and imaginative decorum.
In this complimentary stage, I also compliment the House Leaders for agreeing to the present House order so that a Bill which had received many hours of debate at second reading and before the legislative committee did not die with the
March 2, 1987

prorogation of Parliament. In effect there was an agreement to bring it back to the House, basically with the removal of Clause 4, so that we could give the Bill third reading and have it passed. I compliment the House Leaders for that agreement. As a result we have third reading stage today.
The matter has been extensively discussed. Over 60 witnesses representing 28 associations and organizations presented briefs to the legislative committee. More than 20 amendments were made to the Bill as originally introduced. As a result of the committee's work, I believe the Bill has been improved and will go a long way, in an era of advancing marine technology, to keeping Canada in the forefront of maritime and marine safety. Those amendments are an indication that the Government and government Members have listened to the constructive suggestions as reflected in the legislation now before the House.
I should now like to comment on some of the important features of the Bill relating to safety and the protection of the environment. During committee hearings the exclusion clause in respect of Canadian mobile offshore drilling units, also known as MODUs, was removed. The Bill now provides that regulations covering certain certification and training, design and construction, and accident prevention for MODUs, when submitted for Governor in Council approval, will be jointly recommended by the Minister of Transport and by the Minister of Energy, Mines and Resources. There is precedent for the interesting innovation of a joint recommendation by two Ministers in Part IV of the Canada Labour Code. While it is an innovative procedure, it is an interim solution, as the Minister of Energy, Mines and Resources (Mr. Masse) is considering measures pertaining to mobile offshore drilling units. Hon. Members will recall the omnibus Bill respecting MODUs which was recommended by the royal commission investigation of the Ocean Ranger marine disaster.
Bill C-39 will permit the strengthening of Canadian participation within the international maritime organization and the international shipping community. It will allow Canada to accede to six international conventions and five codes dealing with the certification of masters and seamen, ship constructions, tonnage measurement, liability and compensation, and prevention and control of pollution from ships. The most important conventions are those relating to the standards of training, certification, and watch-keeping for seafarers; the convention for the prevention of pollution from ships, MARPOL; the associated conventions on civil liability for oil pollution damage and for the establishment of an international fund for compensation for oil pollution damage. The codes will also deal with construction and equipment for liquefied gas carriers, chemical carriers, mobile offshore drilling units, and the safety of dynamically supported craft. As you can see, Madam Speaker, the Bill is an omnibus Bill, covering all these areas which can potentially create many problems in the sea.
Penalties for oil pollution will be increased. Existing penalties of $100,000 will be increased to $200,000 and, for
Canada Shipping Act
contravening the regulations prohibiting the discharge of pollutants, the penalty will be increased from $100,000 to $250,000. The present penalty for a master who does not give reasonable assistance to a pollution prevention officer will be increased to $10,000 from the present $5,000 in the old Bill.
The Bill also revises and improves the scheme for liability and compensation for oil pollution damage. It will allow small claimants, such as fishermen and small boat operators whose property is damaged by oil pollution, to claim directly against our own domestic ship source oil pollution fund without having first to claim against shipowners, as is now the case. This will help eliminate lengthy and costly legal proceedings which now face many small claimants.
I should like to talk about certification of pleasure craft operators for a moment. It appears that members of the boating public and various boating associations believe that certification would be introduced for all types of pleasure craft. I should like to stress that this is not the case, again as a result of the very vigorous debate of the issue in the legislative committee.
In order to reassure the boating public, and in response to concerns expressed by Members and the general public, the Bill has been amended to exempt pleasure yachts of less than 20 metres, and vessels, boats, and craft of any length which are propelled manually by oars or paddles. This gets away from the interesting original interpretation of the definition that one might require certification of a rowing shell. Certainly that was never the intent of the legislators, even though it may have fallen within the imagination of the interpreters. Our intention here to is to clarify the issue of operator licensing for small pleasure craft and at the same time to provide enabling legislation which would allow the Government to respond to future certification requirements because of the size and power of the yachts involved.
I should now like to discuss the most controversial item in the Bill. Clause 4 deals with charges relating to navigational services. As the Minister has mentioned several times, the desirability of putting in place the important safety provisions contained in the Bill have led the Minister to withdraw the cost-recovery clause and re-introduce this legislation. This does not mean, however, that the Government has abandoned its commitment to deficit reduction of which the cost-recovery provisions of the Bill were an integral part. We continue to believe that the users of the Department's facilities and services including those provided by the Coast Guard should pay for a fair share of those incurred costs.
The Minister has accordingly instructed his Departmental officials to consult all interested parties on the principles that should govern the cost-recovery process and on the ways in which these principles could be implemented. The results of this consultation will be reported to the Minister and will be used as the basis for a return to Cabinet for approval to proceed with new enabling legislation for the introduction of

March 2, 1987
Canada Shipping Act
charges for services provided by the Coast Guard. It will have to return to the House at some time depending upon consultation and depending upon final agreement and/or the Cabinet's decision.
I think the Government has given proof of its willingness to listen to representations made by witnesses and by all committee members and to react to these representations in a most positive and constructive way. Members of all Parties will understand the importance of this legislation to the shipping community and to shipping activities in Canada. This Bill significantly improves and modernizes a 50-year-old Act that dates back to 1936.
I urge Hon. Members to consider the important safety features which are fundamental to the amendments to the Canada Shipping Act and to recognize the improvements that have been made in this legislation as a result of this Bill. Therefore, in the interests of marine safety, I ask in the name of the Minister that this House give expeditious passage to this legislation which has been long awaited both nationally and internationally.


Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Madam Speaker, I am pleased to rise again to participate in the debate on this Bill. In fact, the last time I had the opportunity to participate in the debate on this Bill it was entitled Bill C-75. At the end of last June, as I recall, I was about seven hours into my speech and was just warming up on the measure called Clause 4, that Draconian clause, when the Speaker, not intentionally I am sure, rose to his feet to inform us that the House was rising for the summer. Unfortunately for the Government, fortunately for the marine industry of Canada, the result of the interruption by the Speaker of my speech, which I now hope to continue today, was that the Bill was lost and had to be re-introduced.
I enjoy hearing from the gentleman who has just spoken. He is a very able Chairman of the Transport Committee.


Jean-Robert Gauthier: Should have been a Minister.


Brian Vincent Tobin: He should have been a Minister of the Crown. The Hon. Member for Annapolis Valley-Hants (Mr. Nowlan) would have been an effective Minister of the Crown. He is an enjoyable man, a man who has the ability of convincing a person after he has gone through a time of rough waters in a small boat that he has really been on a short ride in a very pleasant craft. He has just described for the House the air of reasonableness surrounding this Bill. He has described the consideration, consultation, care and attention that has been exhibited by the Government with respect to this Bill. I cannot help but chuckle.
My colleague, the Hon. Member for Westmorland-Kent (Mr. Robichaud), the Hon. Member for Thunder Bay- Atikokan (Mr. Angus) and I moved numerous motions in many different ways designed to have Clause 4 withdrawn from Bill C-75, the former title of the current Bill. Each and every motion was defeated, though not by the Chairman, being
the neutral person he is, the wise and able arbitrator of the Transport Committee. He did not speak, express himself or indicate where he stood. However, each and every attempt to withdraw Clause 4 was defeated by the Conservative majority. I know that if the Hon. Member for Annapolis Valley-Hants had been an active participant rather than a neutral Chairman, this colossal mistake and delayed awakening to reality would never have occurred because he would have spoken as clearly, intelligently, persuasively and eloquently as he has today about-


Mr. Angus:: Madam Speaker, I rise on a point of order. I would like to point out to the Hon. Member that the Hon. Member for Brant (Mr. Blackburn) was the Chairman of the legislative committee. The Hon. Member for Annapolis Valley-Hants was a member of that Conservative majority.


The Acting Speaker (Mrs. Champagne):: The point is well taken.


Brian Vincent Tobin: Madam Speaker, I would simply point out that there is a generous side to my nature. There is a deep and abiding kindness in me that prevented me from pointing out that the Hon. Member was a voting member of that committee that defeated motions designed to do away with Clause 4. I thought that it was more of a reflection of the Hon. Member's other role as Chairman of the Transport Committee, so I was excusing him today, given that he has made such a fine introductory speech.
As it now stands, Bill C-39 is an excellent Bill. I agree with the Hon. Member for Annapolis Valley-Hants on that. It is an excellent Bill in that it deals with reform of the Canada Shipping Act, reform which is long overdue. It makes regulations relevant to conditions today, and for today's shipping environment it is an excellent Bill. It does some rather intelligent things because of amendments, whether they be Liberal, NDP or Conservative amendments, that we were able to have passed as Members working together in a non-partisan way.
We were able to ensure the Gazetting of all new regulations so that those people affected by regulations would have a chance to comment on them and appeal them long before they became the law of the land. That is a very important change that democratizes the power of Cabinet to make changes by Order in Council without coming to the House. We were able to ensure that the many hundreds of thousands of Canada's pleasure craft were not caught up in bureaucratic red tape by exempting them where it was appropriate. Of course, there were dramatic increases in the pollution fines that had been in place in the old Bill.
It is important to note that while the introduction of this Bill without the dreaded Clause 4 would be a major recognition of the difficulty of the shipping industry in Canada, and particularly the St. Lawrence Seaway system, the committee has been responsible for providing for some very severe penalties to be imposed on those shippers who pollute, notwithstanding their
March 2, 1987

ability to pay under the user-pay clause that was withdrawn in recognition of that difficulty. We increased dramatically and severely the fine for those shippers who would pollute the Canadian environment. There has been an increase from $100,000 to $250,000 for the discharge of pollutants. There will be fines of $200,000 for offences under pollution law committed by persons or ships. There will be fines of $10,000 for failing to comply with pollution officers. I think these are very important changes.
I said that the Bill was an excellent Bill insofar as it deals with the subject matter that exists in it. It is a great shame that this Bill does not deal with the recommendations of the Royal Commission on the Ocean Ranger disaster. Every Hon. Member will recall that horrific day when we woke up and heard the news that 84 men had lost their lives on the Ocean Ranger, that unsinkable oil rig which went down in the wild Atlantic waters off Newfoundland. Every Hon. Member will recall the painstaking work that was done, that $15 million exercise which took over nearly three years, by the Royal Commission on the Ocean Ranger disaster. That work was done to find ways to ensure that this kind of loss of life would never happen again to the extent that it was a result of human or mechanical failure.
One of the central recommendations of that Royal Commission, a fundamental pillar of that $15 million report, was that the operation of oil-drilling rigs should be covered under the Canada Shipping Act. It was ludicrous that that kind of activity was governed by the authority of the Minister of Energy, Mines and Resources (Mr. Masse) when every other ship or vessel, including garbage scows, had to be regulated by the Minister of Transport (Mr. Crosbie). It was ludicrous that these rigs, examples of evolutionary technology operating in the most hazardous of conditions, were not covered by the Canada Shipping Act. The Royal Commission said, cover these rigs under that Act, ensure by law, not as a result of goodwill, that the masters on those vessels are properly certified and trained. We know many of the rigs operating off the East Coast have not had properly certified masters as determined by the Canada Shipping Act. Despite the fact we in this Party moved amendments, supported by the NDP, to achieve that inclusion under the Act, despite the fact that I know every member of the committee, even those of the Conservative Party, realized the wisdom of the Royal Commission recommendation, no such provision can be found in Bill C-39.
No one has ever given a rational explanation for that. The Hon. Member who spoke on behalf of the Government in introducing the Bill made reference to an interim measure. The Bill was debated for two years and all that could be found was an interim measure. Let every Member pray to the man above that there is not another disaster while we implement an interim measure.
Canada Shipping Act
We should have acted but what prevented us? Was it because we were not able to draft the appropriate regulations? Was it because the companies were opposed to being included under the Canada Shipping Act? Was it because the coastal provinces were opposed? Was it because the people who were going to sea and putting life and limb at risk were opposed to being included under the Act? They were not. Why was it? It was because we have this twisted mentality in Ottawa from time to time which says Ministers' Departments are empires. Every piece of regulatory machinery you can attach to your Department binds your empire and expands your status. The then Minister of Energy, Mines and Resources, now the Minister for International Trade (Miss Carney), refused to give up that power. It was a ministerial battle between the current Deputy Prime Minister (Mr. Mazankowski) and the former Minister of Energy, Mines and Resources who refused to give up that bit of authority because it was a reflection on her empire.
Why were we unable to ask ourselves about what was in the best interests of the men and women who work on those rigs?
Why were we unable to ask ourselves what was in the best interests of the industry? Why did ministerial ego prevent a very important amendment from being included in Bill C-39?
I raise that today, not to be sour about what I think is an otherwise good Bill but because I want the Government to know, particularly those government Members who serve on the Standing Committee on Transport, that an interim measure is not good enough.
The drive to ensure the proper regulation and protection of workers in the offshore will not be forgotten with the passage of this Bill. The impetus will not be lost today because this Bill, flawed at least in that respect, has passed. Another ten years cannot go by before we provide rational and proper regulations and protection for those who work in one of the most dangerous environments in the world, the waters of the northeast Atlantic. There should not have to be another Ocean Ranger disaster with 84 lives lost. There should not have to be another $15 million story told about that disaster. Parliamentarians have to find the backbone to override the bullying caused by departmental empire building and see that a long overdue amendment to the Bill is passed.
As I said, the withdrawal of Clause 4 is a note of recognition by the Government that you cannot simply proceed with legislation which enables the Government to raise funds in a holus-bolus manner. You cannot ask for authority to impose fees on the basis that you will tell the people concerned later on what the fees are going to be. That is the equivalent of giving someone a rifle, a bullet, and they then load the gun and pull the trigger, without knowing who that person is going to shoot at. No one in his right mind does that. You do not pass a loaded weapon to someone unless you know what he intends to use it for. Here the Government was asking for a loaded weapon in the form of a blank cheque and it would tell the industry later how it was going to use it.

March 2, 1987
Canada Shipping Act
A subcommittee of the Standing Committee on Transport has been struck to look into the problems of the St. Lawrence Seaway. The at least temporary withdrawal of Clause 4 and user-fees will cause some comfort to those operators who are part and parcel of the St. Lawrence Seaway. Elowever, that is not enough. The Seaway has two problems which the Government has to address soon, and separately from this Bill, and they need to be flagged in this debate. I read an article in The Toronto Star the other day which started off, "Canada's heartland, Ontario and Quebec, is fed by a thick vein of filth, the St. Lawrence River". That is an environmental reality we have to come to grips with. We have dealt with it in this Bill, to some extent. We have dramatically increased the fines for discharging pollutants from ships. However, we have to find a way to deal with the pollution being dumped in the river by companies who operate along its banks.
There is a second problem. Even as the Government announces it is withdrawing Clause 4 it has in the same breath said it is going to consult, and that we applaud, but it intends to come back as soon as possible with an amendment to impose user-fees. Traffic along the St. Lawrence Seaway has dropped dramatically, 40 per cent or more, over the last handful of years. At a time when Canada is pursuing a user-pay philosophy for services which have historically and traditionally been provided by the Canadian Coast Guard through navigational aids and so on, the U.S. Government is taking a different attitude. It is moving towards toll decreases. It recognizes that the St. Lawrence Seaway Authority is not just another Crown corporation which has to show a profit at the end of the year. It is really an intricate part of Canada's industrial heartland. You cannot, in a ledger or bottom-line style, impose user fees on a service that is in decline and not affect the industrial strategy of the country.
I, for one, eagerly await the report of the subcommittee of the Department of Transport on the St. Lawrence Seaway to see what recommendations it will come forward with. I hope the Government is eagerly awaiting it as well and will be prepared to act. Otherwise, the system which is now in decline is not likely to survive as a major transportation artery beyond the turn of the century. That is not at all an exaggeration. The pessimist would say that the death-knell has already been rung. I do not believe it. It is up to government and Parliamentarians to act.
It was worrisome for me to note in today's Estimates that the budget of Marine Atlantic has dropped by $70 million over last year. Marine Atlantic provides a service rather than a sightseeing route by the sea of Atlantic Canada. I am talking about the ferry service. It is not the pleasant way to go out and get some salt air and see some fine scenery in Atlantic Canada. It may be for tourists, and we welcome them in droves, but for the people of Atlantic Canada, Marine Atlantic and its ferry services is the primary and, in many cases, only means of transportation.
The $70 million cut announced today in the Estimates, accompanied by dramatic rate increases over the last two years, is another unpleasant signal to the regions. It is the kind of thing which causes a gentleman whom I do not accuse of always being the most rational in the world, Premier Peckford of Newfoundland, to make noises about separatist sentiment. I have no time for those who would seek to cure the ills of their particular region, be it in the West, in Atlantic Canada or in Quebec, by raising the spectre of separatism. I have no time for that kind of talk. However, when I hear it raised I assume there is a problem. This cut-back announced today is part of the problem.
The budget of the Canadian Coast Guard has been cut by $9 million. Under the proposed Clause 4 of Bill C-75 the fishermen of Atlantic Canada run the risk of receiving a bill if they thought they were in trouble, radioed the Coast Guard, and subsequently found that they were not in trouble. They run the risk of being billed for asking for emergency help. A man in a boat on the high seas who was not sure whether or not he was going down might hesitate to ask for help because he may have to pay for asking the Government of this great marine nation to come to his aid. Clause 4 is gone, but the cutbacks were announced today in the Estimates tabled not two hours ago by the Minister responsible for the Treasury Board. That will have a negative impact on our ability to help men in trouble.
I had a very unpleasant and difficult task to perform last month. I had to go to the small community of 125 people called Bar Harbour. I had to go into a house and sit at a table with four women, all widows, who had been married to four brothers who fished one boat. They were lost off the south coast of Newfoundland adjacent to the riding of my colleague, the Member for Burin-St. George's (Mr. Price).
I have been in this place for seven years. We sometimes get blinded by the glare of the chandeliers, the richness of the wood paneling and the lustre of the carpet. We tend to think about the the Coast Guard only in terms of numbers. We tend to think about service only in terms of political debate and, to be very frank, scoring political points. Sometimes it takes that kind of meeting to make us realize that $9 million is more than a number, more than an adjustment to the bottom line. A decrease of $9 million in the budget of the Canada Coast Guard represents the ability of the excellent men and women who work for Canada's Coast Guard to respond to those in distress. We have again today taken away a considerable measure of the Coast Guard's ability to respond and install the navigational aids which are necessary for safe shipping. I hope the Government will reconsider this. There are many other cuts that I could talk about, many of which are considerably larger than $9 million. However, I earmark this one and hope the Government will consider withdrawing such a cut in such an essential service.
With these remarks I conclude my comments on Bill C-39. I urge that the Bill be passed as agreed in discussions between all three Parties after my colleague, the transport critic, says a
March 2, 1987

few words. I would like to join with the Member for Annapolis Valley-Hants in congratulating all Members, including my colleague, the Member for Westmoreland Kent, and my colleagues in the New Democratic and Conservative Parties who worked on this Bill. I believe that this is a good piece of work. However, at the first opportunity it must deal with the problems of the oil and gas industry.


Iain Francis Angus: Madam
Speaker, today is a very significant day for back-benchers and opposition Members in this House. We have before us at third reading stage, by unanimous agreement, Bill C-39, which is the infamous Bill C-75 recycled. I say it is a good day for back-benchers because we, particularly on the opposition side, have been able to convince one of the largest Governments in the history of this country to change its approach to the very fundamental issue of cost recovery in the marine sector.
I would like to refer to the history of this Bill in a parallel action, which sets my Party apart from that of the Government on the issue of the marine sector. The Government made a conscious decision that it had to extract more money from the users of the marine service, particularly those operating within the St. Lawrence Seaway-Great Lakes waterway system. I, on the other hand, along with my colleagues, believed that we first had to examine the problems of the St. Lawrence Seaway and the marine sector to learn what was preventing them from making a buck, from keeping people employed, and from moving goods from east to west, or west to east.
To this end, as long ago as July 10, 1985 I wrote to the chairman of the Transport Committee who spoke on behalf of the Government today, requesting a full scale review of the Seaway. Later that month my colleague, the Member for Thunder Bay-Nipigon (Mr. Epp), and I wrote to the Prime Minister (Mr. Mulroney) outlining major problems on the Seaway and asking for a comprehensive approach to be taken. The Government's response was the introduction on September 24, 1985 of Bill C-75, a Bill to amend the Canada Shipping Act, among others. That Bill contained one contentious clause. It was Clause 4 which provided the Minister of Transport (Mr. Crosbie) with the power to levy charges for Coast Guard services. Those charges could be up to 100 per cent of the actual cost of providing that service.
While those of us who deal with Bills that come before the House realize that it is not easy to receive a Bill the same day that it is tabled, 1 managed to get a copy of it before returning to Thunder Bay. Immediately upon reviewing the Bill, I knew that Clause 4 presented a severe threat to the viability of the Great Lakes and St. Lawrence Seaway. This included the viability of the Port of Thunder Bay, part of which I represent, as well as other ports along the system. It was a threat to coal miners in British Columbia, potash miners in Saskatchewan and grain farmers in the West. It was a threat to end users like Ontario Hydro, farmers who use potash products and container carriers who move part way through the St. Lawrence
Canada Shipping Act
Seaway system. I wrote to the industry warning them about Clause 4 of the Bill. I asked them to review that clause and prepare for what might be a major battle to protect their interests.
Second reading debate of the Bill took place on October 15. The Minister of Transport began with the normal overview of the intentions of his legislation. The Member for Davenport (Mr. Caccia) spoke on behalf of the Liberal Party. He spoke entirely about the impact of increased shipping in the North, especially with respect to Lancaster Sound. In fact, his concluding words were, as reported at page 7623 of Hansard'.
Therefore, the Minister of Transport and his Government owe this House as well as the affected communities a thorough explanation as to what the longterm policy of this Government is in relation to year-round oil tanker traffic in Arctic waters. This is the basic policy direction which has to be understood on second reading of Bill C-75.
Clearly, the spokesman for the Liberal Party had not been briefed or did not fully understand the issue before us. Other Members who spoke later began to deal with the issue, and I appreciate their support in that campaign.
Let me return to the chronology of this Bill. The Legislative Committee, chaired very capably by the Hon. Member for Brant (Mr. Blackburn) from my Party, had its first organizational meeting on October 22, 1985. It did not meet again until January 23, 1986, when we met the Minister of Transport.
In the meantime, the four members of the Transport Committee, including myself, the Hon. Member for Regina West (Mr. Benjamin), the Member for Humber-Port au Port-St. Barbe (Mr. Tobin) and the Member for St. Catharines (Mr. Reid), wrote a letter to the Chairman of the Transport Committee asking for a review of the Seaway pursuant to Standing Order 72(b). That letter was distributed to the industry early in the new year. The Legislative Committee held eight public hearings between January 30 and February 13 where we heard 28 witnesses. Quite frankly, all but one of those witnesses strongly opposed Clause 4 and the cost recovery mandate.
I want to recall my speech in the House during second reading of this Bill because one reason for Opposition to this clause was the matter of process. Opponents of this clause believe that no Minister should have the power to unilaterally charge any price and that there should be prior consultation. They wanted to know what this clause would mean to them as shippers, carriers or communities that depend on shipping for their livelihood.
Let me quote what I said during that debate on Tuesday, October 15, 1985, as reported at page 7628 of Hansard:
What I would like to see happen is for the Minister to remove voluntarily Clause 4 from the Bill and refer it and all other user fees in the marine industry to the Standing Committee on Transport so that the philosophical aspect can be dealt with. In that way we can have hearings focusing on the impact of user fees on marine transportation.
That would allow this Bill to go through in the expedient manner that he has asked for. In that way the positive aspects of the Bill can be put in place, as they most appropriately should be, with the controversial element removed from the
March 2, 1987

Canada Shipping Act
Bill, thus giving us an opportunity to examine that issue with the industry, with the users, with the workers.
In that way we can take a good hard look at the whole question of the cost of using the Seaway system and the costs of using our ports. It also will allow us to work with the United States in doing these things in concert.
The Government finally accepted that recommendation some 16 months later. It had an opportunity at that time to remove Clause 4 from the Bill by accepting the words of caution from opposition Members, primarily myself, and allow the rest of what is basically good legislation to proceed. I guarantee that if the Government had done so, the Bill would have been passed in the House by April, 1986 at the latest. All of these important steps to upgrade Canada's maritime law, which has not been upgraded for 50 years, could be in place today.
Although this Bill will pass today, it still must receive Senate approval and Royal Assent. The regulations must be written and gazetted. These important changes will not be in place for some months to come. The Government made a grave strategic error by bootlegging in Clause 4, such a fundamental philosophical clause on cost recovery, to a Bill that was designed as a technical mechanism to bring Canada into the 21st century in terms of marine law. If there is any blame for the delay in improving this Bill, it lies with the Government. I regret that government Members on the Legislative Committee were not prepared to listen to representations made to them. Unfortunately, they did as they were told and retained Clause 4, which I sincerely believe they knew was wrong.
Since the decision to reintroduce this Bill without Clause 4, two members of that Legislative Committee have risen in the House to say the Bill ought to be brought back without Clause 4. While I applaud that gesture, they would not have done so had it not been for the coalition that developed. It was a diverse coalition of shippers, carriers, communities, labour and management.
During the last week of June, the sub-committee on the St. Lawrence Seaway held hearings in Thunder Bay. Although the hearings did not concern Bill C-75, everyone who made representations said that Clause 4 of the Bill had to go. These witnesses included the radicals, some New Democrats in Thunder Bay, the Chamber of Commerce, the Labour Council as well as two past Conservative federal candidates. They were members of City Council, they were Liberals and New Democrats. The community of Thunder Bay united in opposition to this particular clause. The community set aside philosophy and partisan politics because it realized it is so important to our survival and we have to fight against it. The community united just like other communities elsewhere along the system. Fishermen in Atlantic Canada and on the West Coast, shippers and carriers all pulled together and extraordinary lengths were gone to in order to convince the Government of the error of its ways. In fact, I do not know for sure but I have been told of individuals placing in the inside pocket of the Prime Minister letters directed to him. This was done by passing staff, aides and so on who were basically saying: "Smarten up. What you are doing is going to hurt us".
I am pleased today that we have reached the point of seeing good legislation brought in without Clause 4 tagging along. I know that people in the Great Lakes area and the St. Lawrence Seaway will be very pleased about this. However, they also know the battle is not over. We still have to go through the process of negotiatons with the Government on cost recovery in the marine sector, and these people are betting it is going to take a year and a half to two years and then what will happen is we will have another election. They know these folks are not going to be around so they do not have to worry about this kind of Bill being brought forward, at least by this Government.
There are two other areas in the Bill I would like to refer to briefly because they are important matters which I raised in committee. The amendments were not accepted by the Government members. One amendment was withdrawn because of a statement made by the counsel to the Department, which advice we have since found was erroneous. There are two areas to which I would encourage the Government to give consideration. I put it in that context because I realize on third reading I am not allowed to make amendments.
We heard from a group of aboriginal peoples who were concerned with the impact of travel through the Arctic by ship. They were concerned about the fact that these people who are guiding the ship, while they are very well qualified technically in terms of getting from point A to point B and doing so without endangering the lives of the passengers and crew or the vessel itself, did not understand the nuances of the Arctic. They did not understand migration patterns of the wild life which may in fact be severely interrupted by the passage of a vessel breaking through the ice, or the nomadic patterns of the hunters. What the aboriginal people recommended, and what I tried to put forward in an amendment in committee, was that provision be made for what I refer to as "special aboriginal guides" to be placed on those vessels which are travelling through the Arctic waters. I think the Government would be doing an excellent service to those peoples if it brought back a Bill at a later date which deals with that matter by itself.
There was one area where there was some contention within the committee dealing with the situation where orders go from the shore which supersede the orders of the captain or pilot. There was concern expressed by the Canadian Merchants Services Guild, which is one of the organizations which appeared before the committee, that there was some ambiguity in the wording of the legislation. We received just recently from Mr. Jacques Rousseau of the Law and Government Division, Research Branch of the Library of Parliament, who was assigned to the Senate Committee on Bill C-75. He reviewed the testimony before the legislative committee and offered the following:
Clause 70 of Bill C-75 was incorporated in the portion of the Bill dealing with vessel traffic service. This clause proposed to create offences in this area of the shipping legislation. It also proposed, with regard to some of those offences, that the following defence to a charge be provided for by proposed section 635.19(2) of the Bill:
March 2, 1987

It is a defence to a charge under subsection (1) of contravening a regulation made under paragraph 635.16(c), subsection 635.18(3) or a direction referred to in paragraph (l)(c) that the master, pilot or person in charge of the deck watch of the ship had reasonable grounds to believe that compliance would have imperilled life, the ship or any other ship or any property, and, in the case of contravening a direction referred to in paragraph (l)(c), notified the person who gave the direction as soon as possible of the contravention and of the reasons therefor.
The Canadian Merchant Services Guild wanted this proposed subsection to be amended so that the master, pilot or person in charge of the deck watch would be able to plead a defence of "due diligence".
Mr. Rousseau stated that the amendment I moved during the clause-by-clause study of Bill C-75 was designed to achieve that very purpose. At that point, Mr. Popp, the General Counsel of the Department of Transport, Admiralty and Maritime Law, made the following statement:
The only observation I would make is that we do not see how the wording of the proposed amendment is an improvement over the very precise language that you now have in proposed (subsection 635.19 (2)).
In other words, I am suggesting that the words in the motion seem to be more vague than the very precise language in the bill.
Mr. Rousseau continues:
The explanation given by Mr. Popp suggests that the defence of "due diligence" and the defence provided by proposed subsection 635.19(2) of Bill C-
and now Bill C-39.
-are the same and that, consequently, an amendment providing for the defence of "due diligence" as you moved is useless. If such were the case, it is clear that the amendment you moved was not opposed by the Government as a matter of principle, but rather because the wording of proposed subsection 635.19(2) was already providing for the purpose sought to be achieved by your amendment.
However, as I will now undertake to explain, the defence of "due diligence" and the defence provided for in proposed subsection 635.19(2) are two different things.
The defence provided for in proposed subsection 635.19(2) may be described as a statutory defence of necessity. Proposed subsection 635.19(2) offers a defence of necessity in cases of wilful violations of a regulation, for instance where the captain had reasonable grounds to believe that compliance would have imperilled life. The defence of "due diligence" is one that permits the person charged to explain that despite the fact he or she took all reasonable measures to comply, apparent commission of the offence occurred without his or her having intended to do so.
At law, there is a presumption that the defence of "due diligence" is available to the person charged. However, by its very nature, a presumption can be overturned by the language-
I wonder, Madam Speaker, if I could have just a few more minutes by unanimous consent?


The Acting Speaker (Mrs. Champagne):: Is there unanimous consent?


Some Hon. Members:: Agreed.


The Acting Speaker (Mrs. Champagne):: The Hon. Member may continue.


Iain Francis Angus: I thank Hon. Members and you, Madam Speaker.
Canada Shipping Act
-used in the statute prescribing the offence. In the case of proposed subsection 635.19(2), it is not clear, to say the least, whether the words used in proposed subsection 635.19(1) leave open to persons eventually charged the possibility of availing themselves of the benefit of the defence of "due diligence".
Clearly there is a dispute between the counsel for the Department and the interpretation of the researcher of the Library of Parliament. I wrote to the Minister's office on Friday last and requested this be reviewed with a mind to bringing in an amendment today but, obviously, because of consultation we have had, that cannot happen. Therefore, I would encourage the Minister to have his officials review this matter, as well as the matter of the aboriginal guides, and bring in separate legislation. I know I can speak for my caucus when I say that we would give fairly quick and speedy passage to the two amendments. I am sure other Hon. Members will consider that as well.
I would like to reiterate my pleasure at being here today in the House speaking to this very important matter. It shows that a back-bench Member of Parliament, an opposition Member of Parliament, can have a major influence if he or she does the homework, develops the coalition and the lobbying and can convince the Government to change its approach with respect to a particular piece of legislation. I wish to thank my colleagues on the legislative committee. We had some rocky times. We felt we were being pushed a little bit too fast for our liking. However, we are all colleagues and I appreciate the opportunity to be able to work with them. I know that at 3.30 p.m. today we will be doing just that when we commence our deliberations with respect to the deregulation legislation. I am sure there will be a great deal of conflict with respect to that legislation as well.


Philip Derek Lewis: Madam Speaker, I rise on a point of order. There have been discussions among the Parties with respect to the most expeditious way of utilizing the time of the House while at the same time accomodating the Hon. Member for Papineau (Mr. Ouellet) who wishes to make a speech on Bill C-39. What we propose is that we adjourn the debate on Bill C-39 at this point in time until after Question Period and proceed to discuss report stage of Bill C-6. If, at the conclusion of his speech-and we have not by any means finalized this- the question is put and a division is requested then we suggest that that division be deferred until 6.15 p.m. this evening at which time we will have dealt with the division of the amendment of the Hon. Member for Ottawa Centre (Mr. Cassidy) with respect to the Budget.
With the unanimous consent of the House I suggest that the debate be now adjourned.


The Acting Speaker (Mrs. Champagne):: Is there unanimous consent?


Some Hon. Members:: Agreed.

March 2, 1987
Atlantic Accord


ATLANTIC ACCORD-CANADA-NEWFOUNDLAND MEASURE TO IMPLEMENT
[Stage Direction]
The House proceeded to the consideration of Bill C-6, an Act to implement an agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore petroleum resource management and revenue sharing and to make related and consequential amendments, as reported (with amendments) from a legislative committee.
The Acting Speaker (Mrs. Champagne):: The Hon. Member for Ottawa-Vanier (Mr. Gauthier) on a point of order.


Jean-Robert Gauthier: Madam Speaker, of course we are at the report stage of Bill C-6 and since the House is sitting past one o'clock our critic is not here now to proceed with the report stage debate of Bill C-6. Personally I would like the House to consider that the agreement we made-

The deal we had with respect to Bill C-39 and Bill C-6 is that the critics of the various Parties would be in the House to speak. They are not here at the moment, but I know that they are en route. At least I know that the Hon. Member who speaks on behalf of the Liberal Party is on his way to the House. I wonder if the House would see fit to take its time and to give us a few minutes to allow the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) to get here. We could proceed at this time with the amendments, or at least the tabling of them.


Mr. Waddell:: Madam Speaker, I rise on the same point of order. I wish to point out that I am the critic for my Party in this particular area. I am ready to proceed. I think the best way we can proceed is to table the amendments first. Since there are so many clauses and a great deal of material with respect to them I agree with the Hon. Member for Ottawa- Vanier (Mr. Gauthier). Perhaps the Parliamentary Secretary could take us through the amendments in an orderly fashion and provide us with an explanation.


The Acting Speaker (Mrs. Champagne):: There are eight report stage motions on today's Order Paper and Notices in amendment to Bill C-6, an Act to implement an agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore petroleum resource management and revenue sharing and to make related and consequential amendments.
Motions Nos. 1, 3 and 7 will be grouped for debate. Motion No. 1 will be voted on separately. A vote on Motion No. 3 will apply to Motion No. 7.
Motion No. 2 standing in the name of the Hon. Minister appears to seek to introduce a new concept into the Bill. However, there is some doubt in my mind. Therefore, I have decided to let the motion go forward.
Motion No. 4 will be debated and voted on separately.
Motions Nos. 5 and 6 will be grouped for debate but voted on separately.
Motion No. 8 will be debated and voted on separately. [Translation]


Hon. Michel Cote (for the Minister of Energy, Mines and Resources) moved:: Motion No. 1.
That Bill C-6 be amended in Clause 8 by striking out lines 26 to 30 at page 6 and substituting the following therefor:
"(2) Subject to section 101, the Canada Petroleum Resources Act and the Oil and Gas Production and Conservation Act and any regulations made under those Acts do not apply within the offshore area."
Motion No. 3.
That Bill C-6 be amended in Clause 101 by striking out lines 18 to 34 at page 53 and substituting the following therefor:
"101. (1) Part VII of the Canada Petroleum Resources Act applies, with such modifications as the circumstances require, within the offshore area.
(2)	The rates fixed by the Federal Minister pursuant to section 80 of the Canada Petroleum Resources Act, as they apply to the offshore area, are subject to approval by the Board.
(3)	Notwithstanding subsection 78(2) of the Canada Petroleum Resources Act, one of the members of the Environmental Studies Management Board established by subsection 78(1) of that Act is to be appointed by the Board on the recommendation of the Provincial Minister.
(4)	The Environmental Studies Management Board referred to in subsection (3) shall submit to the Board a copy of every annual report and recommendation submitted to the Federal Minister pursuant to paragraph 79(1 )(</) or (e) of the Canada Petroleum Resources Act at the same time the report or recommendation is submitted to the Federal Minister."
Motion No. 7.
That Bill C-6 be amended in Clause 236 by striking out lines 1 to 39 at page 139 and lines 1 to 40 at page 140 and substituting the following therefor:
"236. Notwithstanding section 49 of the Canada Oil and Gas Act as it read immediately before the coming into force of this section, where an exploration agreement in relation to any portion of the offshore area was entered into or negotiations in respect thereof were completed under the Canada Oil and Gas Act on or after February 11, 1985 and before the coming into force of Part VII of the Canada Petroleum Resources Act,
(a)	the interest owner shall deposit for payment into the relevant fund an amount determined in accordance with subsection 81(2) of the Canada Petroleum Resources Act; and
(b)	where, prior to the coming into force of this section, there has been deposited for payment into the relevant fund in relation to that exploration agreement an amount determined in accordance with section 49 of the Canada Oil and Gas Act as it read immediately before the coming into force of this section, the Minister may refund to the interest owner an amount equal to the difference between that amount and the amount required to be deposited under paragraph (a)."


Mr. Jack Shields (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Madam Speaker, I wish to make a few remarks on both the amendments recommended
March 2, 1987

by the legislative committee, as well as the amendments recently tabled by the Government.
The amendments recommended by the legislative committee fall into one of three categories, those arising from Bill C-5, those of a technical nature, and those of a policy nature.
In the first category the vast majority of these amendments are identical to those made to Bill C-5, the Canada Petroleum Resources Act. Since Bill C-6 incorporates Bill C-5 in its entirety, it is necessary to make similar amendments to Bill C-6 to ensure that the two pieces of legislation are consistent.
In the second category there are a number of amendments which are technical in nature, or which are made to ensure that the French and English versions of the Bill are in conformity.
The third category contains amendments recommended by the committee of a policy nature.
There is an amendment to Clause 142 of the Bill. This clause provides for an oil and gas committee whose main function is to review, at the request of an interest holder, any decision made by the Canada-Newfoundland Offshore Petroleum Board. The amendment clarifies the membership of the committee by excluding any members of the board or their staff from sitting on it. This will ensure that the review committee does not include members who work for the organization whose decision is being reviewed. Otherwise, this could be perceived as the board reviewing its own decisions.
There is an amendment to Clause 152 which provides that federal, rather than provincial legislation governing industrial relations would apply to floating exploration and production structures. This reflects the agreement with the province that the intent of the legislation is not to cause any decertification of unions when an offshore structure moves from offshore Newfoundland to offshore Nova Scotia or vice versa. Without this amendment there is a risk that such decertification could occur.
The amendment to Clause 232(4) establishes a sunset provision with respect to the operation of the offshore development fund committee. The mandate of the committee is to monitor and review the implementation of the development fund. The committee would terminate three years after the last payment is disbursed from the fund. This accords with a provision in the development fund agreement which requires all records to be maintained for this same three-year period. It is advisable to maintain the committee for this three-year period, but no longer.
The final policy amendment is to Clause 236 which deals with the payment of levies by interest owners for the environmental studies research fund. Under the new regime established by Bill C-5, interest owners would be liable only for back levies applied during the two years preceding the ownership of the interest. This amendment provides a transition provision to ensure that this part of the legislation is applicable from the date when the Atlantic Accord was
Atlantic Accord
assigned. This will ensure that new interest owners, who entered into an exploration agreement between the signing of the Accord and the passage of Bill C-6, will be liable only for the two years of back levies.
I also wish to comment on eight amendments which the Government is introducing at this report stage. Four of these simply replace a reference to the Canada Oil and Gas Act with a reference to the Canada Petroleum Resources Act, the replacement legislation. This replacement legislation, Bill C-5, only received third reading by the Senate on November 6, 1986. Under legislative drafting procedures, Bill C-6 could not refer to the new Act until it had been passed by the Senate.
Three other amendments are also of a technical nature. The amendment to Clause 232(4) changes a citation to the provincial Act which had been incorrectly numbered. The amendment to Clause 239 removes a provision for the coming into force of several other clauses of this legislation. These other clauses will come into force automatically when this legislation is proclaimed. They incorporate sections of the Canada Petroleum Resources Act which has been recently proclaimed.
The third technical amendment is to Clause 233. This amendment is to ensure that the payments from the offshore development fund will be disbursed in conformity with federal government accounting practices.
The eighth amendment is of a policy nature. The amendment to Clause 16 establishes a requirement for the board to purchase liability insurance, the premium which would be paid for by the two governments. As members are aware, it is standard practice for a corporation to carry liability insurance, and to provide indemnity for its board members. However, if the Canada-Newfoundland board is unable to obtain total insurance coverage, an indemnification provision would apply. Under this provision, the two governments would indemnify the board members against any costs and amounts awarded against them, as long as the board members were acting honestly, in good faith, and within the scope of their duties.
I recommend that all Members of the House support the amendments proposed by the committee and the Government. These amendments will ensure that the legislation is technically sound, is in accordance with the Canada Petroleum Resources Act, and reflects the agreements which we have reached with the co-signer of the Atlantic Accord, the Government of Newfoundland.
In closing, I wish to thank my colleagues, the critic for the Liberal Party, and the critic for the NDP, for their cooperation in allowing the report stage of this Bill to receive quick passage.


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Madam Speaker, I wish to make a few comments regarding the report stage of this Bill. First, I wish to say that it is unfortunate that this Bill has taken so long. I do not mean that as a criticism of the Hon. Parliamentary Secretary, because he has worked quite well on this. Had it not been for the Hon.

March 2, 1987
Atlantic Accord
Parliamentary Secretary the report would probably not presently be at the report stage. The opposition Parties have moved quickly on this Bill. The Province of Newfoundland is very anxious to receive some funding under the Canada-Newfoundland Offshore Development Fund Agreement. As far as its own contribution is concerned, it has had these moneys for quite some time.
I wish to mention two of the amendments proposed by the Government. First, Madam Speaker, you have already mentioned Motion No. 2 which is correctly perceived to be introducing a new concept. It is important that the board members be protected from possible liability, but this could certainly be done with a private agreement between the governments. The motion that I am concerned about is not mentioned in this particular grouping. I presume that we will be talking about amendment No. 6 later. Is that correct, Madam Speaker? The grouping presently is Nos. 1, 3, and 6.


The Acting Speaker (Mrs. Champagne):: Nos. 1, 3, and 7.


Russell Gregoire MacLellan: I wish to say that I hope that this Bill receives passage through report stage today. It is important that it not be delayed any longer, and that the people of Newfoundland have the benefit of the funding that will be forthcoming under the Canada-Newfoundland Offshore Development Agreement.


Jack Wendele Shields: Madam Speaker, I rise on a point of order. Motion No. 6 is a technical amendment to Clause 233 to be in accord with the actual accounting practices of the Office of the Comptroller General. There is no necessity to have specific language appropriating funds. It is sufficient to have a statutory provision authorizing payment of funds from the Consolidated Revenue Fund. It is technical in nature, just to keep in line with our practices.


Ian Gardiner Waddell: Madam
Speaker, I will deal with Motion No. 6 later. This afternoon I will have an opportunity to give a speech on third reading which will deal with what I think about the Bill and about the disastrous energy situation in the East Coast off Newfoundland and Nova Scotia.
Before beginning discussion on these motions I wanted to raise a matter at the earliest stage of debate after committee hearings, which is now. I am not very satisfied with the manner in which the Bill was dealt with in committee. As a matter of fact, I have been in the House for almost eight years and it was the worst I have ever seen. It was a disgrace.
There were two large Bills containing 200 clauses each. One was Bill C-5 and the other was Bill C-6. The first Bill went through the House and to a legislative committee. It was a Bill dealing with the entire offshore regime which the federal Government controls, that is, the North, the Pacific, the Atlantic-the entire offshore. It mainly dealt with Canada lands. The federal Government controls the North, so it really
dealt with a new oil and gas regime for the northern territories. We debated the Bill for a long time. We in the New Democratic Party took a long time in the committee to force the Government to listen to the native point of view. As with many things, such as energy in the North, native people were frozen out. By taking our time on Bill C-5, native people representing different native organizations, as well as the Inuit and other native people from northern Quebec, came to the committee. I hope the Parliamentary Secretary will listen to my remarks. These people appeared before the committee. We forced a hearing for them before the committee in the fine sense of parliamentary tradition. The Government did not buy all their amendments, but at least they had a hearing, which made the Government and its bureaucrats think about some of the concerns of native people in the North vis-a-vis energy development. The Bill then went through.
The next thing which happened was that Bill C-6 went before the committee. I indicated to the Government that we would not delay it. Since many of its provisions were similar to the previous Bill, and since it dealt specifically with the East Coast offshore, as the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) just said, and other Members have said, we thought the Newfoundland Government needed the Bill and the money, and we wanted to put it through. I was not about to delay it in committee. However, I pointed out an article by a learned professor at Osgoode Hall in Toronto which appeared in the Law Journal and raised some very interesting constitutional matters that may cause the Government of Canada, no matter who is in Government, some problems in the future. I thought it was proper to take at least two days on the Bill.
Hon. Members opposite seem to be talking about something, Madam Speaker. I wonder if it would be possible to have some order. If they are not interested, perhaps they could go outside and talk.
Let me continue. I was a member of the committee dealing with Bill C-6, with the present Parliamentary Secretary conducting it through the committee. At 5 p.m. on the day we were debating the Bill in committee we agreed that we would sit until 5.30 and that consideration of the Bill would be finished on the following day. I then left the committee because I had to attend another meeting. We must remember that there are 210 Conservative Members of Parliament, 30 members of the NDP, and 40 members of the Liberal Party. There are many meetings and it is difficult for us in this Parliament. We have had pretty good co-operation from the Government in other matters, despite its large majority. As I said, the committee was to sit until 5.30. The Liberal Member who appeared before the committee left at 5.20 because apparently his father had heart problems and he had to leave; it was an emergency. Instead of the committee finishing at 5.30, the Parliamentary Secretary and others made motions that the committee wind up the whole Bill and go through every clause. Only Conservative Members were present when the committee wound up its consideration of the Bill by 6 p.m.
March 2, 1987

Atlantic Accord
and pushed it through. In my view that was unparliamentary.
If one cannot take a person's word, that person is very diminished in my view.
The committee was chaired by the Hon. Member for Bow River (Mr. Taylor). It is a matter of public record who else was on it. It was pushed through by the Parliamentary Secretary. If I were the Prime Minister of Canada, I would not promote that Parliamentary Secretary. Thankfully for him I do not have any choice in that matter. However, this matter should be raised in Parliament, and I will send it to the Prime Minister's Office. How can they expect co-operation from us-


The Acting Speaker (Mrs. Champagne):: Order. I understand the Hon. Member's concern. I am sure he has many ways to let it be known. However, I am trying to understand how it relates directly to Motions Nos. 1, 3, and 7 which are now being debated in the House. Perhaps the Hon. Member would indicate that relationship to the Chair.


Ian Gardiner Waddell: Thank you, Madam Speaker, and thank you for letting me put it on the record. Parliament works by people co-operating in Parliament. When those kinds of tricks are played, why should people co-operate? It seems to me that cooperation is what the parliamentary system is about. It is about fighting hard, but essentially co-operating and playing clean. A day will come when the Parliamentary Secretary will need a favour or some help from the Opposition, and he will have to search deep for it.
Because of the interests of Newfoundland and the interests of the other people of Atlantic Canada, the Bill should go through. Therefore, we will not oppose the particular amendments which appear to be technical ones. The Hon. Member for Cape Breton-The Sydneys may have something to say on Motion No. 6, but as far as I can see, Motions Nos. 1, 2, and 7 are technical amendments and we are prepared to let them go through. We have not forgotten what happened in committee, and some day those people responsible will pay for it.


Mr. Morrissey Johnson (Bonavista-Trinity-Conception):: Madam Speaker, since the Hon. Member for Vancouver Kingsway (Mr. Waddell) wished to set the record straight, and rather than immediately getting into what I wanted to say about the Bill before us now, I should like to set the record straight.
I was on the committee that dealt with Bill C-94, Bill C-92, and Bill C-6. If the Hon. Member had given the co-operation which he said he did not get, Bill C-94 would have been passed prior to the summer recess.
Bill C-6 is important to Newfoundland. It is also on record in the minutes of the legislative committee that I asked the Hon. Member whether he was speaking for himself or on behalf of his Party. I wanted to know if I should go back to Newfoundland to say who was really holding up the legislation that was so vital to the people of Newfoundland.
As my colleague, the Hon. Member for Athabasca and Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. Shields) has stated so clearly, the amendments to Bill C-6 deserve the complete support of the House. I am glad Hon. members of the Opposition have agreed to give it quick passage.
These important amendments to this historic legislation have been given careful consideration by both the legislative committee and the Government. The amendments described by the Parliamentary Secretary strengthen this Bill by building on the spirit of co-operation and fairness that has guided the Governments of Canada and Newfoundland during the drafting of this proposed legislation. It has been two years now since the signing of the Atlantic Accord between the Government of Canada and Newfoundland. Bill C-6 will enshrine that federal-provincial agreement in law.
This legislation establishes a clear set of rules for the exploration and development of the rich petroleum resources off the shore of Newfoundland. The impediments to the development of petroleum resources off Canada's East Coast have been removed. Companies that recognize this area s resource potential can invest in its development knowing the rules of the game before risking the vast amounts of capital necessary for such a development. This legislation establishes a S300-million offshore development fund and this joint federal-provincial fund has already committed $37 million for investment in education and training of Newfoundlanders for technical jobs in the offshore.
The amendments to Bill C-6 which are before the House today will ensure that this legislation is consistent with related legislation, and specifically with Bill C-5, the Canada Petroleum Resources Act. It will ensure that Bill C-6 is fair to interest holders, workers and both levels of Government.
One of the amendments tabled today, which was recommended by the legislative committee, will ensure fair treatment to companies operating off the shore of Newfoundland. Now appeals to the Canada-Newfoundland Offshore Petroleum Board will be reviewed by a committee comprised of persons not directly affiliated with the Board.
Another amendment recommended by the legislative committee will protect the rights of workers on floating offshore structures. This amendment provides that federal legislation governing industrial relations would apply to floating offshore structures. This reflects the agreement with the province that the intent of legislation is not to cause decertification of unions after an offshore structure has moved from offshore Newfoundland to offshore Nova Scotia or vice versa. Finally, amendments to this legislation improve the management of offshore development by ensuring that disbursements from the joint offshore development fund conform with the federal Government's accounting practices.
Bill C-6 is legislation that reflects the co-operation and good will that exists between the Governments of Canada and

March 2, 1987
Newfoundland regarding the concerns we share for the environment, for workers, particularly Newfoundlanders, and for the risks taken by the private sector.
In closing, I would like to thank the legislative committee for its valuable contribution to this legislation which deserves the unanimous support of the House.
Motion No. 1 (Mr. Masse) agreed to.


The Acting Speaker (Mrs. Champagne):: Is it the pleasure of the House to adopt Motion No. 3?


Some Hon. Members:: Agreed.
Motion No. 3 (Mr. Masse) agreed to.


The Acting Speaker (Mrs. Champagne):: It was agreed that the vote on Motion No. 3 would apply to Motion No. 7.
Motion No. 7 (Mr. Masse) agreed to.


The Acting Speaker (Mrs. Champagne):: The next motion is Motion No. 2.


Jack Wendele Shields: It being 1.47 p.m., I do now leave the chair until 2 p.m.
At 1.47 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, Soviet Leader Mikhail Gorbachev's call for the removal of medium-range nuclear missiles from Europe within five years is a most welcome announcement. It not only reopens the door to a concrete plan for action towards disarmament, but also augurs well for the talks between the two superpowers which ultimately will decide the fate of a world wanting to rid itself of all nuclear weapons. I urge our Government to support the two sides negotiating in good faith on this important proposal and I encourage our U.S. neighbour to take most seriously this latest breakthrough on a matter of such critical importance.


Mr. Don Ravis (Saskatoon East):: Mr. Speaker, I rise to pay tribute to the Kinsmen Clubs of Saskatchewan which serve our province with dedication and distinction. This past weekend I had the pleasure of participating in the 11th Kinsmen Telemiracle in Saskatoon which raised $2.1 million in 20 hours. The Kinsmen Foundation has long contributed to assisting those who are less fortunate. These contributions will help support people with special needs throughout the province.
Since 1972 the Kinsmen Foundation has answered requests from residents in 145 communities in Saskatchewan, including organizations such as cystic fibrosis, mentally retarded, learning disabled, wheelchair sports, Camp Easter Seal, abilities' council, and dozens more. I ask my colleagues to join with me in congratulating the 1,600 Kinsmen and Kinettes
March 2, 1987

who volunteered their time so generously in order that others may enjoy a better life.



COMPANIES' WITHHOLDING OF SOFTWOOD LUMBER EXPORT TAX

Mr. Jim Fulton (Skeena):: Mr. Speaker, the two largest forest products companies in B.C. have decided to withhold payment of the 15 per cent export tax on softwood lumber bound for the U.S. market. Today is the first day for voluntary payments. This decision represents a technical violation of the December 30 agreement between Canada and the U.S., but since Bill C-37 is before a legislative committee and will be for some time, collection of the tax is not enforceable by Revenue Canada.
As more evidence is heard by the committee studying Bill C-37 it becomes clear that the effect of the $600 million tax varies widely from operation to operation and region to region. For example, some companies are exempt while identical operations across the street are not. Some re-manufactured products are exempt while other similar products are not. Some mills must pay the tax despite the fact the raw logs come from the U.S. Some mills pay 30 to 40 times the stumpage rate paid by a similar mill in another region.
If some companies are now excusing themselves from paying this tax, then fairness must prevail and the Minister of National Revenue (Mr. MacKay) must advise all Canadian companies exporting to the U.S. softwood market that, at least for the moment, the wood is not legally taxable and there is no interest charged on missed payments.



BEAUCE REGION


Mr. Gilles Bernier (Beauce):: Mr. Speaker, throughout 1987, the Beauce region will be celebrating its 250th anniversary, commemorating the founding of the five "seigneuries" that make up its territory. What would New France have been without the people of "New Beauce"? In fact, it is the only inland territory colonized under the French regime.
Our ancestors struggled to survive in this new land where isolation helped develop some very special traits. The people of Beauce are stubborn, inventive, creative, resourceful and hard workers. The expression "jarrets noirs" is synonymous with all these character traits.
The people of Beauce take pride in their survival, their drive and their eagerness to rise to a challenge. I represent a
courageous group of people who stand on their own two feet, and that is why our unemployment rate is four points below the national average.
Today I am proud to salute two gentlemen, the co-chairmen of the 250th anniversary festivities, Mr. Paul Vachon, former mayor of Ville Sainte-Marie de Beauce and Mr. Fabien Roy, a former Member of the House, both of whom are in our gallery today.



REVENUE CANADA


Maurice Brydon Foster: Mr. Speaker, last week when the Minister of National Revenue (Mr. MacKay) was boasting about an unprecedented federal grant of over $1 million for a court-house in his own riding, the auditors in his Department were busy preying on the farmers of western Canada who are facing the worst financial crisis in the grain industry since the 1930s and the days of R. B. Bennett.
The Keystone Agriculture Producers have responded with outrage at this harassment of farmers and re-evaluation of farm equipment and of regular commercial contracts made in 1983 and 1984. The Government is trying to extract more blood from farmers at a time when they are already reeling from low grain prices and falling land values.
Today we learned that there will be 403 more people in the Department of National Revenue in the coming year. I call upon the Minister and the Government to call off these auditors and this harassment of agricultural producers.



PUBLIC SERVICE


Mr. David Daubney (Ottawa West):: Mr. Speaker, last week we heard from a spokesperson for the Treasury Board that legislation protecting the political rights of more than 230,000 Canadians, members of Canada's Public Service, might have to wait until after the next election.
I am a member of a political Party which made a clear commitment two and one half years ago to present legislation defining and expanding the political rights of public servants. This has been discussed at length in private meetings and in public debate. I and other Members of this House have spoken on this issue, carefully reviewing and weighing the many questions it presents.

March 2, 1987
This is not a partisan issue, Mr. Speaker. It is a question of fundamental rights, a question of who should have the power to define, rescind, or extend the civil liberties of Canadian citizens. For far too long successive Governments have avoided their responsibility to deal with this issue. The time has come to discard this cumulative record of indifference, to face squarely a question fundamental to our definition of democracy. The time has come to resolve this issue, not to hide from it.



NATIONAL DEFENCE


Nelson Andrew Riis: Mr. Speaker, a range war is raging in western Canada, not between cattlemen and sheepmen, but between cattlemen and the Department of National Defence. The Department of National Defence plans to take over some of the most valuable ranch land in Canada and is offering to pay more than twice the market value. Ranch lands nearby are selling for an average of $282 an acre while the military is offering $800 an acre for the famous OH Ranch west of Longview in southwestern Alberta.
There is something improper happening here, Mr. Speaker, since three years ago the ranchers, area residents, and conservation groups made it perfectly clear to the Government that they did not want this beautiful, pristine grazing land watershed turned into a military training ground for tanks, other armed vehicles, machine gun and hand grenade practice, and the like.
Today area ranchers, rural councillors, conservation groups, MLAs and the area's Member of Parliament oppose this military takeover. I urge the Government to find out why the military is paying such high rates for the land, to listen to the people, to respect the requests of the area's elected representatives to keep the beautiful Highwood Valley for people and ranching, and to train for war elsewhere. The Government should follow the advice urged by ranchers' placards last week in Longview which said: "Make hay-not war!"



RAILWAYS


Guy St-Julien: Mr. Speaker, trains are dying out in Quebec and especially in Abitibi. Well before the introduction of Bill C-18 whose purpose is to update our railway system, it was already clear, from internal confidential
memos, that Canadian National had started to dismantle its workshops at Senneterre and its railway network in Quebec.
The Quebec Minister of Transport, Mr. Marc-Yvan Cote, has attacked officials of the federal Ministry of Transport, saying that as far as railway transportation is concerned, they are being manipulated by Toronto to protect Western interests.
Bill C-18 is a good Bill and its objectives were supported by Quebec. However, the wording is unacceptable, and Quebec is demanding several amendments in order to restore a measure of balance. The main areas where railway lines would be abandoned are the Gaspe, Beauce, the Eastern Townships, Abitibi-Temiscamingue and Lac-Saint-Jean.
I want to appeal to all Members of this House, Liberals, New Democrats and Conservatives from Quebec, to immediately make representations to the Minister of Transport that the railway network in Quebec should remain intact. Otherwise, it will be a disaster for our lumber, pulp and paper and mining industries.



BY-ELECTIONS HAMILTON MOUNTAIN BY-ELECTION DATE CONDEMNED

Ms. Sheila Copps (Hamilton East):: Mr. Speaker, Liberals on Hamilton Mountain are ready to do battle. The Prime Minister (Mr. Mulroney can call the election any time he wants. We want to challenge him to call it earlier. Why is he calling it in July of this year? It will be almost one year that the riding of Hamilton Mountain has been without representation. The NDP cannot complain about that because they vacated the seat. The Tories cannot complain about it because they set the date. However, we, the Liberal Party in Hamilton Mountain, have elected a candidate who is ready to do battle on the hustings.
We want action on the Windermere Basin and the $1.25 million that the Government refuses to give to an area that has been designated as one of the most polluted bodies of water in North America. We want action on the Hamilton Airport and, especially, action on the steel industry.
When the Minister for International Trade (Miss Carney) says that it is merely a small matter that the steel industry is being deluged with unfair trading complaints from the United States, that is unacceptable. We need someone who will fight for Hamilton. We need someone from Hamilton who will fight for all of the people. The only candidate who can do that is Beth Phinney for the Liberal Party.
March 2, 1987



IMMIGRATION


Mr. John Oostrom (Willowdale):: Mr. Speaker, the Minister of Employment and Immigration (Mr. Bouchard) and the Minister of State for Immigration (Mr. Weiner) are to be commended for their firm action in reasserting control over our borders from those individuals who have sought to subvert Canadian immigration laws. Already, all of our points of entry are reporting a dramatic decrease of individuals wishing to circumvent standard immigration procedures by declaring themselves refugees. The Government is not acting against genuine refugees but only against those who are openly abusing Canada's compassion to peoples in need of assistance.
The rhetoric the Government has received on this issue is totally unjustified. When people are coached on how to break and evade our laws, the Government must act, for the basic foundations of our democracy are being undermined. The Ministers acted in a manner which has preserved Canada's humanitarianism as well as sending a strong message to the world that Canada will not tolerate lawbreakers in our society.



CORPORATE AFFAIRS


Hon. Edward Broadbent (Oshawa):: Mr. Speaker, too often over the past few years this House has been advised of corporate manipulations that have resulted in the totally unnnecessary closure of plants and offices. One of these tragic events is occurring at Whitby, Ontario, where the confectionery operation of Cadbury Schweppes Canada is being taken over by William Neilson Ltd.
On the very day that this corporate takeover was announced in January, the 450 workers at this efficient plant were informed that they would be thrown out of work, many of whose seniority reaches up to 19 or 20 years.
We must deplore this callous plan and last week's decision of the Canadian Competition Tribunal to discontinue its investigation of the takeover. I call upon the Minister of Consumer and Corporate Affairs (Mr. Andre) to exercise his responsibility and authority under the Competition Act to order that the inquiry proceed forthwith.



THE ECONOMY


Mr. Geoff Wilson (Swift Current-Maple Creek):: Mr. Speaker, the Opposition say that the Government is living in the past. I am proud to say that this is true.
We are turning back the clock on government overspending. For the first time in over 30 years the annual federal deficit will decline three years in a row, despite the burden of paying interest on the past Liberal debt.
We have turned back the clock on high interest rates. The Bank of Canada rate has declined nearly 5 per cent. We have turned back the clock on the prime rate ten years, to 9.25 per cent.
We have turned the clock back on short-term mortgage rates by 20 years, to 7.5 per cent. We have turned back the clock on high unemployment by 2 percentage points, and have provided the kind of environment in which the small business sector has been able to create 675,000 new jobs in the past 28 months.
By any yardstick the economic policies of the Government have been successful, and we intend to turn back the clock some more to return to the days when the Government balanced its books and the days when individual Canadians could expect their initiative to be rewarded.
r



GOVERNMENT EXPENDITURES


Brian Vincent Tobin: Mr. Speaker, this morning's Estimates were a litany of cut-backs on the backs of those people in this country who can least afford it. There were cut-backs in social programs, health transfer funds and education transfer funds.
However, tucked away beneath the layers of cuts that reflect a welt across the backs of Canada's poorer citizens were a few increases. There is an increase in PCO, Dalton Camp's new office, with three new positions and a $250,000 budget. The $2.3 million secretariat in the PCO has gone to $18 million for a separate office, creating a bureaucracy of privatization to sell off the Crown assets.
Treasury Board managers throughout the Civil Service will get a productivity bonus of some $4.5 million in total. All that is happening at a time when the fishermen of Atlantic Canada, who have just gone through the Canada-France Fisheries Treaty, see a 15 per cent reduction for small craft harbours.
The Government is totally out of touch with the needs of ordinary Canadians. It is paying managers to lay off employees, cutting back on health, education and social programs, and putting new furniture in Dalton Camp's office. It is a downright shame.

March 2, 1987
Oral Questions SOVEREIGNTY



PROTECTION TO BE AFFORDED BY PROPOSED POLAR CLASS 8 ICE-BREAKER

Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, the Class 8 ice-breaker, construction of which ought to start soon in a West Coast shipyard, will do much to promote Canadian sovereignty in our Arctic waters. While primarily and properly a civilian vessel to be operated as part of the Canadian Coast Guard fleet, the ship will be designed to meet military specifications if it is ever to be required for such a purpose.
The vessel promotes Canadian nautical technology and will provide many-man years of employment in our shipbuilding industry. Navigation in Arctic waters will be greatly enhanced when we have the capability of keeping the Northwest Passage open year round. In addition to all of this, the ship will provide a floating scientific research platform.
With the commissioning of this vessel, Canada will take the lead in world-wide ice-breaking technology.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, in a few weeks the President of the United States, a good friend of the Prime Minister, will be here in Ottawa. I doubt that on this visit either of them will have too much to sing about. Is the Prime Minister preparing the scene for the visit of the President by indicating through nameless officials that in the trade talks with the United States everything is now on the table? Will the Prime Minister tell this House and all Canadians what his position is before he tells the President? And if not, why not?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, we have naturally seen the speculative story which was carried by Canadian Press. I do not need to remind the Right Hon. Leader of the Opposition that many people can engage in speculation and that the policy of a Government is not official policy until it has been approved by a Cabinet. On the question of the debate about trade in the country, this Government believes it is very important that there be the widest possible debate based upon hard facts. That is why we have set up an extensive network of consultations with the private sector. That is why, for the first time, we have brought the provinces into the process. It is why there was consideration of this question by the Special Joint Committee of the House of Commons last summer.
In 1985 I indicated to the House that we would be prepared to have a parliamentary debate. We think that would be an
appropriate thing to do. The next meeting of First Ministers on questions of trade will be on March 10. My colleague, the House Leader of the Government, will be consulting with the House Leaders of other Parties later this week with an eye to arranging a debate on a day of government time a week or so after that First Ministers' Conference.


John Napier Turner: Mr. Speaker, the Secretary of State for External Affairs is quite right in suggesting there should be debate because, since the Prime Minister introduced the subject into this House on September 26, 1985, there has been no debate in the House of Commons and no public debate in the country. It is about time, and we would welcome that debate.


NEGOTIABLE ITEMS INQUIRY
John Napier Turner: On
September 26, 1985, the Prime Minister told this House, and I use his own words in Hansard at page 7056:
Our political sovereignty, our system of social programs, our commitment to fight regional disparities, our unique cultural identity, our special linguistic character-these are the essence of Canada. They are not at issue in these negotiations.
I put to the Prime Minister, and I hope he will reply, or to the Secretary of State for External Affairs, that last week a senior government official-and the Secretary of State for External Affairs can either deny it or confirm it-let it be known that everything was now negotiable. Will the Secretary of State for External Affairs or the Prime Minister declare succinctly and simply to this House, a yes or no will suffice, is the Auto Pact on the table? Are our cultural industries on the table? Are our agricultural programs on the table? Yes or no? Whom are we to believe?


Charles Joseph Clark: Mr. Speaker, the Right Hon. Leader of the Opposition knows the parliamentary system well enough to know that, given the choice between an unidentified spokesperson and the Prime Minister of Canada, it is the Prime Minister of Canada who states the policy of the Government. In one of his more eloquent interventions in the House the Leader of the Opposition just quoted the Right Hon. Prime Minister. The Prime Minister's words state the continuing policy of the Government.


GOVERNMENT POSITION
John Napier Turner: gave the Minister the opportunity to either deny or confirm that the word "officials" is qualified by expressions such as "nameless" and "clandestine". Canadians are confused, very obviously, because as a result of the Government's capitulation in the cases of softwood lumber, fisheries, books and drugs they can see that this Government is prepared to negotiate anything in favour of the Americans and at the expense of
March 2, 1987

Canadians. Now again I ask the question: Does the Minister claim that the Prime Minister can make a public statement while letting these nameless officials continue secret free trade negotiations with the United States, in some other way? Will he confirm or deny, and in any case will he tell us what is the position of his Government before the President of the United States comes to Canada?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, the position of the Government is that which 1 explained and as supported by the Secretary of State for External Affairs.

I am astonished that the Leader of the Opposition would be worrying about confusion in regard to the trade issue. On December 1, 1986, dealing with the issue raised by my hon. friend, The Ottawa Citizen quotes members of his Party as follows:
"We want to trade around the world with every nation of the world. We don't want to lock ourselves in (with the United States)," yelled Axworthy from one microphone.
Screamed Johnston from another: "If you want to protect cultural industries, you do so through bilateral arrangements with the United States."
The Liberal Party is a Party based on division and hypocrisy. It has no policy on this issue at all. The Government speaks for all Canadians in making these arrangements.


CANADIAN CULTURAL IDENTITY
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, we are asking the Prime Minister questions about his Government's policy. The Prime Minister has said that our unique cultural identity is the essence of Canada. For Canadians, cultural identity is the books and magazines that they read, the TV and films that they watch, and the music to which they listen.
Does the Prime Minister realize that less than 5 per cent of the films and TV drama available to our viewers is Canadian? Does he realize that when Canadians go to the book and magazine stands that they have a very small chance of learning about themselves and who they are? Therefore, does the Prime Minister not recognize how fragile our cultural industries are? Will he instruct Mr. Reisman that culture is not on the balance sheet and under no circumstances can these industries be treated-


Some Hon. Members:: Order, order.


Some Hon. Members:: Speech!


Mr. Speaker:: The Hon. Member has several questions. They are certainly important ones. I would ask the Hon. Member to confine her question to one question and not to draw it out overly long.


Martin Brian Mulroney: Mr. Speaker, the Hon. Member refers to a 5 per cent Canadian opportunity and a very small chance for book publishers and
Oral Questions
those involved in the cultural industries. I agree with her. That represents a terrible indictment of those who governed Canada for the previous 20 years.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: This is the result of a Liberal policy that was completely insensitive to the cultural realities of Canada. We heard it was so bad that a leading member of the NDP asked Canadians to watch ABC when they could listen to the sterling programs of the CBC. That, too, is an indication of how far the situation has gone.
Culture is protected on this side of the House, and we are proud to do it.


Some Hon. Members:: Hear, hear!


GOVERNMENT POLICY
Sheila Finestone: Mr. Speaker, the Prime Minister cares to be partisan and play with Canadian politics. I would prefer to take a look at and ask very specifically if Bill C-58 and the Canadian cultural content regulations, the various support measures, and the Canadian film, magazine, and book publishing policy are on the free trade table? Have you directed Mr. Reisman not to negotiate with those as your bargaining chips?


Charles Joseph Clark: Mr. Speaker, I have three quick comments. First, this trade negotiation is not about culture, it is about trade. Second, the Government, recognizing the legacy that we inherited from the former Government, a legacy that, as the Prime Minister has said, had severely weakened the cultural industries of this country, has already begun to act on changes in film distribution, changes with respect to book publishing, and other cultural areas. Third, the Government looks forward to the debate on trade in the House, so that we will know whether there are one, 40, or 400 different positions from the Official Opposition on this issue.


CHILD CARE
John Edward Broadbent: Mr. Speaker, my question is directed to the Prime Minister. During the election campaign two and a half years ago, the Prime Minister said that the Conservative Government was concerned about providing an effective child care program. Last November at the First Ministers' Conference the Prime Minister made the same statement, he repeated it over Christmas, and this morning when speaking to a national symposium on the family he said the following, "Canada shall have an effective national child care system".

Oral Questions
My question to the Prime Minister is this. Since nothing was found in the Budget about money allocation for such an effective child care program, will the Prime Minister confirm that in all the Estimates that are before Parliament for the first time today there is not a single new dollar reference to an effective child care program? Will the Prime Minister tell us why not?


Martin Brian Mulroney: Mr. Speaker, I thought I had addressed that in my speech this morning which dealt with the urgent requirements of Government and the Canadian people involving themselves in the quest for equality and fairness for all Canadian women. In regard to that specific point, I indicated that the Hon. Member for Lincoln in her capacity as chairperson of the task force would be bringing in a report within weeks, and it would be on the basis of that parliamentary task force with its recommendations that the Government will act, as I indicated to the First Ministers, to implement a truly national, effective, and accessible policy to benefit all Canadians.


GOVERNMENT COMMITMENT
John Edward Broadbent: Mr. Speaker, the Prime Minister has referred to the immediate need of Canadian families. They know that they have the need, and we in this Party know that there is a need. Will the Government set aside making speeches and commit itself now to a Supplementary Estimate that could be drawn from the $300 million of unallocated funds that are found in today's Estimates in the appropriate Minister's Department? Will the Prime Minister make a commitment today to use $300 million to launch an effective child care program in this country?


Martin Brian Mulroney: Mr. Speaker, in my remarks this morning I indicated that our commitment to the establishment of a day care program was real, that the resources required to sustain it would be found even in a difficult economic climate, and that we viewed this as a priority issue to bring about fairness for Canadian women. I have given that assurance to the Premiers, and I give it again to my hon. friend with great certainty that the appropriate resources required to fund a day care program of this nature will be found by the Government of Canada and introduced.


INQUIRY WHY FUNDS ABSENT FOR CANADIAN FAMILIES
John Edward Broadbent: Mr. Speaker, the Prime Minister knows full well that when Canadian banks ran into difficulties the Government of Canada found the money. It was good for the banks in the past, but why not for Canadian families right now?


Martin Brian Mulroney: Mr. Speaker, my friend amazes me because the Canadian Government also found $1 billion to help Canadian farmers but he does not mention that. That money-raised before-was to help the depositors of these chartered banks. Now there may
March 2, 1987
be diverging views concerning the use of public funds, but if we acted quickly to help Canadian farmers, we are also committed to do the same thing for Canadian women and, regardless of our financial difficulties, we will find the resosurces required to implement this kind of plan for the benefit of Canadian women.


REFUGEES
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is for the Prime Minister as well. In reference to the life threatening reality facing refugees, the Prime Minister told the country last August:
If we err, we will always err on the side of justice and on the side of compassion.
Therefore I would like to ask the Prime Minister how he can now justify recent changes which eliminate overnight the list of 18 non-deportable countries, which jeopardize people who return to those parts of the world, which drive people to protect their lives through hunger strikes, which strand families at airports, and which continue to peddle a nonexistent, non-legal, non-written agreement with the United States. How can the Prime Minister promote a chaotic system which ignores the principles of justice and compassion, two principles about which he spoke so highly only six months ago?


Hon. Gerry Weiner (Minister of State (Immigration)):: Mr. Speaker, our policy, straightforward, remains the same-real refugees who come to our door will be provided a haven and settled. A real refugee will never be sent back to face death or torture. However, our proud tradition was being undermined by a lot of abusers. The measures we have put in place are to detect those abusers, not to deny access to real refugees.


Some Hon. Members:: Hear, hear!


REFUGEE DETERMINATION SYSTEM
Sergio Marchi: Mr. Speaker, the Minister knows the conditions facing a number of families whether they are applying from the United States or from within. However,
I return to the Prime Minister who I hope will have the leadership to address a story of human tragedy within our borders. Given the fact that the only solution to the problem is the establishment of a new, permanent and independent refugee determination system, and given that we have been promised one for three years by four different Ministers of Immigration, will the Prime Minister not rescind recent announcements which endanger legitimate refugees and allow the system to continue until legislation-

March 2, 1987


Mr. Speaker:: I think the Hon. Member has put his question, and the Minister can respond.


Gérard (Gerry) Weiner: Mr. Speaker, our commitment to refugees is very clear-$50 million this past year to international humanitarian agencies such as the UNHCR and the Red Cross, and another $16 million in terms of food aid. Every claimant who comes to our door, the only western democracy to do so, is given an oral hearing in front of an independent tribunal. That is what our feeling is. We know that a new system is in the process of being determined. However, in the meantime every claimant, whether in the United States or elsewhere, is entitled to that fair and open hearing and will be given that hearing.
There is no danger to the people now waiting in the United States because we have an arrangement with the Americans. Case by case that arrangement is working. Our officers, in conjunction with their INS officials, are making sure that every individual is available for that hearing.


ESTIMATES
Michael Morris Cassidy: Mr. Speaker, my question is directed to the President of the Treasury Board.
Could the Minister explain to the House why the Government continues to ignore the plight of disadvantaged regions in its Estimates, and specifically, considering that only 10,000 jobs were created in the province of Quebec last year, could the Government perhaps explain why it has just cut $71 million in equalization payments to the province of Quebec for the 1987-88 financial year?


Robert René de Cotret: Mr. Speaker, I can inform the Hon. Member that the Estimates tabled this morning in the House demonstrate the Government's will to restrict its spending as we have been doing since the beginning of our term.
The results for the economy have been clear across the country, in all regions. I think we can say there has been a substantial reduction in the unemployment rate, that inflation has been maintained at reasonable levels, that interest rates have gone down and that among industrialized nations, this country has enjoyed a level of economic growth second only to that of Japan.
I think this Government's economic policies are benefitting all Canadians and that all Members of this House should be glad to have those policies in this country.
Oral Questions


CRITERIA FOR ALLOCATION OF FEDERAL FUNDS
Michael Morris Cassidy: Mr. Speaker, perhaps the President of the Treasury Board could answer my question specifically. How does he justify a situation in which Ontario, where the unemployment rate is down to 6.6 per cent, is receiving an increase in transfer payments and other federal payments amounting to $550 million, while Quebec is seeing a cut of $71 million in equalization payments, which if we look at total transfers and equalization payments means an increase of only $7 million? How does he justify this discrimination against Quebecers?


Geoff Wilson: Mr. Speaker, perhaps I could answer the question. I think the Hon. Member is making some very imaginative use of figures. The entitlements for equalization for the Province of Quebec, as for other provinces, went up last year and will go up again in the coming year. Federal-provincial transfers on post-secondary education and health care are subject to a formula. They are also going up. These two programs-equalization and the Established Programs Financing-are both going up at one of the fastest rates of any government program. In the next five years I believe the EPF figure will be over $25 billion higher than the amounts paid out over the previous five years-from $65 billion to over $90 billion.


REFUGEES
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is directed to the Prime Minister. The refugee situation in Canada has degenerated because the Government has failed to act and has procrastinated for over two years. In June, 1985, the Plaut Commission recommended a new refugee process. In November, 1985, the Standing Committee on Labour, Employment and Immigration made further recommendations. The former Minister of State for Immigration promised in the House legislation for September, 1986, six months ago, and still we have no Bill. I should like to ask the Prime Minister, who is in charge of the Government, one would hope, when the Government would finally table its Bill to provide the country with humane and efficient refugee legislation.
Gérard (Gerry) Weiner: Mr. Speaker, the Bill will be tabled very, very soon. However, in the meantime there is no doubt about the fact that we are the only western democracy which offers every claimant who comes to our door an oral hearing in front of an independent tribunal. There were 18,000 claimants last year and, according to our Refugee Status Advisory Committee, two-thirds of them were non bona fide refugees. Certainly we have protected the 5,500. What we are looking at now is a system which will

March 2, 1987
Oral Questions
expeditiously clear away the over 12,000 non bona fide claimants as we had at our door last year.


Mr. Allmand:: The Government has been promising that legislation for over two years, and we still do not have it.


REQUEST FOR NEGOTIATION OF ACCORD WITH UNITED STATES CONCERNING CENTRAL AMERICA REFUGEES
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, while waiting for this legislation is the Government prepared to approach the United States at the earliest opportunity with a view to negotiating a formal accord so that Central America refugees are not deported to their country of origin while their applications are still under study in Canada? Are you prepared to do that?
Gérard (Gerry) Weiner: Mr. Speaker, the exchange of letters and the existing agreement work out very well on a case by case basis. The applicant is or will be available for the inquiry. We are working in close cooperation with the United States Government and, if a date is set for the inquiry and the applicant receives a deportation notice, the United States can immediately defer the date, or we can set an earlier date for the inquiry, or we can bring the applicant back. But no applicant will be put in a dangerous position because of the date. If he does not have a criminal past his inquiry and Canadian refugee status determination process will take place here.


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ESTABLISHED PROGRAMS FINANCING
Rodney Edward Murphy: Mr. Speaker, my question is directed to the Minister of Finance. In the Main Estimates that were presented to the House today, the Government indicated that fiscal transfer payments will go up by only .23 per cent and health insurance by only .6 per cent, and that post-secondary education will actually decrease by .6 per cent. In addition to that, the Province of Newfoundland believes it is being asked to return $76 million in equalization payments. Can the Minister of Finance indicate to the House that he will sit down with his provincial counterparts to come to an agreement that would provide an adequate level of services to all provinces in Canada?


Geoff Wilson: Mr. Speaker, the Hon. Member has mentioned a number of figures. I know that one of them is wrong. I would have to check the "blues" for the other ones because he mentioned so many of them at one time.
We have had, I believe, 26 meetings on equalization with provincial Ministers as well as officials during the course of the past two and a half years. As far as the Established Programs Financing is concerned, I responded to the Hon. Member's colleague by saying that the amounts we are spending on EPF will grow from $65 billion to over $90 billion from the last five years to the next five years. That clearly is a very strong indication of the support this Government is providing to post-secondary education and health care.


STATEMENT ATTRIBUTED TO NEWFOUNDLAND PREMIER
Rodney Edward Murphy: Mr. Speaker, my question is again directed to the Minister of Finance. The Minister is aware that the Premier of Newfoundland has indicated that he predicts the province will return to the financial crisis of 1933 unless the equalization problem is solved. In light of the prediction of financial crisis and chaos in the province made by the Premier, will the Minister not sit down with his provincial counterparts one more time to try to resolve this problem?


Geoff Wilson: Mr. Speaker, the Hon. Member has referred to equalization. I would like to remind him that last year the Government provided supplementary equalization payments for which it had no legal obligation at all. This was done because we shared the concerns the Hon. Member has just expressed. In addition, we will be increasing, through the changes in the technical aspects of the formula, the equalization payments this year and next over and above that provided for by the normal formula. The amounts to which the provinces are entitled will go up in excess of 5 per cent, and if the Hon. Member were to check the Estimates he would see that that is one of the faster growing programs of government.


ADMINISTRATION OF JUSTICE
Mr. Alan Redway (York East):: Mr. Speaker, my question is for the Minister of Justice. Last week the Minister rightfully condemned Charles Bronson vigilante justice but at the same time he admitted that Canadians are frustrated with the present system. Will the Minister advise the House, bearing in mind that he is the chief law officer responsible for the justice system in Canada, what he intends to do to restore the confidence of Canadians in the justice system? In particular, does he intend to make changes in such things as the present sentencing, bail, and parole laws?


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I appreciate the question asked by the Hon. Member who has had a long-standing interest in the criminal justice system. Of course I intend to work co-operatively with my provincial counterparts in areas of mutual jurisdiction including public legal education, victims
March 2, 1987

of crime, and other areas where I think the criminal justice system could use improvement in terms of explaining the process and the reasons judges sentence in the way they do.
Within my own area of responsibility, I look forward to receiving the sentencing commission report which should be forthcoming soon. This report will address the whole question of the appropriateness of the penalties for the crimes under the Criminal Code. I look forward to entering into a debate with the people of Canada and with the Hon. Member on this important issue.


PUBLIC SERVICE
George Baker: Mr. Speaker, the President of the Treasury Board announced today $4.5 million in bonuses to be paid out after the end of this month to "senior Public Service managers who are instrumental in the realization of person-year reductions goals and expenditure reductions". Is it necessary to pay bonuses to 5,000 already highly paid senior public servants? Would it not be better to use that $4.5 million to help reduce unemployment rather than to try to create it?


Robert René de Cotret: Mr. Speaker, the Minister of Finance and I announced a year ago that we would introduce a productivity bonus for senior management categories within the Public Service with the expressed intent of rewarding the competence and productivity of senior managers. We have done that. We have waited to see how the performance of these managers would be over the year before we announced the results, and we felt that it was appropriate at this time to announce a program totalling $4.5 million in the form of a productivity bonus to managers who have performed exceptionally over the past 12 months.


IMPLEMENTATION OF PROGRAM
George Baker: Mr. Speaker, according to the Estimates, 3,100 jobs will be terminated with the help of this $4.5 million. It is clear that the Government has now created a hierarchy of hit-men in the Public Service. Since there are now 3,100 contracts out on people's jobs, how will it be determined who will get paid for each lay-off? Is it not possible to waste money by having two pay-offs for each lay-off? This is a Government of pay-offs for lay-offs.


Robert René de Cotret: Mr. Speaker, if I needed a speech writer, I would know exactly where to go. However, I do not.
I must say that this productivity bonus is a recognition of an outstanding effort by an outstanding group of people. I am not ashamed to say that the senior Public Service has done an
Oral Questions
outstanding job not only in terms of job reduction but in terms of carrying out the economic policies of this Government.
Let me remind my hon. colleague that the top level of the Public Service received a pay increase of zero, the second tier received 1 per cent, and the third tier of those eligible for this bonus received 2 per cent. All we are saying is that those who have performed exceptionally well will be able to receive a very meagre 1 per cent as a productivity bonus, or 1.5 per cent if their performance was particularly exceptional. I think that is treating senior managers fairly and recognizing their contribution to the Government's effort to curb expenditures that were really out of control under the former Government.


NUCLEAR ARMAMENTS
Ms. Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. When the Liberal Government of the day agreed in 1983 to test the Cruise missile in Canada, the then Secretary of State for External Affairs said on July 18, 1983, that we would test Cruise missiles until "concrete results were achieved in the INF negotiations; namely, results that would decrease the level of missile deployment in Europe". Will the Government indicate now that it too will end Cruise missile tests if the breakthrough on INF in Geneva is realized?


Charles Joseph Clark: Mr. Speaker, the Hon. Member knows better than to ask hypothetical questions. She has been a Member of the House for a long time and she understands the rules. I would think that she would join with me in welcoming not only the significant change in the position that has been taken by the Soviet Union and the initiative put forward by Mr. Gorbachev but also the positive response of the United States which has resulted, among other things, in an agreement not to end the current negotiating sessions at Geneva on March 4 but rather to carry them forward. We think that is very good news and should be celebrated on its own grounds.


CONTINUATION OF GENEVA TALKS-CANADIAN POSITION
Pauline Jewett: Mr. Speaker, the then Secretary of State for External Affairs also said in July, 1983, after being asked what circumstances would allow Canada to terminate Cruise missile testing, that those circumstances would be: "if there were a substantial result in INF talks or indeed if the zero option were adopted". That is what is taking place in Geneva, if the Minister does not know. I am asking if he, too, would see the probability of ending Cruise missile testing under those circumstances.

March 2, 1987
Oral Questions
[DOT] (M50)


Charles Joseph Clark: What is taking place in Geneva, just to be precise about it, is that a discussion which appeared to be closed has now been opened. We will determine Canadian Government policy on the basis of what is actually decided in Geneva.

[Translation)


INQUIRY CONCERNING LOCATION OF SERVICE STATIONS WHICH INCREASED GASOLINE PRICE BY ONLY ONE CENT PER LITRE
Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, my question is directed to the Minister of Finance. On Friday,' February 20, in answer to a question concerning the three-cent a litre or 13-cent a gallon increase in gasoline prices announced by certain companies the Minister told Canadians that if they did not like such increases they could go to other service stations, and 1 should like to quote him. He said: The consumer can teach them a lesson by going to the companies which have only increased their price by one cent a litre.
My question to the Minister is this: Where are those miraculous service stations which are supposed to have increased their prices by only one cent a litre? Does the Minister believe that Canadians can benefit from competition when even State-owned Petro-Canada increased its prices by 13 cents a gallon?

Hon. Harvie Andre (Minister of Consumer and Corporate
Affairs): Mr. Speaker, as the Hon. Member knows, there is no constitutional authority for the federal Government to engage in price controls. That is a provincial responsibility and he should talk to his provincial colleagues if that is what he is asking for.
The Director of Investigation Research of the Combines Branch of my Department monitors the situation continuously, especially when there have been increases. If he or any other Member of the House has evidence of collusion he should bring it to the attention of the Director and action will be taken. I might point out that my colleague from Brampton- Georgetown informed me that over the weekend the price dropped 2 cents a litre in his constituency, showing that the market-place has been working, w


REQUEST THAT MINISTER ORDER PETRO-CANADA TO REDUCE PRICE
Raymond Garneau: Mr. Speaker, the Minister knows that according to the law he can direct Petro-Canada to lower the price of its product in the marketplace. The price of a barrel of oil went down by $2 U.S.
recently. As well, Petro-Canada just announced an increase of 28 per cent in its profit. Therefore, can the Minister use the power the law gives him and direct Petro-Canada to lower the price by 2 cents a litre?


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: As a matter of fact, the Hon. Member is inaccurate. The Petro-Canada Act states quite specifically that the Government may give policy direction to Petro-Canada but not involve itself in day-to-day operations. Hon. Members opposite can check the Act if they choose to do so. The policy put in place by the previous Government, and which we think is appropriate, is that Petro-Canada should operate in the market-place as a commercial corporation. That I presume is what it is doing.
I repeat, if there is any evidence of collusion to manipulate the market-place to the disadvantage of the consumer, then action will be taken. If the Hon. Member has any such evidence I ask that he bring it to the attention of the Director of Investigation Research of the Combines Branch.


CANADA-UNITED STATES NEGOTIATIONS-ELIMINATION OF TARIFFS
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I would like to return to the free trade issue. The Government is becoming known for what seems to be, given the stories last week, hoax and trickery. Will the Prime Minister take this occasion to confirm or deny that the free trade negotiators are aiming to eliminate all tariffs for the Auto Pact without exception, and whether we are discussing cultural industries and agriculture?


Charles Joseph Clark: If the Hon. Member were genuinely interested in having facts on the table, he would not carefully construct tricky questions.


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: That is what he has just done. If he is asking me is it the goal of the trade negotiations to reduce tariffs, the answer is yes. If he is asking me if the Auto Pact is on the table, the answer is no. Why can he not ask a straight question? He gets straight answers when he does.


REQUEST THAT PARLIAMENTARY TASK FORCE OVERSEE NEGOTIATIONS
Steven W. Langdon: Let me try a
straight question.


Some Hon. Members:: Hear, hear!
March 2, 1987


Steven W. Langdon: It is going to be tough to get an answer from the Minister but let me put it to him. Will he or the Prime Minister set up a special parliamentary task force to oversee the trade negotiations-


Some Hon. Members:: Oh!


Steven W. Langdon: -and let Canadians know precisely what is taking place behind closed doors?


Charles Joseph Clark: No, Mr. Speaker, I will not. Why not? For at least the following reasons. First, there is an extraordinary and unprecedented degree of co-operation among federal and provincial authorities, and indeed federal and provincial Ministers, overseeing these negotiations. Second, there was an opportunity for a joint standing committee of this House and the other place to look at the question of trade. Third, there is going to be an opportunity for a full debate in this House and I look forward with great anticipation to seeing if the NDP are going to be able to come forward with a consistent position or if they are going to be against free trade negotiations in the same way they used to be against the Auto Pact.


Some Hon. Members:: Hear, hear!


OIL AND GAS INDUSTRY-EXCISE TAX REVENUE
Russell Gregoire MacLellan: Mr. Speaker, my question is directed to the Minister of Finance. Four major oil companies with refining and marketing capacity are continuing to fleece the Canadian consumer. However, those producers without marketing and refining capacity are being pushed to the wall because of the lack of assistance from the Government. By the end of the fiscal year 1986-87 the Government will have made billions of dollars as a result of excise tax increases on gasoline, some $480 million alone in this coming fiscal year. Why does the Government continue to use the oil and gas sector as a cash cow without being prepared to assist the industry?


Mr. McDermid:: How can you ask that question with a straight face?


Geoff Wilson: Mr. Speaker, I cannot believe my ears. Let me recount for the Hon. Member what went on between 1980 and 1984. There was the Petroleum Gas Revenue Tax. There was the Natural Gas Liquids Tax. There was the petroleum compensation charge. There was the Canadian ownership charge. If any Government ever looked upon that industry as a cash cow it was the Government he supported for the four years ending in 1984. Where was he at that time?


Some Hon. Members:: More!
Oral Questions


Russell Gregoire MacLellan: Mr. Speaker, the Albertans do not think that is particularly funny.


John Horton McDermid: Coming from you they do.


Sheila Maureen Copps: He speaks for Alberta and that is more than you can say for the deadheads on your side of the street.


Some Hon. Members:: Oh, oh!


John Horton McDermid: Come on, Sheila, be nice; you are going to be a mother soon.


Mr. Speaker:: Perhaps Hon. Members would permit the Hon. Member to put his question.


Harvie Andre: Especially his seat-mate.


GOVERNMENT ASSISTANCE FOR INDUSTRY
Russell Gregoire MacLellan: Mr. Speaker, the Deputy Prime Minister seems to have a different attitude. He said in a release on February 18, the same day as the Budget, that measures would be implemented to assist the energy industry during this period of severe difficulty. When is the assistance going to take place? After most of the producers have gone bankrupt?


Geoff Wilson: Mr. Speaker, the Deputy Prime Minister put out a press release at the time of the Budget which said much the same as I have been saying. There have been meetings of Energy Ministers. The first meeting since 1978 was held under the auspices of my colleague, the Minister of Energy, Mines and Resources. They will be reviewing the impact of current pricing on security and supply and reporting, I believe, in July.
I have said there has been a good degree of inequity in the tax system as it affects the oil and gas industry, starting with the taxes I referred to in my earlier answer. There is still work to be done there. We hope to address the problem in tax reform. Yes, there are things being considered right now, and in due course we will be making those announcements.


AGRICULTURE
Geoff Wilson: Mr. Speaker, my question is directed to the Minister of Agriculture. He will know that Canadian grain farmers will soon have to make some basic decisions concerning spring planting and acreage and crop and so on. Since there may be expectations of further government programs such as the Canadian Special Grains Program, based on seeded acreage, can the Minister give direction as to the thrust of any possible future government programs? In particular, should western dryland farmers be considering seeding stubble?

March 2, 1987
Oral Questions


John Wise: Mr. Speaker, I welcome this opportunity to indicate to the Member and the House that the Special Canadian Grains Program is on track. The cheques are being delivered on time. We have now delivered well over 150,000 cheques. We also have about 40,000 applications in the mill and over half of those will be completed by the end of the day.
The day that we released the program we indicated to Canadian farming people, and have tried to repeat the message every day since, that they should not plan their 1987 cropping pattern based on the formula of distribution in the Special Canadian Grains Program.


SALE OF POTASH TO UNITED STATES-ANNOUNCEMENT OF ANTI-DUMPING INVESTIGATION
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Secretary of State for External Affairs. This morning the people of Saskatchewan and New Brunswick received some very bad news, namely, that the U.S. Department of Commerce has announced that it is going to investigate whether or not Canadian potash was sold in the United States at under the cost of production.
Can the Secretary of State explain why, according to my information, in a diplomatic note sent to the Americans he failed to deal directly with the U.S. argument that we are selling our potash under the cost of production? Why did he fail to deal with the allegation that there are unfair Canadian subsidies, and that an export tax is not acceptable? Can he explain to the House why he did not make these strong arguments on behalf of the people of Saskatchewan and New Brunswick? Get off your knees and stand up for Canada.


John Horton McDermid: Mr. Speaker, it is interesting to hear that kind of talk in the House of Commons. Today federal officials met with representatives of the industry and the provinces to work out a plan to answer the charges coming from the United States. I would point out that it is an antidumping investigation which is going on rather than one for a countervail duty, and that will take up to a year. We are cooperating with the producers on this problem and will defend the right of the potash producers.


SUPPLY AND SERVICES
Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, my question is for the Minister of Supply and Services. According to an internal government document all awards for government contracts over $25,000 in six selected ridings including, conveniently, her own and that of the Prime Minister must be brought to the attention of the Minister's office before an award is announced.
In light of recent events which have sharply brought into question the fairness of the bidding system regarding government contracts, how can the Minister justify this policy which leaves itself open to political interference?


Hon. Monique Vezina (Minister of Supply and Services):: As usual, Mr. Speaker, the Opposition is all mixed up. First a distinction should be made between the contract award process and the information system concerning contracts about to be awarded. The information method I set up is meant to ensure close co-operation between the Government and the private sector. This being a new mechanism, we set up this system, of course, we had to begin with a pilot project. I might also point out that this is a non-partisan mechanism available to all Members of the House.


PRICE OF GASOLINE-GOVERNMENT POSITION
Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, my question is addressed to the Minister of Energy, Mines and Resources. In the early 1970s we had a crisis in the oil industry when oil companies deceived Canadians. We now have phoney increases at the pumps. Increases in excess of excise gasoline taxes are being charged at the pumps across the country. Why are these companies, including Petro-Canada, being allowed to get away with this? What does the Government intend to do about it?


Jack Wendele Shields: Mr. Speaker, the market-place will decide whether the latest increases will be sustained. For example, in Toronto market prices were generally up 4.2 cents a litre last week. It is my understanding that some service stations have carried that price over to this week, but others within the Toronto area have dropped their prices by approximately 3 cents. Therefore, market forces are at play and are working. I am sure that given time this will happen.
March 2, 1987

Statements by Ministers
POINT OF ORDER	ROUTINE PROCEEDINGS


CORRECTION TO MINISTER'S STATEMENT
Geoff Wilson: Mr. Speaker, I would like to correct the record with regard to an exchange in the House on Friday, February 20. At that time I inadvertently used the word "families" when I should have stated that 263,000 fewer individuals were below the poverty line since this Government came into office. Therefore, it is "individuals" rather than "families" as I inadvertently said. I apologize for the error.


BUSINESS OF THE HOUSE
Philip Derek Lewis: Mr. Speaker, there have been discussions among the Parties. I believe that if you were to seek it, you would find unanimous consent of the House to revert to Statements by Ministers in order to allow the Right Hon. Secretary of State for External Affairs (Mr. Clark) to make a statement.
In order not to interfere with Private Members' Hour, we suggest that the Chair seek unanimous consent not to extend the sitting so that Private Members' Hour would not be interfered with.


Mr. Speaker:: Hon. Members have heard the suggestion and the request.


Hon. Herb Gray (Windsor West):: Mr. Speaker, there have been contacts by the Government with the Official Opposition on this matter. We will give our consent today. However, I want to make it clear that we do not consider this a precedent for having Statements made at three o'clock rather than the customary time of eleven o'clock when Routine Proceedings ordinarily take place. We expect that statements will generally be made at the time provided for in the rules.


Some Hon. Members:: Agreed.


Mr. Speaker:: There seems to be a disposition to proceed as suggested by the Hon. Parliamentary Secretary. The suggestion made by the Hon. Parliamentary Secretary with regard to time also seems to have approval, especially that of members of the Opposition. I thank the Hon. Parliamentary Secretary.


SHIPBUILDING
Charles Joseph Clark: Mr. Speaker, I have the pleasure to announce that my colleagues, the Minister of Transport (Mr. Crosbie) and the Minister of International Trade (Miss Carney), met this morning with Versatile Pacific Shipyards Incorporated of Vancouver. They informed Versatile that the Government proposes to build the world's largest ice-breaker, the Arctic Class 8, at Versatile Pacific Shipyards and they conveyed a draft letter of intent outlining the conditions the shipyard is expected to meet.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: Canada must be able to exercise our sovereignty over our North. That requires tools as well as will, and the Government attaches the highest priority to advancing Canada's national interests in the North. No Government in Canadian history has done more in so short a time to reaffirm and consolidate Canada's northern sovereignty-


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: In my statement in the House on September 10, 1985 I set out the policy of the Government in respect of Canadian sovereignty in Arctic waters. I said that "The policy of the Government is to maintain the natural unity of the Canadian Arctic archipelago and to preserve Canada's sovereignty on land, sea and ice undiminished and undivided".
[ Translation]
To implement this policy, we must take appropriate steps to strengthen our actual control over the waters of the Arctic archipelago. Building an Arctic Class 8 icebreaker is a major step towards attaining this goal. A vessel that enables us to patrol Arctic waters practically year round will be the best possible instrument to affirm our sovereignty over the waters in question. We will be able to provide for both safe navigation and compliance with our laws throughout our Arctic waters. The decision to build the icebreaker is a clear sign to the world of our firm resolve to exercise our sovereignty in the Arctic. It will also put us on a line with other countries who have this type of vessel and thus provide a sound basis for our position as one of the major Arctic countries.
The construction contract will provide over 1,100 person years of employment in British Columbia's shipbuilding industry during the four years the work will take.
Other provinces will benefit through sub-contracting arrangements. We will ensure that Canadian content is as substantial as possible, and we intend to obtain major long-

March 2, 1987
Statements by Ministers
term benefits from foreign suppliers in the form of joint enterprises and technology transfers.
In addition, Canada's arctic infrastructure and control are being strengthened in such areas as ship construction for support of northern commercial operations, aids to navigation, ice reconnaissance and forecasting, satellite communication, establishment of marine parks, political devolution and native land claims.
In the past, Canadian policy in the Arctic has been characterized by fits and starts. That will no longer do. The Government has made a firm commitment to the Arctic. Our response to the report of the Special Joint Committee on Canada's International Relations places unprecedented emphasis on the northern dimension of Canada's foreign policy. In the coming months the Government will act to give further effect to the undertakings we have made,for example, in continuing to modernize Canada's northern defences and in promoting enhanced co-operation with circumpolar countries and with Greenland.
This Government is determined to assert Canadian sovereignty in the North and promote Canada as a key player in Arctic co-operation. The decision to proceed with construction of the ice-breaker is proof of that resolve.


Hon. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, of course we are happy for the Versatile Pacific Shipyard, but this is not a very enlightening statement. Apart from a few partisan slapshots, which are rather wild and inaccurate, and on which I shall comment in a moment, this is a remarkably vacuous declaration by the Minister. What information does it provide us about this proposed contract?

For instance, what is the cost?

What is the cost? I looked in the Estimates which were tabled today but I saw nothing under ice-breaking except an increase of $7 million over last year. Does this mean there will be no funds under this program until 1988-89, or are they hidden somewhere else in the Estimates and have escaped me? We did not receive the Estimates or the Minister's declaration until noon.
[ Translation]
Mr. Speaker, there is nothing in the Estimates. I would like to know the cost and when construction will start.

When will this ship be commissioned? More important- [Translation]
-Who will be the designers of this icebreaker?

Furthermore, we do not know who will be the designers. We know that an ice-breaker will be built and that a letter of intent has been given. Apart from the fact that it is going to Versatile, which is important information, that is all we know.
Since the Minister has emphasized that the sovereignty role is a primary concern, presumably this proposal will somehow be integrated with the proposals in the forthcoming Defence White Paper which we also have yet to see. It is impossible for us to relate this to sovereignty, taken in isolation. We know that an ice-breaker operating in the Arctic by itself would simply facilitate the passage of foreign vessels which, of course, cannot now penetrate the Arctic ice.
Let me return to the partisan slapshots to which I referred. Specifically, the Minister had the temerity to say that no Government in Canadian history has done more in so short a time to reaffirm and consolidate northern sovereignty. This is not a pro-active policy, but strictly a reactive policy.
When the Minister talks about fits and starts, I remind the House of the fits which took place when the Polar Sea penetrated the Northwest Passage, having told the Canadian Government it would do so, but not seeking permission. That occurred in July, 1985, and the Government subsequently authorized the passage of the Polar Sea after the fact. The Americans never sought any authorization from the Government to send their ice-breaker through the Northwest Passage.
No one dared challenge the sovereignty of the Northwest Passage while Liberal Governments were in power. Prime Minister Trudeau never had to authorize retroactively the passage of any foreign vessel through the Northwest Passage. The Minister is quite right when he says that nothing like this has been done in the past. His Government's action is strictly a reaction to its failure to assert its sovereignty.
On September 10, 1985, the Minister made a grand declaration when he, among other things, referred to the Canadian Laws Offshore Application Act which was introduced in April, 1986, almost a year ago. It passed first reading and has been on the Notice Paper since October. We do not know when that Bili will be brought forward.
In terms of Liberal Governments, I must say, en passant, that first it was not challenged because there was respect for Canadian sovereignty under Liberal Governments. Second, it was the Liberal Government that negotiated a 200-mile limit on the Law of the Sea which has been so instrumental, not only in terms of Arctic sovereignty but in terms of sovereignty over all Canada's territorial waters. I remind the Minister that it was also the Liberal Government that procured the long-range patrol aircraft which provide a means of surveying the Arctic. When the Minister says that the Government will increase flights over the Arctic, it is with the tools already furnished by a prior Liberal Government.
Therefore, I am not much impressed by this declaration, although Canadians can be assured by one comment by the Minister, that this is an ice-breaker with the capacity to break
March 2, 1987

ice. 1 notice that the Minister had the wisdom to read that passage in its French text, but Canadians will be grateful that this ice-breaker will have the capacity to break ice. Hopefully, Canadians can look forward to a Government that will have the capacity of governing. I am afraid, though, that they may have to wait until 1988 or 1989 for that happy event.
Mis. Pauline Jewett (New Westminster-Coquitlam): Mr. Speaker, on behalf of my Party I am pleased to respond to the Minister's statement. New Democrats have been in the forefront of demanding more Canadian action in maintaining and promoting Canada's Arctic sovereignty. We have also been in the forefront in advocating a major restructuring of Canada's shipbuilding industry and the need for a planned revitalization of that industry. I want to refer in particular to my colleagues, the Member for Vancouver East (Ms. Mitchell) and the Member for Cowichan-Malahat-The Islands (Mr. Manly) in that regard.
New Democrats welcome today's announcement. The construction of the world's largest ice-breaker by Versatile Pacific is welcome news for British Columbia, the shipbuilding industry, and shipbuilding workers. It is a welcome symbol of commitment by Canada to establishing a larger presence in the Arctic.
I urge the Government, however, to do more-much more. If Canada is to regain its natural place as a major shipbuilding and shipping nation, the Government must keep its earlier promises to revitalize the industry. Canada must end its ad hoc approach to shipbuilding which has drastically weakened the industry and cost thousands of jobs. It is time for planning and vital long-term support.
I also urge the Government to do much more in establishing Canada's undisputed sovereignty in the north. My colleague, the Hon. Member for Skeena (Mr. Fulton), has on several occasions pointed out this Government's failure, and the long failure of previous Liberal Governments, to adequately address our boundary disputes on the North-West coast and in the Arctic. We have also pointed out that any establishment of Canadian sovereignty in the North must deal with the urgent need to address the rights and land title of our aboriginal peoples.
Finally, I urgently remind the Government that the long awaited and much welcome news of the contract for the Polar 8 ice-breaker will not address the larger and critical issue of foreign militarization of the Arctic and the potential weakening of Canada's sovereignty through the north warning system, SDI developments and through U.S. submarine voyages. Canada must join the efforts of other Arctic and Nordic nations to demilitarize the whole Arctic region and to support a nuclear weapons free zone in that region.
Canada Shipping Act POINT OF ORDER


CORRECTION TO STATEMENT
John Horton McDermid: Mr. Speaker, I would like to qualify the information I gave today in Question Period for my friend, the Hon. Member for Yorkton-Melville (Mr. Nystrom). I inadvertently misled the House when I said the meeting was taking place today. In fact, with respect to the potash situation, the meeting took place on February 19. I just wanted to clear up that matter for the record.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Crosbie that Bill C-39, an Act to amend the Canada Shipping Act and to amend the Arctic Waters Pollution Prevention Act, the Maritime Code Act and the Oil and Gas Production and Conservation Act in consequence thereof, be read the third time and passed.
Mr. Speaker:: I think the situation was that the Hon. Member for Thunder Bay-Atikokan (Mr. Angus) had completed his remarks but there was still a 10-minute question and comment period. There being no questions and comments, is the House ready for the question?


Some Hon. Members:: Question.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the third time and passed.

[Stage Direction]
The House resumed consideration of Bill C-6, an Act to implement an agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore petroleum resource management and revenue sharing and to make related and consequential amendments, as reported (with amendments) from a legislative committee.
Mr. Deputy Speaker:: Motion No. 2 is now before the House.


Russell Gregoire MacLellan: Mr. Speaker, my wish is to debate is on Motion No. 6.1 am prepared to allow a vote on Motion No. 2.
3726

March 2, 1987
Atlantic Accord


Ian Gardiner Waddell: Mr. Speaker, on behalf of the New Democratic Party, we are prepared to let this motion go through. I notice the ruling of the Speaker states, "The Hon. Minister seeks to introduce a new concept into the Bill, however, since there is doubt in my mind, I have decided that the motion should go forward". I do not know whether the Parliamentary Secretary wants to speak specifically, but I think he should perhaps just outline the terms of the motion so we have in Hansard the fact that there is no substantial change from the principles of the Bill.


Jack Wendele Shields: Motion No. 2 is an amendment to Clause 16 which is to establish a requirement for the Board to purchase liability insurance, the premium of which would be paid for by the two Governments. As Hon. Members are aware, it is a standard practice for a corporation to carry liability insurance and to provide indemnity for its board members. If the Canada-Newfoundland Board, however, is unable to obtain total insurance coverage an indemnification provision would apply. Under this provision, the two Governments would indemnify the Board members against any costs and amounts awarded against them as long as the Board members were acting honestly and in good faith and within the scope of their duties.
I question whether it is a change in policy. It is rather just a way to cover the Board members from harm.


The Acting Speaker (Mrs. Champagne):: Is the House ready for the question?


Some Hon. Members:: Question.


The Acting Speaker (Mrs. Champagne):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.
Motion No. 2 (Mr. Masse) agreed to.


The Acting Speaker (Mrs. Champagne):: We will now proceed to Motion No. 4.


Hon. James Kelleher (for the Minister of Energy, Mines and Resources) moved:: Motion No. 4.
That Bill C-6, be amended in Clause 119 by striking out lines 48 and 49 at page 67 and lines 1 and 2 at page 68 and substituting the following therefor:
"(h) any study funded from an account established under Subsection 76(1) of the Canada Petroleum Resources Act, if the study has been completed; and".


The Acting Speaker (Mrs. Champagne):: is the House ready for the question?


Some Hon. Members:: Question.


The Acting Speaker (Mrs. Champagne):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.
Motion No. 4 (Mr. Masse) agreed to.


The Acting Speaker (Mrs. Champagne):: We will now proceed to Motions Nos. 5 and 6.


James Francis Kelleher: Motion No. 5.
That Bill C-6, be amended in Clause 232 by striking out line 3 at page 138 and substituting the following therefor:
"subsection 204(4) of the Provincial Act, dis-".
Motion No. 6.
That Bill C-6, be amended in Clause 233 by striking out lines 8 to 14 at page 138 and substituting the following therefor:
"233. (1) There may be paid out of the Consolidated Revenue Fund, for the purpose of making payments pursuant to this Part, amounts not exceeding, in the aggregate, the sum of two hundred and twenty-five million dollars."


Jack Wendele Shields: Madam Speaker, I would just like to explain Motion Nos. 5 and 6 briefly. Motion No. 5 with respect to Clause 232 is a technical amendment. The previous citation to the section of the provincial legislation was incorrect. The correct section reference is Section 204(4) of the provincial Act and not Section 232(4). So this is technical in nature. What we have to do is to mirror the provincial legislation, which is what has been done.
Motion No. 6 is also a technical amendment to bring about agreement with the actual accounting practices of the Office of the Comptroller General. There is no necessity to have specific language appropriating funds. It is sufficient to have a statutory provision authorizing payment of funds from the Consolidated Revenue Fund. This is really just a technical amendment as well.


Russell Gregoire MacLellan: Madam Speaker, I do not quite agree with the Parliamentary Secretary with respect to his analysis of Motion No. 6. I think it is more than just a technical amendment. In fact, I think it goes quite deeply into the intention that was agreed upon when the development fund was signed by the federal Government and the provincial Government of Newfoundland. Clause 233(1) states:
There is hereby appropriated for the purposes of making payments pursuant to this Part, and such payments may be made out of the Consolidated Revenue Fund in, an aggregate amount not exceeding the sum of two hundred and twenty-five million dollars.
That is the way Clause 233 reads at the present time. The change being proposed by the Government would have the clause read:
There may be paid out of the Consolidated Revenue Fund, for the purpose of making payments pursuant to this Part, amounts not exceeding, in the aggregate, the sum of two hundred and twenty-five million dollars.
The amendment omits the words: "There is hereby appropriated for the purposes of making such payments-". In my opinion, if we were to leave the wording as it is presently, then
March 2, 1987

the funds would automatically be put into a fund, a development fund, to be jointly administered by the Province of Newfoundland and the Government of Canada. If we do not have those words then what we have is the federal Government drawing down from the Consolidated Revenue Fund funds to be applied against the expenditures outlined in the agreement whereby the payments may not be made on time or whereby the payments are not in a particular fund governed by the Province and the federal Government and the board that would oversee the fund. There is a significant difference. I can understand the Department of Finance not wanting to part with money any sooner than it absolutely has to part with it. However, if we approve the amendment then we are going counter to the spirit of the development fund agreement and counter to what was the intention of the Province of Newfoundland.
1 ask the Government to withdraw this amendment because I do not think it is in the interests of Newfoundland. After all, the Government has delayed this Bill for a considerable amount of time. Newfoundland passed its legislation some time ago.
I wish to take exception to the remarks made this morning by an Hon. Member from Newfoundland who stated that the Opposition held this Bill up. That is not the case. As a matter of fact, this Bill was dealt with quickly and expeditiously by members of the Opposition. The Bill was given first reading one year ago. We then dealt with second reading and the matter was referred to committee at the end of June just before the House adjourned for the summer recess. Members of the Opposition did very well in dealing with Bill C-5. It was a committee which dealt with Bill C-92 and then Bill C-94, which were the numbers of the Bills in the first session, and which Bill C-5 and Bill C-6 now represent in this session of Parliament. There was no time to deal with Bill C-94. At that time there was no mention by the Government or anyone else that the Opposition was stalling with respect to these Bills. In fact, members of the Opposition have bent over backward to deal expeditiously with this Bill.
I would like to see report stage proceeded with quickly. But I do not think it would be in the best interests of the people of Newfoundland not to point out that I think the amendment suggested by the Government goes counter to their interests.
Motion No. 5 (Mr. Masse) agreed to.


The Acting Speaker (Mrs. Champagne):: Mr. Masse, seconded by Mr. Oberle, moves that Bill C-6, an Act to implement an agreement between the Government of Canada and the Government of Newfoundland and Labrador on offshore petroleum resource and management and revenue sharing and to make related and consequential amendments, be amended in Clause 233 by striking out lines 8 to 14 at page 138 and substituting the following therefor:-
Atlantic Accord


Philip Derek Lewis: Madam Speaker, I rise on a point of order. I think the record should properly show that the motion was moved by Mr. Oberle for Mr. Masse and seconded by Madam Landry.


The Acting Speaker (Mrs. Champagne):: If I remember correctly, the motion was moved for Mr. Masse by Mr. Kelleher and seconded by Mr. Oberle.


Some Hon. Members:: No.


Philip Derek Lewis: Madam Speaker, with respect to the particular motion you are putting before the House at the present time there are two cabinet Ministers in the House in their seats. I suggest it should be moved for Mr. Masse by Mr. Oberle and seconded by Madam Landry.


The Acting Speaker (Mrs. Champagne):: We will check the record. However, when the motion was first proposed these people were present and I think the motion was in order.


Ian Gardiner Waddell: Madam Speaker, I rise on a point of order. I hesitate to interrupt at this time. It is a small matter but I think we should clear up the proceedings. I cannot say who is present and who is not present since there are rules of the House with respect to that. However, I do not recall seeing the Hon. Minister of Energy, Mines and Resources (Mr. Masse) in the House. Therefore, he could not have proposed the motion. I support what the Parliamentary Secretary has said with respect to the way the motion should read.


The Acting Speaker (Mrs. Champagne):: I hope the House will allow me to try to make things clear. When the motion was first introduced in the House it was introduced in the following way. It was moved by Mr. Kelleher for Mr. Masse, seconded by Mr. Oberle. I think that should stand.


Some Hon. Members:: Agreed.


The Acting Speaker (Mrs. Champagne):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.
Motion No. 6 (Mr. Masse) agreed to.


James Francis Kelleher: 
The Acting Speaker (Mrs. Champagne):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.
Motion No. 8 (Mr. Masse) agreed to.

March 2, 1987
Atlantic Accord
Hon. James Kelieher (for Mr. Masse), moved that Bill C-6, as amended, be concurred in.


The Acting Speaker (Mrs. Champagne):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mrs. Champagne):: When shall the Bill be read the third time? At the next sitting of the House?


Philip Derek Lewis: Madam Speaker, I rise on a point of order. There have been discussions among the Parties, and if you were to seek unanimous consent you may find that there would be a disposition in the House to proceed with third reading at the present time.


Jean-Robert Gauthier: Madam Speaker, I confirm that indeed there have been negotiations. The Official Opposition, in the spirit of co-operation and in trying to get the Government to do the right thing, has agreed to proceed to third reading today, [Translation]


Ian Gardiner Waddell: Now that the NDP has 36 per cent of popular support according to the polls in Quebec, we are agreeable, as are the Government and the Opposition, to proceeding with consideration of the Bill at this time.


James Francis Kelleher: that Bill C-6 be read the third time and passed.


Jack Wendele Shields: Madam Speaker, 1 wish to thank my colleagues from the Liberal caucus and the NDP caucus for their co-operation in expediting this Bill, which is very important to Newfoundland and it is waiting patiently to see that it is passed.
It is with great pleasure and satisfaction that I introduce for adoption by the House on third reading Bill C-6 to implement the Atlantic Accord.
The Government of Canada seeks to establish harmonious relations with the provinces, to stimulate economic development and foster social justice from coast to coast. Every action it takes necessarily bears witness to this fundamental guiding principle of the Government. Bill C-6 is another striking example.
We believe that the country's stability and prosperity depend on each provincial Government fully carrying out its role within our political and economic framework. That is why this Bill establishes the Government of Canada and the Government of Newfoundland and Labrador as equal partners in the management of offshore oil and gas resources.
The establishment of the Canada-Newfoundland Offshore Oil and Gas Board under the Accord demonstrates this recognition by assigning an equal number of representatives from each Government as well as a chairperson selected by
mutual agreement. The Government of Canada and the Government of Newfoundland and Labrador will jointly give to the board instructions on key issues such as the rate and method of exploration and production of petroleum resources. In this manner, the two levels of Government will be able to ensure that the board is kept aware of their primary concerns. Similarly, a number of basic board decisions can be reviewed by either Government. This management system, which is based on the responsibilities and capabilities of both parties, is a model of co-operation and co-ordination, something which has been absent for a number of years.
These basic concepts also guide the Government's economic position. We believe that in order to foster economic development throughout Canada it is necessary to stimulate the economy of each province. This requires, among other things, the revival of provincial sources of revenue. Hence, in addition to a joint management system, the Government of Canada grants Newfoundland access to revenues deriving from the exploration or exploitation of offshore oil and gas resources. This sharing is possible because we consider oil and gas resources offshore Newfoundland to be the same as land resources.
As a result of this Bill, the province will participate in key resource management decisions and provincial statutes regarding resource revenues will be incorporated. These important measures are introduced pursuant to federal legislation in an area where the Government of Canada has jurisdiction. The Bill also provides for equalization payments to Newfoundland once production has reached a specified level. The purpose of these payments is to ensure that the province is not penalized, and that it will be able to benefit from the additional revenue for a period defined in Part V of the Bill.
However, we also believe that economic development must promote social justice, and that job creation is one of the best ways to bring this about. To this end, Bill C-6 establishes the $300 million Canada-Newfoundland Development Fund, three-quarters of which is funded by the Government of Canada. It allows the province to set up the socio-economic infrastructure needed to allow it to profit from offshore oil and natural gas development.
In order to establish this infrastructure, Newfoundland will undertake the construction of access roads or drilling rig manufacturing plants, and it will be prepared to provide required goods and services. It will also attend to the training of the people needed to fill the positions that will become available because of these activities. All these activities will create jobs.
In concluding, I wish to quote the Hon. Brian Peckford, Premier of Newfoundland, on the occasion of the signing of the Atlantic Accord on February 11, 1985. He stated:
this whole agreement has been accomplished recognizing our role in Confederation and our commitment to national self-sufficiency for Canada-
March 2, 1987

There is no other document in existence that so clearly establishes Newfoundland's right to have a significant say and control over such a huge resource ... Today marks a watershed in the development of Newfoundland. It signals a dramatic turning point in the economic history of this place.
His words underline in an eloquent fashion the achievement of the objectives set by the Canadian Government when it first took office. We are convinced-and Bill C-6 is further evidence of this-that by giving each province increased control over its economy, the political unity and economic prosperity of the whole country are strengthened.


Russell Gregoire MacLellan: Madam Speaker, I am pleased to speak on third reading of Bill C-6, a very important piece of legislation in terms of what it can do for the Province of Newfoundland. I do not agree with a great deal of the legislation and think that it is counterproductive. However, it is important that it be passed as soon as possible.
As I said at report stage, I do not agree with the change to Clause 233 which would strike out the following words: "There is hereby appropriated for the purposes of making payments pursuant to this Part". If we just say that funds can be taken from the Consolidated Revenue Fund and there is no reference in the section to the funds actually being appropriated, the funds may not go to the Province of Newfoundland as quickly as it would like. In accordance with the spirit of the agreement between the province and the federal Government, the funds should be appropriated immediately and put into the special development fund so that they can be used, and perhaps even accumulate some interest, for the benefit of the people of Newfoundland. It is a complete change of the position and the spirit of the agreement between the two Governments.
I am also unclear about Clause 41(l)(b) which refers to the feedstock requirements of the facilities at Come-By-Chance, if the facilities were operating at capacity. What may be intended here is sufficient feedstock to service the refinery at Come-By-Chance. However, the wording is not very secure and it more or less excludes Come-By-Chance if the refinery is not operating at capacity, which would be very damaging to the Province of Newfoundland. The wording in Clause 41(l)(b) should be clarified. The federal Government should state emphatically what it means in that very important clause.
With the passage of the Bill through the House and subsequently through the other place, $225 million, as agreed by the federal Government and the Province of Newfoundland, will go to the development fund. Finally it will be available to the province to help it develop infrastructure and facilities to assist it in being ready for the time when Hibernia and other oil deposits reach the developmental stage.
I only hope that the Province of Newfoundland spends the money a lot better than did the Province of Nova Scotia. That province built roads, but they were nowhere near areas where there would be oil or gas development or any of the oil or gas coming ashore. It was used for political purposes. I request the
Atlantic Accord
Government of Newfoundland to use the money to develop infrastructure for the offshore. It is important for the people of Newfoundland that nothing happens to delay further the bringing ashore of oil reserves off the coast. I emphasize that it has been delayed enough and that the passage of the Bill will do nothing to bring on those reserves. We need resolve on the part of the federal Government to develop a fiscal regime to bring about a policy which will take major producers by the ears and say that the reserve must be developed.
The people of Newfoundland have been disappointed many times. One example would be the Churchill linerboard plant. They have suffered through the ups and downs of the refinery at Come-By-Chance, which we hope is on an up cycle and will continue in that way. They cannot wait forever to realize the potential of Hibernia and other deposits off the coast of Newfoundland.
This area has tremendous potential, and the potential is being allowed to dissipate. Many small business which were operating with the express purpose of being part of the exploration and development of Hibernia were unable to keep their businesses going and have closed their doors. As many as 200 small businesses have been lost because of the Government's delay in bringing this important resource ashore and in delaying the fiscal regime necessary to act as the cohesive force.
The most damaging aspect occurred almost a year ago when Chevron sent $500 million back to its parent company in San Francisco, stating as a reason for doing so that the indecision about Hibernia and the lack of resolve by the federal Government with regard to this important resource made it unsure of the future role of Hibernia in Canada's oil and gas sector. Rather than dealing with the uncertainty of sitting and waiting for something to happen, it sent the $500 million back to its parent company. It was very damaging because it was $500 million targeted for equity on the offshore. We are not only minus the $500 million itself, but we are also minus the borrowing leverage which the $500 million could bring. If the parent company in turn lends the subsidiary in Canada millions of dollars, it would not be the same because the parent company would be borrowing from the head office. Unfortunately the delay has caused the loss of a potential $500 million in equity.
However, the potential remains. The Avalon Basin is tremendously rich in oil and gas. Unfortunately government programs have met a drastic cut-back in exploration. The uncertainty of the Government in terms of where it is going and the importance of developing the Avalon Basin area has meant that the industry has cooled and backed away from previous intense negotiations about bringing the reserves onstream. I ask the Government to bring this matter forward.
Bill C-6 was introduced and given first reading as Bill C-94 in the previous session on February 7. At least two months later it was given second reading. It was the end of June before it went to the legislative committee along with Bill C-92 for study. Because of the co-operation of the two opposition

March 2, 1987
Atlantic Accord
Parties, Bill C-92 went through committee stage. Then Bill C-92 became Bill C-5 in the present session, was passed at report stage, given third reading, was subsequently passed in the other place, and has now become law. Because of time constraints we were unable to deal with Bill C-94, as it was then known, or Bill C-6 before us now. It went to committee not as soon as we returned but weeks later. Here we are today on March 2 dealing with report stage and third reading of the Bill.
This is a Bill that could potentially provide the Province of Newfoundland with $225 million in development funds. Months ago the Province of Newfoundland passed its companion legislation and it has been waiting for this House to pass its Bill. I think the Government has perpetrated a breach of trust. I think it is unfair to the people of Newfoundland and the Government of Newfoundland. However, it is not surprising when one considers the way the Government backed away from the potential economic value of Hibernia to the Province of Newfoundland.
I would ask the Government as I have asked it before to please proceed with Hibernia and to pass this legislation as quickly as possible, as I think the Government will do after today. I plead with the Government to get on immediately with the development of those very important oil reserves.


Ian Gardiner Waddell: Madam Speaker, I have a few words to say on third reading stage of this very important Bill. Of course, I agree with the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan). The Government does have control of the agenda. I do not want the Hon. Member for Bonavista-Trinity-Conception (Mr. Johnson) to return to Newfoundland to say that either the Hon. Member for Cape Breton-The Sydneys, who is a Liberal, or the Hon. Member for Vancouver-Kingsway, who is a member of the NDP, was holding up this Bill. We are not holding up the Bill. We do not have control of the parliamentary agenda. The Government could have brought this Bill before the House at any time. Now it is before us. Let us deal with it.
I have some real concerns in the back of my mind. We could be setting up a strange creature we have not examined properly over which we may not have control. That creature is this dual management of the offshore resource. I know it is a way of trying to get around the problem of giving Newfoundland control without the requirement of a constitutional amendment. The Supreme Court of Canada says that the federal Government owns the offshore, so I know what the Government is trying to do. However, I think we may have created a rather strange creature that may be difficult to control.
During the second of the two committee hearings which were held, I tried to voice my concern. As reported at page 1:93 of the committee hearing of Tuesday, November 4, 1986,
I put it this way:
Let us say as a matter of national policy the government decides it wants to change the situation fairly dramatically in Hibernia to develop it to take Canadian control over the development. This is hypothetical. Mobil does not want to go ahead with it. They have things in other parts of the world they want to do. The Government of Canada decides we have to go with Hibernia and the board sides with Mobil. How locked in are we to an independent board as opposed to national policy set by a Minister?
This question has now come up again.
D. Paul Emond of Osgoode Hall Law School wrote an article in Resources, the newsletter of the Canadian Institute of Resources Law, an eminent Calgary group. In the Resources newsletter number 12 of August 1985, Professor Emond spoke of the problem involved with control over what we are setting up. He said:
Offshore exploration activity is partly the result of massive federal subsidies. While costly, these expenditures have made good political and even economic sense. They have enabled us to learn more about the size and accessibility of frontier oil and gas. They have benefited have-not provinces such as Newfoundland. They have also benefited other Canadians, as owners of the frontier lands. How else can Canada justify paying such large subsidies for offshore exploration?
We have spent about $11 billion on offshore exploration subsidies since 1960. Professor Emond continues:
One would have expected, therefore, that the federal government would be reluctant to give up almost all of the financial benefits that development of the Newfoundland offshore might bring.
The Atlantic Accord expresses the federal interest in the Newfoundland offshore in terms of national self-sufficiency, security of supply and, to a lesser extent, Canadianization of the industry. This seriously understates the federal interest. In the past, Canadian energy policy has reflected a multiplicity of interests, including conservation, environmental protection, economic development, regional disparity, and consumer price protection.
This apparent narrowing of federal policy interest would be less disturbing if the Accord provided for periodic review and mechanisms by which it could be adjusted. But, without Newfoundland's consent, that option is not available. Indeed, if Newfoundland achieves the requisite support from other provinces, clause 64 commits the federal Government to introduce a mutually agreeable resolution into Parliament to constitutionally entrench the Accord. If that should happen, the Accord and the Board would be effectively insulated from any government review.
Professor Emond also points out in this article that the board is almost completely divorced from government policy. That is what I meant when I described this hybrid we have created. Suppose there is another energy crisis in the 1990s and we have to develop Hibernia right away. Suppose the federal Government wants to be involved in it. There may be some difficulties over that with the board.
It has been put another way by Frances Russell, a very thoughtful journalist who writes for the Winnipeg Free Press. Her column in the Winnipeg Free Press of January 17 reads in part as follows:
One sure way to achieve harmony, of course, is to give your opposite number everything he wants and more.
The Mulroney government conceded without a murmur what the Liberals had fought, at great political cost, to achieve: that Ottawa, as the government of ail Canadians, should have some access to the nation's resource wealth.
Although Ottawa's constitutional ownership rights to Newfoundland's offshore resources were upheld by the Supreme Court of Canada, the Liberals planned to give the province a minority say in management and full revenues until it became one of Confederation's "haves."
March 2, 1987

The Mulroney government went a giant step further in Carney's Atlantic Accord. It provided for joint management of the resource, with Newfoundland having the exclusive right to set royalties and with disputes between the two governments to be resolved by a panel of appointed officials.
The following is the key paragraph in the column:
Fundamental matters of state involving the national interest are to be decided, not by the national government, but by a group of bureaucrats, half of whom represent a province.
Ms. Russell goes on to say:
The Western Accord, signed with Alberta, Saskatchewan and B.C., was a complete federal rout.
The dismantling of the Liberals' National Energy Policy meant a total repudiation of Ottawa's hard-won power back to provincial capitals, and a potentially massive flow of revenue from the federal government through the provinces back to the oil companies.
If I might put it another way, Frances Russell is really asking who is speaking for Canada. I must say that I am surprised that members of the Liberal Party have not put up more of a defence of its own National Energy Program rather than succumbing so easily to some of the Tory myths about the National Energy Program. That program had faults and it had some pluses. Conservatives just do not tell the truth about it and I think the Liberals have bought those myths too easily. They should have defended the program.
Let me return to the Bill that is before us. All of us in the House want to pass the Bill in order to help Newfoundland. We want Newfoundland to become a have province and to be like some of the western provinces that have used their resources for economic growth. We all believe in that. However, I am saying that there is a little niggling doubt in the back of my mind. Professor Emond and Frances Russell talked about it as well. That doubt is that in an energy crisis when we will need a national policy for Canada, will a future Government be stymied by the fact that we have set up this hybrid, strange creature that will manage the Newfoundland offshore, a board that will either be a creature of the provincial Government or a creature unto itself, removed from government policy? You should not on principle remove bureaucrats from the control of their political masters, so that when there is a concern over national policy you can act. While I hope we do not, I am afraid we might wake up in 10 years and regret that we did not give that closer scrutiny in this Bill.
As far as I can see, there is nothing happening in oil exploration off Newfoundland and Nova Scotia. In fact, exploration has collapsed. The Department of Regional Industrial Expansion review of capital investment reports that petroleum companies operating in Newfoundland, who cut their investment by 42 per cent in 1986, will pare off another 46 per cent this year. In dollar terms the investment declined from $443 million in 1985 to $356 million last year, and they anticipate a mere $270 million next year. In other words, as long as world oil prices are down and the Government does not give more grants, there is not going to be much exploration off Newfoundland. The Globe and Mail says that offshore
Atlantic Accord
exploration for oil and gas is expected to remain stagnant with only one or two rigs working off the Newfoundland coast.
While we all tried to support this Bill in that we thought it was an example of the new federal-provincial co-operation, we now know that the Premier of Newfoundland has had some fundamental differences over the fisheries question with the Prime Minister (Mr. Mulroney) and his Ministers. We have to contrast the urgency attached by the former Minister of Energy, Mines and Resources to speedy passage of Bill C-94 in the last session of Parliament with the lackadaisical approach by the present Minister in bringing this Bill forward. Newfoundlanders are now seeing the reality in a Government led by a Prime Minister who once said, in the course of the election campaign, that he was not afraid to inflict prosperity on Newfoundland.
In the course of committee deliberations on this Bill and Bill C-5 previously which dealt with frontier energy, concerns were expressed about encouraging balanced, sustainable, long-term regional development and the need to ensure that the development of the offshore petroleum industry in Newfoundland proceeds carefully so as not to harm the vital fishing industry on which so many Newfoundlanders depend for their livelihood. Now, however, the Prime Minister's Government has, in its own inimitable fashion, simplified matters by handing over the fishery to France. We need a regional development strategy. I was hoping the legislative committee would hold some hearings in Atlantic Canada, examine the development fund details and look at safety concerns. After all, we had the Ocean Ranger disaster involving a tragic loss of life. These rigs are going to go into Iceberg Alley, and we have not really looked at the danger there. I hoped we would look into preferential hiring of local people and the effect of development on other industries such as the forest and fishing industries of Newfoundland. I hoped we would look at Canadianization and who will benefit from it. Will it be Mobil Oil of New York or will it be Canadians? Finally, I hoped we would look at the role of Petro-Canada. Yet we did none of that. Quite frankly, the Conservative Members on the committee were not interested in examining these issues which have to be examined.
As someone who is not from Atlantic Canada, like some other speakers in this debate, I find that many of the Premiers in Atlantic Canada have sold a kind of bill of goods to the people there. "This great development is a pot of gold and you are going to be rich tomorrow". That is wrong. It is fraudulent in many ways. I know they have won elections like that, but I think politicians have to be honest with the people of Newfoundland about regional development. If I can put it as honestly as I would like to, I say to the people of Newfoundland that it is my observation that they should not forget their fishing industry. Do not forget the forest, mining and tourism industries. Do not just go for this pot of gold at the end of the rainbow. Do not think that Hibernia is somehow going to be a heaven and you will have a big surplus fund like Alberta has. I hope there is development.

March 2, 1987
Atlantic Accord
I said in my speech in this House on second reading on May 26, 1986, that we need Hibernia in the 1990s. We are asleep now and we are going to have another energy crisis. Oil is a non-renewable resource and we are running out of cheap and easily obtainable oil. The National Energy Board told us we will be running out in about eight years. We will have to go to the frontier and it will cost Canadians a lot more. The price of gas could be double what it is today if we have to develop those resources. The world oil resources will then be concentrated in the Middle East, a very unstable area. We are looking at an energy crisis in the 1990s and we should wake up and realize it. That is why the development of Hibernia is important. That is why this Bill is important. It is flawed in many ways, it was a quick fix Atlantic energy Accord in the style of the Government. However, we will do our best to make it work, and that is why we are prepared to let it go through today.


Mr. Joe Price (Parliamentary Secretary to Minister of Labour):: Madam Speaker, I would much prefer to discuss some of the more positive aspects of this legislation but I will succumb to the temptation to comment on a number of statements made by members from both opposition Parties with respect to delays. The Hon. Member for Cape Breton- The Sydneys (Mr. MacLellan) indicated a concern over the length of time the Government took to introduce this legislation. I simply ask him where he and his Government were prior to 1984 when the Government of Newfoundland approached his Liberal Government in Ottawa to try to resolve this dispute so we could get on with development. He knows and the country knows how many times the provincial Government made those approaches and how many times it was rebuked. I would also remind the Hon. Member that within six months of taking office, this Government went to Newfoundland and signed the Atlantic Accord. For the Hon. Member's information, the legislation was introduced and debated, and it could have been passed in a timely fashion concurrent with the legislation in the province. Why did it not get through all stages of this House? Because of the delaying tactics of the Opposition, in particular the NDP.


Ian Gardiner Waddell: Not true.


Joseph Price: Indeed it is true. My colleague from Bonavista- Trinity-Conception sat on both legislative committees which dealt with Bill C-94 and Bill C-6. He came out of those committees time and time again in frustration expressing concern because of the delays by the Hon. Member for Vancouver-Kingsway (Mr. Waddell).


Ian Gardiner Waddell: Would the Hon. Member not allow the native people to speak in committee?


Joseph Price: I am not suggesting that we should not allow the native people to speak. I am suggesting-


The Acting Speaker (Mrs. Champagne):: Order, please. The Hon. Member for Burin-St. George's (Mr. Price) has the floor.


Joseph Price: Thank you, Madam Speaker. The delays were indeed unnecessary delays. I, being a member of the legislative committee on Bill C-6, do not mind saying in this House that I supported an extension of the committee sitting so that we could get on with the passage of this Bill. We indeed extended the sittings on that day and got through that Bill in a timely fashion because we, as Members from the Province of Newfoundland, were concerned that this Bill not be delayed any longer. We wanted to get the development under way.
The Hon. Member talks about a lack of research on iceberg movement. Has he not heard about the fine research efforts at the Memorial University of Newfoundland? The C-CORD Foundation is a world leader in marine research. It was the same Member, incidentally who said that the Atlantic Accord was only a piece of paper. I suggest that there are people in Newfoundland who think differently.
The spirit of this legislation marks a clean break from the Ottawa-dominated policies of the previous Government. Indeed, the Atlantic Accord is a milestone in the history of federal-provincial relations in Canada. We all remember the inability of the previous Government to reach an agreement with the Province of Newfoundland on the issue of offshore oil and gas resource management and revenue sharing. There were some who said it could not be done, that Newfoundland's demand for a shared management regime based on equality was unrealistic. Not only were their demands realistic, they are now realized because of the determination of the Government to do what is morally right for the Province of Newfoundland. Together this Government and the Province of Newfoundland showed that it could be done in a way that recognized our respective roles in Confederation and our joint commitment to energy self-sufficiency for Canada.
This legislation is based on the principle of federal-provincial sharing of decisions on important issues which affect the economic and social development of a province and the country as a whole. The Atlantic Accord reflected in Bill C-6 clearly established Newfoundland's right to have a significant say and degree of control over the management of its important offshore oil and gas resources. It protects Newfoundland from the kind of arrogant and uncaring actions demonstrated by the previous Liberal administration.
The principle of joint management has been ensured by the creation of a strong, independent Canada-Newfoundland Offshore Petroleum Board. This legislation empowers the board to make decisions on all matters related to the management of offshore oil and gas resources. There is a provision for joint policy direction to the board by both Governments on key issues such as industrial and employment benefits, public reviews, and decisions affecting the pace and mode of exploration and development. This will ensure the board remains responsive to both Governments.
March 2, 1987

In addition, certain fundamental decisions of the board will be subject to review by both Governments. In the event that the two Governments fail to reach a consensus on a fundamental board decision, the responsibility of approval will rest with one of the two Ministers depending on whether or not Canada is self-sufficient in crude oil. This legislation will be well received by the industry. It provides a stable regime within which industry can develop valuable offshore oil and gas resources in the interests of Newfoundland and Canada as a whole.
The important issue of revenue sharing has been resolved in a way consistent with the Government's belief that provinces should play the primary role in benefiting from wealth generated by our natural resources. The sharing of offshore revenues will be the same as it is between Canada and those provinces with petroleum activities on land. In this regard, the legislation adopts Newfoundland legislation related to the establishment and collection of provincial-type resource revenues and taxes of general application. This Bill also confers important powers on the province regarding resource management. These important measures are enacted through federal legislation in an area in which the federal Government has legislative jurisdiction.
The signing of the Atlantic Accord was itself more than ample proof of our respect for the rights of both Canada and Newfoundland in the offshore. That respect is enshrined in this legislation. The first benefits of this new partnership will occur with funding from the $300 million Offshore Development Fund. This fund will be used to put in place the infrastructure necessary to ensure Newfoundland receives maximum benefits from future petroleum development. The Newfoundland Government has shown foresight in its first proposals for projects under the fund. Already approximately $37 million has been committed to projects related to education and training. Through projects such as these, Newfoundlanders will be qualified and ready for the many jobs resulting from development of offshore oil and gas resources.
Bill C-6 provides protection for the Newfoundland economy by ensuring there will not be a dollar-for-dollar loss in equalization payments when the revenues begin to flow into the provincial treasury. Additionally, this legislation continues an oil spill compensation regime which, with respect to absolute liability for oil spill damages and debris, requires the oil industry to provide financial security. The new legislation includes the formation of a committee with representatives from both Governments and the petroleum and fishing industries. This committee will be required to review and monitor the effectiveness of the compensation regime.
In closing, Madam Speaker, I wish to say once again how proud I am of the achievements of the Government and the Government of Newfoundland which are reflected in this Bill. 1 am confident it will benefit future generations of Newfoundlanders as well as other Canadians. With this law we show all of Canada that the principles of social justice can be achieved through federal-provincial co-operation in a way which
Atlantic Accord
strengthens our country and ensures better lives for all Canadians by the sharing of responsibility and the wealth of our bountiful resources. On behalf of the House, I would like to thank the committee for its contribution in the study of this Bill. The proposed legislation deserves the unanimous support of the House and I ask all Members to support it accordingly.


George Baker: Mr. Speaker, I will not be very long. For just a moment I will refer to the last statement of the Hon. Member. He has called upon all Members of the House to support this legislation. I can assure him that I will say no to the passage of the legislation, but I will not hold it up, simply because I cannot.
While I have 20 minutes in which to speak, it may only take five minutes to explain why I do not like this legislation. The Bill gives the Newfoundland Government substantial funds immediately upon its passage, but I believe it will go down in Newfoundland history as being the biggest sell-out in the Province of Newfoundland, far surpassing the agreement made on the upper Churchill in Labrador that is sometimes referred to by politicians in Newfoundland and Ottawa.
It is the biggest sell-out in Newfoundland history because of a clause in the Bill that was briefly alluded to by some other Members. According to that clause, no new industry can be built in Newfoundland using offshore oil from Newfoundland unless every industry is fed by that oil in other provinces in eastern Canada. Not one petrochemical industry can be built in Newfoundland in order to utilize offshore oil unless the Irving refinery in Saint John, New Brunswick is satisfied, unless the Point Tupper refinery is reopened in Nova Scotia, and unless the petrochemical industry in Dartmouth and Halifax is satisfied.
The Newfoundland Bill that is the same as this Bill was passed unanimously by all Parties in the Newfoundland Legislature. It means that for all time petroleum resources taken from the offshore cannot be used to construct new industrial capacity in the poorer Province of Newfoundland.
Perhaps the only contribution I may make today is to put that proof on the record so that sometime in 20 or 30 years when there is a big row in Newfoundland about the big sell-out that took place in 1987, people may look back and say that at least it was pointed out in the House and is in the official record. I refer to Clause 41(1) under Regional Security of Supply. That clause states that the delivery of petroleum from the offshore in Newfoundland will go first to:
(a) the end use consumption and feedstock requirements of industrial facilities
that are in place in the Province on the day of the coming into force of this
Act;
The clause mentions industrial facilities, but the only other refinery that was open in Newfoundland, other than Come-By-Chance, was torn down two years ago.


Jack Wendele Shields: Build her up.

March 2, 1987
Atlantic Accord


George Baker: The Parliamentary Secretary says to build her up. That cannot be done because it is not allowed after this Bill is passed.
Clause 41 (1 )(b) states:
The feedstock requirements of the refining facilities at Come-By-Chance on the day of the coming-into-force of this Act or any refining facility constructed in the Province to replace those facilities;
The facilities at Come-By-Chance are the only ones in existence in Newfoundland. Those two subclauses are not required. Those facilities are not operating at capacity, which is 100,000 barrels a day. They never operated at capacity and never will. Subclause (b) concludes "-or any refining facility constructed in the province to replace those facilities". Therein you are guaranteed 100,000 barrels of oil a day from the offshore for Newfoundland. The clause goes on to state:
-or (c) the feedstock requirements of any refining facility located in the province that was not in place on the coming-into-force of this Act, other than a facility referred to in paragraph (b)-
Which is the facility at Come-By-Chance. It goes on to say where:
-the feedstock requirements required to satisfy the demand of industrial capacity, on the day of the coming-into-force of this Act, in the Provinces of Nova Scotia, New Brunswick, Prince Edward Islandhave been met.
The Bill refers to existing industrial capacity in those three provinces on the day of coming into force of this Act. There is no industrial capacity in the Province of Newfoundland that wishes to use offshore oil. Vet Come-By-Chance is guaranteed
100,000	barrels a day. Yet in the same clause the Irving refinery in New Brunswick is guaranteed capacity which is about 290,000 barrels a day. It is operating at 40 per cent to 45 per cent capacity. It guarantees the refining capacity of Nova Scotia on the day of the coming into force of this Act.
Then there is Newfoundland, which is far behind, with no industrial requirements at all for offshore oil. There are no mothballed refineries in Newfoundland, no refineries operating on oil from Venezuela like others in Atlantic Canada, and no refineries operating at half capacity. This Bill stipulates that for all time offshore oil from Newfoundland cannot be used to construct any new industries there because it does not have those industrial requirements on the day of the coming into force of this Act. I was law clerk in the provincial Legislature of Newfoundland for three years. I know Newfoundland legislation probably better than anyone in this Chamber and perhaps am only matched by the Member for St. John's West, the Minister of Transport (Mr. Crosbie). I taught him when he was new to politics, and I suggest it is obvious that I taught him very well. He knows almost as much as I know about Newfoundland legislation. I do not know of any other piece of legislation in the Newfoundland Legislature that is so glaring in intent to do harm to the industrial future of Newfoundland than this legislation.
It states that for all time offshore oil off Newfoundland cannot be used to construct a petrochemical industry or anything other than what is presently at Come-By-Chance,
which is really not operating to any capacity today. It is hard to believe that the legislation could be worse, but when one reads further, one sees that it refers to the time when there is a shortfall of petroleum deliveries in the province. This is after Nova Scotia is satisfied, after Prince Edward Island is satisfied and after New Brunswick is satisfied. Once everyone is satisfied and all the refineries of the Maritimes are blocked with oil, the Minister from Newfoundland might declare a shortfall in petroleum deliveries in that province. We are only talking about Newfoundland. The province gets the first option to acquire on commercial terms, protecting the big multinational oil companies, petroleum produced in the offshore area, unless-u-n-l-e-s-s-a sales contract with respect to the petroleum has been entered into prior to the giving of the notice.
In other words, not only is Newfoundland relegated to the position of being less than every other province on the eastern seaboard, but it is now relegated to the position of being less than the multinational oil companies which are drilling for the oil. Would it not be silly for a company to drill on Hibernia if it were not guaranteed a contract for sale of the oil? Why else would it drill? What Clause 41(2) does-as if Clause 41(1) were not bad enough-is to tell the oil companies that if they have a contract, they do not have to give it to anyone. If they have a contract in Venezuela, in the United States, in England or in France, they can take the oil to those countries. If Saudi Arabia wants to buy the oil, it can be given to them. They do not have to supply Newfoundland with anything. That is why I say that this is the biggest sell-out in Newfoundland history that I know of.
Imagine what would happen to the Parliamentary Secretary to the Minister if he stood in this Chamber and introduced a Bill which provided that oil found in the Province of Alberta from this time forth must go to satisfy the existing industrial capacity of Saskatchewan, Ontario and Quebec. Imagine if it would not be allowed to be used in Alberta to construct a petro-chemical complex. A separation would take place. Confederation would be no more. Alberta would not be a part of Confederation any longer. I know the Hon. Member is from Fort McMurray because there are a lot of Newfoundlanders up in Fort McMurray and when they have problems they have to telephone his office, so I know him fairly well. If the Hon. Member stood in this Chamber and supported such a Bill which told the people of Alberta that their oil can no longer be used to build a petro-chemical complex or oil refinery in Alberta, that it must be sent to Saskatchewan, Ontario and Quebec, he would not be allowed back into Calgary airport. He would not be allowed off the plane. Here we have an incredible situation. The Newfoundland Government is saying it wants this Bill. It wants the clauses passed and passed yesterday.
For the record, Madam Speaker, I think this is a bad Bill. I think the drafters of this legislation probably knew that when they were drafting the Bill. It is the worst Bill ever concocted
March 2, 1987

in the history of this place. I do not know why the Newfoundland Government agreed to it. 1 have to agree with some of the remarks made by some government Members of Parliament from Newfoundland when they said: "We want this Bill now because the payments can start and we need the money in Newfoundland. We need the $200 million1'. This guarantees that over $200 million could be passed to the provincial Government for projects with respect to much needed employment. Therefore, Madam Speaker, all I want to say for the record is that one of these days some student will be researching this Bill. He is going to think that there was a bunch of crazy Members of Parliament back in 1987. He will think that the Newfoundland Legislature must have been insane to have passed this particular piece of legislation. I want to be on the record as pointing out that I do not agree with this legislation at all and I certainly would not do anything to hurry its passage.


Mr. Hovdebo:: Madam Speaker, Bill C-6 is supposed to give Newfoundland the same kind of control over its resources on land and in the sea around Newfoundland as the other provinces have who are land-locked. I wonder if the Hon. Member would comment if the legislation really does this? The fish resource of the sea is a resource which Newfoundland has depended on. It has thought, I am sure, that it owned that resource as much as it does the oil which could be developed from under-sea mining. Just lately the Government made an agreement with France which gave away a considerable amount of that fish resource which belongs to Newfoundland. Does the Hon. Member think that the people of Newfoundland have any assurance that this Bill will guarantee that this Government, or some other Government, will not do exactly the same thing later on and give away some of Newfoundland's oil in the same way as the Government has given away Newfoundland's fish?


George Baker: Madam Speaker, with respect to the question of the resource being treated the same as if it were on land, there is in this Bill a section called The Security of Regional Supply. Certainly, if it were treated the same as if the oil were on land, then we would not have any guarantees under this Bill to support industrial capacity which lies outside the Province of Newfoundland. Therefore, it differs considerably from the situation if the oil were on land.
The question raised by the Hon. Member concerning the piece of territory which is off the coast of Newfoundland, in which St. Pierre and Miquelon is in the middle, and where we presently have a dispute, I would say that if any constitutional experts were sitting down and examining the position of the federal Government, they would think that the first thing which should be done is that the Secretary of State for External Affairs (Mr. Clark) should be removed from his position.
There is no case in history to even hint that France has any rights whatsoever beyond three miles to ten miles off St. Pierre
Radio Act
and Miquelon when one looks at international law. France was in just the opposite position with respect to the Channel Islands where another country was claiming an extended zone. What happened there? We all know that it ended up to be 10 miles. It is absolutely insane for Canada to say to France: "This is a disputed zone", which is an admission by Canadian standards that France actually has a claim on that offshore area. There is not an example in the entire world where a colony of another country has rights to 200 miles. Nowhere in international law is there an example of that. One wonders where the advice in the Department of External Affairs came from. Or was it from the Department of External Affairs? Was it perhaps from the Department of External Affairs of France? Perhaps they got it mixed up. That is the way the Government has treated the Newfoundland fishery and even the Newfoundland resources which are off the coast of St. Pierre and Miquelon.
This Bill does not treat the resource as if it were on land because if it were on land, the oil would not be guaranteed to every other province except the Province of Newfoundland.
Motion agreed to and Bill read the third time and passed.


RADIO ACT
[Stage Direction]
The House proceeded to the consideration of Bill C-3, an Act to amend the Radio Act, as reported (without amendment) from a legislative committee.
James Francis Kelleher: that Bill C-3 be concurred in.


The Acting Speaker (Mrs. Champagne):: Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
James Francis Kelleher: that the Bill be read the third time and do pass.


Mrs. Claudy Mailly (Parliamentary Secretary to Minister of Communications):: Madam Speaker, I welcome this opportunity to introduce the third reading of Bill C-3, an Act to amend the Radio Act. As the Minister of Communications (Miss MacDonald) explained when appearing before the legislative committee that examined this Bill, it costs money to employ people to manage the radio frequency spectrum.
Most spectrum users have been contributing towards the cost of this service for years through their radio licence fees. However, federal and provincial departments as well as Crown corporations and Government agencies have never paid for a
March 2, 1987

Radio Act
service that ensures they can use their radio equipment interference-free.
These agencies have always been exempted from paying fees, pursuant to sub-section 2(2) regarding Her Majesty in right of Canada and each province. Currently, costs are paid for from the general tax revenues. In other words, not only have hundreds of thousands of licensees been contributing to these costs for years by paying their own fees but they also pay for those who do not through their individual and corporate income tax.
To provide for sensible and prudent administration of a vital resource, it is only fair to have the cost of such administration shared as widely as possible. We all tend to be more appreciative of what we pay for. Even if the fee is not considerable, the fact that there is one tends to enhance our interest in the service provided.
Madam Speaker, this would seem to be a very straightforward Bill. We heard a number of witnesses who said they were in favour of the Bill because it provided for a measure of fairness in paying for license fees, and there were of course other witnesses who will now have to pay license fees and who did not agree. There was one point which gave rise to quite a bit of discussion and which unfortunately resulted from a misunderstanding about the scope of this Bill. I am referring to fees collected for municipal radio licenses. These fees will not be increased as of April 1, 1987 as provided under Bill C-3, because the Bill does not affect fees for municipal radio licenses. The cause of all the confusion goes back to June 1986, when it was announced that preferential treatment for users of municipal radio services would come to an end. Municipal radio licensees were advised they would have to pay the same fees as private sector users. This proposal was part of a plan to apply the user-pay principle to all users of the radio frequency spectrum, as part of the Government's public finance administration program. The proposal was to become effective, as I said before, on April 1 and would have meant an increase in fees for most municipal radio licensees.
However, on January 21, 1987, the Minister advised all Members that these particular radio licence fees would not be increased. There will be no change, so that municipalities will continue to enjoy their preferential treatment. Madam Speaker, I think that is the essence of the Bill, and I would ask the House to adopt this legislation because we would like to see it become effective as of April 1, in order to establish an equitable system that will apply to all radio frequency users.


Sheila Finestone: Madam Speaker, I am pleased to have the opportunity to speak to Bill C-3, an Act to amend the Radio Act. Although this Bill is only a few lines in length it will have important financial consequences for those affected by it. The Bill, if passed, will have ramifications for those government institutions which utilize radio frequencies for communication purposes.
At present, the federal Department of Communications is charged with the responsibility of setting the rules for those who wish to use the radio spectrum in Canada for purposes other than broadcasting to the general public. The Department regulates these users by giving each of them a licence to operate at a certain frequency, at a certain power and at a certain place so that there is no interference in using the spectrum. In short, the Department of Communications is concerned with spectrum management at the local, provincial, national and international levels when spectrum service has to be negotiated.
Bill C-3 establishes a user-pay principle in the field of radio spectrum. Current provisions of the Radio Act exempt federal and provincial Governments, government Departments and agencies and certain Crown corporations from paying any radio licence fees to the Department of Communications. However, Bill C-3 will remove this exemption. As a result, provincial and federal government Departments and agencies will pay the same licence fees as would be charged to a user in the private sector. The Government calls this equity. The Government calls this fair usage. I say that it is just a transfer of burden from the federal taxpayer to the provincial taxpayer and that it has rather serious consequences.
The Radio Common Carriers Association of Canada informed the Legislative Committee on Bill C-3 that one positive feature of charging government Departments for radio licences is that those Departments may be forced to reconsider whether or not they really need to occupy a radio frequency. They stated that if one has to pay for something, then one has to take a look at what one is getting. I do not know that that is a good enough reason for having to take such a broad sweep at this area, including every agency and all provincial users, into the wide net that is being conceived by this Bill.
If one looks at the theory that charging an entity for a service which has previously been provided for free may force that entity to reconsider the need for the service in the first place, it is possible that some government agencies which currently hold licences, but make minimal use of radio frequencies, may decide to surrender them. As a result, a number of frequencies may be freed up for other users. If there is good management, that should have happened in the first place. Our provincial Governments are as capable and as concerned with good policy and management as is the federal Government.
[ Translation]


The Acting Speaker (Mrs. Champagne):: Order. I am sorry to have to interrupt the Hon. Member for Mount Royal (Mrs. Finestone).
It being 5 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.
March 2, 1987


PRIVATE MEMBERS' BUSINESS-PUBLIC BILLS   PARITY PRICES FOR FARM PRODUCTS ACT MEASURE TO ENACT
Lorne Edmund Nystrom: that Bill C-221, an Act respecting parity prices for farm products, be read the second time and referred to a legislative committee.
He said: Madam Speaker, it is with pleasure that I rise today to propose Bill C-221, an Act respecting parity prices for farm products. For many years in the House I have said that the number one industry in Canada is agriculture, the production of food for Canadian people and other people around the world. I also believe that when the farmer is better off we are all better off. When the farmer is better off there is more money for the creation of jobs for young people in the towns and cities of Canada. We must do whatever we can to support the farmer who is going through some difficult times.
In essence, this particular Bill proposes the establishment of a floor price for agricultural products that has some reflection in the cost of production and a decent return for farmers. This Bill is proposing that, like workers who have a trade union or businessmen and professionals and their associations, farmers should have some guarantee that the price they receive will support them and their families in the production of food.
This Bill specifically deals with wheat, oats, and barley which are now marketed through the Canadian Wheat Board. It also deals with pork and beef. There is no marketing board for those two products. This Bill would establish a price that would reflect parity for what a farmer receives for grain with the costs of production and a decent return for his product. This applies only to domestic human consumption, because we can set a higher Canadian price without violating the GATT rules when dealing with the Canadian consumer, particularly in the case of these grains, because we do have the selling agency, the Canadian Wheat Board. That agency is the sole selling agency for Canadian grain. Therefore, we can have a domestic price different from the international price. Presently there is a $7 domestic price, while the international price is $3 to $3.50 a bushel. There is no technical difficulty in having a parity price for grain domestically consumed. We are talking here of about 9 or 10 per cent of the grain produced by our farmers. I believe that that can and should be done as soon as possible.
Some people ask what the cost of production is. We all know that the cost of production varies region to region, province to province, and product to product. There are cost of production formula for a number of commodities such as milk, with the milk marketing agencies; turkeys, chickens, and for other commodities. It is not impossible to devise an average cost of production formula that is relevant to grain producers, as we have one for other producers. So that can be done.
Parity Prices for Farm Products Act
The second part of this Bill deals with pork and beef. That is a little more complicated because we do not have a national beef marketing board or pork marketing board. This Bill suggests that there should be marketing commissions in these two areas to lay the ground work for a parity pricing system. I strongly believe in economic democracy and political democracy. I propose in this Bill that we should only have these marketing agencies and commissions if the farmers choose to follow this particular route. In other words, if the beef producers wish to establish a national marketing board, that is their prerogative. If they choose not to, that is also their prerogative. If the farmers choose not to follow that route, we cannot have a different Canadian price, or a price based on the costs of production which are different from the international price. That would be a violation of GATT rules. That is why I put it in this manner. The same thing pertains to hog producers. If they wish to establish a national hog marketing agency, then we can do so, but only if they vote in a majority to follow that direction. If they do, we could then have a different Canadian price that is higher or lower than the international price without violating international trading rules. Those are the points that I wish to make on these particular products.
The third point that I wish to make is that this Bill deals with wheat, oats, barley, hogs, and beef, but it could be amended to include other products. I have received representation from corn growers in Ontario, and from soybean producers. They would like to have some marketing mechanism where their price is in accordance with a reflection of the cost of production and a decent return, and where they too would have a floor price or a guaranteed price for the commodity they are producing for the people of Canada.
The fourth point I wish to make, which may be of particular interest to my friend from Lethbridge, is that this Bill does not provide a subsidy. This Bill would take the higher price out of the market-place. I believe that, as a first priority, the farmers do not wish to have a subsidy from the taxpayer or the federal-provincial Governments. What the farmers want is a fair share from the Canadian market-place. If it costs $7, $9, $10, or $12 to produce a bushel of wheat with a decent return, then the people of Canada should be paying that price for products manufactured or produced from that bushel of wheat. Indeed, if those products are too expensive for low income people, then the federal or provincial Government should devise a plan where there is a subsidized price for that loaf of bread, litre of milk, or whatever the commodity may be. It should not be the farmer who subsidizes the consumer. If there is need of a subsidy, then it should be the Government that subsidizes the consumers who need that particular subsidization.
I make it very clear that this Bill would take the increased price from the market-place and not as a subsidy to the farmers.
The last point I wish to make is that this Bill does not deal with international pricing. For many commodities, for example, western wheat, the majority of our sales are made to

March 2, 1987
Parity Prices for Farm Products Act
countries around the world. Under the regulations of the House of Commons, as a private Member I cannot produce a Bill that would call for a subsidy or a deficiency payment. That is an expenditure of public money, and in accordance with the rules I cannot do that. That is why this Bill is drafted only to provide a parity price for the food domestically consumed in this country.
On the other hand, I do believe that we will need a large deficiency payment for grain farmers for the following couple of years because of low international prices. Even with the billion dollars last year which worked out to 48 cents a bushel of wheat, the farmer is fortunate if he produces the best quality grain and has the correct weather to produce that grain to receive $3.50 a bushel for that grain. On the other hand, the Americans who are growing grain a few miles south of the border of Saskatchewan in Montana or North Dakota are guaranteed a floor price of $4.80 U.S. a bushel of grain. This converts to $6 Canadian a bushel for grain. It is not fair for Americans to receive $6 a bushel and Canadians to receive $3.50 a bushel. That cannot be covered by this Bill because of the regulations of the House.
The last point I wish to make is that many people say there is a surplus of food in the world. There is no surplus of food. People are dying of starvation. The problem is the distribution system for the food, and helping poorer countries afford to buy food from Canada.
This is a votable motion and I request that Members vote freely and support an idea that would provide farmers with a basic floor price based on the cost of production, and a decent profit for the work put into producing food for the people of Canada. That is not too much to ask. I hope that my colleagues in all Parties will support this particular idea.


Maurice Brydon Foster: Madam Speaker, I am delighted to have an opportunity to speak on Bill C-221, an Act respecting parity prices for agricultural products. It especially zeroes in on the idea of having a parity price or a cost of production price related to wheat used for human consumption in Canada. It also provides for the establishment of commissions for the marketing of beef and pork. In the current national farm products marketing legislation those two commodities are not named. However, they would be included if this Bill were passed and adopted by the House.
I think it is important to take this opportunity to call the attention of the nation to the urgent problems facing Canadian agriculture. That urgency was brought home to all Canadians during the last 12 months, especially because of the United States Farm Bill. It has cost our grain producing industry some $2 billion to $3 billion and has resulted in a drop of some 10 per cent to 20 per cent in direct farm incomes without assistance in western Canada, as the Hon. Member outlined.
Recently I had the opportunity to look at the impact of low commodity prices which the Bill seeks to alter, at least for
commodities consumed domestically, especially hogs, beef, and wheat. During the past 12 months we have seen a drop of 6.9 per cent or over $7 billion in the value of farm land. In the period from 1984 to 1986 we saw a drop of some 15 per cent in farm values across the board. In some areas of southwestern Ontario and western Canada those figures are minimum. They have experienced losses which may be two times or three times those averages. For well established farmers with 100 per cent equity it is not as urgent a problem as it is for young farmers. If we take away some $17 billion worth of farm asset value across the country, obviously we are taking away equity from many young farmers who are starting out or have been in the industry for the last four years or five years or even eight years or ten years. All they are left with is debt, and in many commodities the income is not adequate to service that debt.
Let us take a look at the Farm Credit Corporation figures. They are simply devastating. In the last 12 months alone,
18.000	of the 75,000 FCC loans were in arrears. The amount of money which is due, payable, and overdue has risen from $260 million as at January 1, 1986 to some $377 million as at January 1, 1987. Even more disturbing is the fact that these
18.000	FCC loans have been in arrears for more than two years. Experience has shown that when loans are in arrears for more than two years, it is almost impossible or extremely difficult for farmers to recoup. As at January there were some 2,600 applications before farm debt review boards. During the coming year thousands of young farmers will be facing a most difficult, painful, and terrible experience. The Bill before us really addresses the farm income problem, which is a major factor.
Let us look at the last Budget presented by the Minister of Finance (Mr. Wilson). He went into great detail about the $1 billion Special Canadian Grains Program announced by the Government in Saskatchewan during the election campaign. However, he did not make any commitment on how much the Government would provide under that program for the coming year. Farmers need to know whether the Government of Canada will stand behind them in the new crop year starting August 1, especially as it relates to grains in the western part of the country and throughout the Canadian agricultural community. If we look at the Budget we see no new commitments for the farm debt crisis. No new money was committed in that regard.
As a matter of fact the western agricultural caucus of the Liberal Party held hearings last week in Winnipeg, Saskatoon, Edmonton, and Vancouver. It was painfully apparent to the various agricultural groups which made presentations to our caucus that the Government had made no new commitments in the Budget with regard to the farm debt crisis or to the exact amount that would be provided for the new crop year.
According to the Estimates tabled today, the Department of Agriculture has had a reduction in staff of some 275 people. ARDA has been cut back from $21.9 million to $13.5 million. Research has been cut back from $240 million last year to $220 million this year. We see no indication in the Estimates
March 2, 1987

of how much will be paid out under the Western Grain Stabilization Act, to which farmers contributed a third and the Government of Canada contributed two-thirds. There was no commitment in the Estimates or in the Budget in terms of what assistance will be provided.
I should like to refer to what really concerns farmers most. This Bill talks about utilizing the mechanism of national marketing boards and agencies to try to reach a parity price or a price related to the cost of production. Nothing has caused greater concern in the controlled commodities of milk and other dairy products, feathers, poultry, eggs, and turkey than the ongoing free trade negotiations between Canada and the United States. A year ago the Secretary of State for External Affairs (Mr. Clark) told me in the House that marketing boards could not be taken off the table because they had never been on the table. In a leak from the Department last week it was made very clear that everything is on the table, that when Simon Reisman sits down with Peter Murphy, all items are on the table, contrary to what the Minister said.
The part of the whole free trade negotiations that concerns me the most is the comment made by Daniel Amstutz, the American Under-Secretary of State for Agriculture, in a radio interview on CBC a week ago last Sunday. In that interview, Mr. Amstutz, the chief adviser on agriculture for the United States trade representative, made it clear that in his opinion, there would be no free trade agreement without agriculture being on the table. He wanted to have major changes to the whole supply, management and marketing boards in any agreement Canada and the United States would sign. That is why many farmers will be very concerned with those negotiations and why we need to be concerned with the Bill before us today. Under a comprehensive free trade agreement, marketing boards would clearly be out of the question as far as the Americans are concerned.


Geoff Wilson: Madam Speaker, I welcome the opportunity to join in this debate on a topic which was the subject of a set of parliamentary committee hearings. This committee toured the country during 1986 and 1 had the honour of being a part of it along with the two Hon. Members who spoke previously. Indeed, the committee was charged with the responsibility, among other things, of examining parity pricing. A number of witnesses raised the concept of parity pricing. However, given the variety of views expressed on such issues as the definition of parity pricing and its relation to the domestic price of wheat and since no consensus was reached, it was the conclusion of the committee that it would not make a recommendation with respect to parity pricing.
Virtually every group which appeared before the Special Committee on the Pricing of Domestic Wheat addressed the matter of parity pricing. Indeed, some individuals and organizations based their entire presentations on the concept of parity pricing and made little reference whatsoever to domestic
Parity Prices for Farm Products Act
wheat. It is therefore with some surprise that I see the matter here again.
I wish to take this opportunity to quote from a few of the presentations which were made before the committee with respect to parity pricing. I recall the presentation of Mr. David Ramsay, the provincial MP from the riding of Timiskaming. He said the following:
If the main problem in agriculture today is overproduction, and I believe it is, then it is imperative that we take the initiative and formulate a strategy to deal with this problem.
I believe the concept of parity pricing is the first step that needs to be taken on the road to a comprehensive supply management system for all our commodities in this country.
Parity pricing would ensure a decent level of return on those commodities that have their prices determined by the international commodity markets. But I do feel that if any direct price supports are instituted, we must at the same time control the level of production. It would be more self-destructive in the long run if we followed the European example of high price supports without any production controls.
That was an interesting presentation made by someone who would appear to favour the five-year program which has been so successful in the Soviet Union. If memory serves me correctly, I believe this is the Member who has since bolted from the New Democrats and joined another Party in Ontario. Perhaps his conclusions would be different now.
It would be interesting to contrast what Mr. Ramsay had to say with the presentation of the Western Canadian Wheat Growers. In answer to a question concerning supply management or quotas which are inherent in this notion of parity, Mr. Esquirol said:
To answer your question on supply management or quotas-I forget the word you used-you cannot have one without the other.
I suppose if I can be a little bit bold or deviant and say that farmers like to produce, as a thoroughbred likes to run, as soon as you destroy this incentive, I think you have allowed or you have taken away the incentive or the energy and the contribution that Canadian farmers can make to this country.
I believe those are very interesting contrasting points of view which would fairly reflect the two sides of this question, a question which I hope is more one of theory than of practicality.
The fatal flaw in any sort of reference like this is the matter of cost of production. I think it was obvious from the presentations that were made to the domestic wheat committee hearings that inevitably the gravitation is toward the highest possible cost of production rather than the lowest possible cost of production, which surely should be the target. Representatives of the Canadian Cattlemen's Association correctly pointed out the problem in their presentation. They said the following:
With or without public support, commodities will not sell above a price determined in the market place. Obviously, therefore, some surplus product would have to be taken off the market and stored-until the market improved. If the market did not improve, these stored products would accumulate to overhang the market much as they do now within the EEC.
The Leader of the Alberta New Democratic Party appeared at the hearings and was asked what he thought about parity pricing. He said the following:

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Parity Prices for Farm Products Act
As I look around the world in many agriculture commodities, they are subsidized by government, whether you want to call it parity pricing or whatever you want to call it. It is clear that subsidies are occurring in other parts of the world. We can talk about free trade and all the rest of it, but if they are doing it we have to do the same thing to protect our own producers.
I find myself in complete agreement with the statement made by the Leader of the Alberta New Democrats. I agree with his comments and I think we all do. The problem lies with the degree of subsidization that is going on in agriculture in the rest of the world. The answer clearly is the two-track policy which our Government, of which I am proud to be a member, has embarked upon. That involves two thrusts: one domestically to protect our farmers, and the other an international thrust to deal with the problems of international pricing.
Our producers, cattlemen and grain farmers are among the most efficient in the world. They are quite capable of competing on a level playing field with producers anywhere else. They do not want parity, they do not want subsidies and they do not want government intervention. What they would like is to be left alone. They would like to get all Governments world-wide out of agriculture so that they could compete head-on with producers from other countries. Were they able to do so, I suggest that our producers would do very well. I believe they can out-produce anyone, but they cannot compete against the Treasuries of western Europe and the United States.
On the domestic side, clearly we have undertaken to assist and shall continue to do so to the extent that our Treasury and our population will allow. We in this Government have acted, and I think actions speak louder than words. The Government has put forward some good, practical programs that put cash in the pockets of Canadian farmers, not vague notions. Our farmers are being squeezed right now because of the interventions of Governments elsewhere, because of parity and because of the programs and guarantees of other countries which lead to inefficient production and which have flooded the world with over-production. The lowest common denominator of efficiency has been utilized, particularly in the Common Market, with disastrous results for our own producers.
On the international side, the Minister of State for the Canadian Wheat Board (Mr. Mayer) has clearly been working in concert with the other grain exporting countries to do everything possible to bring an end to the grain subsidy wars we have been seeing. As well, under the Uruguay round of GATT talks, our statesmen succeeded in securing the inclusion of agriculture on the agenda for the upcoming GATT talks.
On the domestic side, the Government has done a lot of things. It has eliminated capital gains for the most part on farm lands. It has amended the Prairie Grain Advance Payments Act to double the level of interest-free cash advances. It has also straightened out some technical problems to enable tenants to apply for advances without the consent of landlords. We have enacted legislation rebating over 35 cents per gallon on fuel tax. In response to drought, over $150 million was paid out to western farmers. Under federal-provincial crop insurance programs which are contributed to dollar-for-dollar by the farmer and the federal Government,
large amounts have been paid out. We amended the Western Grain Stabilization Act as promised to put forward timely interim payments each spring. Last year some $859 million was paid out under that program with more to come. The $201 million shortfall in Canadian Wheat Board sales was recently covered.
Finally, we have the Canada special grains program which has paid $1 billion to Canadian grain farmers. That to some people is not enough, but the net farm income in Saskatchewan for this year was estimated to be in the area of $400 million. Saskatchewan's share under the program I just referred to is $420 million. With a stroke of the pen this Government doubled net farm income in Saskatchewan. That is timely action and I suggest that is what counts.
I would like to close by quoting from the presentation of the Canadian Cattlemen's Association to the committee which dealt with grain and parity pricing. They closed with this comment:
Let us assume for one mad moment that parity pricing were the option of choice. Canadian agriculture earns 50% of its gross farm income in export markets. Who will buy our products at the parity price? Obviously, the answer is no one so long as other nations are prepared to meet the market. Then who will pay to make up the difference? Surely not the farmer. After struggling to achieve parity pricing, he is not about to give half of it back to move half of his product into world markets. And, if the Government pays the bill, how long will we avoid a successful countervail challenge?
The entire idea of parity pricing distills down to nonsense. It is not remotely a viable policy option for Canadian agriculture. It is, in fact, a cruel hoax upon the desperate hopes and aspirations of many financially distressed farmers.
I think Canadian farmers know that this Government's programs have put a lot more cash in their pockets than the moribund policies put forward in this Private Members' Bill.


Nelson Andrew Riis: Madam
Speaker, I have always wondered what it meant to be a progressive person and a conservative person at the same time.
I often felt it was a contradiction in terms. Having listened to the Hon. Member for Swift Current-Maple Creek (Mr. Wilson), I am absolutely convinced that this is the case. By definition Conservatives are contradictory. He went on for some time saying he was in favour of the free market-place, we should not give out subsidies, we should not support farmers, and we should not have all these different support programs, and in the last half of his speech he listed all the ways in which Government has helped farmers. You cannot have it both ways. I suppose as long as you send only part of your speech to your constituents you can cater to whatever group you want to at that point.
I want to say how pleased I am to have an opportunity to say a few words on Bill C-221 put forward by my friend and colleague from Yorkton-Melville. You will know that the NDP has been calling for this approach to agriculture for many, many years. I do not think anyone would argue that there does not appear to be a growing crisis in the farm community. If you look at the Farm Credit Corporation books
March 2, 1987

you will find that over the last 12 months there were in excess of 18,000 farm loans in arrears, to say nothing about all the farmers who deal with other lending institutions. Of course this farm crisis has many causes, including such things as poor debt-equity ratios, the high cost of farm credit, the fact that young people cannot afford to get into farming, the increasing cost of doing business, market stability, and the ongoing problems of storage, process and marketing, as well as transportation costs. The list goes on and on. This sector of our economy is experiencing very difficult times and, as my colleague indicated, this is perhaps the most critical sector of the Canadian economy. Not only does it provide us with the very essence of life itself, food in its various forms, but it represents something which has always been Canadian, the farm and ranch. I think they stand high among the ideals and goals we have for our country. I feel we should do whatever we can to preserve the family farm and ranch.
The fundamental problem, of course, is that the prices many producers receive simply do not cover their costs. This Bill attempts to match the cost of doing business with the price the producer receives for his or her product. A lot of people came to this country from oppressive countries where a modern-type of feudalism was a reality. Large land owners, corporations or state farms dominated the agricultural landscape. People came to Canada so they could start their own farm or ranch. I suspect that unless something along the lines suggested by Bill C-221 is done we will have the 21st century version of feudalism in Canada where the corporate farm is the major food producer. I think all of us who are fortunate enough to represent the rural part of Canada see with a heavy heart every time we visit our constituency that more and more agricultural land is falling into the hands of the banks and the corporate sector. This is not good for the long-term stability of agriculture in Canada.
Granted, if we are going to ensure that our food producers receive adequate prices, it will cost Canadians in a variety of ways. Elowever, perhaps a more important question is not what it will cost to keep the family farm and ranch in business but what it will cost if we do not. What will be the cost of rural depopulation as the small towns of Canada pack up and move away? Where will all those people go? We also have to start asking ourselves whether we want to see control of our food supply concentrated in the hands of a few corporations. In the long run that would result in a food pricing cartel and significant price increases for the consumer.
When you look at the alternatives and the fact that the Governments of our competitors are helping their farm sectors in one way or another, then we have come to a time when we have to, as the old Newfoundland saying goes, fish or cut bait. We have to decide whether we are going to support the family farm and ranch or not. That is why Bill C-221 takes a step and indicates to the farm community that we are serious.
There are steps which can be taken and legislation which can be introduced to guarantee a fair return for the producer. I do not think that is unreasonable when you consider how we
Parity Prices for Farm Products Act
support utilities, pipelines, port facilities and all sorts of other things which are critical to our economy. We a ; prepared to say that if it costs this much to operate that particular venture or enterprise we will have to guarantee a fair return. That is all we are saying in this Bill. If it costs x number of dollars to produce a bushel of wheat or to raise a healthy steer, then that is the price the farmer or rancher should receive in return. This Bill refers to wheat, oats and barley used for human consumption. It includes beef and pork as well. There is no reason that, if Parliament felt it could support this Bill, we could not expand it to include all food products.
In closing let me say again that I appreciate this opportunity to speak to the Bill and support the notion that this is one way in which we could act as a unified and co-operative Parliament to ensure that food production in Canada stays in the hands of family farms and ranches and does not go the way of corporate agricultural business.


Mr. Elliott Hardey (Kent):: Madam Speaker, as my hon. colleague, the Member for Swift Current-Maple Creek (Mr. Wilson), has indicated, the matter of parity prices for farm products has been discussed in this House before as it has certainly been in my riding of Kent and around countless kitchen tables in rural Canada. The goal of the Bill put forward by the Hon. Member for Yorkton-Melville (Mr. Nystrom) is commendable. Surely every Member of this House would agree that our farmers deserve a fair return for their investment and labour. However, I do not believe for a moment that any one Bill can ensure adequate returns for all the farmers of Canada at all times. The reality is that no single program will achieve that goal, least of all the mammoth bureaucracy proposed by Bill C-221. Surely the parity pricing experience in the United States has taught us that lesson.
For the purpose of this debate, I think it would be valuable to review the U.S. system of parity prices and its consequences. The first parity formula in the U.S. was established by the Agricultural Adjustment Act. The purpose of the Act was to "re-establish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base period".
This concept of equivalent purchasing power for farmers over time is quite appealing. However, in order for purchasing power to be maintained over time it must also be true that equality is reflected in the base period. Clearly, in the United States it has become apparent that there were substantial income differences in the base period. No matter what base period one uses, that is going to be true. Basically, the intended purpose of the original parity pricing Act in the U.S. was similar to the intended purpose of the Bill put forward by the Hon. Member for Yorkton-Melville, that is, prices of farm commodities should reflect changes in the prices of the articles that farmers buy.

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Parity Prices for Farm Products Act
Thus, the two original parts of the U.S. parity formula were, one, prices farmers received for products they sold and, two, prices they paid for the articles they bought. Legislative changes were periodically made to the formula as inevitable problems arose. I am relating established facts and am not looking into a crystal ball.
A major new wrinkle appeared when the Commodity Credit Corporation was established in order to stabilize supplies and prices of certain farm products. The corporation, in effect, was to act as a storage agency, making loans to farmers for their products, selling what they could, and storing the rest. The loan rate was, in effect, a support price.
At first the corporation set its own loan rates to farmers. Then, in 1938 the Agricultural Adjustment Act took over and incorporated parity prices into the loan rate formula. In the case of corn, for example, the loan rates varied with the size of the corn crop. This had incredible consequences. Agricultural production in the U.S. had already been increasing faster than demand due to rapid technological advancements. The setting of price supports and percentages of parity worsened the overproduction problems considerably. As a result, huge stocks of wheat, cotton, and feed grains were accumulated by the Commodity Credit Corporation. Attempts to deal with the oversupply problem were costly to taxpayers and not entirely effective. By the 1960s emergency programs to reduce production were required. Obviously, the investment in price support programs had become very expensive.
It is also interesting to note that although costs associated with the parity formula grew dramatically, farmers were often not at the receiving end. Much of the money went to storage agencies and indirectly to construction companies for building storage space. For example, in 1958 the realized cost of the corn program was $271 million. Of that, $110 million went to the grain trade and transportation agency. That is nearly one-half.
As the U.S. experience vividly illustrates, parity prices are not suitable to the purpose of price support. Their use for this purpose has cost billions of dollars, only part of which has gone to farmers. Let us look specifically at the U.S. dairy sector. The Act which established parity pricing, and under which the Commodity Credit Corporation operates, are the basic laws under which U.S. dairy prices are supported through government offers to purchase. Manufacturing grade milk prices are supported at 75 to 90 per cent of parity.
Again, the aim of the program is to establish a parity price that will give milk the same purchasing power, in terms of things that farmers generally buy to produce farm products, as milk had during a five-year base period. The corporation tries to ensure that the support price will be reflected in the market by offering to buy butter, milk powder, and cheese at specified support prices.
Today we see the practical results of this policy: vast oversupplies of dairy products in the United States. A herd buy-out program is the United States' current expensive attempt to
deal with the oversupply. The parity policy on its own is not taking into account the demand side of the milk market in the United States which creates a serious problem in terms of farmers' individual production decisions. That is because farmers look to the level of Commodity Credit Corporation purchases in order to judge current supply and demand. They know that if purchases are high then probably supplies are too high relative to demand. They know that if purchases are low and market prices are above the support price, then supply is probably low relative to demand.
The problem with this system is that the response of dairy farmers to the changes in support prices are delayed. As you see, Madam Speaker, if prices rise as a result of an increase in the support price, farmers will increase their production, although not by much initially. Production will increase in larger amounts later until a peak is reached. Then production will increase more slowly until the stimulus of the support price has no further effect.
The policy is based on what has turned out to be an incorrect analysis of the agricultural problem in the first place. It is not simply a price problem. Production, changing technology, fluctuating input costs, and the many variables in the international market-place all come into play.
Therefore, I reiterate my earlier statement that the way to deal with the many factors that affect returns for our farmers is not by introducing one sweeping Bill as proposed by the Hon. Member for Yorkton-Melville. Rather, the solution rests on consistent, ongoing initiatives to lower production costs and to increase the competitiveness and efficiency of our farm sector. That is, and I hope will continue to be, the policy of this Government.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Madam Speaker, I am pleased this afternoon to take part in this debate on Bill C-221, introduced in the House by the Hon. Member for Yorkton-Melville (Mr. Nystrom). I can say that generally speaking, I support some of the views contained in this bill. However, I must say that although I support this bill entitled "An Act respecting parity prices for farm products", I am not convinced that it would provide parity pricing for those commodities, except for wheat of course since this bill contains a specific section about this matter.

As I was saying, Madam Speaker, in terms of red meat as proposed in the Bill before us, I still do not think that this Bill would give Canada parity pricing in the area of red meat, particularly beef and pork. The Bill addresses the question of establishing a marketing board for those two products. I do not believe it would provide parity pricing for those commodities because 1 think parity pricing or something close to it in the red meat sector would be achieved under a supply management system.
March 2, 1987

I suggest that this should be the issue being discussed today. That is the only effective means I know to arrive at anything close to parity pricing which is the relation of the cost of producing something to what it is really worth, in comparison to the same amount of time invested in other areas.
It is interesting to have this conversation today, and particularly informative to hear Conservative Members, in view of the current Canada-U.S. free trade negotiations. We know that there would be very little opportunity for supply management in any new commodities under such a free trade agreement. In fact, we would be hard pressed to maintain supply management in the areas where it already exists.
I want to draw to the attention of the House a brief that we received recently from chicken producers. They sent a very impressive memo to the Minister of Agriculture (Mr. Wise) in which they state very clearly that supply management is totally irreconcilable with free trade. When I hear chicken producers and the dairy farmers of Canada who have made similar presentations in the past, I am greatly concerned about the direction these negotiations are taking.
I recall the Minister of Agriculture initially saying that agriculture will not be on the bargaining table. Later, he said that if agriculture is on the table in the beginning, we can be assured that it will be removed almost immediately. These negotiations have taken place for almost a year, but there is still no talk of removing the supply managed agricultural sector from the discussions.
I recognize the good intentions of the Hon. Member for Yorkton-Melville (Mr. Nystrom) in his proposal to move toward parity pricing in the area of beef and pork. I favour that, but I wish pork producers in this country would be more willing to have a supply management system for hogs. They must make their own decision and, as far as I am concerned, I would not want to be party to any suggestion that would impose a forced system of supply management on hog and beef producers. There must be an agreement among the majority of producers in all provinces where there is a significant amount of production.

This is why, Madam Speaker, I should like to end my remarks by saying that I am pleased to support the Bill of the Hon. Member for Yorkton-Melville (Mr. Nystrom). I acknowledge that this measure has been introduced in this House on several occasions in the past. As a matter of fact, about a year ago I had the opportunity to take part in the debate and offer my support. Although I am not in full agreement with the Hon. Member when I say that I do not believe his Bill would lead to parity prices for all farm products, or even for the products mentioned in the Bill itself, I do think that the intention is good and, in addition, as he suggests, we ought to promote the establishment of pork and beef marketing boards. In the case of pork there are such
The Budget
boards in a number of provinces, especially mine, and undoubtedly it is the same thing in your province, Madam Speaker.
In any event, I support this Bill. 1 do hope the House will adopt it and that we will convey two messages at the same time. First, we want to continue to protect our agricultural sector which has been so hard hit since the Conservative Government took office, if I may put it this way. Second, we should use this opportunity to send a clear message to the Ministers by telling them that we want to make sure that supply management, that quotas will be protected in the free trade negotiations between Canada and the United States. This is why I ask my colleagues on either side of the House who represent agricultural ridings, including the Hon. Member for Argenteuil-Papineau (Mrs. Bourgault), to support this Bill because it is good for my riding, for hers, and for those of other Members who represent agricultural ridings.


Mrs. Lise Bourgault (Argenteuil-Papineau):: Madam Speaker, I am pleased to rise this evening to speak on Bill C-221 introduced by my colleague from the New Democratic Party. What gives me even greater pleasure is the fact that, every time I have the opportunity to address this House, the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) opposite seems to be there. I do not know whether this is a coincidence or not, but he is always there.
Madam Speaker, I had prepared some interesting comments which might not have been quite in agreement with the views of my colleague directly opposite or of my colleague from the New Democratic Party, but I would like to suggest that we call it 6 o'clock and that I be recognized the next time this bill is debated rather than beginning my speech only to have it interrupted. Could I have the agreement of the House?


The Acting Speaker (Mrs. Champagne):: Is there unanimous consent to call it six o'clock?


Some Hon. Members:: Agreed.


The Acting Speaker (Mrs. Champagne):: The hour provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 36(2), this order shall be dropped to the bottom of the order of precedence on the Order Paper.


THE BUDGET
[Stage Direction]
The House resumed from Friday, February 20, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this
[Stage Direction]
March 2, 1987
The Budget
House approve in general the budgetary policy of the Government, and the amendment of Mr. Garneau (p. 3594), and the amendment to the amendment of Mr. Cassidy (p. 3604).
The Acting Speaker (Mrs. Champagne):: It being six o'clock, pursuant to Standing Order 13(4)(a), the House will now proceed with the deferred division on the amendment to the amendment of Mr. Cassidy. The question is as follows. Mr. Cassidy, seconded by Mr. Murphy, moved:
That the amendment be amended by adding immediately thereafter the following words:
and this House further condemns the Government for introducing a budget that tolerates the existence of 1,250,000 unemployed Canadians and fails to show fairness to the average Canadian family and regions that continue to feel the burden of economic recession with respect to employment and income;
-for failing to introduce a system of universal childcare that would assist families and create jobs;
-for failing to demonstrate to the average Canadian taxpayer a genuine commitment to tax reform by eliminating in this budget some of the worst excesses in the tax system, such as the erosion of the corporate tax base begun by the Liberals in 1983;
-for failing to even give mention in the budget to the tragedy of 4,000,000 Canadians living in poverty; and
-for failing to make full employment the first priority of the federal government.


The Acting Speaker (Mrs. Champagne):: I declare the subamendment defeated.


Herbert Eser (Herb) Gray: Madam Speaker, I rise on a point of order. I wonder if the Acting Government House Leader could tell us the business to be called tomorrow.


Philip Derek Lewis: Madam Speaker, it is the intention of the Government to call the third day of the Budget debate tomorrow.


The Acting Speaker (Mrs. Champagne):: It being 6.28 p.m., this House stands adjourned until tomorrow at 11 a.m., persuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 6.28 p.m.
[Stage Direction]

Tuesday, March 3, 1987
[Stage Direction]
Prayers