1987-01-19

ROUTINE PROCEEDINGS


Hon. Pat Carney (Minister for International Trade):: Mr. Speaker, pursuant to Standing Order 84(1), 1 have the honour to lay upon the table a notice of a Ways and Means motion to impose a charge on the export of certain softwood lumber products.
Pursuant to Standing Order 84(2), I ask that an Order of the Day be designated for the consideration of the said motion.


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I rise on a point of order. On behalf of the Government I would like to welcome all Hon. Members back and to extend our best wishes to you, Sir. I observe from your opening comments that you are in your usual good humour. I think that will have a major
bearing upon the proceedings of the House during the next while.
There have been short preliminary discussions pertaining to the notice of Ways and Means motion which the Hon. Minister of International Trade (Miss Carney) has just laid upon the table. The Bill is printed and ready for introduction. I am advised that the Bill is identical to the Ways and Means motion. We would be prepared to deal with this issue later this day. However, as you and Hon. Members know, Sir, this would require unanimous consent. I would not expect to receive an immediate response from the Opposition House Leaders, but I invite them to consider the matter. Perhaps they may want to advise us of their decision later this day.
A debate on this issue could take place at 3 o'clock this afternoon, or even at 6 o'clock inasmuch as we are on extended hours today, tomorrow and Thursday. I make that proposition to Hon. Members opposite. We are certainly prepared to try to work out arrangements which would be satisfactory to all.


Hon. Herb Gray (Windsor West):: Mr. Speaker, we, of course, have not seen the Ways and Means motion on which the Bill is based. It will be understood that we will have to reserve our position until we have had an opportunity to study the motion. This is a very serious and complex matter. We will be willing to consider the proposal of the Government House Leader, but in view of our opposition to the course of action undertaken by the Government on softwood lumber as represented by the Ways and Means motion, we will have to give careful thought to the best way to deal with this.
While I reciprocate in one way the Government House Leader's wishes for the new year, I can only repeat the saying of an oriental culture, that it is either a blessing or a curse to extend the wish to people that they live in interesting times. I am sure we have begun another stage in that regard. To answer the question about how interesting they will be, we will have to consider the Government House Leader's proposal in light of our own assessment of the Ways and Means motion. I will get back to him on this as soon as possible later this day.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, there were both formal and informal discussions earlier today. Based on the content of the Bill, it would be our intention to provide total co-operation in an effort to begin debate later today. I note that the next item on the agenda is Statements by Ministers. Since the Minister for International Trade (Miss Carney) was not in the country and Parliament was not in session when the actual signing of the agreement took place, one presumes that on this the first sitting day of the new year,

January 19, 1987
Point of Order-Mr. Riis
the Minister will stand in her place in a few moments and make a statement to the House of Commons to clarify a variety of issues. Her comments in that statement may help us to determine whether we plan to co-operate with the Government's initiative.


Mr. Lewis:: Mr. Speaker, I just wanted to ensure that the discussion on that matter was finished.


PETITIONS
Philip Derek Lewis: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour of tabling, in both official languages, the Government's response to Petitions Nos. 332-90, 332-101, 332-106, 332-107, 332-110, 332-116, 332-122, 332-128 to 332-130 inclusive, 332-137, 332149, 332-152, 332-160, 332-168 to 332-184 inclusive, 332-189 to 332-229 inclusive, 332-233 to 332-240 inclusive, 332-289, 332-290, 332-292, 332-316, 332-318, 332-330, 332-339, 332340, 332-342, 332-398 and 332-439.



POINTS OF ORDER


Nelson Andrew Riis: Mr. Speaker, is it the intention of the Government not to use this first opportunity back to have the Minister for International Trade (Miss Carney) make a statement on the decision of the Government to proceed with the tax proposal?


Mr. Benjamin:: Somebody. Anybody.


Donald Frank Mazankowski: Mr. Speaker, I think that is really not in order. Secondly, we have offered to debate this issue in its fullest, its content as well as the actions taken by the Minister for International Trade (Miss Carney) and by this Government. We would like to get on with the debate on the Bill in question, which seems to be occupying a great deal of the interest of Hon. Members opposite.


An Hon. Member:: And the country.


Donald Frank Mazankowski: That is right, indeed, the country, and the Government are only too anxious to get into the meat of the Bill. We will be very glad to do so. Of course, I have today
provided the opportunity to expedite that process and I do not think we should be sidetracked by any phony points of order.


Some Hon. Members:: Oh, oh!


An Hon. Member:: That is no way to start off.


Mr. Gauthier:: Happy new year.


Nelson Andrew Riis: Mr. Speaker, on a new point of order?


Mr. Speaker:: Order, please. I think it is necessary that all Hon. Members consider carefully that at the moment, certainly as the Chair sees it, there does not seem to be any Minister rising on Statements by Ministers in this regard.
The Hon. Member for Kamloops-Shuswap (Mr. Riis) has asked specifically if at this time any statement is to be made by the Government. The Government has indicated not at this time. However, it is my understanding that what the Government is proposing is that the Right Hon. Leader of the Opposition (Mr. Turner) and the Parliamentary Leaders of the Official Opposition and the New Democratic Party consider whether it would be appropriate in their consideration to commence proceedings on the Ways and Means Motion and the legislation which goes with it which has been tabled by the announcement of the Minister this morning.
That is the situation as the Chair sees it. Unless someone has something of great pertinence to add, I think that is where the matter ought to be left until the appropriate Hon. Members and Ministers in the Chamber decide whether they have something to bring back to my attention later on today.
I am very grateful for the comments of all Hon. Members. However, I think that probably closes off this exchange. As 1 understand it, and I do not want any doubt about this, the Chair will be expecting some response back from the Government or the Opposition to indicate just how any discussions have gone which may well flow from the exchange of remarks this morning.
I would ask all Hon. Members, since we are back after Christmas and this is the new year, as of course I know all Hon. Members will want, to treat the interventions of all Hon. Members and Ministers with the greatest respect and dignity, gentleness and kindness.


Jean-Robert Gauthier: May I just ask for your co-operation, Sir? I have asked for a copy of the Ways and Means Motion from the Table and I have been told just a few moments ago that a copy is not available to Members of Parliament before the next half hour or so. I wonder if the Table could accelerate the process so we can all receive copies of the so-called Ways and Means Motion.


Mr. Speaker:: I thank the Hon. Member for the intervention and I will see what I can do to assist.

January 19, 1987



TRANSPORTATION-REQUEST FOR STATEMENT

["I am very grateful to the Right Hon. the Leader of the Opposition (Mr. Turner (Vancouver Quadra)), the Hon. Member for Windsor West (Mr. Gray), and the Hon. Member for Fundy-Royal (Mr. Corbett) for their interventions. Both issues are very important to all Canadians but, especially in view of statements made earlier in this House by the Deputy Prime Minister (Mr. Mazankowski) and other Hon. Members, I think that the best thing I can do now is defer my ruling until 3 o'clock this afternoon."]
Nelson Andrew Riis: Mr. Speaker, on a new point of order, I ask for some guidance. During the recess, the Prime Minister (Mr. Mulroney) saw fit to ask for the resignation of a very critical Cabinet Minister at a time when we are debating the most important piece of transportation legislation which this House has seen in many decades. Again I was assuming that under Statements by Ministers the Prime Minister (Mr. Mulroney) or the Deputy House Leader would use the opportunity to give an explanation as to why the Government decided to act on this matter during the recess.


Mr. Speaker:: I thank the Hon. Member for the point he raised. However, I think clearly the Minister should not rise on that point or any other at this time. I point out to all Hon. Members, and to Canadians in general, that there will, of course, be the usual Question Period this afternoon and Hon. Members, of course, will use their own discretion as to what matters will be raised. The Minister, I am sure, will be here to respond.



Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I have the honour to present a petition under the provisions of Standing Order 106 which comes from people residing in Chatham and London and several other Ontario cities. They say the federal Government's proposal to change the Patent Act relating to prescription drugs will increase drug prices for Canadian consumers and severely restrict the ability of average Canadians to buy necessary prescription drugs. Therefore, they humbly pray and call upon Parliament to reject these proposals which will increase prescription drug prices for Canadians.


Mr. Cyril Keeper (Winnipeg North Center):: Mr. Speaker, I have here a petition signed by a number of Canadians who wish to express their concerns about to the Patent Act, especially in connection with the patents on pharmaceutical products, which will increase the price of drugs for Canadian consumers and make it increasingly difficult for many people to purchase the drugs they need. These Canadians are asking Parliament to reject the proposed changes that will increase the price of drugs.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I have three different petitions to present. The first petition relates to changes to the patent law which would result in higher drug prices. The petitioners point out that this will unfairly hurt those who depend on the purchase of prescription drugs and will also create a problem for provincial drug plans.
Petitions
The petitioners call upon Parliament to reject the proposals which will increase prescription drug prices for Canadians.


James Douglas Manly: My
second petition, Mr. Speaker, relates to the low level flight training of pilots of NATO countries at the Canadian Forces Base in Goose Bay, Labrador. The petitioners point out that this interferes with the life of the native people there and that there are other economic options which should be pursued. The petitioners call upon Parliament to ensure that the Prime Minister (Mr. Mulroney) ends all low-level flight training at the Goose Bay Canadian Forces Base and cease negotitions with NATO for a NATO base there.


James Douglas Manly: Mr. Speaker, my third petition relates to the question of fishermen and unemployment insurance. The petitioners fear there is a possibility that the Unemployment Insurance Program will be amended in such a way that they will lose the rights they have at present under the Unemployment Insurance Program. They point out the importance of that program to fishermen and call upon the Minister of Employment and Immigration (Mr. Bouchard) to reject any recommendations which would deprive them of their right to collect unemployment insurance.


Mr. Derek Blackburn (Brant):: Mr. Speaker, I too have a petition from several people who reside in Kitchener, Waterloo, New Hamburg, St. Thomas and other cities in Ontario with respect to Bill C-22. The petitioners are extremely concerned that tampering with the Drug Patent Act will result in much higher prices for prescription medication, and they call upon the Government to withdraw the Bill.


Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, I have the honour to present two petitions to the House of Commons. The first one bears the signatures of 50-odd Canadians from Alma, Harvey and Baie-Comeau, which happens to be the home town of the Prime Minister. They object to the statements of the Government concerning patents, especially as they relate to pharmaceutical products. They are convinced that the federal Government proposals will lead to higher provincial health insurance costs. They humbly call upon Parliament to reject these proposals which will boost drug prices paid by Canadian men and women.
Mr. Speaker, the second petition I have is signed by a number of Canadians who live in the region of Stoney Creek and the great riding of Hamilton Mountain. These citizens also object to the proposals of the federal Government with respect to changes to the Patent Act which they believe will

January 19, 1987
Petitions
severely restrict the ability of average Canadians to buy necessary prescription drugs. Because they believe these changes are another example of Canadian government concessions to the United States in the free trade negotiations, at the expense of average Canadians, they call upon the Government to reject the proposals and the increases in prescription drug prices for Canadians which would result.


Ms. Copps:: Mr. Speaker, I rise on a point of order. I know that the residents of the entire Hamilton area should be well represented. However, the City of Stoney Creek is in the riding of Lincoln.


Mr. Speaker:: I thank the Hon. Member for Hamilton East (Ms. Copps) for pointing out that geographic fact. Perhaps the Hon. Member for Ottawa Centre (Mr. Cassidy) and the other Hon. Member would like to discuss from exactly where these petitions come. However, under the rules of the House the petition will be received and dealt with in the appropriate manner.


Leslie Gordon Benjamin: Mr. Speaker, I have the honour and duty to present two petitions to the House today. The first is from an organization known as Senior Power. It is signed by a number of citizens who live in the City of Regina, the Queen City. In their petition they state that the Government's proposals to change the Patent Act relating to prescription drugs will increase drug prices for Canadian consumers and severely restrict the ability of average Canadians to buy necessary prescription drugs. Therefore they petition the Parliament of Canada to reject these proposals because they will increase drug prices for all Canadians.


Leslie Gordon Benjamin: Mr. Speaker, the other petition I have is signed by a number of Canadians who live in Ontario, particularly in Sault Ste Marie, Bruce Mines and a number of locations in northern Ontario. In their petition they indicate that in their opinion transportation is a natural monopoly without economic regulation and that economic regulatory reform of the dimensions proposed by the Government in Bill C-18 will create unnecessary chaos in the transportation industry. They call upon this House to have the Government withdraw Bill C-18 and to retain public convenience and necessity as a fundamental factor in the development of public transportation policy in Canada.


Mr. Rod Murphy (Churchill):: Mr. Speaker, I also have the honour to present a petition on behalf of Canadian residents who express their opposition to the Government's intention to change the Patent Act as it relates to prescription drugs. In their petition they state their belief that this measure will increase drug prices for Canadian consumers and severely restrict the ability of average Canadians to buy necessary prescription drugs. They also believe that this measure is another example of Canadian government concessions to the
United States in the free trade negotiations at the expense of average Canadians.


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I have a petition from residents of the Town of Humboldt who point out that the proposed changes to the Patent Act relating to prescription drugs will increases drug prices for Canadian consumers, severely restrict the ability of the average Canadian to buy necessary prescription drugs, unfairly hurt those Canadians whose health needs require the purchase of prescription drugs on an ongoing basis, and that this measure will result in higher costs to provincial government drug plans. Therefore, they call upon Parliament to reject these proposals which will increase prescription drug costs for all Canadians.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I have a petition which, as with those we presented last year, carries forward the objections many Canadians have to the suggested changes which are now before the House with respect to drug legislation. In this case the petition is from citizens living in the Province of Ontario. In particular they object to the considerable concessions which they see being made in this case, as in so many others, with respect to and in response to the free trade discussions with the United States.


Mr. Howard McCurdy (Windsor-Walkerville):: Mr. Speaker, I am pleased to join with my colleagues in presenting one of a number of petitions received in protest to the changes in the Patent Act which will ultimately result in higher drug prices. They also protest the fact that this legislation represents another example of obsequious concessions to the Americans to obtain a free trade agreement.


Nelson Andrew Riis: Mr. Speaker, pursuant to the provisions of Standing Order 106 I have the honour to present a petition on behalf of a number of Canadians who are concerned about the Government's proposal to change the Patent Act, which they claim will increase drug prices to Canadian consumers and severely restrict the ability of average Canadians to buy necessary prescription drugs. They call upon the Government to reject these proposals which they feel will increase prescription drug prices for Canadians.


Nelson Andrew Riis: Mr. Speaker, I would also like to present a petition on behalf of a number of Canadians who are concerned about government cut-backs to the National Research Council which they claim is causing disruption of scientific acitivity and threatening the economic future as well as the health and safety of Canadians. The petitioners ask the Government to rescind the funding cutbacks to the National Research Council, including all the consequent terminations and cut-backs in research activities and to provide funding for the space program from sources other than the NRC budget or any existing scientific program. They ask the Government to develop a national policy for research, science and technology based upon a target of 2.5 per
January 19, 1987

cent of the GNP to be devoted to research and development in Canada.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Philip Derek Lewis: Mr. Speaker, the following questions will be answered today: Nos. 49, 50, 52 and 53.


Mr. Riis: For the period January 1 to November 28, 1986, did the Government authorize permits for the export of any goods falling under Section 7 of the Export Control List where the destination of the said goods was (a) Chile (b) Syria (c) Iran (d) Pakistan (e) Iraq (/) Honduras (g) Guatemala (h) Nicaragua (/) Indonesia (j) Libya (k) Lebanon (/) South Africa (m) Mozambique and, if so, in each case, what was the total value of these export permits?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Permits for export of any goods falling under Section 7 of the Export Control List. For the period January 1- November 28, 1986.
Country	Permits Issued	Total ValueChile	yes	$11,261,150Syria	yes	$ 441,000Iran	no	Pakistan	yes	$2,056,734Iraq	no	Honduras	no	Guatemala	no	Nicaragua	no	Indonesia	yes	$2,156,107Libya	no	Lebanon	no	South Africa	no	Mozambique	no


Mr. Rodriguez: 1.	(a) Since its inception, what was the total cost incurred by the commission of inquiry into unemployment insurance (b) what was the total renumeration in salary and expenses received by the Commissioners?
2.	To date, what was the number of employees employed by the Commission and how much have they been paid?
Order Paper Questions
3.	Did the Commission award contracts to study the unemployment insurance system and, if so (a) how many (6) at what cost (c) to whom?


Hon. Benoit Bouchard (Minister of Employment and Immigration):: 1. (a) The total cost was $4,671,000 (from inception to November 30, 1986). There are approximately $530,000 in outstanding commitments.
	Honorarium	Expenses
Claude Forget	$174,937	$ 34,862Roy Bennett	$ 36,600	$ 20,642Mo Morgan	$ 75,800	$ 37,064Jack Munroe	$ 40,800	$ 26,895Guylaine Saucier	$ 34,800	$ 14,144Frances Soboda	$ 78,400	$ 43,594Total $441,337	$177,2012. There were	32 employees. Average salary	of these
employees is $26,520.
3. Yes. (a) 25. (b) $486,614.
c) Desmond John Byrne Canada East West Ltd. Jean David J. Davidson-Palmer and Associates Decima Research Pierre Dufour Grady Economics R.D. Hood Economics Inc. Infor-metrica 1SMEA (Institut de Sciences Mathematiques et Economiques Appliquees) Karyo Communications Inc. Walter Nicholson Lars Osberg W. Craig Riddell Abraham Rotstein (2) St. Louis and Associates St. Louis and Shabbas Irving R. Silver Associates Monica Townson Associates Martin Weitzman Arthur Andersen and Associates Gerald Beaudoin Paul Dickinson Gardner-Pinfold Consulting Econ. Ltd.


Mr. Boudria: 1.	Did the Department of Supply and Services recently move its Mont-Joli office to Rimouski, Quebec and, if so, for what reason?
2.	What was the (a) total cost (6) cost for (i) moving (ii) leasing new offices (iii) purchase or lease of new furniture (iv) relocation of employees (v) rental on the vacated location (vi) legal fees?
3.	Where there other costs involved with this move and, if so, what were they?


Hon. Monique Vezina (Minister of Supply and Services):: 1. The Mont-Joli office was moved on November 28, 1986. The recommendation to transfer the operations of our office from Mont-Joli to Rimouski was proposed in a study which was done by the Quebec Region Supply Centre on May 26, 1986.
This recommendation noted the following: (i) Rimouski is the largest commercial and industrial centre of the region; consequently, it allows us to get closer to our most important suppliers.
(ii)	It is preferable to operate in the same area as our principal suppliers, since this facilitates our contacts with them, and permits us to accomplish more efficiently our objectives related to: (a) Suppliers awareness program (b) Identification of new sources of supply (c) Activities aimed at the development of businesses

January 19, 1987
(iii)	The suppliers of the Mont-Joli region will not be affected, since they still will have access, as in the past, to the federal government contracts.
2.	(a) See answer to 2(b).
(b) (i) Cost related to the moving: $1,985.20. This amount will be the responsibility of Public Works Canada.
(ii)	Leasing cost of the new offices: $6,650 from December 1, 1986 to March 31, 1987.
(iii)	Purchasing of leasing cost of new furniture: None. (No purchasing or leasing of furniture).
(iv)	Relocation of two employees: Real cost estimated at $3,200.
(v)	In the event that Public Works Canada cannot find new tenants for the space at the Mont-Joli office (120.8 square meters), Public Works Canada estimates that it would cost Supply and Services Canada, $975. a month for the remainder of the 18 month lease.
(vi)	No legal fees were incurred.
3.	Reinstallation of telephone lines. This cost if $457.80.


Mr. Rodriguez: Since the inception of the commission of inquiry into unemployment insurance what was the total renumeration in salary and expenses received by each Commissioner?


Benoît Bouchard: See reply to Question No. 50 answered this day.


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


Mr. Speaker:: The questions enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions stand?


Some Hon. Members:: Agreed.


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, pursuant to the provisions of Standing Order 29 I ask leave to move a motion to adjourn the House for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the signing and implementing of an agreement with the United States to impose a 15 per cent export tax on certain Canadian softwood lumber products being shipped to the United States.
This agreement deprives the Canadian industry of up to $600 million annually, throws thousands of forestry workers out of work, imperils Canadian sovereignty, allows the U.S. Government the power to veto actions of the federal and provincial levels of Government to assist Canadians in the industry, thereby invading our sovereignty, imposes a retroactive tax on Canadians without parliamentary approval, or even parliamentary debate, and sets an unwelcome and dangerous precedent on Canada's ability to establish its own natural resource policy and its own export potential.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: I advise Hon. Members that I have received notice of the application that has just been made to the Chamber by the Right Hon. Leader of the Opposition (Mr. Turner). I have also received an application for an emergency debate on the same subject matter.
I think that the Hon. Member for Fundy-Royal (Mr. Corbett) wishes to make some comments, and I welcome those comments at this time.


Mr. Bob Corbett (Fundy-Royal):: I was delighted this morning to hear the Government make the offer of introducing the legislation at the earliest possible convenience. I was also pleased to hear the response from the NDP that they were in agreement with that. I also hope that the Liberals will give their consideration to that offer by the Government. If debate is entered into today on the Bill, this would make my application redundant. I will await your decision, and the decision of the Official Opposition.
My request under Standing Order 29 is based on the recent decision to impose a 15 per cent export tax on softwood lumber which has caused grave concern among Maritime lumber producers. Many producers fear for the economic viability of their operations, and the jobs dependent upon their competitiveness.
The agreement imposes the tax upon all but five Maritime softwood producers that previously enjoyed exemptions from such action. The consequence of such a decision creates a situation whereby the livelihood of Maritime softwood producers is threatened by an action designed to resolve a problem created by extremely low stumpage fees in British Columbia, Alberta, Ontario, and Quebec.
Many lumber producers fear that they will not survive if they are required to pay not only the highest stumpage fees in Canada, but also an additional 15 per cent tax on their exported products. There is also a very real concern that the lumber market within the Maritime provinces may be swamped by western lumber seeking refuge from the tax.


Mr. Speaker:: Order, please. The Hon. Member is referring to the letter that he has sent to the Speaker, which I have read. In view of the fact that the Right Hon. Leader of the Opposition (Mr. Turner) was very succinct on the basis of the
January 19, 1987

application, I am sure that the Hon. Member would perhaps feel that the point has been made. All Hon. Members, and the voters that he represents, will know that that matter is receiving the attention of the Chair. I thank the Hon. Member for his intervention.


Herbert Eser (Herb) Gray: Mr. Speaker, pursuant to Standing Order 29, I ask leave to propose a motion to adjourn the House for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the new American demands, as expressed by Chief Negotiator Murphy, that the Canada-U.S. Auto Pact be made an integral part of the free trade negotiations with the United States. This serious development demands immediate parliamentary discussion because of the importance of the continuation of the Pact and its safeguards for the preservation of thousands of Canadian jobs, and the well-being of the entire Canadian economy.


Mr. Speaker:: I am very grateful to the Right Hon. the Leader of the Opposition (Mr. Turner (Vancouver Quadra)), the Hon. Member for Windsor West (Mr. Gray), and the Hon. Member for Fundy-Royal (Mr. Corbett) for their interventions. Both issues are very important to all Canadians but, especially in view of statements made earlier in this House by the Deputy Prime Minister (Mr. Mazankowski) and other Hon. Members, I think that the best thing I can do now is defer my ruling until 3 o'clock this afternoon.



POINT OF ORDER


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, I rise on a point of order which relates to an occurrence that took place immediately prior to adjournment on December 19, 1986. This is the first opportunity I have had to bring it to your attention.
At that time Members of this House were proceeding, in accordance with the desire of His Honour, the Deputy Excellency the Governor General, from the Commons to the Senate Chamber to witness the Royal Assent to Bills. The traditional and solemn procession was invaded by TV cameras and boom microphones. I believe at the time they were after the Deputy Prime Minister (Mr. Mazankowski). The operators literally became part of the procession. Because many of
National Transportation Act, 1986
them were walking backwards, they physically impeded the Members who were participating in this procession. There is no objection to the taking of pictures from the sidelines. But to become part of the procession is surely contrary to the rules that we have in effect.
Is it possible, Your Honour, that action be taken so that this is not repeated, and so that in future this procession can take place with all due decorum?


Mr. Ouellet:: Mr. Speaker, I rise on the same point of order.
I would like to indicate to you, Mr. Speaker, that if the House implemented the specific recommendation that the McGrath Report made in this regard, that is, to abolish this practice, the incident the Hon. Member talks about would not have occurred. I hope that the new Government House Leader (Mr. Mazankowski) in his wisdom will make sure that this one small recommendation of the report is implemented as quickly as possible.


Mr. Speaker:: I wish to advise the Hon. Member for Western Arctic (Mr. Nickerson), and the Hon. Member for Papineau (Mr. Ouellet), that the Chair will take with some concern the representations that have been made. We will consider what can be done to maintain the dignity of these proceedings, if indeed it is appropriate to continue these proceedings in the manner in which they are presently done. It is a matter which is before the board of internal inquiry. I know that the Hon. Member for Papineau will ensure that the matter will be on the agenda this week. I thank the Hon. Member for the intervention.
Orders of the Day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from December 19, 1986, consideration of the motion of Mr. Crosbie (St. John's West) that Bill C-18, an Act respecting national transportation, be read the second time and referred to a legislative committee.
André Ouellet: Mr. Speaker, today the House is about to continue debate on Bill C-18, also known as the National Transportation Act, 1986. The purpose of this Bill is to revise the existing National Transportation Act introduced by the Hon. Jack Pickersgill in 1967, legislation that has served the Canadian economy very well during the past twenty years.
Now, it is perfectly normal to want to make certain changes to improve a piece of legislation, but this attempt by the government to turn the whole legislation upside down and

January 19, 1987
National Transportation Act, 1986
question every single aspect in the transportation sector is quite frankly nothing short of absurd. The previous Government admitted there was a case for amending the National Transportation Act and that there was room for improvement. In May 1984, my colleague, the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), then Minister of Transport, was the first to suggest gradual deregulation of the transportation industry. At the time, our Government was thinking of a more flexible regulatory framework that would be better adapted to new economic configurations and the changing realities of the transportation sector.
We wanted a framework with less regulation that would enhance the development of Canada's transportation industry. At the same time, we wanted to ensure that guarantees would be provided for greater economic competitiveness.
Our policy not only had vision, it was firmly anchored in the realities of the day. Unlike the extremely bulky Bill we are considering today, my colleague, the former Minister of Transport, proposed a strategy for regulatory flexibility that could be defined as a step-by-step policy. At first, the strategy would basically deal with the air transportation sector and, in this respect, the Government at the time had provided a series of guarantees and specific conditions for deregulation in this sector.
However, by deciding to change everything at the same time, the present Government has raised a veritable wave of panic in many areas of the transportation industry, including air, trucking and railway transportation.
In fact, if we look at the alarming number of takeovers by large carriers of small airlines during the past two years, it is clear that the latter are very uneasy about this Bill.
In the trucking industry, for instance, people say there is a very real danger that the Canadian industry will be completely taken over by American interests. In the railway sector, CP Rail is afraid it will have to close down by 1992 if this Bill becomes law.
Although we endorse the principle of orderly deregulation, Mr. Speaker, our Party cannot accept the way this Bill has been brought forward nor the expediency of the legislative procedure chosen by the Government. We are strongly opposed to a series of measures contained in this Bill which, we believe, will be very harmful to the Canadian economy for years to come.
We also deplore the fact that this Bill does not contain the regulations required to establish, among other things, definite and credible safety standards for air passengers, as well as measures to guarantee adequate services for handicapped travelers and other provisions to protect jobs in the transport industry. There is nothing to assure us that deregulation will not entail widespread lay-offs, particularly in the air trasnsport sector. We oppose this Bill for its failure to offer guarantees to those who work in this major Canadian industry. Absolutely nothing tells us that our national transportation system will
continue to be-as it has been in the past and must indeed remain in future-the cornerstone of regional expansion in Canada.
What I am saying is more than my own personal conviction, more than the opinion of my colleagues of the Liberal Party of Canada who have examined this matter, for it reflects as well the views of a great many organizations, associations, and interest groups which have made it quite clear to the Government that this Bill has to be amended.
Regretfully I must say to the Minister of Transport (Mr. Crosbie) that between June 26 last when the Bill-then C-126-was first tabled and November 4, 1986, when this Bill C-18 was introduced for first reading in this new session, the Government has turned a deaf ear to the quite legitimate representations made by a good many organizations representing thousands of Canadians-proof positive that this Government cares precious little about consultation as a democratic process. Worse still, the transport industry and Canadian consumers will bear the dire consequences of the Conservative Government's indifference or stubborness.
Mr. Speaker, the review of a blueprint act of such basic importance for the social and economic equilibrium of the country would have deserved a more balanced approach by the Government. It should have called for a great deal of caution in measuring the impact of such a de-regulation exercise, first, on passenger safety; second, on consumers, especially as concerns air fares; third, on jobs in the industry, as I mentioned earlier; fourth, on what is an acceptable level of foreign control; and finally, on regional development.
Unfortunately, the position of the Government seems to be set in concrete. Nothing has changed since publication of the paper "Freedom to Move".
You will recall that the Standing House of Commons Committee on Transport held public hearings throughout the country to collect the views of the public on the paper "Freedom to Move".
My colleague for Regina West (Mr. Benjamin) is quite right to remind me that this Parliamentary Committee should normally have held hearings in all provinces and not only in major centers, but also in rural areas and the remote regions of our country since tranport in such a vast land as Canada has to meet the needs not only of urban dwellers, but perhaps even more so of people in remote areas.
However, the Committee held hearings only in four cities. In addition what I found was that the great majority if not all of those who made submissions to the committee or expressed their views about this initiative of the Conservative Government were opposed to it and to the Government's wish to deregulate transport in Canada so quickly and completely. The only witnesses we heard who supported the Government initiative were the shippers, the large shipping companies who see in this initiative a possibility of lowering the cost of moving their goods and products.
January 19, 1987

Of course, we recognize the need to develop a more effective and less costly transport service in Canada, but we maintain that this should not be done at the cost of other considerations and factors which are just as important. There must remain a fair balance in transport otherwise there will be very serious dangers and even the risk of a disaster in Canadian transport. I fear that some of the effects of implementing such a piece of legislation will not bring about lower transport prices as hoped by Canadian shippers but will probably mean higher rates for them in the middle- or long-term. What they want in the shortterm could in the long-term provide more disadvantages than advantages. Yet, this Government has refused to listen not only to the comments made before the Committee, but also to what was said when Bill C-126 was introduced. Indeed, at the Standing Transport Committee, the Conservative Members themselves expressed certain reservations about the Government initiative. Since they did not go far enough, the Liberal Party and the New Democratic Party had to present minority reports to object to the majority report supported exclusively by Conservative Members of the Committee, even though many of these Members recognized several of the dangers inherent in the Government initiative. We would have expected at the very least that the Government would have taken into account the recommendations of its own Members, which it did not do in introducing Bill C-126.
I must say that Bill C-18 now under consideration is essentially a carbon copy of Bill C-126.
At a press conference, when the Minister of Transport was asked by a reporter what difference there was between the two Bills, the Minister did not know himself. He simply replied that there had been only a few technical changes. It is obvious that the Government has been deaf to the many representations made by the public and organizations opposed to its first Bill, for instance the Canadian Trucking Association.
The Canadian Trucking Association, following the presentation of Bills C-126 and C-127, wrote to the Minister indicating its opposition. In writing to me, the Executive Director had this to say concerning the Government:
Hopefully they will start over, but in their present form, these Bills are a disaster for the private sector common carrier transportation industry and truckers especially. In addition they have done nothing to even the playing field. U.S. truckers enjoy huge tax advantages and so forth. One would almost think that the future viability of the common carrier concept is no longer considered important in some respects.
That is the view of the Canadian Trucking Association about Bill C-126. As this legislation has been tabled again without amendment, the view of the Association will be the same.
Second, I have received a confidential representation from a federal public servant. He is very much concerned about the doing away of the air transport committee which has a responsibility to monitor the entrance and the exit of airlines.
National Transportation Act, 1986
He talks about the potential pitfalls of totally eliminating economic entry control in abolishing the test of public convenience and necessity, or the ignoring of certain elements of the test which has been carried out by the air transport committee, since May, 1984. This federal public servant has told me that he has been speaking not only on his own behalf but on behalf of a number of people who have spent their lives and careers working in this area.


Mr. Crosbie:: Malarky, junk.


André Ouellet: The Government not only does not want to listen to them but it is totally ignoring their advice and point of view.


John Carnell Crosbie: Give us his name.


André Ouellet: Also, the opposition to the rail deregulation as it is contemplated by the Government has been very much opposed by the two railways, the CPR and the CNR. The following is CP Rail's position on Bill C-126:
If Bill C-126 were adopted in its present form, its plausible consequence as they relate to CP Rail are predictable.
Strong downward pressure will be exerted on rates. Given the unlikelihood of increased traffic volume and that there is little, if anything, in the Bill that will produce significant cost reductions, net income will fall. The resultant deteriorating financial condition of the railway enterprise and the increased risk of railway investments will limit the availability and raise the cost of external financing.
These factors, in combination with the decline in internally generated funds, will impair the ability of the private enterprise railway to finance the capital and maintenance expenditures essential for a safe, efficient and reliable railway
system.
The Minister has totally ignored these representations. He also ignores the view of a senior official of the CNR who spoke on regulatory reform and railway viability at a conference in Vancouver last October. He was speaking about Bill C-126 which had not passed in previous sessions but was to be reintroduced in the new session. He said:
I am hopeful that when the Bill is reintroduced into the House, our legislators will carefully assess the long-term impact it could have on Canadian shippers.
Quite frankly, I believe that unless significant changes are made to the content of that Bill, we can expect results that will be unsettling to the transportation industry and, in the end, will not give shippers what they need.
That is the view of a senior vice-president of CN Rail and the Minister and the Government have totally ignored that point of view.

People are ignored not only in the transportation industry: even provincial Premiers are. Indeed, the Premier of New Brunswick, on behalf of the Council of Maritime Premiers, wrote to the Minister of Transport asking him to amend his legislation. He also wrote my colleague, the Hon. Member for Westmorland-Kent (Mr. Robichaud), in December 1986, saying how much he was concerned and disappointed with the attitude of the Canadian Minister of Transport, who had failed to amend Bill C-18 as suggested by the Atlantic Premiers in
2350

January 19, 1987
National Transportation Act, 1986
the representations they made when Bill C-126 was originally introduced.
Once again, the Minister remained stone deaf to the representations asking for amendments to the Bill.
Union lobbying against transport deregulation is well known.
The Canadian Labour Congress held a press conference to indicate how much it opposed the kind of deregulation proposed by this Conservative Government, and to ask for amendments to the legislation if the Governement intended to proceed with the Bill, on the subject especially of job security for transportation workers.
Once more, the Minister remained totally unyielding on the representations that were made.
I am therefore forced to conclude, Mr. Speaker, that the Government has already cast its position in concrete, and that Mr. Keith Thompson, the official who has been acting on behalf of the Government since the beginning, who has met with all the parties concerned, who has had discussions with all those in the area of transportation who have a position to defend or interests to represent, has politely given the brush off to all those who met him and were told that the Bill is already drafted, and is not subject to change.
I would therefore like to tell the Minister it would be wiser to listen to the various parties involved in transportation who have amendments to suggest, rather than listen to Mr. Keith Thompson who apparently has decided the Bill was his baby and has to remain unchanged is spite of everything. Indeed Conservatives Members should remember that not so long ago they opposed the previous Government when we insisted on putting through the Bill amending the National Energy Program, and I would remind him of what a representative of a major Canadian association opposing the legislation was telling me recently. I would like to quote him, just to give the Minister food for thought:
"Keith Thompson will be to the transportation legislation what Ed Clark was to the national energy policy". I hope the Minister will reflect on this statement made by a representative of a national organization who is very much afraid that this official will play such a role that the Minister will have no chance at all to put his own imprimatur on the legislation.


John Carnell Crosbie: Should we send him to Paris?


André Ouellet: He is afraid that this official has already decided what will be in the legislation which was first drafted in the document entitled Freedom to Move and then introduced in Bill C-126. Obviously the current Minister did not have very much to say because he tabled Bill C-18, a Bill which is almost identical to the previous legislation.
According to the people to whom I have talked, Mr. Thompson is running the show. He has already decided what the legislation will contain. No matter what the Minister, Conservative back-benchers, the public at large, the various associations or the Opposition think, this is the way Mr. Thompson thinks it should be. I do not know if it is true-


John Carnell Crosbie: It's not. Let me reassure you.


André Ouellet: So far there is no evidence to the contrary. When we begin studying this legislation in committee, we will know who is running the show. If the Minister is present, accepting or moving amendments, then we will know that he is the one who is carrying the ball on behalf of the Government. Until then, the impression will be that he is not running his own Department and that he does not know what the legislation he has submitted to the House is all about. I do hope that he will come forward with great interest and a sense of understanding for the various representations for amendments to this legislation.

It is with this in mind that we in the Liberal Party are preparing to discuss the Bill. As I said earlier, the principle of deregulation by itself, to promote stronger, more useful competition in transportation, is something that we certainly look forward to. We have no objection whatsoever to an orderly deregulation that would lead to greater competition in Canada's transportation industry. But our view is that, currently, the Government is totally insensitive to the representations that were made and we believe there are nefarious ramifications to that kind of roughshod deregulation as proposed by the Minister.
We thus want to be to a certain extent the spokespeople of all those Canadians whose views were not considered by the Minister when this Bill was drafted and we want to join them to denounce a legislation which we now feel to be inadequate.
We are specifically thinking of the safety area. We regret that the Bill does not contain any provision to prevent conditions which could effectively reduce air safety. The American experience teaches us that this is a real danger and that it is absolutely necessary to make sure that safety will not be jeopardized. The facts are as follows: In his report to the House of Commons for the fiscal year ended March 31 1985, the Auditor General, Kenneth Dye, stated that Transport Canada had been unable to check all carriers under its jurisdiction at least once a year. We cannot maintain that such safety standards are high and deregulation should in no way be introduced before strict and non-equivocal safety measures are implemented. The Liberal Party of Canada for sure will strongly object to any policy threatening the safety of airplane passengers in Canada.
In the United States, air travel is not as safe as before deregulation came into effect. The rate of fatal accidents and casualties has increased. Ronald Cape, President of the American company CETUS, states and I quote: "Commercial
January 19, 1987

flights are not as safe as before deregulation". And the President of Bache-Prudential, Mr. Harry Jacobs Jr. says: "To travel by plane is now much more dangerous." We merely want to make sure that what happened in the United States will not happen in Canada.
The tendency of this Tory Government to copy the Americans is really annoying. Why is it that every time something happens in the United States, a Conservative minister or Prime Minister always tries immediately to copy the Americans? I have nothing against the Government copying them when they do something good, but I certainly do not want us to copy what they have done in the United States in the area of air transport deregulation.
I have just mentioned that there is a major deficiency in the United States in the area of safety, an area that the Minister's bill has not provided for and that should be clearly stated with solid guarantees for air transport users in Canada. We know also that since deregulation was implemented, the number of employees in the air transport industry in the United States has greatly decreased.
And we are now witnessing a major concentration of American airlines. Due to deregulation, the concentration in the United States has been such recently that six airline companies now control as much as 80 per cent of the market in that country.
We have been quite concerned ever since the Government announced its desire to move forward with an urgent, quick and complete deregulation. A similar situation now exists in Canada: Since CP Air was bought by Pacific Western Airlines, two companies, Pacific Western Airlines and Air Canada, now control over 90 per cent of the Canadian market.
In my opinion, this is quite the opposite of what the Minister of Transport (Mr. Crosbie) himself said in the House when he introduced his Bill. On December 19, the Minister stated, and I quote:
The legislation that we are now presenting to the House has as its purpose the increase of competition in air-
It is the Minister of Transport himself, as reported in Hansard on page 2318, who said so. But the fact is that the Government has done nothing since the Minister announced its deregulation project to stop take-overs in the air transportation industry; not only has it done nothing to oppose these takeovers and prevent a greater concentration in Canada, but it has even encouraged it through remarks made recently in Parliament in reply to the question of an Opposition member.
Under the previous administration, before the Conservatives came to power, we had not only the two major national companies, Air Canada and CP Air, but also several important and profitable regional companies, like Pacific Western Airlines and Nordair which were doing very well, and others like Eastern Provincial, Quebecair, Air Ontario which were hanging on quite well to their shares of the market.
It is becoming obvious that deregulation is bringing a greater concentration in the air transportation industry, whereas the Government was saying, when it introduced the
National Transportation Act, 1986
Bill, that one the three basic principles of deregulation was increased competition among air carriers. What is happening is just the opposite. The Government will have to show us how all these take-overs will translate into increased competition.
Principles and rules of economics tell us that the greater the concentration, the less competition there is. It seems that the Government does not understand that since, as I said earlier, it did not chose to reject any of the nine take-overs which took place since it came to power.
In our opinion, this cannot continue. At the present time, Mr. Speaker, the transportation sector is in a state of chaos. I was talking a moment ago about uncertainty in the trucking industry, about the deep and understandable concerns of owners of trucking companies who feel they have been abandoned in an untenable situation.
Secondly, the two main railway companies in the country, CP Rail and CN Rail, are opposed to the Bill as proposed by the Minister while air transportation companies are changing ownership at a frantic rate.
It is clear that this Government has lost control of the situation in the transportation industry. Because of the Government's desire to deregulate too fast and too soon, this particular sector of our economy which has always been prosperous and provided steady and well-paid employment for thousands of workers across Canada, may be in for a very difficult time and fall prey to foreign interests.
What we cannot accept in this Bill is that it fails to put any restrictions on foreign control. Is this Government going to leave the sector wide open to anyone who wants to buy? In the United States, foreign control in the transportation industry is limited to 25 per cent. A foreign company cannot own more than 25 per cent of a transportation enterprise in the United States. Members of the Standing Committee on Transport and many intervenors who gave their comments on the Bill suggested this kind of restriction, but the Government, through its Minister, has never been willing to state, in no uncertain terms, that the transportation sector was one industry that had to remain Canadian. At no time did the Minister formally state that he would take steps to ensure that our major airlines and major trucking companies would remain in Canadian hands and that the transportation sector in general would remain in the hands of Canadian companies.
We are afraid that sudden deregulation will enable foreign interests, and especially U.S. interests, to take over the many trucking companies and airlines that would be unable to compete as a result of concentration of the industry among a few large companies, companies that will become far too powerful and thus be in a position to compete unfairly with the few small entrepreneurs that survive or try to survive in the transportation sector.
In concluding, I may say this Bill will need some thorough changes if it is to be at all useful to Canada's transportation sector. I hope that, in future, the Government will be more

January 19, 1987
National Transportation Act, 1986
receptive than it has been up to now to proposals for change with respect to this important legislation.


Leslie Gordon Benjamin: Mr. Speaker, if and when passed, Bill C-18 is to be called a National Transportation Act. It is in the main a copy of the practices in the U.S. and results from their practices. I think the Bill should be known as a Bill to jeopardize safety in transportation. It should be known as an anti-service Bill. It should be known as an anticompetitive Bill. It should be known as an anti-sovereignty Bill.


Mr. Hees:: Make up your mind.


Leslie Gordon Benjamin: It should be known as an anti-regional economic development Bill, which is mentioned in the preamble to the legislation. This Bill enhances discrimination in transportation. We need a Bill which embodies good regulation, which is the real choice.
At the outset I would like to say that if, as, and when this Bill receives second reading, it must go to the Standing Committee on Transportat and hearings must be held all across Canada. The exercise carried out by the Government in its White Paper, Freedom to Move, was totally inadequate. It took a great deal of arguing, persuading and fighting by myself and my colleagues, the Member for Thunder Bay-Atikokan (Mr. Angus) and the Member for Winnipeg-Birds Hill (Mr. Blaikie) among others, to finally persuade the Government to allow the committee to travel. However, we were limited to three locations outside of Ottawa; we went to Vancouver, Winnipeg and Halifax. We missed seven provinces and both territories. As well, we left out the villages of Montreal and Toronto. That was a most inadequate opportunity for the people of Canada to present their views on a major government policy. That is why Canadians from all parts of the country must have the opportunity to express their views on this legislation.
The New Democratic Party is not arguing against up-dating the National Transportation Act. We believe that legislation of this magnitude must be up-dated from time to time. Twenty years have passed since the present Act was put in place. We believe that all regulations should be reviewed almost annually. Obsolete regulations should be gotten rid of, valid ones should be up-dated, and new ones to deal with new developments, practices and technology in transportation should be devised.
We also believe that the Canadian Transport Commission, or under any other name, should be streamlined to allow it to act more quickly and be more responsive. It must be more conscious of the needs of transportation consumers from the various regions of Canada as well as the needs of the transporters.
We believe that the Bill should not be dealt with until all the safety provisions and inspection facilities are in place and functioning. We know that the Government has proposed a railway safety board and that it is in the process of putting into place a national air safety board. We agree with that. However, it will take quite a while to get these boards established and functioning. We know that the Government has increased, to a certain degree, the number of inspectors. However, that is not nearly enough. Even without new legislation it would take many months, if not years, to obtain, train, and put in place the number of inspectors required. Once all of these items are in place and functioning we could consider an up-dated regime for national transportation legislation.
This legislation flies in the face of the very declaration of national transportation policy outlined in the Bill. The ramifications of this legislation and the eventual effects of it, if passed in its present form, will not provide a "safe, economic, efficient and adequate network of viable and effective transportation services" for most of the people and regions of Canada. The Bill ignores the economic imperative for the provision of equitable transportation services, rates, and fares for all of Canada. In fact, it will return this country to the situation of many decades ago; travellers, shippers and receivers will again be discriminated against because of where they happen to live, or where they happen to manufacture, grow, produce or process their products.
That inevitable discrimination will increase alienation felt by many Canadians in many parts of Canada. It will weaken our confederation and destroy our decades of effort for nationhood and co-operative federalism. It will further jeopardize our sovereignty and independence. I will have more to say about that later.
This legislation will provide access and advantage for United States railway and trucking companies in Canada which will not be available to Canadian railroads and trucking companies in the United States. That is a blatant betrayal of our independence. It is another example of the supine sell-out of our nationhood which is so evident in the free trade negotiations and the softwood lumber episode.
Earlier I mentioned discrimination in transportation against certain producers because of where they happen to be located. This Bill would have us make a 180 degree turn in what Canada has been trying to achieve for over 100 years. The Bill ignores Canadian history and, even worse, ignores the present Canadian reality. Historically transportation legislation and regulation have attempted, albeit not always successfully, to give each part of the country a reasonably equal opportunity to compete in far away domestic and foreign markets. It has attempted to require all Canadians to share in the cost of the various means of transporting goods right across our nation and to the rest of the world. Thus, it was no accident and no quirk of some contemporary political ideology that over the decades many transportation measures evolved within the framework of national transportation policy which were efforts
January 19, 1987

to achieve as large a degree of equity of treatment in the costs of transportation as was possible in our vast land.
I would like to remind the House of some efforts which have been made by this nation since the late 1800s. Recall the Crows Nest Pass Agreement of 1897, the statutory grain rates of the 1920s, and, presently, the Western Grain Transportation Act. As bad as it is, it is at least an effort to share in the costs of moving grain to export positions. There were the "at and east" rates, the Bridge rates, the Maritime Freight Assistance Act and the Atlantic Provinces Freight Assistance Act. There were special rates on settlers effects and on the products which settlers produced which were, in effect, in place and being used right up to the late 1950s. In addition, there was a system of agreed charges, which is still in place, which are negotiated among shippers, receivers and transporters. There have been many other arrangements which show the lengths that were gone to by this country to achieve a goal of reasonable equity of treatment in transportation.
This Bill ignores the Canadian reality. It fails miserably to take into account our geography, our sparse, widely-scattered population, our harsh climate and our sovereignty and independence. It returns us to the jungle of the so-called market forces, the myth that competition alone will provide for all of our country. The legislation would have us go back to the 18th and 19th centuries. It would leave us to the "invisible hand" of the market forces.
I would like to remind my Conservative friends that even the Conservatives in the early 1900s finally realized that that does not work. It particularly does not work in a nation as large as this, with our small population and our climate and geography. That has been shown through our experience historically and through the experience of many other countries over the last hundred years.
The legislation makes less effective and endangers the many programs now in place. We should be doing the opposite and strengthening those kinds of measures and devising new programs which take into account our nation and our economy as they are now. The legislation attempts to be an imitation, pale or otherwise, of American practices and incorporates much of its regime in the law and practices of transportation in Canada. The Government fails to realize that Canada is not the same as the United States of America, thank God. The Government fails to recognize that what we have in place now, as imperfect as it is with mistakes made in the past, is Canadian and meant for Canada. It suits Canada. It incorporates the fundamental principle of providing service as an equal if not greater priority to the obtaining of profit in transportation.
When I said the legislation is anti-competitive and antiregional and economic development, I did so partly because of who is the Minister of Transport (Mr. Crosbie) and where he comes from.


An Hon. Member:: And where is he?
National Transportation Act, 1986


Leslie Gordon Benjamin: And where is he? If there is any Member of Parliament who should know about economic and regional disparity, about the requirements of different regions of Canada for extra provisions in the law and in the regulations which gives them at least some kind of equal treatment and opportunity to get into the markets of central Canada and the world, and in many cases the United States, it is the present Minister of Transport. But he is sponsoring legislation which flies in the face of real regional and economic expansion.
If we throw this wide open to the jungle of the so-called free market, free enterprise and competitive systems, the transporters will automatically-and one cannot blame them-gravitate to the largest and most lucrative markets. That means that the outlying regions, the isolated areas in the northern parts of Canada, will receive less service and less opportunity for economic development. If one had $100 million to invest in a new plant and was faced with discriminatory treatment in transportation costs if he located in Atlantic Canada, the Prairies, northern Ontario or northern Quebec, he would be crazy to build a plant in any of those places, no matter what temporary one-shot incentives might be offered by provincial and national Governments. One would be smart to build that plant next to or between Toronto and Montreal, somewhere in the so-called golden triangle.
The provision for confidential rates is not only anticompetitive, it flies in the face of what limited anti-competition law we have. It enhances the anti-competition in transportation. Let me illustrate how it does so. A railroad or consortium of trucking companies, or one major trucking company, can go to a large manufacturer or processor who moves 5,000 or 10,000 carloads a year and negotiate a confidential rate. Because it is confidential, the smaller manufacturer or processor not only cannot find out what the rate is but will not be able to get as good a rate because of the varying economies of scale, the size and volume of goods to be moved.
If I were a small farm implement manufacturer or food processor in the Prairie Provinces, I would be terrified of this legislation. Can you, Mr. Speaker, see either of the railroads or the larger trucking companies giving the same kind of rate to a small farm implement manufacturer in the Prairies who might ship 50 or 100 carloads a year as they would give to Massey-Ferguson, John Deere, J. I. Case or International Harvester Company who ship thousands of carloads a year? Anyone who believes they would is dreaming in technicolour. That is the kind of thing this legislation allows. It will discriminate against the development of manufacturing and processing capability in regions of Canada other than central Canada.
I mentioned earlier that this legislation is an attack on our sovereignty and independence. I would like to talk for a moment about the transborder implications of this legislation on transportation in Canada. The legislation will allow American railroads and trucking companies to do in Canada what Canadian railroads and trucking companies cannot do in the United States. The Bill is a fundamental reformulation of

January 19, 1987
National Transportation Act, 1986
the economic regulations of federal transportation undertakings. Of course the legislation would re-regulate the railroads intensively. It would place Canadian carriers at an unnecessary competitive disadvantage to American carriers in the competition for both transborder traffic and traffic which could be routed through the United States, although it originates or terminates in Canada.
I will illustrate the magnitude of the problem. Canadian Pacific alone earns $700 million annually from this type of traffic. If one adds to that figure the revenues earned by Canadian National and those earned by Canadian truckers one is looking at billions of dollar of traffic revenue.
The Canadian regulatory regime in respect of railways cannot be out of step with the American regime if Canadian railways are to compete effectively with their American counter-parts. This Bill contains a series of measures which would deny Canadian carriers the ability to compete on equal regulatory terms. Specifically, this Bill would enable American carriers to access traffic originating or terminating in Canada on terms and conditions which they are not required to grant to competitors in respect of their own traffic base. This Bill is an invitation for American incursions into the Canadian traffic base without fear that Canadian railways and truckers can retaliate in kind.
I am not known as one who has a great deal of love and affection for Canadian Pacific. I like to tell anti-CPR stories from the Prairies, and they are legion. However, it is still a Canadian company in which the Canadian taxpayers have invested billions of dollars since 1881. If we add to those billions of dollars private investment we will see that a Canadian railway company is jeopardized because of this blind following of Reaganomics, this myopic vision which Americans have that Canada is nothing more than the fifty-first state, an extension of the great U.S.A. Canada is much more than that. We in this Party will not hold still for the supine acquiescence which is contained in this legislation.


Some Hon. Members:: Hear, hear!


Leslie Gordon Benjamin: As if we are not having enough troubles with our friends south of the 49th parallel, not to mention our friends across the way, I could construct a list as long as my arm of the troubles we are having, including such matters as shakes and shingles, cattle, hogs, dressed beef and pork, softwood lumber, steel products, saltfish, groundfish, fresh fish, natural gas, and raspberries. It is about time to give not only the Government and this legislation the raspberry, it is time to give our friends to the south the raspberry as well. We must stand up for the right of Canada and Canadian transporters to have the same access in the United States as we provide the Americans in Canada, or else not provide that access.


Some Hon. Members:: Hear, hear!


Leslie Gordon Benjamin: Unless and until that equity of access is made available to Canadian railroads and the Canadian trucking industry, then this legislation must not pass. That part of the legislation must be deleted.
I would now like to illustrate my point with respect to that access. Let us consider pulp products which originate in northern Ontario, northern Manitoba, Saskatchewan or even in British Columbia. At the present time these products travel via Canadian railways to Montreal. They then connect with Conrail to the northeastern United States and the American eastern seaboard. Under the provisions of this legislation American railroads can access that wood pulp for paper inside the Canadian border, take it back across the American border and haul it to the eastern seaboard, and all Conrail has to do is cancel the connecting rates it presently has between Montreal and the eastern seaboard of the United States. That is all Conrail has to do. The transportation of thousands of carloads a year of pulp would then be moved mainly on American transportation lines. An American railroad or trucking company can come into southern Ontario and obtain the products of manufacturing and processing plants destined for western Canada and the Pacific and take them down across the borders between Ontario and New York, Ohio, Windsor or the Sault and haul it by Conrail to Minneapolis and then on Burlington Northern to Seattle and Tacoma. That immediately places at risk traffic which would otherwise have gone through the Ports of Vancouver and Prince Rupert. My colleagues will have much more to say about that point as this debate continues.
On their way to Seattle and Tacoma cars carrying product manufactured and processed in Quebec or Ontario and destined for Manitoba can be taken off and brought up through Emerson and then to Manitoba. Cars destined for Saskatchewan can be taken off a train on the Burlington Northern and taken up to Portal. In the case of Alberta cars can be taken off Burlington Northern lines, run through Coutts and then into Alberta. The same situation applies to trucking.
Surely no self-respecting Canadian would hold still for that type of action. Surely no self-respecting Government would even contemplate such legislation which would jeopardize our sovereignty. Under this legislation, when, we feel that we are agrieved and require redress in our dealings with the United States in terms of transportation, we cannot go to a Canadian Government or a Canadian regulatory agency. What we will have to do is go on our hands and knees to the administration and regulatory bodies of the United States. It is demeaning and embarrassing. We will not stand quietly by and watch this Government, or any other Government, bring those types of provisions into transportation law in Canada.
In its blind efforts to copy and imitate the United States, no matter how inappropriate it is for Canada, the Government could take a good look at the U.S. experience. Probably there
January 19, 1987

is some validity to a massive deregulated regime in a country with a large, dense population and a lesser geography; then competition would work better, and there would not be discriminatory practices to isolated locations.
The United States has a smaller geography, 10 times the population, more than 10 times the volume of traffic, and a climate that is not nearly as harsh. The scale and volume of transportation movement provides it with the ability to move its goods at lower cost. The Government fails to recognize in this legislation that because of the nature of this country our costs in transportation will always be higher than those of the United States, Western Europe, or Australia. I suppose you could class the Scandinavian countries, the Soviet Union, and Northern Japan in a similar category as Canada. But the practices of the United States cannot be applied in Canada because of those differences.
The largest trucking company in Canada would rank about number 35 or 40 in the United States. We have a good trucking industry. There are some excellent Canadian companies operating and competing with rail, air, and marine, both here and in the United States. Under this legislation the incursions of large American trucking companies into Canada will do irreparable harm to the Canadian trucking industry.
In looking at the American experience and the hundreds of bankruptcies, mergers, acquisitions, and takeovers under its transportation regime, it has now reached the point where a handful of the major truckers directly and indirectly control some 75 or 80 per cent of truck traffic in the United States. So much for great competition.


Derek Nigel Ernest Blackburn: That's Reaganomics.


Leslie Gordon Benjamin: In the airline industry the six major U.S. carriers that have evolved out of their regime since 1978 handle and control some 80 per cent of the traffic in the United States.
We have all seen the deregulation that has already taken place in the airline industry in Canada. There have been mergers, takeovers, and friendly agreements between a major carrier and small commuters and regional carriers, and the bankruptcies or near bankruptcies.
The matter of freedom of entry and exit in the trucking or airline industry means that a small or large reputable airline or trucking company that over the years has built up its routes, services, and customers, can be raided by a fly-by-nighter-if you will pardon the expression-in the airline or the trucking business that can move in at the peak of the market, cream the gravy off the top, and in the bad season pull out. That is not free enterprise. That is piracy.
What would happen to Bradley Air Services which operates an excellent air service into northern Canada when fly-by-nighters and two-bit charters move in on its efforts that serves communities as small as 300 people in the high Arctic? What would happen to its business? It would have no choice but to move its airline infrastructure and facilities out of the Arctic
National Transportation Act, 1986
and down into the Ottawa valley. That is the choice with which it would be faced.
Yet anybody who can con some banker into giving them a loan, lease two or three second-hand aircraft, hire some crews at less than half the pay because they have been laid off from some other airline, can get into business. If there was ever an appeal for a return to mediocrity it is this legislation.
The experience in the United States has not been all that great, but that is its business and its problem. Mark my words, because of the difference between that country and this one, the experience here will be magnified 10 times in terms of the impact, not only on our railways and trucking industry and airlines but on our ports and our shippers and receivers. The Government says that the intention of this Bill is to give them a better deal. The mythology that this will mean cheaper freight rates for everybody, cheaper airline service for everybody is just that, a myth.
Prices go down for a while in the big markets. Seat sales that apply to Toronto, Vancouver, Calgary, Edmonton, Halifax, and maybe Winnipeg, but leave out Moncton, Thunder Bay, and the Windsors of this world, mean that those people in those cities are discriminated against. The fares will be lowered and discounted, and we do not want to regulate that. If an airline, trucking company, or railway is dumb enough to charge less than what it costs, that is its problem. But all Canadians in every region should have the same opportunity for those types of benefits. They do not get them. That is another area where this Bill is discriminatory.
I wish to close by saying to the Government that the New Democratic Party wishes good regulation, because that is the real choice. The New Democratic Party wishes a viable, economic transportation industry in Canada that meets and serves the needs of the people in the regions of all of this nation, not just where the good, lucrative markets are.
Therefore, Mr. Speaker, I wish to move, seconded by the Hon. Member for Thunder Bay-Atikokan (Mr. Angus):
That the motion be amended by deleting all the words after the word "That" and substituting the following therefor:
"Bill C-18, An Act Respecting National Transportation, be not now read a second time but that the Order for Second Reading be discharged, the Bill withdrawn and the subject-matter thereof be referred to the Standing Committee on Transport."


The Acting Speaker (Mr. Paproski):: I will look at the motion and rule on it after two o'clock.
Before I call it one o'clock, I wish to recognize the Hon. Member for Bonaventure-Iles-de-la-Madeleine (Mr. Gray) as the next speaker for the government Party.
It being one o'clock, I do now leave the Chair until 2 o'clock this day.
At 1 p.m. the House took recess.

January 19, 1987


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. George Henderson (Egmont):: Mr. Speaker, recent polls show that Canadians have a very low opinion of the Government. Apparently foreign countries share the same feeling.
Witness these results: the United States has a headlock on our softwood lumber sector, and its veto could spread to the management policies of other resource sectors. In a case of selective amnesia, the President forgets his commitments to combating the acid rain problem.
Meanwhile, eight French factory freezer trawlers are raping the fisheries stocks off Newfoundland's south coast. While Newfoundland's inshore fishermen suffer because of poor catches, the French vessels are catching over four times their proper quota. This blatant overfishing threatens the stocks and livelihood of many fishermen.
It is now high time for the Government to take action and bring this nonsense to a stop. Constructive internationalism has become a cruel joke to these fishermen.



HUMAN RIGHTS


Mr. John Oostrom (Willowdale):: Mr. Speaker, during World War II, Raoul Wallenberg, a Swedish diplomat, worked relentlessly to save the Jewish community of Budapest from extermination by the Nazis, by setting up houses to protect refugees under the Swedish flag, and negotiated tirelessly with Hungarian and Nazi authorities to save hundreds of Jewish lives.
Forty-two years ago, on January 17, 1945, Wallenberg, was last seen in the presence of Soviet armed forces. Although the Soviets claim that Wallenberg died of natural causes in 1947, a number of people have reported seeing him since. It has been suggested that he may still be alive. The Canadian Government has asked for an explanation from Soviet authorities, but the response given is unsatisfactory.
On December 9, 1985, Raoul Wallenberg became the first person to be named an honorary Canadian citizen. He has also been made an honorary citizen of Israel and, together with Winston Churchill, became the only other person to be awarded in his lifetime the title of honorary citizen of the United States.
It is only fitting that we remember this most distinguished citizen of Canada who risked his own life to save others. I call upon the Government to continue pressing Soviet authorities for a satisfactory answer to the whereabouts of Raoul Wallenberg and to secure his freedom.



THE LATE MARGARET LAURENCE


James Douglas Manly: Mr. Speaker, Margaret Laurence's death on January 5 should remind all Canadians how much we owe to our artists.
Through her characters, Margaret Laurence helped us to understand what it means to be Canadian, whether as an expatriate working in Africa, a single schoolteacher in a small prairie town, or an old woman coming to terms with death. Characters such as Hagar in The Stone Angel or Morag in The Diviners show Laurence's awareness both of the strength of women and of their vulnerability as humans.
They struggled to find purpose, integrity, and love, in a landscape and a society which were often harsh and unyielding. In her own struggle against the threat of nuclear war, Margaret Laurence took seriously her responsibility as a citizen of Canada and of the world.
Canada will survive as a nation to the extent that we keep our cultural sovereignty and adopt policies which allow writers like Margaret Laurence to flourish and to be widely read.



TRAGEDIES


Mr. Geoff Wilson (Swift Current-Maple Creek):: Mr. Speaker, on the afternoon of December 30, 1986, the Swift Current Bronco Junior Hockey Club left on a routine trip to Regina. Minutes later, the team bus slid on ice and overturned.
Killed were four outstanding young players: Trent Kresse, 20 of Kindersley, Saskatchewan; Chris Mantyka, 19 of Saskatoon, Saskatchewan; Brent Ruff, 16 of Warburg, Alberta; and home town favourite, Scott Kruger, 19.
As word of the tragic accident spread quickly across Canada and the world, the hockey fraternity everywhere reached out to Swift Current, a community left in shock and disbelief.
In the words of local writer, Brian Costello:
The four brave men who died should be remembered for the way there were, pleasant and special; just like their surviving team mates who struggle with courage to overcome the tragedy.
January 19, 1987

I am sure all Hon. Members will join with me in extending the sympathies of the House to the families and friends of these four young men.



TOURISM


Miss Aideen Nicholson (Trinity):: Mr. Speaker, as one of the top three industries in every region of Canada, the $22 billion tourism industry could become a real force for economic growth and job creation. An increase of just 1 per cent in tourism can generate about 8,000 jobs.
For tourism to reach its full potential, co-operation from the federal Government is needed to attract the investment dollars that will help to create world-class tourism facilities in Canada.
Since the growth of tourism in Canada depends on how Canada is promoted in foreign markets, the Government should discontinue its practice of hiring local people overseas, and put the delivery of its tourism program back into the hands of experienced and knowledgeable Canadian tourism experts. Measures such as these, as well as an increase in the federal tourism marketing budget, will go a long way toward helping the tourism industry to meet its goal of creating 600,000 new jobs by the year 2000.



SOFTWOOD LUMBER EXPORT DUTY-EFFECT ON MARITIMES

Robert Alfred Corbett: Mr. Speaker, the decision of the Government to impose a 15 per cent export duty on Canadian softwood lumber has caused concern among wood producers in the Maritime provinces. Many producers feel their viability and the jobs they provide are in jeopardy.
Although five mills in New Brunswick were exempted from the duty, 125 mills are now hit with a provision that was installed to correct difficulties caused by extremely low stumpage rates in British Columbia, Alberta, Ontario and Quebec. This action could affect many mills, the jobs those mills provide, and the economic livelihood of many communities in a distressed region.
I urge the Government to undertake two initiatives. First, negotiate the entire Maritime region to an exempted status. Second, cause the effect of an increase to the stumpage rates in the four offending provinces, therefore removing the need for the 15 per cent export duty.
Some 22,000 jobs in the Maritimes are dependent upon a healthy and competitive lumber industry. We must ensure the policies we put in place affecting this sector will not result in job loss, greater unemployment, and continued regional disparity.



NATIONAL HERITAGE


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I am rising to urge the Government to act quickly to help out Canada's only living Father of Confederation, Joey Smallwood. Mr. Smallwood, now in his eighties, is being financially hounded owing to his failure to complete his beloved project, a Newfoundland and Labrador encyclopaedia, because he is not well.
I would suggest that the Government pick up the cost of the completion of the valuable project started by Mr. Smallwood. This encyclopaedia is an invaluable resource not only for the people of Newfoundland and Labrador but for all Canadians and, as such, would be well worth the federal Government's investment.
It is a great travesty to see one of Canada's living legends being forced to deal with sheriffs at his advanced age and in his poor state of health. Surely the Government can find it in its heart to act now.



PHARMACEUTICAL INDUSTRY


Mr. Dave Dingwall (Cape Breton-East Richmond):: Mr. Speaker, the amendments proposed in Bill C-22 by the Government amount to nothing more than a complete capitulation by the Government to the pressures of the American multinational drug manufacturers. The Canadian generic drug industry has been sacrificed on the altar of free trade negotiations, a victim of the Prime Minister's (Mr. Mulroney) insatiable need to surrender Canada's sovereignty to the United States.
I call upon the Minister of Consumer and Corporate Affairs (Mr. Andre) to withdraw this legislation immediately, which is an unjustified and unethical attack on the people of this country who have the misfortune to be ill. The sick or elderly should not be expected to pay the price for the Government's mistakes.
In 1983 Canadians saved approximately $200 million as a result of the Bill's amendment in 1969. What the Progressive Conservative Party wants to do is to change its name to the

January 19, 1987
Regressive Conservative Party because it wishes to go back to the pre-1969 days to give the multinationals a clear windfall profit.



FORESTRY


Mr. Guy St. Julien (Abitibi):: Mr. Speaker, considering that Quebec's new forestry policy will be implemented as of next April 1, several pulp and paper companies in Quebec, particularly Domtar and CIP, have been carrying out excessive wood cutting operations for a number of weeks in the Abitibi-Temiscamingue region and in Quebec generally so as to produce more chips to show the Government of Quebec they are maintaining their five-year average wood cutting operations.
As a result of such excessive cutting these Quebec pulp and paper companies are endangering saw mills in Abitibi-Temiscamingue. Some 105,000 tons of wood chips worth $7 million are now piled up on the ground and more will be added in the coming weeks, enough to represent a value of $15 million.
Mr. Speaker, the Government of Quebec will have to look into this problem. There is room in Abitibi for two additional pulp and paper mills.



THE ECONOMY


Mr. Albert Girard (Restigouche):: Mr. Speaker, after two years of Conservative administration I rise today in this House to highlight the positive aftermath of decisions made by our Government.
As a former businessman I vividly remember that, under a Liberal Government, I paid as much as 19 per cent on small business loans. The current rate is 10.75 per cent. I bought a house in 1983 and had to pay as much as 15 per cent in mortgage interests. Today I would be paying only 10 per cent. This is a major improvement, is it not?
Several economic indicators point to positive results throughout Canada. Consider the number of unemployed workers who have rejoined the labour market thanks to the dynamic and progressive policy of this Government. More than 600,000 jobs have been created in the past two years. One must be aware of and appreciate these facts which have made it possible for many of our fellow citizens to earn an honest living.
All these constructive measures taken by the Government will certainly not be headlined in the Star or the Enquirer, but such indeed is the new climate since our Government was elected. A number of improvements have been made and we can now see the beneficial results. You may rest assured that, in spite of all the obstacles it has to get over, our Government will continue to work towards better living conditions for all Canadians.



ENVIRONMENTAL AFFAIRS


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, U.S. Senator George Mitchell is reported as saying:
We have, in all candor, been somewhat disappointed by the willingness of the Canadian Government to accept what I think are less than significant steps by the administration-I would hope that Canada's Prime Minister in the meeting this year will take a strong stand requesting meaningful action by the administration.
We have also learned that Senator Mitchell's frustration is widely shared by U.S. environmental groups that feel Canada let the administration off the hook by endorsing the envoys' report which contained no specific targets for acid rain reductions.
When will the Prime Minister (Mr. Mulroney) wake up to the reality that acid rain cannot be tackled by way of a special relationship with President Reagan? When will the Prime Minister realize that the envoys' report has not reduced acid in Canada by one ounce? The Government has wasted two years. The cost of this inaction is staggering. It is high time the Prime Minister dealt with the substance of the issue and not just with smoke and mirrors.



TAX ON SOFTWOOD LUMBER MANUFACTURED PRODUCTS

Derek Nigel Ernest Blackburn: Mr. Speaker, the Conservative Government is protecting Americans from their own softwood lumber. Not only has it levied a 15 per cent tax on softwood exports to the U.S. but the Government has also put this tax on Canadian products made from American softwood.
A manufacturer in my riding imports American lumber and sells his finished products back in the United States. However, the Conservative Government charges him 15 per cent when the American softwood goes back over the border. That is not all. The Government is not charging 15 per cent of the sawmill price but is putting the tax on the full price of the finished
January 19, 1987

product. Even if the manufacturer buys lumber that is exempt from the export tax from a Canadian mill, he has to pay 15 per cent on any finished goods produced by Canadian workers. This ensures that our manufacturers cannot compete and that Canadian jobs will be lost. Conservatives are exporting jobs to the United States and are ensuring that Canadians remain simple hewers of wood.



EFFECT OF SOFTWOOD LUMBER EXPORT DUTY

Mr. Ted Schellenberg (Nanaimo-Alberni):: Mr. Speaker, in 1983 our nation was faced with the threat of a countervailing duty against softwood lumber. We then had 19 per cent of the market and we won that decision.
In 1986 we were confronted with another CVD petition. The Canadian dollar value was lower and American protectionist sentiment stronger. Our share of the U.S. market had grown to well over 30 per cent. Last October we lost that decision and a 15 per cent CVD was imposed.
Now it is January, 1987. Through negotiations, the duty has been removed. Canadian lumber producers no longer have to post bonds at the border. Over $600 million in reforestation funds will pour into provincial coffers. We British Columbians know that we have not been replanting all that we cut. Now we will.
What a fascinating debate we will have on this issue in the House. The NDP will be fighting for the corporate forest interests and the Ontario Premier, while the Tories will be defending the position of the forest unions, the IWA, and the B.C. NDP. We do live in interesting times.



HISTORIC EVENTS


Mr. Joe Reid (St. Catharines):: Mr. Speaker, on January 22 Ukrainian-Canadian communities will be raising the Ukrainian flag across the country commemorating Ukrainian Independence Day. The emergence of Ukraine as a free state, though for a brief time only, symbolizes the spirit of freedom which continues to live in the hearts of the 35 million Ukrainians now living under Soviet oppression. Although it is the largest nonRussian, eastern European state, Ukraine is denied the freedom of determining its own fate.
In 1975 a 35-nation conference signed an accord in Helsinki which linked human rights, culture, and education with security and co-operation, which includes the right of self-
Oral Questions
determination. Over one-half of Soviet Russia is made up of non-Russian nations. Those nations will ultimately have the right to define their destiny and shape their own identity. World pressure should make it so.



COINAGE


Mr. Maurice Foster (Algoma):: Mr. Speaker, the Government's incompetence usually draws strong criticism and such was the case when it lost the master dies for the new Canadian dollar coin a few weeks ago. However, it is an ill wind that does not blow good for someone. The loss of the original dies has resulted in the selection of the loon design, the work of Robert Carmichael, an artist from Sylvan Valley near Echo Bay in Algoma district, which is in my constituency.
Mr. Carmichael, who was born in Sault Ste. Marie, is a graduate of Carleton University and of the Ontario College of Art. He is an outstanding artist who often paints landscapes of northern scenes. The loon design reminds us of our rich Canadian heritage of northern lakes and waterways, which are the loon's natural habitat. This design will be used on some $450 million worth of Canadian coins and will bring historic renown to one of Algoma's most talented artists.



ORAL QUESTION PERIOD


John Napier Turner: Mr. Speaker, just preceding the reassembly of Parliament the Government spent a desperate weekend on damage control. The United States Vice-President and Secretary of the Treasury are coming up here to see what they can do to help the Government in the trade negotiations which have gone off the rails. Then the Prime Minister-


Some Hon. Members:: Question!


John Napier Turner: -accepted the resignation of a cabinet Minister.
Like every other Member of the House I have had a chance to look at the press release concerning the resignation of the Hon. Member for Saint-Jean as Minister of State for Transport, but it is pathetically incomplete. When did the Prime Minister personally, or any member of his staff, or any current minister of his Government, learn of the alleged irregularities in the awarding of the Low Level Air Defence contract to Oerlikon, or the unusual land transactions involved?

January 19, 1987
Oral Questions


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, the answer to that question is contained in the statement issued yesterday. As I indicated, the information was brought to my attention. I did what a Prime Minister ought to do, acted quickly and in the public interest.


SCOPE OF INVESTIGATION BY ROYAL CANADIAN MOUNTED POLICE
John Napier Turner: The
Prime Minister thereby sticks by the date found in the press release. Because the release also relates to an investigation by the RCMP, may I ask him the scope of that investigation? Will it include all the circumstances surrounding the letting of the Low Level Air Defence contract to Oerlikon, and will the RCMP have access to cabinet minutes and cabinet documents and all information in the possession of the Government at the time the contract was awarded?


Martin Brian Mulroney: Mr. Speaker, the Right Hon. Leader of the Opposition asks about the scope of the RCMP inquiry. That, too, was referred to in my press release where I said I have asked the RCMP:
-to conduct a complete investigation into the matter.
It means exactly that, total and complete.
[ Translation]


REQUEST FOR INQUIRY INTO CONTRACT AWARDING PROCEDURES
John Napier Turner: Mr. Speaker, the Prime Minister did not answer the questions and his broadcast did not answer them either. I am therefore going to ask the Prime Minister when he is going to set up a real inquiry, either a royal commission or a judicial commission, so that we can be in a position to restore public confidence in the Government's adjudication of contracts and in its ministers in this respect.


Martin Brian Mulroney: Mr. Speaker, unlike what was said, I did answer both questions my honourable friend asked initially, notwithstanding his final comments.
The Leader of the Opposition is now saying: When are we going to have a real inquiry? I say quite frankly and without hesitation that a real inquiry is one conducted by the RCMP with instructions to conduct a total and complete inquiry.


ACQUISITION OF LAND BY OERLIKON COMPANY-REPORTED REQUEST FOR RETURN OF MONEYS
Hon. Douglas C. Frith (Sudbury):: Mr. Speaker, my question is directed to the Prime Minister as well. Is he aware that lawyers representing Oerlikon have sent a demand letter to the President of the Progressive Conservative riding association of Saint-Jean, one Normand Ouellette, requesting the return of
$970,000 which Oerlikon alleges Mr. Ouellette improperly received from the land transaction? Is that the reason for the request of the resignation of the Minister of State for Transport?


Martin Brian Mulroney: No, Mr. Speaker, I am not aware of any specific letter sent in that regard. However, no doubt the RCMP will make that very much a part of their investigation. If my hon. friend or any other members of his Party have any information of any kind, I invite them to give it to the RCMP immediately.


Some Hon. Members:: Hear, hear!


Douglas Cockburn Frith: Mr. Speaker, for the record, that information has been given to the Commissioner of the RCMP. I have indicated to the Commissioner that I am quite prepared to relay to him information I have received.


USE OF MONEYS PAID FOR LAND
Douglas Cockburn Frith: Mr. Speaker, I gather from the Prime Minister's response that he is not aware of this letter. Would he at least indicate to the House that he is prepared to give assurances that none of the $970,000 which was paid to the President of the Progressive Conservative riding association of Saint-Jean has found its way, directly or indirectly, into other people's hands, in order to ensure that the integrity of the political system is kept intact?


Charles Joseph Clark: That's out of order.


Mr. Speaker:: This is an important matter. Ordinarily the Chair might have interrupted the question of the Hon. Member for Sudbury. However, I think all Hon. Members understand the importance of this matter. Because it is important, and because an examination has apparently been commenced by the Royal Canadian Mounted Police, it is important that questions be carefully phrased. Since no charges have been laid in this very serious matter, I ask all Members to be very careful in phrasing their questions in order that allegations are not made which may not be appropriate on the facts known at the present time.


Martin Brian Mulroney: Mr. Speaker, I think the question was as to whether I had knowledge of that. If that was the question, the answer is no. However, I ask my hon. friend to impart that information and any other information he might have to the RCMP. They will conduct the fullest of inquiries and, in a non-partisan way, bring down whatever judgments and recommendations are appropriate.
I just mention en passant that the Leader of the Opposition asked for an independent inquiry. I cannot imagine a more independent and distinguished force than the RCMP to conduct an inquiry into these matters. 1 think we should let them do their work.
January 19, 1987


REQUEST FOR EXPLANATION OF MINISTER'S RESIGNATION
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister.
In his press release yesterday, the Prime Minister did not indicate the reasons for the Minister's resignation. My question is simply this: Since the Prime Minister said on television last night that the Minister was a good Canadian, why did he ask for the resignation of this good Canadian?


Martin Brian Mulroney: Mr. Speaker, a parliamentarian, a Canadian, may be an excellent person, but if he is a member of Cabinet, he is subject to various regulations and requirements which, depending on the circumstances, may demand his withdrawal for a period of time while an inquiry is being held.
I said yesterday that a number of facts were brought to my attention which led me to decide the way I did. I also said, however, that the decision in itself did not mean that Mr. Bissonnette was not to benefit from a presumption of innocence like any other Canadian.


MINISTER'S CONDUCT
John Edward Broadbent: Mr. Speaker, I have a supplementary question for the Prime Minister on the same subject matter.
Considering there is an important distinction to be made, which all Hon. Members recognize, between the possibility of legal wrongdoing-the Prime Minister has clearly taken the correct action, it would seem, in having the RCMP conduct an inquiry if he thought there was some possibility of criminal wrongdoing somewhere-and, on the other hand, wrongdoing of a ministerial nature, and considering we have had five or six other Ministers resign, not for criminal wrongdoing but for ministerial wrongdoing, did the Prime Minister have any reasons to believe that the Minister in question was improperly conducting himself as a Minister of the Crown?


Martin Brian Mulroney: Mr. Speaker, the information which was brought to my attention indicated, in my judgment, that the public interest could be best served by my asking for the Minister to step aside. That is what I did. The public interest would be best served as well by an independent agency such as the RCM Police investigating this matter completely and thoroughly and making its report to the proper authorities. The matter was resolved. Any doubt which existed, I believe, was very much resolved in favour of the public interest, and that is the way it should be.


INFORMATION PROVIDED TO PRIME MINISTER
John Edward Broadbent: Mr. Speaker, I say with respect that the Prime Minister has not helped the situation by
Oral Questions
leaving the possible implication that there was criminal wrongdoing. Considering that Mr. Masse when he resigned made it very-


Mr. Hnatyshyn:: Order.


Charles Joseph Clark: Order.


John Edward Broadbent: Considering that the former Minister of Communications when he resigned made it very clear that he was doing it for proper reasons and claimed his own innocence, but we have had no such claim in this instance-


Ramon John Hnatyshyn: Order.


Charles Joseph Clark: Good Lord, such gutter scraping.


John Edward Broadbent: Calm down, Secretary of State.


Ramon John Hnatyshyn: The NDP thinks you are guilty until proven innocent.


An Hon. Member:: They are getting testy over there.


An Hon. Member:: Take a Valium


John Edward Broadbent: Did the Prime Minister-


Mr. Speaker:: Order. I think all Hon. Members know that under all the cirumstances there is a certain concern that both questions and answers be very, very fair. I would hope that all Hon. Members would try to adhere to the common sense of that general approach.
I also want to say to all Hon. Members, please, it is an important and proper matter upon which appropriate questions are asked, and I would ask all Hon. Members to co-operate.


John Edward Broadbent: Mr. Speaker, I am not asking about any legal matter. My question to the Prime Minister is this. Did he have any information brought to his attention which caused him to believe that the Minister in question had improperly acted as a Minister, that he was not carrying out his ministerial responsibilities in a correct manner? If so, will the Prime Minister tell us what question of that kind did he put to the Minister?


Martin Brian Mulroney: Mr. Speaker, I ordered a full and complete inquiry by the RCM Police because of information that was brought to my attention in regard to this matter. I believed, and still believe, that that is of course the proper way to go. When I was asked by the press about it yesterday I indicated that the presumption of innocence is the most fundamental precept in our democracy. I am surprised at the questions of the Leader of the New Democratic Party which suggest anything to the contrary. Surely this is the type of concept that must be protected and respected by all parliamentarians irrespective of Party.


Some Hon. Members:: Hear, hear!

January 19, 1987
Oral Questions
[ Translation]


OERL1KON CONTRACT TRANSACTIONS-EXTENT OF PRIME MINISTER'S INFORMATION
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is also directed to the Prime Minister and concerns the Oerlikon contract transactions.
Given the fact that the media as well as certain Members and many Canadians have been at least partly aware of these transactions for two months already, I would ask the Prime Minister whether he still maintains that he did not know anything about this matter before last Wednesday. 1 remind him that his press release of yesterday does not make it clear and avoids stating whether or not he was aware of this matter. Is he still prepared to say that today?


Martin Brian Mulroney: Mr. Speaker, this is an astonishing statement on the part of the Hon. Member. He solemnly affirms that several people have been aware of this case for a number of months, for two months.
I should like to know who was aware of it and, if the Hon. Member knew about it, why did he not bring it to my attention or to the attention of the RCMP? Indeed, it was his responsibility to do so.


SENATOR'S APPOINTMENT-REQUEST FOR POSTPONEMENT OF SWEARING IN CEREMONY
Don Boudria: Mr. Speaker, I am glad to ask a supplementary question of the Prime Minister in which I remind him that it is our role to ask questions and his to answer them. Given the fact that the Prime Minister saw fit to remove temporarily one of his colleagues in regard to the Oerlikon affair will he now ask his friend, Jean Bazin, to delay voluntarily his own swearing in as a Senator of Canada? Will the Prime Minister commit himself here and now to asking Mr. Bazin to do this?


Martin Brian Mulroney: Mr. Speaker, I just mentioned that quite an astonishing statement has been made on the floor of the House of Commons. The Liberal Member of Parliament says that many Canadians, and by implication himself, have been aware of important facts for some months in regard to an alleged serious matter that involves morals, perhaps public ethics, criminal law and so on. I ask him today to rise in his place in the House of Commons and tell the House who had that information and what it was. If he has had that information for some months why did he not bring it to the attention of the RCMP since his failure to do so could result in the obstruction of justice?


Some Hon. Members:: Hear, hear!
[ Translation]


INQUIRY WHETHER PRIME MINISTER WAS INFORMED OF MUNICIPALITY'S RESOLUTION
Michael Morris Cassidy: Mr. Speaker, my question is directed to the Prime Minister.
Was the Prime Minister informed of a decision by the Municipal Council of Saint-Jean-sur-Richelieu, made on October 7, 1985, in the riding of the Minister of State for Transport, by which the Council repealed a resolution to declare the municipality a non-nuclear zone, so as not to compromise the town's chances of attracting major investment in one of the defence industries?
Will the circumstances of this decision by a municipal council in the Minister's riding be part of the inquiry by the RCMP?


Martin Brian Mulroney: Mr. Speaker, the Hon. Member asked me whether I was informed of a decision by a municipal council in Saint-Jean-sur-Richelieu in October 1985. The answer is no.
If pertinent facts or allegations are concerned, I imagine the Hon. Member will want to bring all this to the attention of the RCMP which is conducting a complete inquiry into the matter.


CABINET CONFIDENTIALITY
Michael Morris Cassidy: Mr. Speaker, I have a supplementary question-


Mr. Speaker:: I hesitate to interrupt more than is absolutely necessary. However, I want to point out to all Hon. Members that questions ought to be confined to areas of ministerial responsibility or areas of the Prime Minister's responsibility. I certainly do not want in any way to make a ruling or suggest something which would do anything to close off the fullest appropriate questions and answers, and debate, if necessary. I ask Hon. Members in this delicate matter to try mightily to be very careful. The Hon. Member for Ottawa Centre (Mr. Cassidy).


Michael Morris Cassidy: Mr. Speaker, I would certainly say to you that the Minister has resigned and that there were some rather curious circumstances in his riding in which a municipality reversed a resolution on its being a non-nuclear zone. Will the Prime Minister assure the House that in fact there was no breach of cabinet confidentiality? Will that question in fact form part of the Royal Canadian Mounted Police investigation since it appears possible that people in the municipality knew as early as October, 1985, that something major was afoot relative to a major defence investment?


Martin Brian Mulroney: Mr. Speaker, I said that I was not aware of the terms of a decision made at the municipal level in October 1985 in one of the

January 19, 1987

ridings of this country. I repeat what I said. One of the reasons for having the RCMP conduct a complete inquiry into the matter is so that it can find out about such claims and judge whether they have a bearing on the ultimate outcome of the inquiry. It will be up to the RCMP to establish the parameters of its inquiry. We want it to be full and complete.


NATIONAL DEFENCE
Mr. Brian Tobin (Humber-Port au Port-St. Barbe):: Mr. Speaker, the Prime Minister is the only Prime Minister in history who would attempt to turn another Tory scandal into something to be blamed on the Opposition.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: While trying as much as I can to offer the fullest opportunity to express themselves, I would ask all Hon. Members to be careful not to make accusations which are not relevant to the questions being asked here. I know the Hon. Member would not want to do that.


Brian Vincent Tobin: Mr. Speaker, I take your words of advice. At the risk of being charged with obstructing justice I ask the Minister of National Defence to explain to the House why Oerlikon received an important Canadian defence contract when in fact its weapons guidance system fails to meet DND specifications for an all-weather system, exceeds DND's original budget estimates by $400 million, and contrary to DND requirements, is not a technologically mature system?


Hon. Paul Dick (Associate Minister of National Defence):: Mr. Speaker, I would like to inform the Hon. Member that in fact the system does comply with DND requirements as to being an all-weather system. It was within budget. Quite frankly, the Hon. Member's questions are without foundation.


REQUEST FOR PRODUCTION OF DOCUMENTS
Brian Vincent Tobin: Mr. Speaker, I remind the Minister that we are in the land of Canada and not in Disneyland. He ought to come to the point in answering the question.
Is the Minister prepared to provide the House of Commons with a complete and detailed analysis of DND's assessment of Oerlikon's bid for the Canadian weapons guidance system? Would he also provide the House with documents outlining DND's rationale for accepting Oerlikon's bid over that of all other defence contractors?
Oral Questions


Paul Wyatt Dick: Mr. Speaker, if the Hon. Member, like other Hon. Members, had shown up at the Defence Committee, he would have found out a number of these things, and would have been entitled to a private briefing.


SOFTWOOD LUMBER EXPORT TAX-ASSISTANCE FOR WORKERS AND COMMUNITIES
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. Everyone recognizes that the 15 per cent export tax on softwood exports to the United States will cost thousands of jobs, and our sovereign control over forest policy. Will the Prime Minister give us his assurance that there will be full and complete assistance to those workers, mills, and communities that will be hurt by the tax?


Pat Carney: Mr. Speaker, it is because of the agreement that we negotiated with the U.S. that we will, in fact, have the money and the revenues available to Canada which the provinces can use for that type of activity, should they so choose.
May I also take this opportunity to remind the Hon. Member and his Party that the people who have been most supportive of the jobs involved, and the protection of the jobs involved, have been the International Woodworkers of America, the union responsible for the workers?
I would like to read for the record of the House the statement made by the IWA:
We therefore strongly believe that it was absolutely essential to conclude a negotiated settlement with the United States which will guarantee that the increased taxes on softwood lumber shipments to the United States be kept in Canada.


Mr. Speaker:: Order, please.


REQUEST FOR FEDERAL COMPENSATION PROGRAM
James Ross Fulton: My supplementary question is directed to the Prime Minister. It is the federal Government that negotiated this agreement. Article 6 is a very difficult one for the provincial Governments to get around. There are fears in many communities of a Scheffervile solution. I would like to ask the Prime Minister to end the confusion surrounding this issue and clearly state that there will be a federal program which will fully compensate and assist those workers, mills, and communities that will be hurt by the 15 per cent export tax.


Pat Carney: Mr. Speaker, I believe I have already covered that in my answer to

January 19, 1987
Oral Questions
the previous Member's question by pointing out that in our settlement we keep about half a billion dollars in Canada which will be returned to the provinces for use in reforestation, in retraining of workers, or as they wish. Without the agreement we have the problem and no money. With the agreement we still have the problem but we have the funds to meet it.


UNITED STATES OFFICIALS' LETTER
Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, 1 have a question for the Prime Minister. His colleague, the Minister of International Trade, has stated that the moneys that will be obtained by the export tax will be used for reforestation and other means to assist the industry. That point was confirmed yesterday in an interview given by the Deputy Prime Minister.
At the same time we have a letter which was put forward by Mr. Yeutter and Mr. Baldrige which clearly stated that those actions on behalf of any Canadian Government are not permissible under the agreement.
When the Prime Minister meets with the Vice-President of the United States on Wednesday will he gain from the VicePresident a clear repudiation of the Yeutter-Baldrige interpretation that infringes our sovereign right to decide for ourselves what to do with our industry? If we do not get that repudiation, will the Prime Minister revoke the agreement that we have signed that limits our sovereign right to decide what to do for the workers in the lumber industry?


Martin Brian Mulroney: Mr. Speaker, I am happy to answer the question from my hon. friend. The deal concluded by the Minister of International Trade was a properly constituted one and very much, in difficult circumstances, in the national interest. Any suggestion by anyone that there is a word, a paragraph, or an adjective in that agreement that is at variance with the strong promotion of our national interests and sovereignty is false.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: I have heard no suggestion at all. I make allowances for those people who like throwing verbal hand-grenades at the United States every day. I believe that it is a challenging-


An Hon. Member:: Why are you calling Bush up here?


Martin Brian Mulroney: I am calling Bush up because he wanted to meet with you.


Lloyd Axworthy: We wish he would.


Mr. Speaker:: Perhaps the Chair should call upon the Hon. Member for Winnipeg-Fort Garry.


Lloyd Axworthy: Mr. Speaker, the Prime Minister is trying to throw verbal hand-grenades.


GOVERNMENT'S POSITION
Lloyd Axworthy: Has the
Prime Minister not just accused the Secretary of Commerce and the U.S. trade representative of falsifying the agreement by the letter that they have written to their own industry which clearly states that the actions by the governmental bodies in Canada are not allowable? These include rebates and remissions, reforestation, and direct assistance to the industry.
I am asking if the Prime Minister of this country, and the Minister for International Trade, are prepared to disregard totally this type of written statement by senior officials of the U.S. Government and not attempt to get a clarification on Wednesday, or repudiate the agreement that will limit our rights according to the American interpretation of that agreement? Why does the Prime Minister refuse to do that?


Martin Brian Mulroney: I do not
refuse to do anything. The agreement speaks for itself. It is the agreement that speaks for itself. I cannot be held responsible for an interpretation that someone in the United States would place on it, any more than any reasonable Canadian would want to be held responsible for the interpretation placed on it by the Hon. Member for Winnipeg-Fort Garry.
The fact of the matter is that when the sovereignty of the nation is involved every Government of Canada, irrespective of political Party, has at all times defended the interests of Canada, no less so than this Government which is formed by a political Party that founded Canada. It was our Party, the Conservative Party, that built this country, and we will continue to defend and enhance Canadian sovereignty at all times.


Lloyd Axworthy: Why give up on it now? You are selling out and you know it.


An Hon. Member:: You are down to fourth place now.

[Translation\


AUTOMOTIVE INDUSTRY
Steven W. Langdon: Mr. Speaker, my question is also directed to the Prime Minister. Considering the confusion created by Peter Murphy's statement on the Auto Pact safeguards, could the Prime Minister make it clear that these safeguards will not be abandoned in the course of the free trade talks?


Pat Carney: Mr. Speaker, I can only repeat what we have said in this House and what our negotiator, Mr. Reisman, has said. We are not
January 19, 1987

proposing to put the Auto Pact into these talks. Should the Americans wish to do that, we will consider any suggestions that they have to improve it.
But may 1 say, Mr. Speaker, that this is a very odd question coming from the Hon. Member of the NDP considering the remarks made by his own Leader in the House as reported by Hansard on July 8, 1977:
First of all, in order to protect the parts industry, which has been losing billions of dollars annually in terms of trade deficit, major modification of the pact is required.


Some Hon. Members:: Oh, oh!


Pat Carney: Further in the same speech, Mr. Speaker, he also stated:
There have been some positive benefits from the pact, and anyone who denies it would be crazy; but there are also a number of severe liabilities in it for Canada-


Mr. Speaker:: Order, please. The Hon. Member for Essex- Windsor.


Steven W. Langdon: I can see that the Minister has been reading speeches over the holidays on the beaches of Hawaii.


Mr. Speaker:: Order, please. The Minister may well have been reading speeches on the beaches of Hawaii, but I am quite sure that the Hon. Member would not want to repeat them all here. Would the Hon. Member ask his question?


SAFEGUARDS IN AUTO PACT
Steven W. Langdon: My question deals directly with the question of safeguards which my Leader sought to increase, not decrease. I wish to ask the Minister if she will guarantee Canadians that the safeguards will not be reduced in any way in the free trade talks that are taking place?


Pat Carney: Mr. Speaker, again I would like to look at the words of the Hon. Leader of the NDP who, on April 17, 1980, asked the then Liberal Government:
-will the Minister not now seize the opportunity of this genuine crisis in the industry to arrange a meeting at the top level, including the Canadian Secretary of State for External Affairs and himself, to get a renegotiated pact in place by the end of this year?


Some Hon. Members:: Oh, oh!


Pat Carney: Those were the words of the Leader of the NDP.


Mr.   La Salle@: Give him the quotation.


Donald Frank Mazankowski: You are blushing, Ed.


John Carnell Crosbie: You have a short memory, Ed.


Some Hon. Members:: Order, order!
Oral Questions


Mr. Speaker:: The Hon. Member for Don Valley East.


HUMAN RIGHTS
Mr. Bill Attewell (Don Valley East):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. On January 8 I telephoned Dr. Alexander Ioffe in Moscow who, a few hours earlier, had started a hunger strike, not for himself-and he has been refused an exit visa for 10 years-but for his son and his family who were refused an exit visa in November. Over last weekend we understand that the Soviet authorities have not made any contact with Dr. Ioffe. Would the Secretary of State have someone in our Embassy in Moscow visit Dr. Ioffe to see the state of his health and to see whether we could be of some help? More particularly, would he exert the pressure of his office to see that an exit visa is granted for Dr. Ioffe's son, Dimitri, so that Dr. Ioffe's health does not deteriorate further?


Charles Joseph Clark: Mr. Speaker, on January 14 a representative of the Canadian Embassy in Moscow visited Mr. Ioffe. We have made representations to the Government of the Soviet-


An Hon. Member:: How is he?


Charles Joseph Clark: I am asked how he is. I hope that is a serious question; certainly it is to us, if not to the Liberal Member who raised it. He appears to be in reasonably good health. We are continuing to make representations to the Soviet Union to seek the possibility for Mr. Ioffe to come to Canada. I should simply make the point that it is precisely on individual cases like that that we will find the real test of the intention of the Soviet Union with regard to people in that country who might want to move to freedom.


THE ADMINISTRATION
Hon. Bob Kaplan (York Centre):: Mr. Speaker, I should like to return to the Prime Minister with a question on the Oerlikon contract. When the Prime Minister says that the RCMP investigation will be complete, he knows of course that the RCMP only investigates law-breaking. It does not investigate standards of behaviour required of Ministers, conflict of interest, maintenance of cabinet confidentiality, or integrity on the job. Is the law-breaking question the end of it, or will there be an investigation or a royal commission, such as my Leader suggested, to look into the larger questions of how

January 19, 1987
Oral Questions
the Government conducts business and what is expected of Ministers?


Martin Brian Mulroney: Mr. Speaker, I think that the word "complete" is a precise one which indicates the openness of the Government. As my hon. friend knows, as a former Solicitor General, once the matter is placed in the hands of the Police, it is not up to the Government or the Solicitor General to try to impose any parameters of any kind on the inquiry. This inquiry by the RCM Police will be conducted fully and completely in a manner that it determines, and its inquiry shall lead it wherever. My responsibility, when confronted with some facts, was to deal with a member of my Government, and I did so and, I think, properly.


PROPRIETY OF CONTRACT NEGOTIATION
Robert Phillip Kaplan: Mr. Speaker, there are larger questions. I want to ask the Prime Minister whether he considers it proper for the Government to enter a contract with a bidder where his friend, Jean Bazin, is a director and legal counsel; where his friend, Roger Nantel, is a paid lobbyist; where his ex-staffer, Peter Ohrt from the Prime Minister's Office, is hired as project manager; and where two officials involved in examining those bids are involved now and working for the bidder. Is this the kind of deal which Canadians can expect the Government to enter into, or will there be an investigation of the propriety of it?


Martin Brian Mulroney: Mr. Speaker, the Hon. Member makes allegations of impropriety which no doubt will be immediately and urgently considered by the RCM Police. That is the objective of giving it to the independent police force in Canada for its analysis, consideration, and determination. I point out, because I know as a lawyer-and I was just about to say something, that I was the classmate of an Hon. Member here who would confirm it, the Hon. Member for Papineau-that it was Mr. Bazin and Mr. Nantel who brought to the attention of the Government, pursuant to a meeting with their client, the facts that permitted this inquiry to get under way-that these are not the acts of guilty people. These are innocent people, and my friend should give them the presumption of innocence.


COST OF ESTABLISHING DEPARTMENTAL COMMUNICATIONS UNIT
Nelson Andrew Riis: Mr. Speaker, my question is directed to the Minister for International Trade who, during the recess, announced that she plans to spend $12 million telling Canadians what a great job she is doing in shoring up her failing reputation. Should the Minister not be blushing a little, considering that in her first speech given in
the House of Commons on October 23, 1980, she condemned the then Liberal Government for doing exactly the same thing-using taxpayers' money to tell the people of Canada what a wonderful job they were doing?


Pat Carney: I will assume, Mr. Speaker, that there is a question in that. I can assure the Hon. Member that the establishment of a communications unit is wholly consistent with normal government operations and responsible to the Deputy Minister. It will provide our Department with the capability to handle communications programs both at home and abroad on all trade issues. Specifically, it will answer the question the Hon. Member for Kamloops-Shuswap asked me in the House on October 27, which was: "How would she suggest I respond to my constituents when they ask me what are the implications of these talks on the Okanagan fruit industry and our fledgling breweries and wineries in British Columbia?" I have put in place a unit which will answer the questions which he and his Party raise.


Nelson Andrew Riis: Mr. Speaker, it is the Minister's job to explain that, not that of the taxpayers of Canada. Where was she at 11 o'clock when she should have stood in her place as a Minister and made those explanations under a Minister's Statement?


Some Hon. Members:: On the beach.


GOVERNMENT ADVERTISING EXPENDITURES
Nelson Andrew Riis: Mr. Speaker, my suplementary question is directed to the Right Hon. Prime Minister who indicated that he would give the Minister the free trade ball; he did not realize that it was going to cost Canadian taxpayers $12 million for that ball. When his present Minister of National Defence was in opposition, he put forward the following motion:
That this House condemns the Government for its increasing use of Canadian taxpayers' dollars for self-serving advertising-at a time when it demands financial sacrifices from ordinary Canadians.
How does the situation today differ from that condemnation which his Party put forth back in 1982?


Martin Brian Mulroney: Mr. Speaker, I want to apologize to the House for any confusion. I stumbled momentarily into the NDP policy meeting on the weekend, and anything which comes out will obviously reflect on that. They, too, are serious matters, very serious matters, with which we are going to be dealing. With regard to the advertising or the public information campaigns, they are not in any way, nor will they be, the kinds of partisan advocacy campaigns that would have applied in the past. These will be-


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: To the extent-


An Hon. Member:: Quit smiling.


Martin Brian Mulroney: These will meet with the objective-
January 19, 1987


John Edward Broadbent: Can I write the ad?


Martin Brian Mulroney: I could even go back and get the speeches of the NDP from 1980 and put them in that-


Mr. Speaker:: Order. The Hon. Member for Saint-Jacques.


CONFLICTS OF INTEREST
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, my question is directed to the Prime Minister and has to do with the Oerlikon case. The statement made yesterday by the Prime Minister is quite short, only 18 lines. It is rather brief to explain the dismissal of a Minister. I should like to ask the Prime Minister if it was his decision to institute an investigation to discover whether the conflicts of interest guidelines were followed or whether they were transgressed because, under the terms of these guidelines, it is up to him as Prime Minister to make sure that the guidelines were followed. Is the Prime Minister now making an investigation into this matter?


Martin Brian Mulroney: Yes, Mr. Speaker, it is indeed my responsibility as Prime Minister to make value judgments, and I made the judgment required under the circumstances. In addition, we have launched a full investigation into this matter and I know that my colleague will want to wait for the findings before making further comments on this.


REQUEST THAT PRIME MINISTER MAKE COMPLETE STATEMENT CONCERNING EVENTS WHICH LED TO HIS DISMISSAL OF MINISTER
Jacques Guilbault: As I just said, Mr. Speaker, 18 lines make a rather brief statement. I want to ask the Prime Minister whether he is prepared to make a complete statement before the House, at the earliest opportunity, concerning the events as he uncovered them and which led to his decision to dismiss a Minister of the Crown.


Martin Brian Mulroney: Mr. Speaker, my friend will see in the same statement that all the information I had was passed on to the RCMP. It is up to our national and independent police force to complete their investigation. And of course we will live not only with the results but also with the conclusions and recommendations of this investigation, as we should.
Oral Questions


REFUGEES
Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, my question is for the Minister of Employment and Immigration. Canadians from all parts of our country are very angry with the apparent abuses of our refugee policy. In light of the media news last week indicating that there is a possible influx of people of central American extraction by way of the United States, what steps are being taken to help prevent this possible influx and abuse of our policy?


Benoît Bouchard: Over the past three weeks, Mr. Speaker, I have had many opportunities to say that indeed the Government is concerned about the problem of refugees now seeking to enter this country. As to the Latin Americans, certainly we are monitoring the situation very closely on a daily basis and, depending on the number of refugees who want to be admitted here, should the situation force us to take other measures besides those we have already taken we will do so. For the time being, however, we are satisfied with closely monitoring the situation.


Mr. Speaker:: I think Hon. Members will realize that there have been some interruptions during Question Period. I will take one question from the Hon. Member for York South- Weston.


THE ADMINISTRATION
Mr. John Nunziata (York South-Weston):: Mr. Speaker, my question is for the Prime Minister. It concerns the conduct of two other Ministers, the Solicitor General and the Minister without portfolio, the Hon. Member for Joliette, in the Frank Majeau affair. Why was a routine security check not done on Mr. Majeau in view of the fact that the RCMP were notified in May of the matter and in view of the fact that the Solicitor General was notified in October? In view of these facts, will the Prime Minister also initiate an RCMP investigation into the conduct of those two particular Ministers to determine whether they, in effect, stopped a security check into Mr. Majeau's background?


Donald Frank Mazankowski: Mr. Speaker, it is true that the strict security procedures were not followed in this particular case. We regret that very much. There has been a full examination by PCO officials into all other matters

January 19, 1987
Business of the House
affecting security clearances on the staffs of all Ministers. I am informed that that review is pretty well completed. I want to assure the Elouse that any members of cabinet Ministers' staff who have not been security cleared who are handling sensitive information will be subject to that procedure. For those who have not cleared security, appropriate action will be taken.


Mr. Speaker:: I must advise Hon. Members that Question Period is running a little late. There have been interruptions. I will recognize the Hon. Member for Vancouver East on one question and then we will have to close out Question Period. I thank Hon. Members.


DAY CARE
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, my question is for the Prime Minister and it concerns the credibility of his child care statements. He said to the First Ministers "the federal Government wants to ensure that affordable quality child care is available to Canadian women", and, "we are prepared to allocate substantial resources". The Minister of National Health and Welfare recently expressed an opposite view and revealed his bias against day care which is urgently needed by the majority of families with young children.


Charles Joseph Clark: That is a falsehood.


Margaret Anne Mitchell: Which person can Canadians believe, the Minister of National Health and Welfare or the Prime Minister, regarding the Government's child care policy?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, I do not have any bias against child care and day-care centres. I said in an interview that the Government had committed itself to an expansion of the day-care system, that I fully endorsed it, and that I have the responsibility to bring forward a system at the end of this week to other Ministers as was confirmed by the Prime Minister in Vancouver.
The area of controversy, if, in fact, there is any-I was asked the question as well-concerns the only exclusive model that all Canadian children should be exposed to, but it varies from one family to another. One family is a single-parent family while another has both parents working outside the home.


Margaret Anne Mitchell: Biased.


Arthur Jacob (Jake) Epp: It is a not a bias. In fact it is a much better view of the family than the Hon. Member's narrow view.


BUSINESS OF THE HOUSE
Donald Frank Mazankowski: Mr. Speaker, as you are
aware, discussions have been going on between the Government and the House Leaders of the other two Parties. That was alluded to this morning. I think you will find unanimous consent, Sir, to allow the order for the concurrence of the Ways and Means Motion to be tabled this afternoon as the first order of business so that we could get on with the debate on the softwood lumber issue which would implement the export tax.


Herbert Eser (Herb) Gray: Mr. Speaker, the Official Opposition is willing to expedite the procedure of debate on second reading of the Government's measure to impose an export tax on softwood lumber-


Mr. Speaker:: It seems to the Chair that after there has been a brisk Question Period, while there are clear signs of cooperation among all Parties to get on with other business in the House, it is appropriate that all Hon. Members let the House Leaders and others comment on the arrangement that is being made. The Hon. Member for Windsor West (Mr. Gray).


Herbert Eser (Herb) Gray: Mr. Speaker, I want to say that in order to allow the debate on second reading of the Government's measure to impose an export tax on softwood lumber to begin today, we are willing to agree to expediting the various steps leading up to that point. However, I want to make it clear that this does not in any way change our opposition to this measure. Therefore, no one should be surprised that when the motion for concurrence is put, we will be voting against it. I am talking about a motion to concur in the Ways and Means motion which was tabled earlier today.


Mr. Speaker:: Order. The Chair understands perfectly the position faced by the Hon. Opposition House Leader. I now recognize the Hon. Member for Kamloops-Shuswap (Mr. Riis).


Nelson Andrew Riis: Mr. Speaker, it is our intention, as we indicated earlier this morning, to cooperate with the Government to facilitate the immediate debate of the 15 per cent tax. Again, just to make the point very clear, our intention is to support the motion so that the process can get under way, but it is to be interpreted in no way as supporting the Government's initiative in terms of its agreement signed at the end of 1986.


Mr. Speaker:: I want to thank Hon. Members for making that clear and I also want to thank them for their co-operation with the Chair. It has been a brisk Question Period and questions and answers were put vividly, but I think it is to the credit of the House that co-operation can be obtained and given freely to move on with the business. I want to advise all
January 19, 1987

Ways and Means
Hon. Members that I understand the basis upon which the cooperation has been given.



ROUTINE PROCEEDINGS


Pat Carney: that a Ways and Means motion to impose a charge on the export of certain softwood lumber products laid upon the Table earlier this day be concurred in.


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


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


Mr. Speaker:: All those in favour please say yea.


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Speaker:: Call in the Members.


The Acting Speaker (Mr. Paproski):: I declare the motion carried.


[Stage Direction]
Motion agreed to.
[Stage Direction]
January 19, 1987
Softwood Lumber Products Export Charge Act

Pat Carney: that Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, be now read the first time and be printed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.
The Acting Speaker (Mr. Paproski):: When shall the Bill be read the second time? By unanimous consent, now?


Some Hon. Members:: Agreed.


Pat Carney: that the Bill be read the second time and referred to a legislative committee.


Herbert Eser (Herb) Gray: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Paproski):: Order, please. Before I entertain points of order Mr. Speaker will take the chair to make a ruling. The Hon. Member for Windsor West (Mr. Gray).


Herbert Eser (Herb) Gray: Mr. Speaker, with your amazing skill at these matters you actually anticipated and answered my point of order.


MOTION TO ADJOURN UNDER S.O. 29 FREE TRADE NEGOTIATIONS-CANADA-U.S. AUTO PACT
Mr. Speaker:: As Hon. Members know, there was an application for an emergency debate by the Right Hon. Leader of the Opposition (Mr. Turner) with respect to which the Chair received notice some days ago and upon which the Chair heard discussion this morning. In view of the arrangements which have been made in the Chamber, there is no need for me to make any comment upon that particular application. However, there is another request for an emergency debate in the name of the Hon. Member for Windsor West (Mr. Gray). The Chair would like to deal with that request now.
The Hon. Member for Windsor West has given due notice of his intention to propose under Standing Order 29 a motion to adjourn the House for the purpose of considering an important matter relating to the Canada-United States free trade negotiations and, more particularly, issues relating to the Canada-United States Auto Pact.

The Chair is well aware that the Auto Pact and the free trade talks are a very important subjects of public debate. It also recognizes how important these matters are to the Hon. Member for Windsor West (Mr. Gray).
It is clear that the matter comes within the scope of ministerial action and is part of the Government's administrative responsibilities.

However, the terms of Standing Order 29 require that the matter proposed to be discussed be specific and that a genuine emergency be at least anticipated if not be fact. The Chair has some difficulty in establishing, on the basis of public statements made to date, whether the Auto Pact will or will not be part of the free trade negotiations and is therefore not convinced that a specific and genuine emergency exists at this time.


John Napier Turner: That is our problem too.


Some Hon. Members:: Right on!


Mr. Speaker:: The Chair is conscious of the fact that, as some Hon. Members have just volunteered, the Chair's problem is also a problem for the House.


Some Hon. Members:: Hear, hear!


Mr. Speaker:: Furthermore, there must be urgency of debate for the Chair to acquiesce to such an application. The Hon. Member for Windsor West may wish to seek other opportunities to debate this matter and there are other avenues which he may want to explore in order to get his views on the record. However, and I emphasize this, for the time being the Chair must rule that his application does not satisfy the exigencies of Standing Order 29. I wish to thank the Hon. Member for Windsor West for his intervention and other Hon. Members for their attention to the ruling of the Chair.


RESIGNATION OF HON. MEMBER FOR YUKON
Mr. Speaker:: It is my obligation as Speaker to bring to the attention of Hon. Members the fact that I have received today a facsimile of a letter dated January 16 from the Hon. Eric Nielsen, Member of Parliament for Yukon. The facsimile reads as follows:

January 19, 1987

Whitehorse, Yukon VIA 2A7
The Honourable John Fraser, The Speaker of the House,
Room 222, North, Centre Block, House of Commons,
Ottawa, Ontario K1A 0A6
January 16, 1987
Dear Mr. Speaker:
This is to officially notify the House of Commons through you, that I hereby resign as Member of Parliament for Yukon effective January 16, 1987 and ask that you convey this to the House on Monday.
Sincerely,
Erik Nielsen,
Member of Parliament for Yukon
There are witnesses duly noted on the letter.
I wish to bring to the attention of all Hon. Members the fact that the Chair has sought the advice of parliamentary counsel on this matter. While this is a facsimile and it is in my view clearly a matter of importance, it should be brought to the House at the first opportunity. I have discussed with the Hon. Member for Yukon the fact that the obligation on the Speaker to refer the matter to the Chief Electoral Officer cannot take place until the original of this document is actually received.
I am advised by the Hon. Member, and have no reason to doubt him, that that particular document has been sent by the usual means to this place.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: That may well be the reason that the Hon. Member for Yukon wished me to make this announcement to Hon. Members this afternoon. In any event, when the original document is received-and I think the Chair is bound by the statute to wait until it is received-the appropriate steps will be taken.
I know that all Hon. Members, especially those of us who have known the Hon. Member for Yukon for many years in different capacities and on different sides of the House, would want me to express to him in the Chamber the accord, the affection and the admiration in which he has been held for many years by all Hon. Members, and perhaps to remember how vividly and vigorously he fought for that which he thought was right and proper in the service of our country.


Some Hon. Members:: Hear, hear!



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Miss Carney that Bill C-37, an Act respecting the imposition of a
Softwood Lumber Products Export Charge Act
charge on the export of certain softwood lumber products, be read the second time and referred to a legislative committee.
Donald Frank Mazankowski: Mr. Speaker, I rise on a point of order. In order to facilitate debate it is the desire of the two opposition Parties to ask for the consent of the House to defer Private Members' Hour until the lead-off speakers of all three Parties have had an opportunity to complete their remarks. I do not wish to put that forward in a formal motion, but if there could be an understanding that we complete the first three speeches, and then go on to Private Member's Hour?


Mr. Speaker:: The House has heard the request of the Hon. Deputy Prime Minister (Mr. Mazankowski). Is there agreement?


Some Hon. Members:: Agreed.


Mr. Speaker:: Members have indicated agreement.
On debate, the Hon. Minister for International Trade (Miss Carney).


Pat Carney: Mr. Speaker, you are aware that we have finally reached an agreement with the United States on the issue of softwood lumber, after months of intense effort on behalf of the Government, and after a study of the many complex issues that this matter brought before us.
I wish to remind you that one of the reasons why this is so important, and the measures we are taking are so vital, is that Canada is very much a forest nation. Including our northern territories, all of Canada in some way is involved with forestry, as is all of Canada involved in some way with trade.
I wish to assure the House that in bringing forward this measure we have acted in the national interest, we have acted consistent with our GATT obligations, and we have acted in a way that is infinitely better than the alternative before us, which was to accept a countervailing duty.
In terms of the national interest, I would like to review with you that we in our agreement moved to protect our sovereignty. The Opposition would allow the U.S. to overrun our forests. We acted to protect our revenues. The Opposition would pay these revenues to the U.S. We acted to protect our industries. The Opposition would expose those industries to other countervails. We acted to protect jobs. The Opposition's preferred option, countervail, would cost jobs.
In terms of dealing with our GATT obligations, I would like to remind the House that Canada is an international trader. We are in the big leagues in trade. Canada, along with the European Community, the U.S., and Japan, are the four big trading interests which account for 40 per cent of the world trade. The Opposition would take us out of the big leagues. The Liberals would send us down to the minors. The NDP would leave us on the bench.

January 19, 1987
Softwood Lumber Products Export Charge Act
In terms of the countervail, I can only quote the Prime Minister (Mr. Mulroney). As the Prime Minister has stated, in terms of the countervail if we had a choice between this agreement and perfection, we would have taken perfection. But we had a choice between this negotiated agreement on our terms, and a countervail. In this agreement we have the best settlement possible, given the alternatives which we faced.
I would like to briefly outline the options, the process, the demands, and the results achieved in this agreement. First, I wish to remind the House that this is not a new issue. Our research shows that the earliest attempts to block softwood lumber exports to the U.S. were in 1892.
In 1983, faced with a similar countervail threat, we won the preliminary determination. However, in 1986 we lost the preliminary determination, and a 15 per cent duty was declared. Therefore, under international law, and under U.S. trade law, we faced three options. We could fight and risk losing the case and paying countervail duties to the U.S. Treasury. We could plead guilty that our stumpage programs were subsidies. This is a position that Canada has always maintained is not the case. Our second option was to plead guilty that our stumpage programs were subsidies and enter into a suspension agreement to keep the additional moneys in Canada. The third option open to us was to negotiate a settlement in order to protect the thousands of Canadians who work in the industry, while protecting the right of the provinces to manage their resources, and to keep forest revenues in Canada.
The Canadian Government engaged in full consultations with the provinces, labour, and industry. We explored all the options consistent with our duty to protect Canada's interest.
A split developed between the provinces as to what approach we should take. This is important, because this Government has always maintained the constitutional right of the provinces to their natural resources, a right that the Liberal Government has ignored in the past.
Ontario wished to proceed to the final decision in the hopes of reversing it, or if that failed, challenging it in the U.S. courts. British Columbia and Quebec are the major owners with 80 per cent of the forests. They favoured negotiating a suspension agreement to keep the money in Canada.
In discussion with the U.S. Commerce officials we became increasingly convinced that notwithstanding our strong case, we would lose the final determination. Such a final determination would have been an open invitation for any special interest group in the U.S. to file a petition against our other resource exports, because that would have put on the books, through the final determination, a precedent which could be used against our other export industries. Thus, in November, I concluded that fighting the case through to the finish would almost certainly entrench a dangerous legal precedent, and see the resulting countervail duties flow to the U.S. Treasury. I may remind the opposition Parties that the duties could well have been higher than 15 per cent. The U.S. industry was asking for
36 per cent. We had no reason to believe that it would be safe to assume that we would only have a 15 per cent duty.
It is our position that we do not fight to lose cases. We fight to win cases. On the other hand, the suspension agreement approach which was favoured by B.C. and Quebec was equally unpalatable. That would have surrendered our forest management policies to the U.S. Government. That was totally unacceptable to the Government of Canada.
The proposal that I developed with Secretary Baldrige came the closest to meeting the objectives of all parties. It was presented to the First Ministers' Conference in November. The Premiers agreed to see if we could explore it. The benefits of seeking a negotiated settlement were very clear. It would meet both national and provincial objectives, increased revenues would be kept in Canada, and these could be used to replenish the forests. These revenues will be returned to the provinces and the provinces have the right to use them for silvaculture, reforestation, worker retraining, or other things within their constitutional jurisdiction.
The provinces would retain their flexibility in determining stumpage pricing, which is very important to the two provinces that had stumpage increases in their systems planned and were caught in the vice of the threatened countervail.
It would avoid the dangerous development in U.S. countervail policy by having the petition withdrawn, because it was central to this negotiation that in return for a negotiated settlement the actual petition that was brought by the U.S. intra groups, the U.S. coalition of lumber, would be withdrawn, and further conflict between the provinces on how they determine their natural resource management policies would remain unimpaired. Unlike a suspension agreement, the U.S. authorities could not infringe Canadian sovereignty by policing provincial management practices.
The agreement we reached with the United States meets all of these objectives. It is important to stress that it is supported by the nine provinces that own the resource, the union that represents the forestry workers, and important elements of the industry. For our B.C. Members of Parliament, it may be useful to note that the B.C. NDP critic, Bob Williams, was reported in the media as saying that the softwood accord was "a pretty good deal". It was the best that could be obtained in difficult circumstances. Moreover, it was reached on our terms, because the key clauses that were on the table at the start of the negotiations were on the table at the end of the negotiations.
Much has been made by the critics about the alleged infringement of Canadian sovereignty. This is really a phoney issue. All countries regularly conclude international agreements in which they agree to restrict their freedom of action, even in the Auto Pact that the NDP is so worried about.
All agreements between countries is an exercise of sovereignty, by the very willingness and ability of countries to enter
January 19, 1987

into them. Our sovereignty is undiminished and, if at some future date we were to decide to terminate the agreement, that too would be an exercise of sovereignty.
What has Canada agreed to do in this agreement? During the course of the negotiations the U.S. coalition made many demands upon Canada. It is fundamental to understand that under existing U.S. trade law any interest group in the United States can bring this kind of action against any Canadian export. This is why we are seeking to negotiate a new trade treaty with the U.S.-to change these rules so that we avoid these kinds of border disputes.
One of the demands which the U.S. coalition sought was to establish a floor price regardless of market conditions. It sought to dictate how Canadian stumpage policies would operate. It demanded specific changes in provincial systems within a defined time frame, with a joint supervisory committee to oversee the changes.
The opposition Parties forget that what the U.S. coalition was asking for was a $ 1.1 billion increase in stumpage in one year. That is what they were seeking, and that is what they did not get. That is almost three times the existing levels of stumpage collected in the country.
If the idea of the joint board had been accepted, the U.S. Government would be able to dictate how our policies should be made and implemented. That was totally unacceptable to Canada, and we rejected it out of hand.
The U.S. administration has expressly recognized Canadian sovereignty in its statement of January 2, wherein it said that "The United States Government will not be concerned with how Canadian authorities make changes in their forest management practices. When they do so or what form these changes take. These are matters for Canadians to decide."
I also assure the Opposition that I personally telephoned Mr. Yeutter, the U.S. trade representative, to make it clear, in terms of the letter which was quoted, that the U.S. had a choice-either we had an agreement on the terms that the U.S. accepted with the statement I have just read from Ambassador Niles, or the U.S. would be in contradiction of the agreement it had just signed. These are all the essential qualities-


Lloyd Axworthy: What did he say?


Pat Carney: The Opposition asks: "What did he say?" They issued the statement; that is what they did. They issued the statement which said: "These are matters for Canadians to decide".
The Hon. Member has been spreading misleading information about this matter in a way which is detrimental to the national interest.


Some Hon. Members:: Hear, hear!


Pat Carney: The only item which is the subject of consultation and agreement is the calculation of the value of any
Softwood Lumber Products Export Charge Act
changes in the export tax, because the export tax is a 15 per cent tax at the border. At some point in time it is planned to phase it, in whole or in part, into increased stumpage, if that is what the provinces wish to do, and the U.S. has the reasonable right to ensure that the conversion from an export tax to stumpage meets the criterion of 15 per cent.
It must not be forgotten that if the countervail had been imposed, Commerce officials would have been coming into Canada, as they did on the preliminary determination, and would have verified provincial and industry books. They would be in the forest services records, they would be in the forests, and they would decide unilaterally how we were going about this method. That unacceptable practice has been avoided.
Under the agreement the information we will provide to the U.S. is essentially in the public domain and does not involve U.S. officials entering Canada to audit and verify it. Reaching this agreement is a major accomplishment. When compared with a suspension agreement, the settlement is infinitely preferable. Like a suspension agreement the money stays in Canada but, more important, the intrusive policing of provincial management practices which a suspension agreement entails has been avoided.
What the Opposition also fails to realize is that if the countervail had gone into effect as expected-and I hope every B.C. Member is conscious of this-the Canadian forest industry would have been faced with a double whammy of both a duty and an increase in stumpage, because the only way one can get rid of a countervail is to increase stumpage to the point where the Commerce Department in the U.S. unilaterally decides that the alleged subsidy was offset.
Here we have an industry which now has a 15 per cent tax that with a countervail would have had both the tax and increases in stumpage to offset it-a 30 per cent plus double whammy. We knew that the Canadian forestry industry could not sustain it. We negotiated the settlement because we knew the double hit of 30 per cent plus would break the industry.
In this we were supported by the IWA which said that the negotiated settlement was absolutely essential. I would like to read the particular paragraph where the IWA said: "We would suggest that many negative comments have been both ill-informed and ill-founded". The IWA also told us: "We . . . strongly believe that it was absolutely essential to conclude a negotiated settlement with the United States which will guarantee that the increased taxes on softwood lumber shipments to the United States be kept in Canada".
I am really looking forward to British Columbia NDP Members of Parliament returning to their ridings, because the IWA has stood by this even when the NDP asked them to back off. The NDP asked them to back off, and the IWA would not. The IWA has been barnstorming around, saying: "This is the letter which we sent the Minister and this is the letter we stand by".


Some Hon. Members:: Hear, hear!

January 19, 1987
Softwood Lumber Products Export Charge Act


Pat Carney: Some critics have predicted massive job losses resulting from our agreement.
As a federal Minister of course I am always concerned about the employment effects of government actions, but we must recognize a few points. First, the forest industry has always been a cyclical one with ups and downs. Second, as the shakes and shingles tariff has shown, the effects of a tariff or charge are difficult to predict. The NDP were maintaining that thousands of people would be laid off and that terror would reign in the woods. As a matter of record, that industry, although it has suffered, has in no way experienced nearly the catastrophe which the NDP suggested.
I can also say that the IWA has made the following clear, in terms of job loss in its letter to me:
The second assumption is that the Canadian sawmilling industry will be unable to compete under the burden of a 15 per cent export levy. We regret the fact that not all Canadian sawmills will survive, and that some jobs will be lost.
As of course does the Government. It continues:
It should not be assumed, however, that a substantial portion of the Canadian sawmilling industry will disappear.
In its letter it gives some well reasoned arguments why.
Where do we go from here? Last week I, along with my colleague, the very able Minister of State for Forestry and Mines (Mr. Merrithew), met with the provincial Ministers. We reviewed the agreement. A federal-provincial task force has been established to review all aspects relating to the implementation of the agreement. We will have a subgroup of forest Ministers, headed by the Hon. Len Simms of Newfoundland, which will study the matter of replacement measures. We will work together to ensure that we iron out the problems which the industry faces.
Before closing, I want to deal with some side issues which have been raised today in debate or in the newspapers. First, one of our colleagues from New Brunswick is worried about the impact on his province. I want to point out that the Government of Canada maintained for his province the 92 per cent exemption on lumber exports contained in the preliminary. In the preliminary decision, 20 firms won an exemption, and 92 per cent of New Brunswick's exports were thus protected. In the negotiations and in the final determination mechanism, the U.S. was moving to take away those exemptions and to expose the New Brunswick industry. We fought for New Brunswick and we maintained the exemption.
In the so-called Dennison letter, which is a self-serving letter, the U.S. told lumber producers, in effect, all the things they could not win at the bargaining table. It is a side letter which has no standing in Canada. It is a side letter which the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) is trotting around as some sort of legal document. He knows that the negotiator for the U.S. side told him that it was a letter for Americans, that it had no standing. He was told that personally by the U.S. negotiator in Washington last week. Knowing
that, and having been told that it has no standing for Canadians, he still purports that this is some kind of legal document, and that is misleading the public.


Some Hon. Members:: Shame, shame!


Pat Carney: The NDP today in, I hope, an innocent error suggested that the export tax would apply to the added value of manufactured products. That is not true. We negotiated very hard.


Derek Nigel Ernest Blackburn: I checked half an hour ago.


Pat Carney: The Hon. Member said he checked. He did not check with us.


Derek Nigel Ernest Blackburn: A half an hour ago.


Pat Carney: He did not check with the Government of Canada because we negotiated an arrangement where the tax applies only to the lumber inputs, not to the added value.


Derek Nigel Ernest Blackburn: Phone your people in London, Ontario.


Pat Carney: I refer the Hon. Member to the agreement. That was the second last clause that we dealt with. This too is better than a countervail because a countervail would have been applied to the whole product, as the New Democratic Party was suggesting.
In terms of jobs, I want to point out that the Members of the NDP travelled around this country with a task force and, as the media reported, they could not Find any lay-offs directly attributable to the export tax, which is quite proper. This is a period of cyclical downturn for some mills and employment is related to the market.
Just one final point, Mr. Speaker. There were suggestions during these discussions that this agreement would be so bad for the industry that it would be paralysed. After seeing some of the statements, I thought people would be leaping out of windows and that terrible things would be happening to the forestry industry. It is worth noting that the market says differently. Stocks of those companies have gone up dramatically since this agreement.


Some Hon. Members:: Hear, hear!


Pat Carney: The Chairman of MacMillan Bloedel said that this agreement would paralyse us and that thousands of people would be laid off, but his stock market price at December 29 was $41-7/8 while on January 18 it was $49.50, a 21 per cent increase. That is not bad. I know the stock. It is probably the best increase it has ever achieved in anything like that time frame.


Some Hon. Members:: Hear, hear!
January 19, 1987


Pat Carney: Canfor stocks are up. That company has had problems, but its stock is up 21.8 per cent. Abitibi's stock is up 7.2 per cent. West Fraser, a smaller operation, is up 5.73 per cent. The forestry index went up a total of 8.6 per cent since December 29, before the agreement was signed, and last Friday when the market closed. The Hon. Member opposite says the Tories measure things by the stock market. That is not the point. This is the way the market operates. This is what investors think. Investors think that this industry is better off after the agreement than before. That is important because it is investors who will put up money for jobs.


Some Hon. Members:: Hear, hear!


Mr. McDermid:: The NDP don't understand it.


Pat Carney: In closing, Mr. Speaker, let me refer to one more paragraph from the letter from the IWA. It is an important paragraph:
The International Woodworkers of America recognize that the negotiated settlement of the softwood lumber dispute does impose an additional burden on the Canadian sawmilling industry. However, given the fact that the U.S. government would have imposed such a burden in any case, the current solution represents the lesser of two evils. We believe that in time adjustments can be made which will permit the Canadian industry to survive and to prosper in the future.
Those adjustments will require a high degree of co-operation between industry, government and labour. It is important to proceed as soon as possible with the search for these solutions.
I concur with the IWA. It is time for us to put this matter behind us, time for us to work out the agreement, implement it, and time to get on with the job of negotiating a new trade treaty.


Some Hon. Members:: Hear, hear!


BUSINESS OF THE HOUSE
John Edward Broadbent: Mr. Speaker, I rise on a point of order. Perhaps I could take a minute before the Leader of the Opposition (Mr. Turner) makes his speech. We heard earlier from you, Sir, that the Hon. Member for Yukon (Mr. Nielsen) has given notice, although by means of a fascimile of a letter that you have received, of his intention to resign. A date is on that letter. I simply want to know if it is possible for the usual kinds of statements to be made in the House.
I found it very surprising that, for a Member who had been here some 25 years, an announcement of this kind could be made in the House of Commons without any response at all about a man, need I say, with whom I disagreed on most political matters, but who nonetheless made a great contribution as he saw it to the people of Canada in Parliament and before that as a member of our armed services. I found it,
Softwood Lumber Products Export Charge Act
frankly, a little surprising that we did not get some initiative from the Government to make comments about a man who was Deputy Prime Minister of Canada. Maybe we could do that.


Mr. Speaker:: The point the Hon. Member for Oshawa (Mr. Broadbent) makes is an act of benevolence and friendship which is properly suited to this place. Perhaps the fault lay with me and, if so, I regret that. Perhaps in making the announcement I should have called on Hon. Members to make comments. The reason that was not done this afternoon is that we have not yet received, according to the statute, the official document.
Perhaps some consultation could take place among the Parties and the Chair would be very, very pleased tomorrow if proper tribute could be given. I see the Prime Minister (Mr. Mulroney) nodding. If there were some agreement to that, I am sure the Chair could make those arrangements tomorrow at the appropriate time. Would the Hon. Member for Oshawa accept that as the appropriate way to conduct ourselves?


John Edward Broadbent: Mr. Speaker, first, my comments did not indicate any criticism of you. What you have now suggested is a procedure which seems to be sensible for Members on all sides of the House.


Philip Derek Lewis: Mr. Speaker, I think the comments of my hon. friend have been helpful as have yours. We will initiate discussions to find an appropriate time when this procedure can take place.


Mr. Speaker:: I thank the Hon. Member for Oshawa for bringing this matter to the attention of the House. It was concerning the Chair. I felt that in view of the statute perhaps some discussion should take place before the proper things were said by all Hon. Members.


Mr. Prud'homme:: As Winston Churchill once said: "Are you sure he really resigned?"


An Hon. Member:: Are you talking about Pierre?


Mr. Speaker:: The Right Hon. Leader of the Opposition.


SOFTWOOD LUMBER PRODUCTS EXPORT CHARGE ACT
[Stage Direction]
The House resumed consideration of the motion of Miss Carney that Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, be read the second time and referred to a legislative committee.
John Napier Turner: Mr. Speaker, the Bill before the House incorporates an agreement,

January 19, 1987
Softwood Lumber Products Export Charge Act
which presumably in due course will be tabled, between the United States and Canada affecting our exports of softwood lumber into the U.S. market. I am glad that the Minister, although she has claimed on several occasions that this was a great victory for Canada, did not go one step farther and claim it was historic. I can assure you, Mr. Speaker, that it will go down in history as the greatest sell-out in the history of our negotiations with the United States and the greatest betrayal of a major industry of Canada by a Minister who should be responsible for export potential.
Our industry, with very few exceptions, will pay a 15 per cent export tax on every bit of softwood lumber going into the United States. It will cost the lumber industry on the basis of this tax about $600 million, maybe more. As I will attempt to portray to the Elouse, as this tax is converted into a timbercutting fee or a stumpage fee at the provincial level, it may well amount to a tax of $950 million to $1 billion against the industry, not just for one year but year after year. Mills will close. Thousands of Canadian workers will lose their jobs and all the Minister has to say to this House, and said earlier, is that "by limiting the Americans only to the arithmetic we kept them out of our forests, out of our books and out of our hair." She made that argument in an interview with a reporter from The Globe and Mail on January 6. She repeated it here today. I want to tell the Minister and the Government,-the Prime Minister (Mr. Mulroney) has just left-that this country surrendered more sovereignty than I can remember in any individual transaction.
The United States now has the right to set the price of our exports of lumber, to set the tax against it, to review how that tax is converted into a fee and to reach into all the documentation necessary to buttress that position. It was a complete sellout.
What is even more astounding about the Minister's characterization of the agreement is that, to use her words, "it was reached on our terms". She said that in a statement made on January 5. She also said that Canadian sovereignty has been and will be maintained. She added that had the Government accepted the American arguments, "the U.S. Government would be able to dictate how our policies should be made and implemented; and. . . that it was totally unacceptable to Canada and we rejected it out of hand." Then she added that the only item that is the subject of consultation and agreement is the calculation of the value of changes in the export charge. That is not a minor side issue. That is the central point of the entire agreement.
The charges that will be imposed under the agreement which the Minister will eventually table cannot be altered or converted in any way into a provincial levy by us without the complete consent and supervision of the United States.


Pat Carney: That's not true.


John Napier Turner: That is what the documents reveal. Not only does the agreement bear that out but the interpretation placed upon the agreement by the Secretary of Commerce and the chief American trade representative in a joint letter to the U.S. Coalition of Lumber is that "the U.S. Government would have to approve any changes in the export charge or any calculation of the value of any replacement measures. Any changes made without U.S. Government approval would be considered a violation of the understanding". That is how the Americans interpret the agreement. If Canada or the provinces operate counter to that understanding, then the Americans will exercise the 30-day clause that will bring the agreement to a termination. If that happens, our Government will have waived its rights before the Inter-State Trade Commission of the United States and before the international tribunals under GATT. Because of this agreement, under Section 301 of the U.S. Trade Act, the President can unilaterally impose a 15 per cent duty right off the bat. As a result of the brilliant negotiations of this Government-


Charles Joseph Clark: An absolute falsehood.


John Napier Turner: I see that the Secretary of State for External Affairs (Mr. Clark) is here. We are in a nowin situation for Canada.


John Horton McDermid: John, you're absolutely wrong.


The Acting Speaker (Mr. Paproski):: Order, please.


John Napier Turner: I can understand the apoplexy on the other side of the House. The Government threw away Canada's bargaining position. If this agreement is terminated by the Americans, they have a unilateral right to proceed by presidential decree under Section 301 of the U.S. Trade Act.


John Horton McDermid: They have anyway.


John Napier Turner: Not while those petitions were before the International Trade Commission. I say to government Members that they had better start getting proper advice.
The final paragraph of the letter written by the Secretary of Commerce and the U.S. trade representative to the U.S. industry, goes on to state exactly what actions on the part of either level of Government will be considered by them to be violations. Let us recite some of those actions: "one, rebate, remission, deferral or non-collection of the export charge except as provided in the understanding; two, the provision of grants, low-cost loans and other benefits; three, exemption from obligations otherwise imposed by the Government of Canada and other governmental bodies in Canada; four, assumption of obligations currently borne by the producers or exporters of certain softwood lumber products; five, reduction in the price of stumpage or other charges on softwood timber harvested from provincial Crown lands; six, changes in log
January 19, 1987

scaling or lumber measurement rules or procedures which affect volume determination; seven, awarding contracts for silvaculture, road building, recreational and other forestry activities on a non-competitive basis."
In other words, the Americans interpret this agreement as saying that if any provincial or federal Government gives an incentive to anyone in the forest industry by way of a road, reforestation, stumpage relief or regional development grants, it can be considered a breach or violation of the understanding subjecting us to the 30-day cancellation clause and leaving us at presidential discretion under the U.S. Trade Act. That is what the Government has done to the industry, the workers and the provinces.
I gather the agreement will ultimately be tabled because the Bill indicates that it will be tabled and it is part of the legislation. The agreement indicates that there will be an exchange of information and monitoring between the two Governments. However, it is not an exchange, it is a one-way flow from us to them. Not one log will move without the Americans knowing every detail.
I would like to quote from Section 7(a) of the agreement which is part of this Bill:
The Government of Canada will provide the Government of the United States of America with data concerning the level of Provincial and Federal softwood and total stumpage harvest, the total revenue collected from the sale of Provincial and Federal softwood and total timber, total export charge collected, total shipments of certain softwood products to the United States of America, total lumber production by province and total softwood lumber production by province, for each fiscal year within three months of the close of the fiscal year-
The United States Government will be receiving more information than our Government currently receives. If the Americans become concerned in any way with any perceived problem of evasion of the tax, all they have to do is demand all the data they need and we are obliged to provide it.
The agreement states as well that that information will be held "in the strictest confidence" and will be made "available only to those government employees directly involved in the review of the identified problem". The American Government gets all the information it needs and promises to hold it in confidence in accordance with the agreement but here again, I would like to turn to the letter from the Secretary of Commerce and the chief trade representative of the United States to the American lumber industry. Mr. Baldrige and Mr. Yeutter state that "the U.S. Government will consult closely with the petitioner, the Coalition for Fair Lumber Imports, concerning the implementation and operation of this agreement and will provide information to assist the Coalition to evaluate the operation and enforcement of this agreement." That does not sound like much of a guarantee of confidentiality to me. Every aspect of the industry will be opened up to inspection, comment and evaluation by its American competitors. Yet the Minister calls this a victory.
Using the currently fashionable vocabulary of the United States to describe the super-power arms negotiations, the Minister has said that the other side blinked. The Yankee
Softwood Lumber Products Export Charge Act
trader did not blink at all. He looked the Minister straight in the eye, took a swing and scored a TKO. It is our lumber industry which is being carried out of the ring on a stretcher. Our industry will be hobbled by the necessity to report to the Americans every tree that is cut down, every log that is brought to a mill, every board that is sawed up. Whether it is rough, dressed or worked, whether it is sideboard or clapboard, whether it is flooring in strips, planks, blocks or assembled units, the United States will now have a complete inventory of our forest products.
The Minister claimed victory. Napoleon could have used her at Waterloo. At least Napoleon got to the battle. Our Minister was slicing up pineapples on a beach in Hawaii when this agreement was finally negotiated and the industry was being sliced up piece by piece and given chunk by chunk to Washington.
If the Minister had been advising Napoleon, she could have reached him before he got to Elba and said: "Look, I have a little $12-million fund. You were not defeated at Waterloo. I have $12 million to convert that into a victory. We will go across Europe telling people that we scored a great victory". This would have eliminated the need for Napoleon to go into exile and would have given him a second career. Who knows.
Mind you, I believe that that is a corruption of history. However, the Canadian people will remember the truth and they will make the proper judgment about this particular agreement. They will remember that the Minister and the Government met their own Waterloo by signing this deplorable agreement. No flock of geese, no matter how majestic or beautifully photographed, is going to change that fact.


Charles Joseph Clark: Whose geese are those?


John Napier Turner: This agreement determines the price, the tax, and the profits of our industry, and monitors its every aspect. It sets a dangerous precedent for every other resource export. What is going to happen to our pulp and paper now? Or, our potash? Or, our oil and gas? Now that the American Government knows the Minister has no guts in negotiations, every industry in the U.S. will be tempted to get a similar deal. They will look the Minister and the Government in the eye and we will see more of this style of negotiation.


John Horton McDermid: Your old law firm will probably represent them.


John Napier Turner: When the Prime Minister appointed that Minister he said: "Now, you watch Pat Carney go. She has the ball, just watch her run. Hang on to your hats." We watched her run with the ball. She ran the wrong way. She scored on our team. I know your preferences on Saturday, Mr. Speaker, but I doubt whether either Denver or New York are going to want that Minister's particular talent in the Super Bowl.

January 19, 1987
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John Horton McDermid: You have that wrong, too. It is on Sunday.


John Napier Turner: It is on Sunday, that is right. The Prime Minister said "Watch Pat Carney go". Canadians are asking one question: When?

Mr. Speaker, once again the Government has bowed down to the U.S. administration and the big U.S. companies.
The Government has offered to put restrictions on our lumber industry. Why? Because the Americans complained. Those bad Canadians had an undue advantage, according to them. Our workers in the softwood lumber industry are the villains of the story. They need a lesson. They have to be punished. For what? What terrible crime did they commit? They worked so efficiently and their products were so competitive, so good in fact too good, that the Americans had to set themselves up as defenders of the private sector and restrict exports of our products to their country.
And did the Government defend those workers? Did it point out to the Americans that they were wrong and that the problem was not us but them? Did it tell them they were the ones who should put their house in order and become more competitive?
Mr. Speaker, we have analyzed the costs that determine the price of our forest products. With adjustments, a given piece of lumber costs practically the same in Canada as in the United States. The problem is not provincial tariffs or stumpage fees. The problem is the value of the Canadian dollar.
That is why our forestry industry was so confident it would be able to repeat its success before the U.S. courts in 1983, since neither the facts nor the legislation have changed. The only thing that has changed is the determination, courage, persistance and negotiating skills of our Minister and the Government of Canada.

When the U.S. Vice-President and Secretary of the Treasury come here on Wednesday, I would think the first question the Prime Minister would want to put to those two eminent gentlemen is: Are you really looking toward a free trade agreement with Canada, or are you really looking toward managed trade? Is it not a fact that these negotiations are being used by the U.S. to set up an umbrella of so-called free trade negotiations while they use it as a lever to pick us apart commodity by commodity and impose unilateral countervailing duties on us? They know our Government is so anxious politically to get an over-all agreement that it will surrender control over any particular commodity until the agreement is concluded and sell those groups right down the river as has happened here.
Are we dealing with free trade or managed trade? As far as the U.S. is concerned, this is an ideal example of how to manage their trading problem. What the U.S. appears to be doing in London, in addition to looking for other items to
attack because of the negotiating ineptness of this Government, is to reduce its trade deficit item by item, country by country, product by product. It has used these trade negotiations with Canada to achieve just that.
The negotiations were pathetically weak. The Minister's position was one of continual vacillation. On behalf of our lumber industry, and without its consent, she gave in. She gave in without a fight even though we won the case in 1983 and nothing changed since then. She pleaded guilty on behalf of our industry before the dispute had been settled. This was despite the fact that in a statement by the Minister of State for Forestry (Mr. Merrithew) and the President of the Treasury Board (Mr. de Cotret) it was the Canadian Government's view that the preliminary countervailing duty decision in October, which she says worried her so much, was "flawed in law, inconsistent with established U.S. practice, and in some important respects based on erroneous assumptions."
If the Government of Canada believed that, why did it not press the case instead of entering negotiations? We have yet to hear a satisfactory explanation as to why the Minister, in her own words on January 5, "became increasingly convinced that notwithstanding our strong case we would lose the final determination." We have yet to hear any convincing explanation from her as to why that was so. How does she know what the U.S. tribunal would have decided? How does she know what the U.S. International Trade Commission would have decided?
There is another important question. Why did the U.S. industry agree to only 15 per cent if everyone was so sure it would get that much and more from its own Government through a decision to impose countervailing duties? As the Minister said again today, the U.S. industry was asking for nearly double the 15 per cent. Surely it would have been in their interest to go for the highest countervailing duty possible. The fact that the American coalition, in a very short space of time, went for a lower rate is a clear indication that they were not at all certain their case would succeed.


Pat Carney: Not true.


John Napier Turner: What is clear is that they became more and more confident. Every time our Minister came in with final offer after final offer after final offer, they said "This is just too good to be true. Let's press them and get this deal because it is probably better than anything we can get before our own tribunal and we got nothing in 1983, so why not take the deal?" What the Americans saw was a Minister and a Government desperate for any deal that would salvage the free trade talks.
As our Minister presented the humiliating spectacle of making final offer after final offer, they had an admirable opportunity to get what they wanted without going through a prolonged legal process. Thanks to the Government we will never know what the outcome of that process might have been because all those other avenues, as I have explained, are now closed to us. We have waived our rights before the U.S.
January 19, 1987

International Trade Commission. We have waived our rights under GATT. We are now in an agreement with the United States within the meaning of their trade law. If that agreement is cancelled or violated in the opinion of the U.S., then the President of the U.S. has the unilateral right under Section 301 to move against us.


Pat Carney: Always has had the right.


John Napier Turner: We have surrendered our rights and now we are completely at the mercy of the President of the U.S. In fact, only now do we learn that a report prepared by the ITC, apparently released on September 23, which would have formed the basis for its final decision, showed clearly that the U.S. lumber industry was not being severely hurt by Canadian lumber imports and the decision could very well have gone in Canada's favour. I asked the Minister if she was aware of that report.

If the Minister was not aware of the report published on December 23 by the International Trade Commission, was she not at least aware of some of the facts it contained? Didn't Canada make any studies of the situation in the U.S. lumber industry? In any case, the Minister and the Government have shown incredible incompetence by negotiating without having all the facts.
It was not one of Canada's shining moments. Personally, I'm convinced that given that kind of choice, most Canadians would have told the Americans to go to hell.
Our representatives should have fought to the very end and negotiated only if the decision handed down was not in our favour.
We could also have defended our case at GATT, instead of giving up on that solution as well.
The Minister now claims that we prevented the Americans from considering our stumpage practices to be a subsidy, and that she prevented the Americans from establishing that as a precedent to be used against other natural resource exports into the American market. However, how did the United States Secretary of Commerce, Mr. Baldrige, and the U.S. trade representative, Mr. Yeutter, explain the deal to the U.S. industry in that same letter? In the second paragraph of the letter of December 30 they say that our 15 per cent tax "is being imposed for the purposes of offsetting Canadian stumpage subsidies". Therefore, the Minister has not convinced the Americans that stumpage is not a subsidy. The best she has managed is that the U.S. Government agrees, for purposes of the agreement before the House only, that the positions of either Government will not be prejudiced by the agreement. However, the American industry reserves the right to file another petition against our lumber at any time it decides the deal is not working in its favour.
Softwood Lumber Products Export Charge Act
I have said that there is a 30-day cancellation clause. I have said that the President of the United States is in a very solid position. Our Government has placed us in a no-win situation and the United States in an absolutely no-lose position.
The impact upon Canadian consumers will quite simply be that we will all pay more for everything for which lumber is used, beginning with housing. We will pay considerably more, particularly if the tax is converted to an increase in provincial stumpage fees as envisaged in the agreement. Increases in stumpage will affect all lumber products in Canada, not only exports to the United States. The real price for Canadians could go as high as $950 million	to $1	billion per year.	In fact,in order to meet the 15 per	cent	level,	stumpage in some parts
of British Columbia will have to be quadrupled which, according to Peter Pearse, an expert in these matters from the University of British Columbia-


Charles Joseph Clark: Where did he run?


John Napier Turner: He ran in Vancouver Quadra at one time.


Pat Carney: He supports our position.


John Napier Turner: I have been in recent communication with him. I want to assure the Minister that she should not count on	that	type	of support too	firmly.Professor Pearse said the	increased	stumpage fees	"would
make an awful lot of our timber in Canada uneconomic to harvest. That difference makes a lot of lumber uneconomic and that means we would have a lot less timber available to use than before."
He said that in an interview with The Toronto Star. He recently prepared a paper entitled: "Forest Policy and Timber Supply in Coastal British Columbia: Progress and Prospects". He delivered this paper on January 14 of this year. He takes us through the problem of higher stumpage. He said the following:
A final worry about the economic timber supply arises out of the U.S. countervailing tariff debacle.
He calls it a debacle as it surely is. He continued:
As we all know, the American lumber lobby has withdrawn its petition for a tariff against Canadian lumber on the condition that the Government of Canada imposes a 15 percent export duty on our lumber entering the United States.
And the arrangement between the federal government and the provinces is that the export duty may be replaced by increases in provincial stumpage rates or other levies that are equivalent to the 15 percent duty.
Here is the rub:
We do not yet know how our provincial government will collect the replacement levies, but if the stumpage system is to be the main vehicle this could mean very hefty increases in stumpage rates.
Very roughly, 15 percent on a lumber price of $240 is about $35 per (thousand board feet). To have an equivalent impact on lumber price, stumpage rates would have to increase by (35 over 5) seven or eight dollars per cubic metre, nearly tripling the current average stumpage rate on the coast.

January 19, 1987
Softwood Lumber Products Export Charge Act
On the copy which the professor sent to me he annotated: "and close to quadrupling it in the interior of the Province of British Columbia". He goes on to say:
Leaving aside the endless debate about reasonable stumpage rates, I want to make two observations about this prospect. One is simply that higher stumpage charges have the same effect on the margin of profitability of timber stands as higher logging costs or lower log values. Because our economic timber supply is so sensitive to these factors any increase in stumpage charges, especially if it is applied across the board, will further diminish our recoverable resource stock.
My second observation is that a substantial part of coastal timber is manufactured into products other than lumber, and much of the lumber is sold in markets other than the United States.
The 15 percent federal export tax will reduce the competitiveness of our lumber in U.S. markets only, whereas a stumpage increase with equivalent impact will hamper the competitiveness of all products in all markets.
Of course, that is what is contemplated under the agreement and that is what is contemplated under the terms of the Bill. We will want an amendment to that. We want to see what the actual transfers of money to the provinces will be and what the stumpage rates will be.
[ Translation]
Mr. Speaker, the Government misread the situation. There was already free trade in the lumber industry. Until now, all our lumber exporters in Quebec, Ontario, British Columbia and other provinces have had free access to the American market. We paid for that privilege when we negotiated many years ago in Tokyo and provided free access for other American products to the Canadian market. That is when we paid for the privilege of having free access to the United States for our lumber exports.
Costs were about the same in Canada and in the United States. The real problem comes from the value of our dollar. It has nothing to do with stumpage fees. Yet, the agreement contained in this Bill includes no provision which would allow a review of this issue if the value of the Canadian dollar were to change. Our industry would be in an even more vulnerable position. If our dollar goes up, the agreement remains and it would be even worse. As for the provincial governments, do they still have some control over their own products and resources? Can they really control their taxation rates for lumber or, in spite of the fact this is their field of jurisdiction, because of the federal agreement with the United States, are they subject to American supervision before they can set their own tax rates? A number of provinces are concerned, not only Ontario, but also Manitoba and Alberta, because they have before them a Government which ignored an area of provincial jurisdiction when negotiating its agreement with the United States.
Indeed, the Canadian Government gave the American administration a veto over an area of provincial jurisdiction and over provincial initiatives regarding lumber. The federal Government gave up a sector under provincial jurisdiction to the Americans. The question we must now ask is this: How will the provinces be able to manage their own area of jurisdiction?

The agreement, of course, has implications for our tax policies, the way we treat other resource industries and, of course, the way we equalize opportunity by way of regional agreement across the country. By imposing the tax retroactively to January 8, before presenting any legislation, the Government is violating the principle which has always been held in high regard by this Parliament that new taxes cannot be imposed on Canadians without being debated or approved by Parliament.

The negotiation was carried out very weakly. It is easy to come to an agreement when you are ready to give up on everything. This is not negotiation, but capitulation.
In the case of this agreement, there was no mutual concession. We gave up everything and the United States took everything from us. This is what has been happening since the coming to power of this Government. This agreement simply confirms that we have ample reasons for seriously doubting the ability of the Canadian Government to negotiate a trade agreement with another country. Even before the negotiations, the Prime Minister (Mr. Mulroney) had abolished the Foreign Investment Review Agency. The Canadian Government had abandoned the National Energy Program and the publishing industry. The Government had made concessions to the American pharmaceutical industry, as evidenced by the Bill now before the House.
On his first trip to the United States after he became Leader of our country, the Prime Minister put on his black tie and went to a great dinner for the American industrial complex and the bankers and said: "Hey, guys, my name is Brian Mulroney and I want to tell you that Canada is open for business again". I said to the Prime Minister when he returned: "It is terrific that Canada is open for business again, but I want you to know, Prime Minister, that Canada is not up for sale". But, Mr. Speaker, I was wrong. Ever since the Prime Minister assumed leadership of our country, this country has been on the block month after month and we have been sold off piece by piece to the United States.
Time and again the Government has demonstrated a shameful and dangerous willingness to please the U.S. administration at any cost all, apparently, in the hope that the United States would sign a free trade deal and thus rescue the sagging political fortunes of the Government. We sold out on acid rain.


Charles Joseph Clark: Charlie Caccia sold out on acid rain.


John Napier Turner: We kept quiet in return for a promise from the President of the United States that he was going to spend billions of dollars in order to live up to his understanding with our Prime Minister. That is a promise now
January 19, 1987

being reneged by the United States as evidenced by its recent budgetary tabulations. In fact, the United States signed a better deal with Mexico.


John Edward Broadbent: With our money.


John Napier Turner: Mexico has our money. It has the Canadian Export Development Corporation financing the offending plants in the northern part of Mexico and, Mr. Speaker, the President of Mexico did not even have to sing for the deal. He did not have to participate in a little Mexican blarney.


An Hon. Member:: Que pasal


John Napier Turner: Que pasal, that is right. Our shakes and shingles industry was slammed with a 35 per cent tariff and the Prime Minister did not do anything to try to stop or reverse that situation. He complained to the President only that it hurt him personally and his Government politically. Again, the strategy was: "Keep quiet. Don't rock the boat. We need these overall negotiations".


Charles Joseph Clark: You are absurd.


John Napier Turner: In the meantime our Government has not stood up for Canada. How many other sectors of the Canadian economy will be sacrificed? What about the Auto Pact? We hear all sorts of conflicting statements. Our chief negotiator has to go to the United States and talk tough. We have had no clear statement from the Government. I think the time has arrived, because of the confusion on the Auto Pact and because of the shameful surrender of sovereignty in this lumber agreement now before the House, for the Prime Minister to stand up and give a statement to the House as to where we are going in these particular negotiations.


John Horton McDermid: Tell us about the Michelin deal, John.


John Napier Turner: I think the Prime Minister should use the visit on Wednesday of the VicePresident of the United States and the Secretary of the Treasury to put a very simple question: "Is the United States really serious about these negotiations or is it using these negotiations as a cover for a series of managed trade arrangements at our expense and at the expense of other trading partners?" If that is so, then we should reassess where we are going in these particular negotiations.


Pat Carney: He wants to open up the Auto Pact.


John Napier Turner: Because Canadians have been absolutely confused as to where the Government is going and as to what is on the table.


Pat Carney: Look who is talking.


John Napier Turner: The Government of Canada now has a duty in the current context to make its
Softwood Lumber Products Export Charge Act
objectives clear to Canadians. We have reached a damage control situation. We do not have any confidence in the way the Government is negotiating for us. This lumber agreement is exhibit A to the incompetence and the lack of persistence, guts, determination and courage on the part of the Government. If this is so, what kind of agreement over-all does the Government expect for Canada? If you want my prediction, Mr. Speaker, I will tell you that I do not believe a comprehensive free trade agreement is possible on the basis of these negotiations, even if it were desirable, and I do not believe the mood of the Congress is going to give it to us. I think the Government will soon run for cover. It will desperately try to get some dispute mechanism between Canada and the United States and claim victory just as the Minister has tried to claim victory on this particular issue.


John Horton McDermid: You say the Congress is going to turn it down?


John Napier Turner: I am saying to the Minister that unless the Government is successful in getting some limitation on the application of U.S. trade law to Canadian products, particularly the trade remedies as it relates to countervail-and this agreement has been an appalling failure-that the over-all agreement between Canada and the United States will not be worth the paper it is written on.


Charles Joseph Clark: You are now for the negotiatons? You have changed again, John.


John Napier Turner: As we travel across the country, we see the reaction of our fellow citizens not in relation to the details of the agreement. Canadians feel we have been had. They are humiliated that we have surrendered our sovereignty in this particular situation.


Pat Carney: Check your own riding.


John Horton McDermid: I was in your riding last week, John.


John Napier Turner: They feel that we have been treated like the fifty-first state. Some have told me we would be better off if we had a couple of Senators down there rather than this Government. They would do a better job of negotiating for us. I do not mean Canadian Senators, I mean Senators in the U.S. Congress.
We are rapidly losing our freedom to set our own economic agenda. We want our political independence, the ability to pursue an independent foreign policy, the preservation of our ability to have regional equality and to maintain our cultural identity. The Government has shown in the piece of legislation reflecting the agreement before the House that it is willing to sacrifice our sovereignty and our ability to determine how we sell our exports and raw materials-


Pat Carney: That is wrong.
2382

January 19, 1987
Adjournment Debate


John Napier Turner: -how we determine the relationship between federal and provincial taxation affecting resources and how we determine what taxation will be applied to it. It is willing to put all of that at risk in order to preserve the tenuous over-all negotiations with the United States on trade. I think it is a sad day for Canada that we are dealing with a piece of legislation such as this. It is a sad day for Canada when the people of our country cannot trust our Government to stand up with firmness and courage in the interests of Canada.
Before I conclude I would like to move this motion:
That the motion be amended by deleting all of the words after the word "That" and substituting the following:
Bill C-37, An Act respecting the imposition of a charge on the export of certain softwood lumber products, be not now read a second time but that it be read a second time this day six months hence.


The Acting Speaker (Mr. Paproski):: Order, please. Before I recognize the Hon. Member for Oshawa (Mr. Broadbent).



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Paproski):: It is my duty, pursuant to Standing Order 66, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for York East (Mr. Redway)-Canadian Human Rights Commission-Resignation of Antonio Arcangel from Human Rights Tribunal; the Hon. Member for Lambton-Middlesex (Mr. Fraleigh)-Status of women- Funding of women's organizations; the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart)-Unemployment insurance-(a) Request for reimbursement of contributions to early retirees, (b) Request that Minister meet representatives of interested parties.


SOFTWOOD LUMBER PRODUCTS EXPORT CHARGE ACT
[Stage Direction]
The House resumed consideration of the motion of Miss Carney that Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, be read the second time and referred to a legislative committee, and the amendment of Mr. Turner (Vancouver Quadra), (page 2382).
John Edward Broadbent: Mr. Speaker, I rise with pleasure to take part in this important debate. I would like to
say at the outset that with a matter as important as this awful softwood deal coming before the House at the opening of the parliamentary process after the Christmas break, being the first piece of legislation to have emerged from the Prime Minister's launching of the trade talks, that he as Prime Minister (Mr. Mulroney), the man who got us into this terrible mess, ought to have been in the House of Commons and ought to have initiated the debate on behalf of the Government of Canada. Perhaps the Prime Minister-


Charles Joseph Clark: You are a total fraud.


John Edward Broadbent: I got him going again. I just have to say a word. The poor man who lost his Government in 1980 has never been able to get over it.


Charles Joseph Clark: You are just a total fraud.


John Edward Broadbent: In any case, if the Secretary of State for External Affairs (Mr. Clark) would calm down just a little, I would just like to say that it would be a welcome event in the House of Commons to have the Prime Minister participate in a debate.


Mr. Thacker:: You should be ashamed of yourself.


John Horton McDermid: You will never be in that seat, I can guarantee you that.


The Acting Speaker (Mr. Paproski):: I find that there are a number of conversations going on in the House. I would like to hear the Hon. Member for Oshawa (Mr. Broadbent) yet a number of Hon. Members are standing up discussing other problems. If they do have problems I wish they would discuss them behind the curtain. I would like to hear the Hon. Member for Oshawa.


John Edward Broadbent: Mr. Speaker, I wish the Secretary of State for External Affairs would take his problems behind the curtain. In any case, I would welcome his contribution later on in the debate. If the Prime Minister is not going to participate in the debate, perhaps we can hear the lofty thoughts of Secretary of State for External Affairs on the matter.
Since the trade talks were launched by the Prime Minister, we have seen in sector after sector a betrayal, a backing-down of one kind or another by the Government of Canada which has ended up in virtually every sector that one can think of, with the United States coming out on top and Canada and the Canadian people coming out on the bottom as a result of what the Government is doing. It began with the abolition of FIRA. It made a concession in publishing and then it did the same thing in the steel industry. It gave the American pharmaceutical industry what it wanted in a Bill which is now before the House. It has talked at three summit meetings on acid rain, if I recall correctly, and received commitments from the President of the United States. But when the budget of the United States was introduced just a few weeks ago, we saw that there was
January 19, 1987

not a penny of new money allocated to live up to its commitments on acid rain. In sector after sector nothing but trouble has been inflicted upon the people of Canada by the Conservative Party since it assumed office. Thank God it will not be in that position for very long.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: We now have a Minister defending her Government's decision on softwood, a decision which will wreak havoc on our major export industry. It is a decision which, according to industrial spokespersons, could cost us thousands of jobs. Perhaps most significantly of all, it is a decision which goes to the very root in terms of abandoning key aspects of sovereignty.
I see that the Minister is on her way back to Hawaii. Perhaps she too will come back into the House for the rest of this debate.


Blaine Allen Thacker: Some leader!


Charles Joseph Clark: Is there nothing too low for you?


John Edward Broadbent: We hear another lofty witticism from the Secretary of State for External Affairs.


John Napier Turner: They are a little raw over there.


John Edward Broadbent: They are in tough shape, and the whole country knows it.
Whatever the sector, this Government and its Prime Minister have demonstrated that he behaves more like a man who was elected Senator in Maine than the Hon. Member for Manicouagan. That is the problem with this Government.


Blaine Allen Thacker: Did you reduce your salary by one cent?


John Edward Broadbent: Does the Hon. Member have a question?


Blaine Allen Thacker: The Prime Minister reduced his salary by 15 per cent. Did you? No way, you are greedy.


Some Hon. Members:: Oh, oh!


The Acting Speaker (Mr. Paproski):: Order, please. The Hon. Member for Oshawa.


John Edward Broadbent: The Tories are a little more rabid than usual. I am sure that you recognize this condition, Mr. Speaker. However, we will do our best to cope with a House that is supposed to have become more civil. Maybe the Tories will need to have another caucus meeting in order to learn something about listening to other people when they speak.


John Horton McDermid: What is civil about your cheap shots?


John Edward Broadbent: I say to the Hon. Member that he will have his chance to speak.
Softwood Lumber Products Export Charge Act
At this point I wish to deal with the central matter as I see it of this Government's failure to defend a crucial principle in negotiations which have been going on, as the Minister herself pointed out, for a number of years, not simply for a number of months. When it comes to stumpage the reality is that the Government of Canada, with the support of all Parties of the House and with the support of the industry, won its case before the U.S. tribunals at that time. The central part of the 1983 decision was that stumpage fees-that is to say a provincial royalty on our forest products-would not in principle be deemed to be a subsidy. That was a fundamental part of our argument at the time, and a fundamental part of the reason for the acceptance of our argument in 1983. It ought to have remained a fundamental concern of the Government in accepting the notion of sovereignty that neither the United States nor any other country ought to have the right to tell Canadian provinces what they are to sell their resources for. That ought to have remained at the centre of contention, but it did not.
An article in the most recent issue of The Financial Post, and I am sure the Secretary of State for External Affairs reads that paper regularly, points out that if the Government had hung tough with its case it could well have won the decision just as we on this side of the House and many others, have been saying. But it did not do so.
Among other points that are emphasized in the article to which I refer is the information that the International Trade Commission had presented to it in December a report by its own staff which showed that the claims by the U.S. industry with respect to having been so badly injured by Canadian exports in softwood had been greatly exaggerated. In terms of the International Trade Commission's final decision, which would have been rendered in February had the Government not negotiated this particular settlement, that was very important. I say that because in terms of the International Trade Commission's final decision it not only had to make a decision about what was or was not a subsidy but it also had to deal with the question of injury. Clearly, the importance of this information is that the International Trade Commission itself had documentary evidence that the case for injury had been greatly exaggerated by U.S. industry.
On behalf of my colleagues, and much more important than that given the importance of this decision, on behalf of the Canadian softwood industry, the workers and companies in it, as well as all our other resource industries which can now be affected by this decision, the Government of Canada ought to have hung tough with its original case. That is what it should have done instead of negotiating it away.
To make the point that has been made by a number of people in recent weeks, had we proceeded to the limit in terms of our quasi-judicial argument before American bodies and finally lost out, instead of capitulating in advance, we could have gone to the GATT as a second and related step. We had a very good chance of winning that case had we failed in the U.S., according to international experts.

January 19, 1987
Softwood Lumber Products Export Charge Act


John Horton McDermid: And then what?


John Edward Broadbent: The Elon. Member asks: "And then what?" We will never know.


John Horton McDermid: Follow it through.


John Edward Broadbent: If the Government does not do the correct thing we will never know. We are saying that once there is a correct procedure established, one should have enough courage and determination to make the argument again. That is what should have been done.


Some Hon. Members:: Hear, hear!


John Horton McDermid: And then what?


John Edward Broadbent: The Hon. Member opposite asks again: "And then what?" This Government has shown more flexibility, more indecision on this matter, than it has shown on any other item that has come before us.
I wish to take a minute to go through the series of flip-flops made by the Minister on this case. Up until September, 1986 both the present Minister and her predecessor made a series of statements about the great confidence that they had in our traditional Canadian argument that stumpage fees were not in any sense a subsidy. They repeated that argument. They had the support of all Parties in the House. They had the support of the industry, and of the provinces. The Minister says that is true. Then something happened. Mr. Vander Zalm was elected in the Province of British Columbia.
Shortly after charmingly appearing together with the Minister in her householder to her constituents, the same Premier started to talk publicly about renegotiating stumpage levels on the one hand and about the importance of the Government of Canada beginning a negotiating process instead of waiting for the quasi-judicial tribunals to make a decision. It was at that time that the Minister made her first statement, the first of many final offers, I say to the Minister. We heard that immortal phrase in September when she offered the 10 per cent settlement. The 15 per cent final settlement came later. The 10 per cent came, then we have what the Minister correctly alludes to as the next phase, the preliminary ruling on October 16. That was a little shocking to the Minister. I do not like doing this at great length, but I wish to put this on the record because it is amusing. If it were not so sad, it would be really funny. The Minister stated after this ruling that we "will fight this all the way... Today it's lumber. Tomorrow it could be any number of issues".
The Minister further stated:
We all agreed that this ruling is deplorable, artificial and contrived, and does not stand up to extensive analysis.
The Minister also stated that it "strikes directly at the sovereign right of a government to manage its own natural resources".
The Minister then stated that, "we will fight to reverse this verdict". That great historical battle that the Minister waged lasted a few days. What the Minister said was absolutely true. That was not enough because on October 27, 1986 the Minister stated the following. This is rather important, and I hope that she remembers it:
This decision has concerned us and should concern all of the United States' trading partners, because we view it as an unacceptable attempt to impose U.S. views on how other governments should manage their natural resources. Furthermore, we feel that this preliminary ruling by the U.S. Commerce Department has no basis in U.S. law, is badly flawed, and is inconsistent with the U.S. obligations under the GATT.
The Minister was right then. We are right now in reaffirming the same point. The Minister ought to have stood by her argument and she might have won.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: If the Minister had stood firm she might have pointed out, as was said at the time, that the U.S. people working on the way of assessing the level of duty that should be imposed had two options. The Minister knows this very well. One option gave them one percentage, and the other option gave them another percentage. Instead of choosing one or the other, they added the two together and got 15 per cent. That was brilliant, and one would have thought they were in the Conservative Cabinet to do this type of thing.
The Minister knows very well that even the 15 per cent level determined in the United States was an absurd figure that they seized upon. What the Minister stated on October 21 and October 27 was right, and she should have stayed with her judgment.
Then we reach November 21, the First Ministers' Meeting. Now I regret to say that what seems to have happened is Mr. Vander Zalm began the historically totally reprehensible process of interfering in a way with the negotiations that were going on undermining a totally credible legal case that we were waging at that time. He was bad enough, but it was worse that the federal Minister joined him. Then we come to the First Ministers' Meeting and Mr. Vander Zalm is joined by the Government of Quebec. According to the inside reports that one hears, and the published reports, both the Government of Quebec and the Government of British Columbia started to get cold feet about our argument. Add their cold feet to the cold feet of the Minister and we have a veritable stampede in the wrong direction at that First Ministers' Meeting. The Minister does another reversal and states that they are going to negotiate again. Then we got the deal which was announced on December 30 that the whole country knows about.
There has been evidence from many sources about the jobs that will be affected, which ought to concern Members on all sides of the House. The impact on our exports is obviously negative, or the Americans would not be doing what they are doing. The one point that I wish to emphasize, without prolonging the obvious about the impact on the different provinces in terms of jobs and our export markets, is the notion of sovereignty itself. What I am personally very concerned
January 19, 1987

about is not simply whether we got a disastrously bad deal for this sector, but that the implications for other sectors are simply horrendous, if the type of reasoning that has been accepted by the Government now leads to the type of conclusions by the United States with this precedent that I think it will. The Minister, and other cabinet Ministers of the Crown, think that the issue of sovereignty has not been infringed upon simply because they say so.
I wish to say something quite specifically about the notion of sovereignty, and why I think that what the Government has done has impinged upon that in a totally unacceptable way. In paragraph 6 of the agreement negotiated by the Government with the United States it states:
The Government of Canada will take no action, and will take all reasonable steps to ensure that no other governmental body in Canada takes any action, directly or indirectly, which has the effect of offsetting or reducing the export charge or replacement measures, except as provided in this Understanding.
It would appear that this undertaking clearly limits anyone looking at this seriously, and clearly limits the federal Government's freedom to act to assist the lumber industry. This is spelled out in the related letter sent out by the U.S. officials. For example, this wording clearly prohibits action by the Government related to the Employment Support Act to support employment in the lumber industry. In 1971, for example, this specific Act was used to make no fewer than 769 grants totalling over $10 million in support of almost 22,000 jobs that were then put at risk because of a U.S. surtax.
The point I wish to make is that we had the right to use that legislation in Canada at that time to protect workers who were injured. Because of the agreement that this Government has entered into, our sovereign power as a nation is restricted, and we can no longer take that type of action to protect our workers.


John Horton McDermid: What action was taken? Countervail action.


John Edward Broadbent: I welcome the comments of the Hon. Member who is heckling from the other side, and I hope that he joins in. But I also ask him to check with a number of international lawyers, and not simply the opposition side, and see what they say on this question of sovereignty. I think he will find that most of them are in agreement with the Opposition, not with the Government of Canada.


Some Hon. Members:: Hear, hear!


John Edward Broadbent: Also I want to say, with reference to the issue of sovereignty, that the same agreement contains the following words: "Calculation of the value of any replacement measures in relation to the export charge will be subject to further consultations and agreement between the two Governments".
The word "agreement" is not an ambiguous word. If a provincial Government replaces the export tax with increased
Softwood Lumber Products Export Charge Act
stumpage or other charges, it will have to obtain the agreement of the U.S. Government. That is what this is all about. We are now involved, in any change in implementing the replacement of the 15 per cent at the provincial level, with the provinces having to go to the federal Government and the federal Government having to trot down to Washington to say: "Will you please agree with us because if you don't, we can't do it". I say that is a betrayal of Canadian sovereignty, and the Minister should be ashamed of herself.
Not only the negotiation by the Government but the acceptance of this deal will have the result about which the Leader of the Opposition (Mr. Turner) and other members on the opposition side have talked for days-a negative impact upon jobs in this sector and upon our own exports as a nation. It has very serious implications for other parts of Canadian industry, for other resource sectors.
Beyond resources, I ask the Hon. Member who is shaking his head whether he can answer the following. If we accept the reasoning that the level of a provincial royalty can be deemed by another sovereign nation as some kind of subsidy to which the Government has now tacitly agreed by its negotiations, what does it mean, not simply for resources but for the manufacturing industry? For example, we in Canada have been beating the Americans in steel because our private steel industry has become one of the most efficient in the world.
As a result of this agreement, I can see the following: a group of producers in the U.S. saying that Canadian steel is beating them, not because we have become more efficient and have renovated our capital equipment at a higher rate and with greater sophistication than they have, but because, they will say, Canadian steel is based in good measure upon Canadian produced iron ore. They will say that the provinces producing the iron ore are charging Canadian steel manufacturers too low a price for iron ore and, therefore, that it constitutes an indirect subsidy to our steel manufacturers. According to the reasoning of this brilliant Tory Government, it would warrant the U.S. taking countervail action!
They have not only put into jeopardy our resource sectors across Canada, they have put into jeopardy all those parts of our manufacturing industry which are beating the Americans in many sectors, and that is not acceptable.
I want to conclude my remarks by saying that when the people of Canada voted just over two years ago for a new deal, for a Government which would be a little more frank and a little more fair about the concerns of the average person, they did so in great numbers. However, there is no doubt in anyone's mind now that if there were an election, the Government would be thrown completely out of office, rejected in almost every province of Canada.
The Government should understand and come to grips with the reality that Canadians expect some frankness. They do not expect miracles but they do expect some fairness. In addition, whatever the ideological make-up of the Government in power, whether it is Conservative, Liberal, or NDP, Canadians want a

January 19, 1987
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Government which will stand up for their sovereign interest and will not be foolish, irrational or chauvinistic in terms of national concerns. They want a Government which will speak with a strong voice for the legitimate Canadian national interest. They will reject out of hand a Government of the kind we have which changes its law every time the Americans, in terms of negotiations, say that we have to change our law in order for them to have access to our markets. If that keeps up-and Canadians have now indicated that perhaps only one out of four will vote for the Conservative Party-they could go right down, almost out of sight.
The person, if he is sitting up there in the Conservative Heaven looking down on all of this, who could be most disturbed by all of this going on is the man who was referred to in Question Period earlier today-Sir John A. Macdonald. He had a greater sense of nation building than this modern Tory Party will ever have.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Paproski):: It being 5.36 o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.


PRIVATE MEMBERS' BUSINESS-MOTIONS   RIGHT HONOURABLE LESTER B. PEARSON STATUE TO HONOUR HIS MEMORY
Don Boudria: That, in the opinion of this House, the Government should consider the advisability of honouring the memory of the Right Honourable Lester B. Pearson by commissioning a statue of him to be placed on Parliament Hill.
He said: As you know, Mr. Speaker, on October 2, 1986 I issued a press release to suggest to the Canadian people that right here on Parliament Hill we should have a statue to honour the late Right Hon. Lester B. Pearson.
First I should like to congratulate the Hon. Member for Scarborough Centre (Mrs. Browes) who introduced a similar resolution last year, word for word except that the name was different. At the time the Hon. Member for Scarborough Centre proposed that a statue be displayed to honour the Right Hon. John Diefenbaker. As Hon. Members will recall the House unanimously adopted the motion on the very day it was introduced and debated. Mr. Speaker, I dare hope, therefore, that for the same reason, Hon. Members from all sides of the House will support this motion today and adopt this initiative for the purpose of setting up a statue in honour of a really great Canadian, a tremendous statesman, a former leader of my Party, a man who is no longer with us and who has served his country so well, the Right Hon. Lester B. Pearson.
Mr. Speaker, one of the most distinguished prime ministers in the history of this country was born 90 years ago. Lester B. Pearson was a prominent diplomat, a prestigious figure who greatly contributed in placing our country at the forefront at the international scene. It was therefore quite fitting that the building which the Department of External Affairs uses as its headquaters should bear its name.
Lester Pearson has indeed left tangible marks in the direction of Canadian foreign policy. As a tough politician, he had undertaken the reconstruction of the Liberal Party of Canada and had fought to maintain Canadian unity.
Following studies in history which led to a teaching career, Lester B. Pearson decided to join the Department of External Affairs which was made up at the time of a handful of officers. Having attracted attention very early because of his insight and his talents as an observer on the international scene, Mr. Pearson was sent to London in 1935 as First Secretary of the Canadian High Commission. This assignment made it possible for him to follow very closely the escalation which led to the outbreak of hostilities in Europe. Deeply influenced by these events, Mr. Pearson became convinced of the need to develop a collective defence.
Shortly after his return to Canada in 1941, Mr. Pearson was posted in Washington where, through his charm and courtesy, he became one of the most admired foreign personalities. In 1945, he was appointed Canadian Ambassador to the United States and, the same year, he took part in the San Francisco Conference which led to the creation of the United Nations.
In September, 1946, Mr. Pearson was summoned to Ottawa by then-Prime Minister Mackenzie King who offered him the position of Deputy Minister of External Affairs. In spite of the assignments related to his position, he continued to follow closely the activities of the United Nations.
Moreover, the development of closer relationships between Canada and its main allies, the United States and Great Britain, was also one of his main concerns. He showed his great talents as an ingenious intermediary when Canada joined NATO.
Our Prime Minister of the time, Mr. Pearson, was a great Canadian for his diplomatic initiatives. He proposed a United Nations peace force to evacuate French forces from Egypt. This realization earned him the Nobel Peace Prize the following year. He is the only Canadian Prime Minister ever to be a recipient of the Nobel Peace Prize.
This stand he took was, however, to create much antagonism domestically. Many criticized the Government's position as failing to support Canada's ally, Britain. When the Liberals were defeated in 1956 and Mr. St. Laurent stepped down as leader, Mr. Pearson won the leadership convention and began the rebuilding of our great Party. It was no easy task. With such brilliant people as Walter Gordon, Mitchell Sharp,
January 19, 1987

Maurice Lamontagne and Paul Martin, we re-established the presence of the Liberal Party on the national scene which made possible the 1963 electoral victory.
In a period characterized by intense turmoil and redefinition of the country's aspirations, the Pearson Government accomplished many important reforms. It left behind an impressive body of legislation, most notably the Canada Pension Plan, the universal medicare system, the unification of the Armed Forces and a revised Transportation Act. As well, it initiated a new approach to the problem of Canada's disadvantaged regions through the Department of Regional Economic Expansion.
The motion I am requesting today asks for the erection of a statue to Lester B. Pearson. I believe this motion is very timely and appropriate. Mike Pearson was one of the greatest Prime Ministers this country has had. Moreover, his renown abroad was perhaps greater than that of any other Prime Minister. In this regard, a tribute to his memory on this the 90th anniversary of his birth will certainly be appreciated by his family and friends as well as being an honour for all our fellow Canadians who, partisanship aside, undoubtedly recognize that Lester B. Pearson did place a very distinct imprint upon Canadian society.

Mr. Speaker, I have already contacted the representatives of the National Capital Commission to seek their advice on this issue and I am happy to report that through its president, Mrs. Jean Piggott, the National Capital Commission has indicated its support for this initiative and has offered to co-operate in the search for a proper location to set up this statue.

It is interesting to note that presently there are statues for every Prime Minister who has been elected except one, that of Lester Pearson. There are no statues of Prime Ministers in the late 1800s who came in a succession, but none of them were elected. There is another Prime Minister for whom a statue was built, but it was later decided not to erect it on Parliament Hill because members of the family perhaps did not feel it appropriate, or they did not like the statue.
I ask for the consent and the support of this House for this non-partisan and most appropriate measure to honour one of Canada's greater citizens, Lester B. Pearson.


Some Hon. Members:: Hear, hear!


Hon. Stewart Mclnnes (Minister of Public Works):: Mr. Speaker, it is with pleasure that I join in the debate on the motion proposed by the Hon. Member for Glengarry- Prescott-Russell (Mr. Boudria). I gather the motion has been precipitated by recent events, namely, the erection of the statue of the Right Hon. John G. Diefenbaker, which was a very successful venture. As a result of the unanimous disposition of this House at the unveiling and ceremony commemorative to Mr. Diefenbaker the event was a total success. We had a magnificent day. There was general acclaim, not only in
Parliament Hill
Ottawa but across the country. For that very reason I gather that my hon. friend has discovered that these kinds of initiatives can be applauded by all Members of the House. Indeed, we are prepared to give favourable consideration to a motion of this nature.
I might observe, Sir, that a statue of this nature has not been erected within the precincts of Parliament for some 11 years. Since there was a commemorative statue erected to honour Sir Wilfred Laurier some 59 years ago only four statues have been constructed within the boundaries of Parliament, those of Prime Ministers Borden, King, St. Laurent and Diefenbaker.
I think I indicated in my remarks at the ceremonies acknowledging Mr. Diefenbaker that this was the kind of tribute and collective action that should be taken by Members here and now who, while they enter into dispute from time to time, do recognize contributions made. It is appropriate and fitting that we recognize the contribution of Members, no matter from which Party they come or which opinion they express from time to time. It is appropriate that we specifically recognize and honour those who have served as Prime Minister no matter from which Party they come.
I have suggested to the Department of Public Works that it carry out a study to determine, from an historic point of view and with a view to giving us guidance for the future, how we might determine what statues should be erected, and in what places, to commemorate the various people it might be appropriate to acknowledge.
I think all of us have a sense of history. It is important in giving direction to future Parliaments that we have the aspirations of all Members and that we derive some guidance and direction from what has taken place in the past. Let me refer to some unhappy historical anecdotes concerning commemorative statues. You may know, Sir, that Sir John A. Macdonald went through a great deal of trial and tribulation and it took many months and years before he was able to satisfy the appropriate acknowledgement that should have been made to Sir George Etienne Cartier. That example should give us cause to reflect on what we are doing to ensure that the procedures we follow are those that can be agreed upon and would be in place not only with respect to the motion today but forever and a day.
I think you will recall the late Judy LaMarsh when she was Secretary of State, Mr. Speaker. She placed before this House, and appropriate committees, suggestions that there be statues erected to four personalities. After many months and many years she was only successful in acquiring an agreement and acknowledgement of the kind of statue and siteing with respect to two Prime Ministers. Her other two proposals foundered and there were unhappy consequences as a result of those debates.

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You will know, Mr. Speaker, that in the past the Minister of Public Works has been responsible for making suggestions concerning the identity of persons who should be acknowledged in the manner that Mr. Diefenbaker was acknowledged. I have no hesitation in suggesting to Hon. Members that my predecessors and the Departmental staff have done a superior job in that regard. Having said that, I think as a Member of Parliament and as the responsible Minister that it is appropriate that in future, all Members have more say in what should be done in matters of this kind.
I recognize that the McGrath Report contained a recommendation that Members of Parliament have a greater say over the physical precincts of Parliament. The Government's reply to that report agreed that the grounds of Parliament should be the subject of debate by the appropriate committees of both Houses. In that regard, I would recommend that the Board of Internal Economy be an adjudicator or abitrator of decisions of the kind we are now discussing. I recommend as well that consultation be had with the Boards of Internal Economy of both Houses with a view to securing an appropriate agreement about the way to proceed.
We are discussing the merit of the proposal with respect to Mr. Pearson who has indeed been acknowledged by having his name appended to an airport, a university and a building in Ottawa. Indeed, his name has been appended to an annual charity baseball game between the Expos and the Blue Jays. It is obviously a common sentiment among Canadians, no matter of which Party, that he is deserving of appropriate recognition. However, there are other people and there are other Prime Ministers.
Sir John Thompson and Prime Minister Borden were both Nova Scotians of note. Sir Charles Tupper was a Father of Confederation. They have not been acknowledged in the way suggested.


Victor Fredrich (Vic) Althouse: Borden is right over on the corner.


Don Boudria: Borden's right out in front.


Stewart Donald McInnes: I apologize. Hon. Members are correct. I meant to refer only to Sir John Thompson and Sir Charles Tupper. Some of my friends who have been here longer than I are more observant than I.


Jean-Robert Gauthier: Were they Prime Ministers?


Stewart Donald McInnes: Indeed they were Prime Ministers of Canada and Sir Charles Tupper was a Father of Confederation. Consideration should be given to his status, and there are other Fathers of Confederation to be considered as well.
Perhaps we should give some thought to honouring women, natives and others who have made a particular mark on society. We must find a means of providing for commemorative statues or medallions recognizing Governors General,
Supreme Court Justices and Speakers of the House. These are all questions which should be the subject of a common study.
While I do not wish to dampen the enthusiasm or, indeed, to immerse in cold water the motion of the Hon. Member, and while I am generally supportive of it, it is my view that this matter should be the subject of discussion by the Board of Internal Economy. With a view to giving it some guidance on principle and procedure, we are prepared to file a complete report with full references to historical influences. In that way, decisions of this nature will not be subject to the influences of those who wish a particular person to be acknowledged today and another person tomorrow. We are trying to free up the debate from partisanship, and I believe my proposal would accomplish that particular goal.


Don Boudria: Internal Economy will have jurisdiction outside now?


Stewart Donald McInnes: A motion of this kind is one that should be applauded by all Members of the House. I know the Hon. Member for Glengarry-Prescott-Russell has taken a fervent interest in this issue. He has been in touch with our Department about it. We want to be supportive and we applaud the Hon. Member's general initiative. However, I suggest that today's motion be the subject of further review so that we are not hindered by particular considerations when we have an opportunity to explore these issues on a more global basis.


Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, I had a little trouble following the Minister's logic. As far as I know, the Board of Internal Economy has no responsibility over the grounds of Parliament.
I would like to say a few words about this matter because I support the idea that a man of the stature of Mike Pearson be recognized for his contribution, not only to Canada but to the world. Twenty-two years ago I was living in New Zealand at the time the maple leaf flag was first flown. Incidentally, it was flown in New Zealand about 15 hours before it was flown in Canada. The High Commission in Wellington had the first flag that went up at dawn on that day that flags were raised around the world. It was with a great burst of pride that I saw that symbol, which had already become a symbol of Canada even before it was the flag of Canada. I felt then and I feel now that, to a great extent, it was a symbol of Mike Pearson. I know it was called Pearson's flag, along with other names at that time. It was a flag which symbolized Prime Minister Pearson's commitment to Canada.
Prime Minister Pearson was a world statesman. As has been mentioned, he was mainly responsible for the easing of the Suez crisis in 1956. As well, he was mainly responsible for the introduction of the peace-keeping force into the Middle East during that period of crisis. For these international activities he received the Nobel Prize. The Nobel Prize citation described Mike Pearson, the diplomat, the statesman and the man, as being a man who had strong faith in the final victory of the goodness of life.
January 19, 1987

His concern for peace and his international understanding remained with him throughout his life as Prime Minister. He stood up to President Johnson during the Vietnam war. He suggested to President Johnson that it would be a good idea to cease bombing North Vietnam. As you can imagine, President Johnson was not particularly appreciative of Canada's position in that case.
I must also say that as the Leader of a minority Government in 1963 and 1965 his Government produced, with the help of the current number two Party in Canada, some very powerful social legislation. The Canada Pension Plan was established. Medicare was not completed during that period of time but the start was made. The Canada Assistance Plan was completed. His commitment to Canadian unity was expressed in the formation of the commission on bilingualism and the first real move to make the Civil Service bilingual. He believed in Canada. He believed in the world. In his life as a politican and statesman he made sure that Canada's position in the world was a major position, as did Mr. Diefenbaker whom we have recognized with a statue. Mr. Pearson did not in any way tarnish the image of Canada. Because of his contribution, and on behalf of my Party, I support the raising of a statue to honour Mike Pearson, a former Prime Minister of Canada.


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, I would like to add a few comments relating to the motion put forward by my colleague for Glengarry-Prescott-Russell (Mr. Boudria). But I would like first to extend to you and to all Members of this House my best wishes for a Happy and Healthy New Year.

This motion is commendable. I agree with what the Minister said in a general context about wanting to set up a committee to look at this kind of suggestion in the future. I recall last September when we unveiled the statue of John George Diefenbaker. It was rather exciting when the Chief revisited Parliament Hill. People from across the country gathered in front of the Centre Block. It was a very important occasion, not just in his memory, but for the people of this country. I recall as we stood there that the sun suddenly broke through the clouds and there he was in his bronze splendour back on Parliament Hill. I want to congratulate the Member's concern for the tremendous amount of work they put into that project, particularly the Hon. Member for Scarborough Centre (Mrs. Browes).
The special committee on reform of this House drew a lot of attention to the interest of parliamentarians from all Parties in having a greater role in directing some of the physical aspects of Parliament Hill, our workplace. I might add that the report also underlined that we should have more imput in the decision-making process involved in governing this country. We have made some strides in that area, but we have to keep
Parliament Hill
going forward, continually indicating to this House and the Government the importance of that spirit of reform.
However, the precincts of Parliament are something very special, not only to those of us who work and admire our great surroundings but for all Canadians. The National Capital Region, as you know, Sir, is where I was born and brought up. It is a piece of real estate that I am very proud to represent. I must say Ottawa is probably the most beautiful city in all of Canada. Tourism is a major industry here. It has tremendous potential to become even greater. Erecting statues to great Canadians is a way to recognize our history and make Canadians even more proud. The Mayor of Ottawa, Jim Durrell, the Chairman of the regional Government, Andy Hayden, and the Chairman of the NCC are continually meeting to focus on the priorities and objectives involved in enhancing the tourism potential of the nation's capital.
The precincts of Parliament, as I am sure you will agree, need a little bit of maintenance. We have seen a lot of deterioration in the doors, some of the gates and some of the steps. We as Members want to have more input into what this place looks like. That includes statues and commemoratives of all kinds. I am thinking of paintings and busts of great Canadians. I think of medallions honouring Governor Generals or Chief Justices and other eminent Canadians who, as the Minister mentioned, contributed significantly to Canada over the years. This includes Mr. Pearson, and we all recognize that quite clearly.
The Minister suggested that we look at these in the broad sense and that perhaps the Board of Internal Economy is one of the committees on the Hill which could look at this. As you know, it is an all-Party committee with input on a regular basis from all Members on all sides of the House.
We learned a lot from the work that was done in the last year and a half to put up the statue to Mr. Diefenbaker. We want to capitalize on that knowledge. However, I sense that cannot be done on an ad hoc basis. So I think it is time to sit down and determine a proper framework, within the parliamentary precincts, which will allow us to work together to create the commemorative objects we wish to have on Parliament Hill.
The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) referred to a statue commissioned to honour Prime Minister Arthur Meighen. He mentioned that the family was not too pleased with the outcome. That is a fact. The statue has been in hiding for decades; that is regrettable. That is why I think the Minister focused on the importance of creating standards to be use for all future statues or other objects commissioned by Parliament to commemorate great Canadians. We must have some kind of quality control, shall we say, over the designs so that we do not have a statue sitting somewhere collecting dust. Indeed, the statue of Arthur Meighen is around somewhere. No one seems to know where, so it is obviously very well hidden.

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As you know, Sir, we are running out of space within the parliamentary precincts. Land is now at a premium. I would ask you, Sir, and other Members of the House, indeed people who live within the National Capital Region and people from all over the country, to suggest locations within the National Capital Region, whether it be on this side of the river-

-or on the other side-in the Gatineau, Hull or Aylmer area-in the National Capital area, we are anxious to have input from both sides of the river on that initiative.
The Minister mentioned that there are a number of buildings including a college and the External Affairs building named after Lester B. Pearson. This is indeed a tribute to a man who enhanced Canada's international reputation. He loved baseball and the annual game between the Blue Jays and the Montreal Expos is named after him. I understand that this year they have been unable to find a date suitable to both teams and the game may not be played.
The Minister is suggesting that a more comprehensive approach be taken, one totally free of any partisan considerations. We must consider the requirements of parliamentarians, the Board of Internal Economy, the National Capital Region, Ministers and Prime Ministers. We would like to see certain parts of our past properly reconstructed and located. We speak these days of the ceremonial route, a very important project which will make our capital city unique in the world. Our scenic route will have beautiful views of Parliament Hill and the museums which are presently being built. As well, it will have statues of some of our great Canadians. We hope to have a statue built to honour Lester B. Pearson which will eventually be placed somewhere within the parliamentary precincts or along the ceremonial route where proud Canadians can see it and remember that Lester B. Pearson contributed significantly to make our country one of the best in the world in which to live.
I support the Minister's general proposal to enhance the role of the Board of Internal Economy. I also support the initiative of the Member for Glengarry-Prescott-Russell. I hope he will continue to persist to ensure that this becomes a priority within the new over-all comemorative framework which the Minister hopes to see parliamentarians and parliamentary assistants focus upon to make a lasting tribute to a man who was, without question, an effective Prime Minister and a great Canadian.


Maurice Brydon Foster: Those words of Lester Pearson describe the great relationship which existed between him and his constituents in Algoma East.
After hearing the speech of the Minister of Public Works (Mr. Mclnnes) I am not exactly sure what the policy of the Government is with regard to the placement of statues in commemoration of the memory of great Prime Ministers of our country. However, statues of all Prime Ministers since 1920 have been erected. I felt it was fitting that last fall we erected a statue of Mr. Diefenbaker, a great Prime Minister. It would be fitting to do the same now in respect of Mr. Pearson. It is absolutely essential that that be done with a non-partisan and positive approach, as it was done with regard to Mr. Diefenbaker.
The Minister's policy seems rather fuzzy to me. He suggested that perhaps there should be more input, as recommended by the McGrath committee, into the activities and decisions relating to Parliament Hill. Surely there can be no more active way for Members of Parliament to participate in decisions relating to Parliament Hill than to move a motion during Private Member's Hour and give every Member an opportunity to participate fully in the debate. If the Minister is proposing an over-all policy which will allow Mr. Pearson's statue to be established on Parliament Hill on the same basis as Mr. Diefenbaker's statue, I think that is a workable arrangement. However, if it is strictly an approach to frustrate the establishment of a statue to honour Mr. Pearson, I think it is a less than acceptable way for the Minister to proceed.
I am sure that Lester B. Pearson qualifies to meet whatever the requirements would be to have a statue raised in his honour on Parliament Hill. Few if any Canadians have made such an outstanding contribution in international affairs for our country and for the world, in domestic and social legislation or in human terms which we in Algoma and Algoma East appreciate so much.
I want to indicate in the strongest possible way my support for the establishment of this statue commemorating the tremendous contribution of the Right Hon. Lester B. Pearson to Parliament and to our country.


Cyril Keeper: Mr. Speaker, I appreciate being recognized during this Private Members' Hour. I had no intention of speaking in this debate because I expected that things would go much as they did a year ago when the motion came forward for a statue to be erected in honour of John G. Diefenbaker. As the Public Works critic I was alerted by my House Leader to be ready to speak. However, a colleague had indicated he would like to speak on this matter and I bowed to him because I thought this motion would receive smooth passage through the House. However, once the Minister of Public Works (Mr. Mclnnes) made his remarks, I must say, quite frankly, I was aroused to speak.
Parliament Hill
The Minister of Public Works said that before a statute could be erected to Mr. Pearson, a former Prime Minister of this country, the matter would have to be referred to a committee to set up guidelines and to go through a long and studied procedure. This strikes me as rather strange. If this is to be the approach, then it should have been taken before the decision was made to erect the statue to John Diefenbaker. A year ago a Private Members' Motion passed through this House to honour the Right Hon. John Diefenbaker, a former Prime Minister of Canada, and rightly so, and the statue has been erected. If the Government wanted to take the approach of setting up guidelines, it should have done so before that statue was erected.
What arouses me, Mr. Speaker, is that what we seem to have here is a petty partisan approach to the question of honouring a former Prime Minister. Is the Government just putting road blocks in the way because it is a former Liberal Prime Minister the private Member is asking to have honoured? If we chose to honour John Diefenbaker then why not honour Mr. Pearson? Certainly, their contribution to history and to our country is of equal merit. Surely most Canadians associate John George Diefenbaker and Lester B. Pearson together in Government.
I was surprised that the Minister of Public Works would speak in this Chamber during Private Members' Hour in order to throw cold water on a motion by a private Member to honour a former Prime Minister. I would have thought he would have waited to hear full debate, allowing private Members to make this decision. I want to make it clear that I think there is a need for a vote on this particular motion. It is sad and regrettable that there is a need for a vote. This motion should have been supported without question. However, because of the comments made by the Minister of Public Works, I feel there is a need for a vote and for private Members to be able to express their opinion and not be whipped into line by the Minister of Public Works.
I want to keep my comments brief, so I will just say that not only was Mr. Pearson Prime Minister in the same historical period as Mr. Diefenbaker, whom we have already honoured, but Mr. Pearson did make significant contributions to this country. He won the Nobel Peace Prize, so obviously he was honoured internationally. He had a part to play in the establishment of medicare and the establishment of the Canada Pension Plan, both of which were significant policy initiatives for a Canadian Prime Minister to have been involved in.
So as not to limit the opportunity of other Hon. Members to express their opinion on this question, and so as not to lose the opportunity to have a vote, I will bring my comments quickly to a close by saying that it strikes me as being partisan that a Minister of the Crown would suggest a different procedure regarding a statue honouring Mr. Pearson than that which was followed for the erection of a statue to honour Mr. Diefenbaker.

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The Acting Speaker (Mr. Paproski):: The Hon. Member for Edmonton East (Mr. Lesick).


Mr. Lesick:: Thank you, Mr. Speaker-


The Acting Speaker (Mr. Paproski):: The Hon. Prime Minister-the Right Hon. Leader of the Opposition.


John Napier Turner: That appears to be a useful premonition.


The Acting Speaker (Mr. Paproski):: I just want to say to the right hon. gentleman that I regret I did not see him rise. I know the Hon. Member for Edmonton East (Mr. Lesick) will defer to the Right Hon. Leader of the Opposition (Mr. Turner).


John Napier Turner: Mr. Speaker, I will not impede the Hon. Member. I recognize the instinctive intuitive premonition in your earlier remark, Mr. Speaker, and we will hang in together.
I had a feeling of great pleasure some months ago to sit on the platform when we dedicated a statue to the Right Hon. John George Diefenbaker. I had the honour of serving in this House both in opposition and on the Government side when Mr. Diefenbaker was Prime Minister and then Leader of the Opposition.
Our quarter of the House thought it entirely appropriate that Mr. Diefenbaker's historical position in Canada in his role as leader of our country should be recognized in a permanent way on Parliament Hill. We looked at it in a non-partisan fashion. Therefore, I rise very briefly to say that I hope the Minister and Hon. Members on all sides of the House will afford the same distinction to Mr. Pearson who, as my friend from the New Democratic Party has remarked, occupied the stage in this House at the same time as Mr. Diefenbaker. They sat opposite each other, on both sides of the House, during a very remarkable period of Canadian history.
I think the arguments put forward in honour of Mr. Diefenbaker some time ago-and I congratulated the mover of that particular motion-apply equally to this motion. I would hope we would have unanimous approval of this motion so that the two men who faced each other so actively across the House representing, as they saw it, our country, would be able to face each other, perhaps at some distance, across Parliament Hill.


William Lesick: Mr. Speaker, I certainly respect the thoughts of the Right Hon. Leader of the Opposition (Mr. Turner) and his concurrence that our former Prime Ministers, John George Diefenbaker and Lester B. Pearson, deserve to be honoured within a short time of each other. It is the same situation as it existed 11 years ago when the late Prime Ministers Mackenzie King and Louis St. Laurent were also honoured with statues.
The late Mr. Pearson was a man of outstanding abilities. During his time he was greatly honoured. However, he also created a certain amount of divisiveness. It has taken the last
20 years to accept his good works, something for which he is highly respected. We know that he will go down in history as an outstanding statesman. There is a place for a statue of Mr. Pearson to be erected here on Parliament Hill. But where is that place?
It is true that we erected a statue of John G. Diefenbaker, something which was long overdue. That former Prime Minister captured the imagination of every Canadian. He was one of the great Canadians in the history of our country. He led a strong Government and a strong Opposition. He was highly respected right up until his last days in power.


Cyril Keeper: Was not Mr. Pearson?


William Lesick: Mr. Pearson was as well. I thank the Hon. Member for his prompting. I realize that we are talking about Mr. Pearson.
Until the unveiling of the commemorative statue of the Right Hon. John Diefenbaker this fall some 11 years had passed since the erection of the previous two statues. There is a sculptor in Edmonton, Mr. Negritto, who is a near-genious. He has extraordinary ability. He has made representations to the Government in this view. There is also a sculptor of outstanding ability in Winnipeg, Mr. Mall. Undoubtedly, there are other sculptors with outstanding abilities who are willing to offer sculptures of the type we would like to see on the grounds of Parliament Hill. However, the question remains, where should they be placed?
At the moment there are four statues on the grounds. They are statues of the former Prime Ministers Borden, King, St. Laurent and Diefenbaker. They are in places which were thought to be relevant at the time. Is this the way in which statues honouring the leaders of our country should be located? What about busts? There has been talk of paintings and pictures. Now we hear talk of standing memorabilia. What will we do with such memorabilia? Is there some overall plan? We have just erected a statue to an outstanding Canadian. Should we rush in and erect another statue on the hallowed grounds of Parliament Hill? The Government feels that we should stop and consider. After all, only a few months have passed since the last statue was erected. We must consider what the best method is for locating sculptures of this type.
One of the problems we have had in the past is that we have forgotten the history of our country. We were not even taught the history of our country. When I went to school I learned British, French and European history but very little about Canadian history. The tables have been turned. We now think about our Canadian history. We think about the impact the French had when they came here over 300 years ago. We think about the English who travelled all over the country and who finally ruled it. What about Canadians since 1867 and the years since? Have we really learned the history of our country? The history of our country should be reflected on
January 19, 1987

Parliament Hill in a more orderly fashion to reflect what is important in terms of what has occurred.
As we consider the possibility of erecting another sculpture we must consider where it should be placed. The Minister of Public Works (Mr. Mclnnes) has said that we should create an orderly plan and have a study made of this matter. In this way the erection of sculptures could be presented for the best interests and delight of all Canadians, as well as for the enjoyment of visitors who come from other countries. In this way they will see that we have some rhyme and reason in terms of the placement of our statues. We must consider how they can be enjoyed and whether they meet the needs of families and parliamentarians. These questions should be considered before we rush into erecting another statue on Parliament Hill.
There are eminent Canadians long since deceased who, in the eyes of Parliamentarians-


Mr. Speaker:: I regret to interrupt the Hon. Member, but 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. However, I should advise Hon. Members that there is some possibility that the motion will be scheduled for debate again on Tuesday, February 10. In view of representations which have been made I wish to bring this matter to the attention of Hon. Members.
The House will now move to Government Orders.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Miss Carney that Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, be read the second time and referred to a legislative committee, and the amendment of Mr. Turner (Vancouver Quadra), (p. 2382).
Ted William Schellenberg: Mr. Speaker, I am very proud this evening to be the second hitter at bat for the Government on the proposed legislation dealing with the export tax and the American countervailing duty. I am particularly pleased to follow another British Columbian, the Minister for International Trade (Miss Carney), who has carried the ball very well with respect to this issue. British Columbians are proud of the fact that she listened to Premier Vander Zalm of B.C. and the people of B.C., including the IWA, and not Adam Zimmerman of Noranda in Toronto or Premier Peterson of Ontario.
Softwood Lumber Products Export Charge Act
I am particularly pleased to stand here this evening because my region is so dependent upon the forest industry. Some
7.000	to 8,000 workers are directly involved in the forest industry in Nanaimo and Alberni, British Columbia. Some
20.000	to 25,000 people are involved in the secondary industries which rely on forestry. Port Alberni in my riding was the forestry capital of Canada in 1986. Thus I would like to say a few words about this proposed legislation.
I was in British Columbia when this deal, as it has been called, was signed. I talked to the forest workers in the province. The message they asked me to bring back to Ottawa was to tell the Chicken Littles that the sky is not falling. This is not the end of the forest industry in British Columbia, or in Canada. British Columbians realize that we have not been replanting what we have been cutting down. They look forward to the fact that we will actually have some money for reforestation in our province and across the country. The province supports what we are doing, as do the forestry unions.
I think it is important to read into the record a couple of paragraphs of the position taken by the International Woodworkers of America in British Columbia. In a letter to the Minister for International Trade they state:
The International Woodworkers of America wishes to extend its general support for the recent negotiated settlement of the softwood lumber dispute with the United States.
Under ideal conditions, many of us would have preferred to have our "day in court" in order to try to reduce the 15 per cent preliminary duty imposed by the U.S. Commerce Department last October. However, given the realities of the strong protectionist mood in the United States, it is extremely unlikely that the 15 per cent could have been reduced substantially in the final Commerce Department decision.
And even if the correct duty were eventually determined to be lower than 15 per cent, that decision could only be arrived at through three or four years of protracted court proceedings. In the meantime, all of the revenues from the countervailing duty would continue to flow into U.S. government coffers at the rate of 12 per cent to 15 per cent on the selling price of lumber.
Those revenues properly belong to the owners of the trees-the people of British Columbia and Canada. We therefore strongly believe that it was absolutely essential to conclude a negotiated settlement with the United States which will guarantee that the increased taxes on softwood lumber shipments to the United States be kept in Canada.
This is the IWA talking. This is a union that represents the men and women who work in the forests of B.C. and across the country. This is a responsible position taken by a responsible union that has entered the 1980s. What does the Opposition and some of the media have to say? The sky is falling. Hundreds of mills are going to shut down. Thousands of jobs will disappear.
Well, we went through all of that with the shake and shingle affair last year and we know the reality of that. The NDP and the Liberals said then that it was the end of the industry; thousands of British Columbians would be on the dole. Now eight months later, thanks to market forces and good management, the shake and shingle industry in this country is doing very well. That was a 35 per cent tariff. Here we are talking about a 15 per cent export tax. When it comes to opposition

January 19, 1987
Softwood Lumber Products Export Charge Act
criticism, that is basically old wine in a new bottle. Come to think of it, all that the Opposition is good at is whining. Nobody whines better than the NDP and the Liberals.
I have a comment from Frank Beban of Beban Logging in Nanaimo. He told me that he does not think the export tax will have that much of an effect; it should not be detrimental to the industry. He feels that the value of the Canadian dollar will have more effect on the B.C. forest industry. This is the same Frank Beban who, with Western Forest Products, was fighting to save logging jobs on the Queen Charlotte Islands. That is where the NDP believe that trees grow to the sky and then suddenly fall down on their own, and that they should not be chopped down by these horrible loggers. That is where they tried to block the logging on Lyell Island. One of the federal NDP Members even dressed up as a Haida native to try and stop the logging. Today they are coming across as the great defenders of the loggers of British Columbia. They are very concerned about the jobs of British Columbians. Horse nonsense, or better still, horse sense.
I see that the Liberal Member for Vancouver Quadra (Mr. Turner) is here. To his credit he travelled up to the Queen Charlottes and saw the Lyell Island situation. He made quite an effort on the Jack Webster Show, and in the House, about the indiscriminate logging of those horrible forest companies. Those are the same forest companies that create the docks, the roads, provide emergency medical service to the people in the Queen Charlottes and throughout British Columbia, and have built up the infrastructure that we are so dependent upon. Now I see this afternoon the Right Hon. Leader of the Opposition trying to hoist this Bill for six months. How can you go back to British Columbia, sir, and tell them that $400 million of reforestation money is going to be delayed for six months? That is about $200 million that they will not get. They will get it down the road.
American protectionism is real and ugly, there is no doubt about that. Let us look at some of the facts of this legislation and what has happened as far as the background is concerned. In 1982-83 a countervailing petition similar to this one was launched by the American forest industry. At that time 29 per cent of the U.S. market was ours. That caused a great deal of fear in British Columbia. Fortunately, at that time the decision was in our favour. But times have changed since then. The forest industry was saying that we won it in 1983, and we will win it in 1986. We are talking about 1986-87 in North America and times have changed. We have gone from some 19 per cent of the American market 10 years ago to some 35, 36 per cent now, some say it is perhaps even higher. The Canadian dollar is devalued even more. In the same 10-year span that the Canadian dollar went from $1.04 down to about 73 cents our share of the American market went from some 19 per cent to 35 or 36 per cent.
Anybody who has talked to American politicians can understand why they have been upset. They stand in their own ridings and watch carload after carload of Canadian lumber going across the border while their own lumber workers are
lined up at the unemployment insurance offices. Any politician in this Chamber will understand the sentiments of the American politicians. It has become more real and ugly over the passing years.
In the summer of 1985 I travelled to Washington, D.C. with an all-parliamentary delegation. The Members for Skeena (Mr. Fulton), Capilano (Mrs. Collins), and Prince George- Peace River (Mr. Oberle) who is now the Minister of Science and Technology, were in attendance. We learned there how real that protectionism sentiment is. Even if the countervailing duty failed, we were told that they were prepared to introduce an omnibus Bill that would take action against our forest products. The only light on the horizon in the U.S., even back in 1985, was that we had a good product that American home builders and home buyers wanted. As a matter of fact, one of the southern Senators said to us that at church on Sunday he was doing the lay sermon. As he walked in the front door a representative of the southern forest industry was saying, "For goodness sake, nail those Canadians. You have got to stop those Canadians". After the sermon he walked out the back door and there was a contractor who builds houses in Georgia saying, "Lay off the Canadians. We need their product. We like their product". That is the type of turmoil we have been going through over the years.
Anyone who has talked to the forest workers, the legislators, or the industry knows that there has been very real concern. Even early in 1986 the forest industry told us as the Government of Canada, "Hands off. Let us deal with it. We won it before, we will win it again". But then by August of 1986 the political pressures in the U.S. were realized, not only by us but by the forest industry in Canada. The provinces, labour, and the forest industry urged that we negotiate our way out of this particular mess. That is why our Minister of International Trade offered a 10 per cent presentation to the Americans to try to forgo the preliminary determination on the countervailing duty. As we all know, that offer was refused.
In October we lost the battle but not the war, in our opinion. When that 15 per cent preliminary determination came down there was a great deal of consternation in the industry and the Government. We thought we could find a way out of it. That is why in November, at the First Ministers' Conference in Vancouver, the Prime Minister (Mr. Mulroney), the Minister of International Trade, the Minister of State for Forestry and Mines (Mr. Merrithew), and the Premiers of this country, with one exception, managed to find a consensus and make another offer to the Americans that would hopefully keep the money north of the 49th Parallel. On December 30 our negotiations were successful.
What did the negotiations entail? The Americans wanted a $1.1 billion increase in stumpage. They wanted an outright veto in changes to our stumpage system. They wanted the export tax to apply to the added value of our lumber. They wanted prohibition against our forestry companies using the cost of the export tax as a business deduction, as they do with stumpage now. They got none of those demands, not one.
January 19, 1987

Instead, on December 30 our Government was successful in ensuring that the $600 million in reforestation money stayed north of the 49th Parallel. Now we will replant what we harvest.
That has been the position of the B.C. NDP for years. They have demanded that we farm and not mine the resource. That is a position that many B.C. Members of Parliament can agree with. It is ironic that now, thanks to a Progressive Conservative national Government, we will be able to do that in my home Province of British Columbia and across the country.
I have some concerns about how these windfall dollars will be spent. Much of it relies on trust with the provinces. We have no real assurances that every penny, with the exception of the cost of administration of the export tax, will go into planting trees, weeding, spacing, and thinning, and doing the job we have not done up until now. But it is essentially a provincial resource. So there will be a great deal of trust involved here.
If I may turn to a few media reports on the imposition of the export tax, let me start with the media in Nanaimo-Alberni, the forestry capital of Canada. The Alberni Valley Times states: "Export duty reasonable-under the circumstances".
Ottawa's export duty saved a lot of money for Canada that would have been spent in the U.S. had not the federal and provincial Governments negotiated the compromise with the tariff-hungry Americans.
Turning to the Nanaimo Daily Free Press of January 3, it reads:
While forest industry unions appear to welcome that lumber export tax agreement with the U.S., it's the big timber bosses' turn to be moaning the odds.
That 15 per cent added cost has produced long faces and fairly scathing criticism of the deal, which was worked out just hours before the deadline-
It continues:
Had there been no agreement, Canada could have faced a tariff even higher than the 15 per cent now agreed.
The difference is that the 15 per cent stays on this side of the 49th parallel. On BCTV, on December 31, an announcer said:
NDP Trade Critic Bob Williams says the softwood accord is "a pretty good deal".
In his interview, Mr. Williams said:
That's right. I'm afraid I disagree (with Broadbent). He is rightly concerned about the sovereignty issue. But at the same time the provinces have not been collecting the value of the trees. I think Mr. Broadbent is ignoring that side of the equation.
I think these articles should be brought to light, in that the Opposition seems to put so much credence upon what the media has to say on these issues. In the January 8 edition of The Toronto Sun, the following article appeared:
In the case of softwood lumber, the American buyers are clearly calling the shots. But not all of them. One irony is that the new 15 per cent export tax imposed here will probably be reflected in higher home prices in the U.S. as importers pass on higher costs to the American consumer.
Which is, if you think about it, a delicious irony.
Softwood Lumber Products Export Charge Act
Then the writer continued:
Meantime, there is no cause for panic. Martin Brian Mulroney hasn't "sold out" the country, nor is he likely to. Peace, order and good government will prevail. The sun will rise in the east and set in the opposite direction.
Life will go on.
Then the following appeared in The Sault Star of Sault Ste. Marie:
It is interesting to note that one Canadian group with a major stake in the issue, the International Woodworkers of America, supports the agreement as "the lesser of the two evils".
In The Toronto Sun Peter Worthington wrote the following:
I wonder if our "nationalists" would prefer the money going to the U.S. in the form of a tariff rather than staying here as tax revenue? Would that be a sell-out too?
Also Worthington wrote:
-one wonders how Canada is supposed to "stand up to" or "resist" American pressure in free-trade talks? Surely with a spirit of isolationism and protectionism rampant in the U.S., it is imperative that we get a free-trade deal as quickly as we can,-
Also he went on to write:
It serves little purpose to reduce the dispute into a "who won, who lost" contest. Free trade is not a hockey game-it's our future. And it seems that on this one, Canada is ahead of the rest of the country.-
They go on and on, including the article written by Marjorie Nichols in The Vancouver Sun which read:
There is nothing novel about this agreement. In terms of the monitoring and enforcement procedures, it is less intrusive into Canadian affairs than other bilateral and multilateral agreements.
The 15 per cent countervail duty is gone, hundreds of millions of dollars in reforestation have been made available, and Canadian sovereignty has been maintained. When one enters into any agreement, there is some give and take on both sides. We have plenty of examples of that. The Auto Pact is one. The Pacific Salmon Treaty is another. The Columbia River Treaty is another example of give and take on both sides. We are giving the U.S.A. a 15 per cent export tax, and they are taking away the countervailing duty which it had imposed.
Let us be realistic and grown up about this. Sovereignty is not the issue. The give and take of any negotiating procedure is a fact of life. When we talk about sovereignty, let us remember what Ambassador Niles had to say in his statement of January
2:
The United States Government will not be concerned with how Canadian authorities make changes in their forest management practices. When they do so or what form these changes make. These are matters for Canadians to decide.
The point the Opposition seems to be missing is that if we had allowed the countervailing duty, Canadian jobs may well have been affected anyway. With the export tax, we will be creating hundreds of jobs in reforestation in the country. Much of the cost of the export tax will be borne by the Americans as well.
The price of Canadian lumber in the U.S. has gone up since December 30. At the end of 1986 it was $190 per thousand for two by four lumber; today it is up to $202, a rise of some $12 in the cost of Canadian lumber in the U.S. It is already being

January 19, 1987
Softwood Lumber Products Export Charge Act
borne by the American consumer. It shows how tariffs and countervailing duties cannot benefit anybody, except perhaps Governments or politicians; they do not benefit the average consumer. That is what free trade is all about. We are trying to get rid of these irritants and ensure that we have the kind of co-operation we need.
As the Minister already mentioned earlier today, the value of stock in Canadian forest companies has gone up, not down. It has gone up since the export tax was introduced, so we can be Chicken Littles or optimistic Canadians.
It is my opinion that this legislation will stand the test of time. The provinces retain their flexibility in determining stumpage pricing, a dangerous development in U.S. countervail policy has been avoided by the withdrawal of the petition, and the ability of the provinces to determine their own natural resource management policies remains unimpaired. They are all worthy goals and accomplishments of which the Government and the House can be proud.
The Canadian forest industry will survive this latest attack by the Americans. We have had them before; hopefully we will not have them again. Our forest industry may even be better managed for what has happened, better managed because of the export tax and the American countervailing duty petition.
We will always have a quality Canadian product which Americans want to buy, so the sky is not falling. It has in fact brightened. I ask that we pass this piece of legislation at the earliest possible opportunity.


Some Hon. Members:: Hear, hear!


Nelson Andrew Riis: Mr. Speaker, I would like to ask a question of my hon. friend who just made a very eloquent plea for support of the Government's initiative.
I should like to refer him to a quotation of Mr. J. Martig-nago, one of the chief officers of Balco Industries, a major forest producer in central British Columbia. I want to take just a moment to quote what he said:
The 15 per cent export tax is devastating. It could cost Balco approximately $8 million per annum.
We will be down sooner and for longer. The Forest Industry Council estimates the additional cost to the Canadian industry will be $600 million per year. That is well in excess of the total profit of all lumber companies in Canada.
The Government ended up giving us Hobson's choice-either the tax goes into our pockets or theirs. What would really hurt is if the language prevents the use of the tax to enhance the forest resource base.
The countervailing duty must remain as a tax on the product exported to the U.S. Were the tax applied on the basis of log scale as stumpage the entire production of every company would be adversely affected. This in effect would not only impact the U.S. market but also eliminate the possibility for Canadian firms to diversify and service international markets other than the U.S.
The Hon. Member's presentation was an interesting one. Although I disagree with it, it contained some interesting arguments. Does he disagree with the comments of this very respected, well-known authority on the British Columbia interior forestry industry when he said that the 15 per cent export tax was devasting?


Ted William Schellenberg: Mr. Speaker, I am very pleased to receive a question from the Hon. Member for Kamloops-Shuswap (Mr. Riis). It was not that long ago, about 10 years, that I was a young radio station cub reporter and the Hon. Member was an alderman in Kamloops and was beginning his political career. If I only knew then what I know now, Mr. Speaker. However, I am pleased to receive a question from him.
Once again we obviously have a divergent point of view. For every letter or comment that he pulls out, I can pull out one with the opposite point of view. Again we have some statistics of doom and gloom; they seem to get used to that in the Opposition. It is full of could, should, maybe and if.
The same is true if we look through Hansard in May 1986 when we dealt with the shake and shingle industry-it could cost, it might cost, or it might have to shut down, not very much of which came true.
I prefer to believe that the country has received sort of a gift from the U.S.A. in reforestation dollars which we can use to the benefit of our forest industry. I prefer to believe that we are going to create more jobs in reforestation, in weeding, spacing and thinning than may be lost in the mills and the forests of British Columbia.
The cost of S600 million has been pulled out of the air. I have heard other costs as well. I know one cost for sure. We will receive those hundreds of millions of export tax dollars into our reforestation funding.
Do I disagree with what the Hon. Member has to say? Time will tell whether the Hon. Member is right or I am right. Perhaps with our mutual experience in the B.C. forest industry and its implications, I prefer to believe that the government Member is right and the opposition Member is wrong.


James Ross Fulton: Mr. Speaker, can the Hon. Member direct any Member of this House to a document or a public statement or anything when he says that hundreds of millions of windfall dollars will come to B.C. and that they will be spent on reforestation? In fact, the Premier of British Columbia has said quite the opposite, that the money will be used for things other than forestry. Can the Hon. Member direct anyone in this House to any document or any statement saying that that money will be spent on reforestation, or is that just pie in the sky?


Ted William Schellenberg: It is an accepted fact, Mr. Speaker, that the Province of British Columbia, along with the Province of Quebec, were anticipating raising their stumpage fees well in advance of what has been going on over the past few months. It is the Premier of British Columbia, let us not forget, who initiated the negotiations, along with our Minister for International Trade and the other provincial premiers, to try to bring in that export tax and to keep it in place. As I said earlier, a lot of this is based on trust, accommodation and belief.
January 19, 1987

We have met with Premier Vander Zalm twice since he attained office in the fall of 1986. I would put forward to this House that the Premier of British Columbia will do everything he can to ensure that the $400 million in British Columbia is put into reforestation. The Premier is not sure that he can spend all of that in one year, which shows the kind of windfall dollars that are involved. The Premier of B.C. has said, I believe, as reported in the Vancouver Sun, that when it comes to a choice between growing a tree, if he uses the funds, and saving a patient who has heart trouble, then that is a decision he will have to make at that time. I am trusting, as we should trust, that he will make the right decision when the time comes.


Michael Morris Cassidy: Mr. Speaker, since this is a bad tax, badly applied, does the Member believe that the bad application of the tax should be sustained or not? I gather from the Member's speech that he endorses the Government's decision to impose the tax.
Is the Hon. Member aware that stumpage in the Province of Quebec, for example, is very substantially higher per thousand cubic feet or per cubic metre than it is in the Province of British Columbia? Is it fair that the tax should apply at the same rate in Quebec as it does in British Columbia?
Is the Hon. Member aware that the tax to be applied is on the f.o.b. price at the mill and as a consequence it will be applied on the f.o.b. price of something like $230 per thousand cubic feet in Quebec as compared to $160 per thousand cubic feet in the interior of British Columbia? In other words, the tax will wind up being about $10 per thousand cubic feet higher in Quebec than it is in British Columbia. Is that fair? Is that just, and if not, what does the Hon. Member intend to do with it as a member of the governing Party?


Ted William Schellenberg: Mr. Speaker, that is not a certainty. The Hon. Member speaks with great certainty that it is going to be an unfair tax applied in different regions of the country. We do not know that for sure. Those negotiations are still going on right now between our Minister for International Trade and the Premiers and forestry Ministers across Canada.


Michael Morris Cassidy: Oh, oh!


Ted William Schellenberg: What a delightful laugh the Hon. Member has. There is no certainty at all of how it will be applied, whether or not it will be higher in Quebec or lower in British Columbia. That is what the negotiations are all about. That is what the NDP does not seem to understand.


Michael Morris Cassidy: It is in the Bill.


Ted William Schellenberg: Negotiations, thank goodness, are being done by a Progressive Conservative Government and not an NDP Government.


Nelson Andrew Riis: Mr. Speaker, I have another question for the Hon. Member. He will be well aware that on the question regarding
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sovereignty, to which he referred in his presentation, when you look at the actual agreement it states:
-that Canada may reduce or eliminate the export charge if other fees are placed on lumber production. But Canada can do this only "subject to further consultations and agreement between the two Governments".
The two Governments being the Government of the United States and the Government of Canada. The agreement is saying that unless the United States Government agrees to this change of obtaining these funds, Canada cannot proceed, the industry cannot proceed or the provincial Government cannot proceed. When it says that in the actual agreement signed by the Governments of Canada and the United States, would the Hon. Member not have to agree that it is really saying that the U.S. Government does, in fact, have a certain amount of decision making in how we manage our forest resource?


Ted William Schellenberg: Once again, Mr. Speaker, I must repeat how happy I am that our Government is doing the negotiating around here and not the NDP.
Does the Hon. Member not realize that in other agreements we have, from the Auto Pact to the Pacific Salmon Treaty alone, there is give and take on both sides? Decisions cannot be made unilaterally by one side without affecting the other. There are agreements that involve mutual negotiation. The Americans are concerned about the arithmetic of that 15 per cent export tax, and rightfully so. They will be monitoring the situation in Canada, but under no circumstances have we given up our sovereignty, under no circumstances at all.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate. The Hon. Member for Laval-des-Rapides (Mr. Garneau).


Mr. Raymond Garneau (Laval-des-Rapides):: Mr. Speaker, Bill C-37 now before the House can be viewed from a fiscal point of view. It can have some other implications we could refer to from the legal, technical point of view, but the heart of this whole debate centers on the ability of the Government of Canada and the provincial governments to make decisions concerning the forest industry, which is a major resource. Mr. Speaker, I would say that this Bill raises two important questions-first, the integrity of our Canadian sovereignty, and second the financial situation that could be faced by a significant part of the forest industry and its workers.
Mr. Speaker, a moment ago I heard the Government Member say there had been no impairment of sovereignty because of those negotiations, and that there had to be some sort of trade-off in those negotiations. The reason why on this side of the House we feel the integrity of Canadian sovereignty has been set at stake by this Government is that we did not have a free hand. The negotiations were entered upon under duress. There was a decision by the U.S. Government, and I wish I had all the time needed to put the case of that 15 per cent levy against the fact that a country's resources may be taxed according to the country's will, and the establishment of new stumpage fees is not a subsidy to our forest industry.

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Mr. Speaker, we on this side of the House defend that view on the authority, not of books or expert opinions but of a ruling by the U.S. International Trade Commission which made a decision on that matter in 1983. As our leader asked earlier today, what is it that has changed in that whole debate since 1982-83? Stumpage fees have remained on the whole identical, and so did their implementation. Mr. Speaker, there has been no change in the international agreements binding the various governments that are members of the GATT. What is it that has changed since 1982-83, if not a Government that cannot stand up to the U.S. Government, a Government that is ready to cave in to each and every demand being addressed to it.
I would not want to come back on the issues which have already been raised such as the national energy policy, the drug legislation, etc.: the Mulroney Government has merely caved in to each American demand and this is again the case today.
We did not negotiate freely, contrary to what the previous speaker, a Government Member, has stated, but we have been forced to enter discussion under the threat of a 15 per cent tax. And given these circumstances, the sovereignty of this country has been challenged.
The second point with which I would like to deal is that not only the integrity of Canadian sovereignty is challenged, but a major Canadian industry could be disabled to the extent that several plants would have to close and their employees laid off. I should like to explain to those who are listening in this House and elsewhere why we have reached that point, and why we are now discussing a bill the contents of which have been dictated by the American government. Why are we forced to discuss it in a Parliament where the various regions of the country are represented? Why do we have to deal with such legislation?
The behaviour of the Prime Minister of this country was extremely naive and lacking in sophistication when, at the Quebec Summit, without preparation of any kind, without prior debate in the House, without prior discussion with the provincial governments, without checking on the situation in the U.S. Senate, without any preparation and without any really thorough research, the Prime Minister of this country agreed to embark on free trade talks with the U.S. President.
In the fall of that year, at the beginning of the session, we were treated to a Government statement about seven or eight minutes long, and that is all we had from this Government in the House, a statement announcing that an agreement had been reached between the U.S. President and the Prime Minister of Canada on starting free trade talks. Unfortunately, the Prime Minister had forgotten that for the talks to get under way, the U.S. President had to refer back to the Senate and that a Senate committee had to approve a decision to start negotiations on the basis of the proposed fast track concept. Unfortunately, the Senate committee's decision came as a surprise to the Conservative Government. The committee refused to give its majority approval to a decision that had
been announced by our Prime Minister and the President of the United States. That is when the trouble started. To avoid losing face, the U.S. President had to do some arm twisting, and in this respect, a number of letters are often referred to.
I have one here before me, signed on May 8, 1986, in which the U.S. President thanked his friend, Dear Bob, in other words, Senator Packwood, for finally deciding to pass the resolution. But he told him he intended to put the pressure on in order to accelerate the process of settling the softwood lumber problem. That was the price that the American Government had to pay to obtain the Senate committee's agreement. If we look at the original text of what the U.S. President said to Senator Packwood-
"I intend to press for an expedited resolution to this problem independent of the comprehensive negotiations".

In addition to the U.S. President's commitment there was also a senior official with the administration's trade sector in the United States, Clayton Yeutter, who in a letter to Senator David Pryor on April 17, 1986, said, and these are his own words:

"We will get timber fixed".
[ Translation]
And that was in the context of discussing whether to go along with the plan for free trade talks between Canada and the United States. So the U.S. Senate had its arm twisted and the U.S. administration promised to foot the bill. However, in the final instance, it is Canada's softwood lumber workers who are going to pay, because as a result of the Prime Minister's incompetence and lack of foresight, we and our workers in the softwood lumber industry are going to suffer the effects of this Government's poor administration.
What happened, Mr. Speaker, was that the tax was imposed. When we were hit by the 15 per cent tax imposed by the United States, the first reaction of this Government was to panic. Why did Mr. Reagan, the friend of the Canadian Prime Minister, impose a 15 per cent tax after we had supposedly undertaken friendly discussions to solve all trade problems between our two countries? There was therefore some panic.
The first reaction of the Minister was to say: We are going to fight. We shall appeal to GATT, we shall fight to have this 15 per cent tax withdrawn which we find unjust because it goes against the rules of international trade.
The House will recall the rhetoric which was used at the press conference. The first reaction was panic. The second was agressiveness. The third reaction was to give up on everything and to make, supposedly as a final offer, a counter-proposal of 10 per cent instead of 15 per cent.
January 19, 1987

The Minister for International Trade said that this was a final offer. Not only was it not a final offer, but we had to go even further and obtain a settlement which is exactly what the Americans wanted. The Government tried to rattle its sword in this battle, but when it saw that its position was not strong enough to negotiate, it showed the white flag late in December and agreed with the American requirements and signed this agreement with which everyone is now familiar and which is reproduced nearly word for word in the Bill under consideration.
The second point I would like to raise concerns the effects of all this. Many have said how important the forest industry is for all of Canada, and as the representative of a Quebec constituency, I would like to underline this importance.
Our lumber industry includes nearly 400 businesses and 21,500 workers and its exports amount to several hundred millions and even billions of dollars. This measure will have an impact on our lumber exports since 51 per cent of Quebec production is exported to the United States.
This industry is therefore important for all of Canada and extremely important for Quebec. This is why this Bill will have a considerable impact. I have had the opportunity to discuss this issue with representatives of the industry and the reactions we have had have been extremely unfavourable. We have been told that the industry is in great difficulty.
Earlier in this debate I heard the Conservative Member and others, including the Minister, say that the price would be paid by the Americans. We have evidence from company owners who told us in no uncertain terms that the day after the tax was imposed they tried to raise their prices so as to be able to pay this tax, but they did not even sell 1,000 feet of lumber. They had to lower their prices and absorb the full tax just to maintain sales in the United States.
So until now the price or tax has been paid by Canadian companies. We would be able to make the Americans pay this tax only if the demand for timber in the United States were to soar overnight. In that case, of course, we could boost prices and make them pay part of the increase. But this surtax is levied at a time when the United States construction industry is hard hit by the tax reform. All those who followed the tax reform debate and saw the reaction of American house builders, all those people are telling us-and I heard the testimony of Americans-that as a result of tax reform amendments affecting those who buy houses or apartments for rental purposes there will be no new housing construction until an adjustment is made. In other words, for the next six to twelve months the tax will have to be paid by Canadian companies and borne by Canadian lumber industry workers.
Mr. Speaker, the consequences will be far-reaching. We could quote a number of statements by experts who commented on this question. I think you know them, including some Quebec company presidents. Then we heard the testimony of the President of the Chamber of Commerce who was also the
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owner of a major industry. Their remarks have been reported in all newspapers, so I would rather not repeat them here.
Rather, I should like to use the time which I still have at my disposal to deal with the very substance of Bill C-37, examine once more the whole issue and emphasize the sovereignty aspect.
Mr. Speaker, Clause 5 provides that a charge will be imposed on a great variety of forest products. In short, all softwood lumber products-the bill requires a full page to list them all-will be affected, and a charge imposed shall be an amount equal to such percentage of the export price of the softwood lumber products, not exceeding 15 per cent thereof, as may be prescribed, up to a maximum of 15 per cent.
Mr. Speaker, I wonder exactly who will decide whether it's going to be less than 15 per cent, say 11, 12 or 8 per cent. I have tried to find out whether it was only the Government of Canada who was going to decide that, but when I examined the agreement-on this basis, I return to the issue of Canadian sovereignty, because the Minister herself has indicated that the clause concerning sovereignty in this bill was item No. 5 of the agreement. Well, dealing with the changes which could be made and included in Clause 5 of the bill, item 5b states, and I quote in English:
"Any such modifications in the export charge will be made by the Government of Canada. Calculation of the value of any replacement measures in relation to the export charge will be subject to further consultations and agreement between the two Governments." In fact, we will not be able to change the tax without the agreement of the U.S. Government. That is why I say that this Bill has really damaged the sovereignty of Canada.

When we consider the other aspects of this bill which deal with these changes, we realize that we still have to refer to the agreement-I do not know whether this is quite often the case with bills, my Parliamentary experience on this level being quite recent-but when we read in Paragraph 3 that in interpreting the schedule, recourse may be had to the Memorandum of Understanding between the Government of Canada and the Government of the United States, we understand that we must read both the bill and the Memorandum of Understanding and that no change in the tax could be made without the consent of the American Government.
Also, Mr. Speaker, the amounts collected by the Government of Canada would normally be shared between the provincial governments. Unfortunately, the time allotted to me will not permit me to deal with this issue, but it appears to me to be extremely important. I hope that before we complete the study of this bill, we will have at least a draft of the regulations, in order to know how they will be shared. But no matter the way they are shared, item 6 of the Memorandum states

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that the amounts thus collected by the Government of Canada could not be used to provide the lumber industry in Canada with an advantage it did not enjoy before the signing of the agreement. In that context, I find its hard to understand how the Government can claim a victory by saying that the monies will be used to do reforestation work, because if reforestation work is done, that cannot be used to the benefit of the company and the company must establish a yearly balance sheet. And in that sense, this means that they will not be able to reach their stated goal, because this would be contrary to the agreement and if the agreement is not honoured, the American Government may terminate it within 30 days. And once it has been terminated because of Canada's failure to comply, as our leader pointed out in his speech earlier today, the U.S. President has the right to unilaterally impose a 10, 15 or 20 per cent tax he can determine himself. If this is not losing face as a country, Mr. Speaker, if we have not relinquished a major part of our sovereignty, I wonder what agreement, what situation could allow us to say otherwise.


Mr. Hamelin:: Mr. Speaker, I rise in this debate as a Member from Quebec, after the Opposition Member who did not hesitate to call this Government and this Prime Minister naive and incompetent. It is very easy to pose as a swashbuckler and see the Canadian Government as a naive, incompetent and bad negotiator, to suggest it has been had, to consider this as a bad deal, a swindle, et cetera.
It is my view, Mr. Speaker, that there is a reason for the Bible to tell us about David and Goliath. It very seldom happens in real life unless God gets involved, and as God is both on Canada's and the United States' sides, God does not get involved in that matter, it very seldom happens that David overcomes Goliath. It is very seldom indeed that the smaller opponent will give a licking to the stronger one, the bigger one, the one with 25 times our population whose budgets and industrial base are world leaders, and the Opposition is asking that we act as swashbucklers, as winning Davids, as champions of Canadian nationalism, the stalwart supporters of interests that are now part of a global market.
In my view, it is sheer foolhardiness to go and get crucified in an arena where one is already sure of losing. There is but one intelligent possibility, that is to negotiate, and this is what we have been attempting to do, in line with the best interests of Canadians and the lumber industry.
If under previous Liberal Governments the Canadian dollar had been stronger than it was as a result of an economy that the Liberals had been literally massacring in Canada for many years, U.S. protectionism would have been less acute and we would not have been faced with the kind of difficult situations we are facing now.
Mr. Speaker, I am therefore going to put my question to the Hon. Member, and I would like to point out that the solution agreed upon with our American friends who are now experiencing internal problems as a result of which protectionism is king, that this solution is the one that is least damaging
to our economy and the one most in line with Canadian interests. Finally, and this is the question I would like to ask the previous speaker: Can our sovereignty of which he is so proud, and we share that pride with him, can this Canadian sovereignty extend beyond our borders?
I think we had a duty to negotiate the best possible arrangement in the circumstances. Would the Hon. Member agree with that?


Raymond Garneau: Mr. Speaker, I've just spent all my time, twenty minutes of it, explaining why I did not agree, what I fail to understand, or rather, I do understand now what I did not understand before, and that is the entire state of mind that prevailed during these talks, and I don't know whether the Hon. Member for Charlevoix (Mr. Hamelin) is reflecting here what he heard in caucus from his Prime Minister, but if that is the state of mind prevailing within the Government, which consists in saying: the Americans are bigger than we are so we jump when they say jump, it is not surprising that we are where we are now. I always thought, and I still do, that we live in a country and on a continent where relations between citizens and between countries are governed by laws. It isn't the number of canons or the number of people that determine international relations. The Hon. Member for Charlevoix says the Americans are bigger and stronger. Americans live in a democratic country that tends to have respect for international agreements. In fact, in 1982-83, in an identical situation, a Government stood its ground and fought its case before the American courts, and Canada won a battle, the same battle this Government has refused to fight.
The Conservative Government simply went down on its knees as it did on the Foreign Investment Review Agency, with respect to books and other areas of our cultural industries, and is now doing with respect to pharmaceutical products. I am flabbergasted at the line of reasoning followed by the Hon. Member for Charlevoix, which appears to come straight from the Government benches and the confidential meetings they had, a line of reasoning that consists in saying that laws and international agreements don't count anymore, nowadays, every time someone who is bigger than we are says: move over, raise your taxes, lower them, remove that legislation, which means the Canadian Government will have to obey. In that case, Mr. Speaker, we are not living in a civilized world where the law forms the basis for relations, not just between individual citizens and between the citizen and his government, but also for all international activity. This would mean there would be an end to all that, and, Mr. Speaker, I think this truly reflects a defeatist attitude which certainly does not augur well for the rest of the talks, since it was this Government's decision as part of a comprehensive free trade agreement between our two countries.


John Horton McDermid: I would like to put a question to my honourable friend.
January 19, 1987

Is the Hon. Member familiar with the Michelin case of 1972 wherein countervail was placed on Canadian tires by the United States because the Canadian Government saw fit to give Michelin a grant to establish in Nova Scotia which then became countervailable? To this day that decision causes problems with regard to regional disparity in this country. The Canadian Government of the day, which happened to be Liberal, did not fight that one. I cannot remember that Government talking about sovereignty then. I have other examples as well.
Does the Hon. Member remember that? Will he not admit that that was an intrusion in Canada by the United States and was, in fact, a far more severe intrusion on our sovereignty than is a negotiated settlement between two sovereign governments?


Raymond Garneau: Mr. Speaker, I am completely flabbergasted by the question of the Hon. Member. It is unbelievable that he would compare a grant given to a foreign company which wanted to invest in Canada to the power of a province to establish the price of its natural resources. Is it possible to compare those two things and ask the question which he has asked? He is comparing the power of a province to sell its natural resources to a grant given by a government for an investment in a particular region of Canada.
I hope the Government will not settle the natural resources dispute based on that example. What happened in 1972 was a completely different case. If the Member is suggesting that a grant given by a government to a company must be considered as a possible countervailing duty by another country on the same footing as stumpage fees, a royalty on natural gas, or royalties on a mine, we should stop negotiating with the United States right now because we will lose our shirts.


The Acting Speaker (Mr. Paproski):: The period for questions and comments is now over.


James Ross Fulton: Mr. Speaker, I am pleased to participate in this debate. This Bill and its implications will have a great effect on Canada's largest industry, something which I believe the House tends to forget from time to time. About one million Canadians are directly and indirectly employed in the forest sector. I want to deal with a little bit of the history of this matter because I think it involves an historic error of Government judgment which extends back to the time between 1983, when we were found innocent of the charge, and December 30, 1986, when this agreement was reached in Washington.
Before I do that, I will deal quickly with the final remarks made by the Minister for International Trade (Miss Carney). She believes that one of the most important signs that this agreement is successful is the fact that stocks have gone up. I
Softwood Lumber Products Export Charge Act
believe the Minister is aware, as is everyone else in the House, that the reason they did that is that the incredible level of uncertainty surrounding this issue was gone. It certainly had nothing to do with the Ways and Means motion now before the House implementing a 15 per cent export tax.
The other Conservative Member who spoke demonstrated a level of naivete that I have not seen for some time in this House. He said that $400 million a year would now be spent on reforestation in B.C. He could not produce a single public statement or document indicating that that has been promised by anyone in British Columbia. With regard to the history of reforestation, the Social Credit Government of British Columbia has the worst track record of any government in the history of Canada. We have "not satisfactorily restocked" lands larger than Prince Edward Island. These lands have never been replanted by the Government or the companies which logged them.
To indicate to British Columbians and other Canadians that the $600 million collected under the export tax is in any way, shape, or form going to be going into reforestation, retraining, or market or plant diversification, is to give false hope which I do not think government or opposition Members should give to people who work in the woods, whether they are buckers, fallers, skidder operators or work in planer mills or sawmills or anything else. I think this debate should be far more frank. It is for that reason that I will discuss for a few moments the history of this issue.
As a Parliament and a country we should have fought much more vigorously. I think we could have won. I believe that if the academics, historians, and legal scholars took a close look at this issue they would realize how we should have fought this battle. There are Hon. Members here during the debate this evening who were at the meeting with me in Washington, in other areas of the United States and in Vancouver where it became clear that the protectionist fervour, coming particularly from members of the Congress and Senate from producing states, was starting to move the administration. What we should have done almost two years ago was to have fanned out trade consulates throughout the United States in selected states and cities and got accurate information out to American consumers about the effects of the proposals of the U.S. coalition on U.S. consumers. We managed through our U.S. Embassy to get to a few people and a few newspapers. There were a few editorials written. However, the U.S. consumers are still in the dark. What has happened is one of the most complex situations of price fixing of which I am aware, although I have only been here seven-odd years.
Let us get a few things clear on the record. Canadian SPF, spruce pine fir, is preferentially purchased in the United States by contractors and homebuilders. They pay a higher price. They have always paid a higher price. They know it is a better quality wood for studs, joists, rafters and for general basic construction. One should look at the tracking of the exchange

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rate. The argument should have been about the exchange rate. As we took more market share in the United States, it tracked perfectly day by day, week by week, month by month, the exchange differential between Canada and the United States. We picked up that market, certainly a big chunk of it from B.C. producers, some of it from other areas of the country, but we tracked into that market because the wood is preferentially purchased.
As the housing markets went up, we picked up more of that market because of the exchange rate. So a group of producers in the United States got together and asked: "How are we going to get our prices up? We can't price fix in the United States. We can't even talk about it because of anti-trust legislation in the United States". I have talked to a lot of Canadian producers about what Canada could have and should have done in dealing with this issue. However, the Americans got to Washington and from 1983 onward a lot of money was spent and they were very careful about who they were moving, people such as Senator Mattingly, Senator Baucus, and Senator Packwood. They knew how to get to Sam Gibbons. They knew all the key players they had to get moving in terms of the U.S. administration.
Finally, we had the most preposterous letter I have ever seen, the May 8, 1986 famed "Dear Bob" letter from President Reagan which I will read later into the record. They were very well organized. They wanted a larger market share. We retooled our mills on time in British Columbia, in Alberta, in Saskatchewan, to a small extent in Manitoba, and in Ontario, Quebec and the Maritimes. We spent the money as a country, as corporations. We have much more highly productive workers. We had a much better industry and we have better wood. The Americans asked: "How do we get more southern yellow pine on to the market? How do we get these antiquated mills running again? How do we get people in the United States to buy this crappy wood again?" They asked how they could get American consumers to pay $1,000 to $4,000 more per unit. American consumers should be kicking those Senators and members of the Congress around the block for this form of price fixing. Instead, we are having a debate which makes me as a Canadian feel ill. We know if one takes $600 million out of an industry which only made $600 million last year, that industry will be in trouble.
I will refer to page 5 of the most recent Hay-Roe's and read what he feels is likely to happen in the cyclical downturn in terms of interest rates and the slowdown in the U.S. housing market. This is from the November-December issue of Hay-Roe's-.
The problem Canada faces, then, is that a rise in interest rates will not only generate a downturn in the lumber market, but will also increase the sawmillers' interest costs. Such a squeeze might have been bearable without a tariff to hurdle, but that 15 per cent off the top could be the undoing of the weaker or higher-cost Canadian companies.
For next year, a trend-line (3 per cent) increase in costs, coupled with the cost of the tariff, would shrink gross profits from $50 to $20 (Canadian dollars) per thousand board feet; and that is the result before allowing for any cyclical weakness in the market.
If we then knock off a "normal" cyclical price decline-which should be expected in 1988 or 1989-the full horror of the situation is evident. A typical cyclical decline since World War II has been about a 20 per cent drop, using annual average prices. Applying that percentage to our hoped-for 1987 average price implies a drop of more than $50 Canadian (almost $40 U.S.).
This would run our aggregate gross margin for the Canadian industry about $30 into the hole-much worse than the losses seen even in 1982-and that assumes no further increase in unit costs.
-the next downturn will force some very unpleasant changes on the
Canadian industry.
Let us go back, Mr. Speaker, to that window of opportunity. We heard when we were in Washington that we should be doing this. We brought that message back to the Secretary of State for External Affairs (Mr. Clark). We brought it to the then Minister for International Trade. Not a thin dime was put forward. However, today we find out that the Minister for International Trade wants to spend $12 million, after the fact, on a salvage operation at least in relation to the softwood issue. It had the window of opportunity to get to U.S. consumers, who would in turn get to U.S. legislators to have them back off, and I do not know why Cabinet did not do it. I know it received the message because it came from us, the all-member committee which went to the United States a number of times. I discussed it directly with some of the Ministers who were involved but they did not carry it any further. That real opportunity was gone and now we are into all of what I consider to be somewhat false arguments which are going on in the House today. We know in 1983 we won the case before the same tribunal, before the International Trade Commission. Everyone then started saying it was double jeopardy to be tried again and we will win it again. So the industry put $10 million in its basket and went down and fought it in Washington. It lobbied. It had lawyers. It did this and that and held out the hope to Canadian workers and companies that we would simply win.
I believe many Hon. Members of the House honestly thought we were going to win. Then things started to come unwound partly in relation to a statement made this fall by the Minister of Forests in British Columbia. That was followed by the Premier of British Columbia, Mr. Vander Zalm, when he said the stumpage policies were going to have to be reviewed and so on. That was the first political admission that the forest industry in British Columbia was being subsidized. The Americans immediately picked up that statement and ran with it in the United States. There were three blinks by Mr. Vander Zalm and every worker in the Canadian forest industry-and it was certainly well known in the corporate boardrooms- knew that the loose lips of Vander Zalm were the first thing which really started getting us into trouble.
The famed three blinks were the political admission of the subsidy, then it was said they were going to go it alone to Washington and then it was said that the deal had been struck which, of course, was totally erroneous. The Premier had heard someone said something on television and called a press conference, which was ridiculous. Adding to that was the problem created by the Minister for International Trade in going to Washington, and being pushed around by the Premier
January 19, 1987

of British Columbia and perhaps by some other forces, she said: "We are making this once only final offer of 10 per cent. That is it. Take it or leave it". This is after we had made arguments. I was there along with the Hon. Member for Cariboo-Chilcotin (Mr. Greenaway) and other Members of the House and we told the Americans they were wrong. We told them about double jeopardy, about double counting. We told them all of the things which were wrong with their arguments. They knew we were right.
I know the reason Mr. Vander Zalm wants this export tax. He will never convert this to stumpage increases. He will never do that because there is no incentive for him to do so. He can take this cash and pave roads with it or whatever he bloody well pleases. It will never go into reforestation. I think it unfair and erroneous for Hon. Members to stand in this House and say this is a windfall, that stocks are going up, that it means reforestation programs and no one will lose their jobs. They should read Mike MacEachern. He says 4,700 jobs will be lost. Charlie Widman, not the most accurate guy in the world, says somewhere in the neighbourhood of 40 sawmills will close and
17,000	jobs will be lost.
What we do know is this tax will take away $600 million which could be going back into the industry. It is going to take that money and put it into provincial hands and it will be damn difficult to make any kind of new agreement or arrangement which the Americans will accept because there is no incentive for the Canadians to come forward with a legitimate proposal the Americans would buy, nor is there any serious likelihood, with the variation there is in stumpage in Canada at $10 a thousand in British Columbia, $36 a thousand in Ontario, $40 in Quebec and far higher than that in New Brunswick. With those kinds of ratios what incentive is there for British Columbia, the largest producer to do that? British Columbia will get a larger market share within Canada and in relation to the gross size of the market in the United States as well. Mr. Speaker, I need at least an hour to finish my remarks. I have not even dealt with my notes yet.
I would now like to deal with some of the arguments I heard made in this place by members of the Government and by others. One argument was that we could have won at the ITC or in the courts. The reason given for not going through with that process is that there would have been years of battle. That is quite true. To have carried on the fight at great length in terms of the U.S. court system, having waited beyond December 30 when the petition could not be withdrawn, would have involved a very lengthy process. There is no doubt about that.
Let me now deal with the real issue which is that if we are all standing together on the concept that Canada is a sovereign nation, then we should have fought this matter all the way through. There have been a great many erroneous statements made about what the positions of different people are. We should have fought the conservatives in the United States. The Government decided not to do that, and we will let that be.
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Then there was the Department of Commerce process to be considered. It goes through a process of double addition. All of us who are members of the Forestry Committee have been through that process. The highest figure which it could have come up with, using its own figures, would have been a 7 per cent countervail. We know that. We know that 15 per cent is illegal. The Secretary of State for External Affairs has said that, and so have I. A great many people have said that. It was an illegal countervail duty. It was an administrative decision made for political reasons.
How can that type of politics be dealt with? I do not think our Government ever sat down to try to address the issue. This matter involves the biggest industry in Canada. Softwood lumber accounts for the largest source of balance of trade. Yet what did the Government do? It let the first window close and when the second one came along, an illegal countervail presented itself. The Minister stood up twice in the House and said: "We will fight this all the way". She said: "We will do everything we can". I think at that point in time we should have really mobilized.
What was going on in the United States? More disinformation and more misinformation. Reporters on U.S. television networks were saying that the reason wood prices were going to increase in the United States was because of Canada. I raised this issue here in the House. A television station in Florida, and other news broadcasters, have said that the whole issue regarding softwood lumber was created by Canada.
The Americans got away with misinformation, illegal processes and administrative decisions. It is all very well for the Minister to get up and say that we had to get the precedent off the books. The fact of the matter is that a far worse precedent is now on the books. The Americans blackmailed us to begin with. They had a powerful lobby which set representatives to their politicians. The politicians went to the Department of Commerce and to the ITC. They came up with an illegal administrative decision and then said: "Okay, Mr. Prime Minister, you take the gun. We are going to nail you for 15 per cent. Hold it to your head and shoot yourself. We will not put the 15 per cent. You go ahead and shoot yourself'. So we sent some guys down to Washington. The Minister for International Trade was off on the other side of the planet. These guys went down and negotiated what they could. But they did not have much to deal with. What were they to do? They wrote a few things down. There was a ways and means motion and we heard them say: "People will not be hurt too much".
The fact of the matter is that when I asked the Prime Minister (Mr. Mulroney) here in the House, he would not offer any kind of guarantee that there will be federal assistance for those workers or those companies which will be hurt by this export tax. We know who they will be. Through the Forestry Committee we have been asking for months to obtain a list of those companies which are most likely to be knocked out first. We know who they are. They are small companies working in high-cost timber. They are fairly far from the

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market or they are already paying a higher royalty than that paid in other areas of the country. We already know who they are. Those people are frightened. Those workers are frightened because they go to work and the company says: "We cannot have a union here anymore because we have this 15 per cent tax so let us get rid of that collective agreement. You are now being paid $8 an hour. We will have to shave it down to $5 in order to deal with this export tax. We have to do this to stay in the market". That type of dialogue has already started. The people are frightened. We know that some of these mills are only marginally competitive now. A great many of them have been swimming in red ink for years.


John Martin Oostrom: Scare tactics!


James Ross Fulton: Scare tactics? Members of the Government have stood in their places and made totally erroneous statements with respect to S400 million per year in B.C. going for reforestation. That is absolutely and totally false. The Hon. Member who made that statement could not direct Members of the House to a single public statement or document that has ever come out in that regard. Talk about erroneous bafflegab! I would use much stronger language to describe it if I were not in the House; but you know I will not, Mr. Speaker.
The Minister has travelled around the country and said: "Members of the NDP and the Liberals say that the money should all go to the United States". Who does the Government think it will con with that type of statement? A six-year-old child could tell us that it is better for the $600 million to stay in Canada than to go to the United States. That is not the argument. There has been blatant government incompetence and backing-down to the bully tactics of the United States. That is what is at issue here. We should have fought as a country. We fought in 1812 when a great many families came to this country.


Some Hon. Members:: Oh, oh!


James Ross Fulton: The Prime Minister stood up and mentioned Sir John A. Macdonald and the Tory Party and all other kinds of malarkey. This country will only stand together and hang together while we deal with countries such as the United States without blinking. Vander Zalm blinked. The Minister for International Trade blinked. We ended up with a bum deal for Canada, a bum deal for Canadian workers. It is a deal that will hurt far more than just the softwood sector. There will be a spill-over effect into other parts of the industry.
Have I run out of time, Mr. Speaker?


The Acting Speaker (Mr. Paproski):: You have one minute remaining.


James Ross Fulton: I would now like to illustrate the type of argument we should have taken to our American friends. Some 30 million Americans come to Canada every year. We all know a great many Americans. We all have a great many American friends. Ten years ago 80 per cent of small home appliances purchased in Canada were made in Canada. Now
some 90 per cent come from the United States. When the Americans were using this false argument about us having increased our market-share to almost one-third of the U.S. wood market we should have been getting that kind of factual, honest and accurate information to U.S. consumers and legislators. We should have been saying: "We are fair. We are competing fairly. For 50 years we have had absolutely unrestricted free trade, a half a century of free trade in softwood". We should have taken that type of information to the American consumers who could have gone to their legislators and said: "Stop bullying Canada. Stop using blackmail. Stop using these illegal tactics. Treat Canada as the northern friend it really is".


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Paproski):: Are there questions or comments? The Hon. Member for Mission-Port Moody (Mr. St. Germain).


Mr. St. Germain:: Mr. Speaker, I am glad to see the Hon. Member for Skeena (Mr. Fulton) back from Hawaii or wherever he has been with his million-dollar suntan.


An Hon. Member:: He was probably in Cuba.


Gerry St. Germain: I thought socialists would have taken the time and devoted it to social work. However, the Hon. Member saw fit to spend time with the capitalists.
What we are dealing with is the fact that members of the New Democratic Party and the Liberals are trying to turn a business issue into an emotional one. We are dealing with business. They have talked about sovereignty. The Japanese did not relinquish any of their sovereignty when they made a trade agreement concerning automobiles. We have a situation in which we have gone from less than 20 per cent of the American domestic market to well in excess of 30 per cent. We are dealing with trade. When one makes trade agreements, arrangements, administrative deals or whatever they may be, I do not feel that any sovereignty is lost.
The Hon. Member also spoke of the fact that a precedent has been set. No precedent has been set. When a deal is struck, whether it be as a result of court action or whatever, there is no precedent set. I think the Hon. Member is trying to create fear among the general population which is really not genuine. I think that should be brought to light.
The question that I have for the Hon. Member is this. The IWA is headed by a man named Jack Munro, a man I greatly respect, a man who has led the IWA quite successfully in the Province of British Columbia. He is now throwing his hat in the ring to become the Leader of the NDP. He supports this deal because he says that it is a good deal for the workers, for the industry, and for British Columbia. The province supports it. As far as I can tell, the entire NDP Party in the Province of
January 19, 1987

British Columbia supports it. The industry supports it, because the industry is in my riding and I have spoken to it.
Will the Hon. Member tell me what he is basing his arguments on as a British Columbian that this is no good for British Columbia?


James Ross Fulton: I am sorry that the Hon. Member did not listen to my speech. I tried to point out that the only argument that the government Members are using is that it is better to have the $600 million a year in Canada than in the United States. That is the only strong ground that you are on. Jack Munro and everyone else is absolutely correct in saying that keeping the money in Canada is better than having it go to the United States. That is not the argument here today.
What I am saying is that we have a number of windows of opportunity where we could and should have won this case in the United States. Many Americans fully expected us to win it. Sam Gibbons and the President of the United States expected us to win it. The President expected that he would have to find other ways of dealing with this issue. I am saying that bungling has gone on, and quite often bungling from inaction.
I am not saying that some of the actions that led to this were what caused it, I am saying that in many cases it was inaction. The Cabinet seemed to always be dealing with other things. Finally the hens have come home to roost. The Minister for International Trade has ended up having to cut a deal. She had no other option. The Government would have looked ridiculous. Let us be serious, Gerry-


The Acting Speaker (Mr. Paproski):: Please address your questions through the Chair.


James Ross Fulton: The Government would have looked ridiculous, and the Member for Mission-Port Moody (Mr. St. Germain) would have looked ridiculous if the money had been going into the coffers of the United States. We all know that. I do not think that the Government is being fair in what it is putting forward in this debate and saying that is what the whole issue is about. It is over-simplifying it to a repulsive extent. We could have won it. There would not have been a countervailing duty or an export tax, if we had played our cards properly. We could at least have fought in terms of the double mathematics. We have said for months that double mathematics was used, and that the highest they could have properly come to using their own figures was a 7 per cent countervail. What are we doing imposing a 15 per cent tax on ourselves? Do we not even believe our own bilge-water, the Government's own bilge-water, when we are involved in debates in the House?


The Acting Speaker (Mr. Paproski):: On a supplementary question, the Hon. Member for Mission-Port Moody (Mr. St. Germain).


Gerry St. Germain: The Hon. Member put forward the argument that the increase in the price of stocks certainly was not an indication. I would like the Hon. Member to qualify this. Does the Hon. Member actually believe that Canadian
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investors would invest in a company or companies and increase the value of stocks if this was not a good deal and a bona fide situation?


James Ross Fulton: I do not know who has been buying those stocks. What I said in my speech was that the reason that people were buying those stocks was that the uncertainty was gone; that the cloud of uncertainty that surrounded the forest sector was removed.


Mr. Greenaway:: I was wondering if I heard the Hon. Member correctly when he said that the money was going to go to the provinces rather than to the companies, and that he did not trust what the provinces were going to do with this money. Does that mean that he trusts the companies, these multinational integrated companies to spend this money better than the provinces?


James Ross Fulton: I certainly did not say that. What I said, and it is in the Ways and Means Motion, is that the money that is collected will be going back to those provinces where the wood was produced. I am saying that I frankly think that that money would be better spent by almost any Canadian forest corporation than by Bill Vander Zalm and his Government, based on their track record.


Nelson Andrew Riis: I wish to compliment my colleague on what must be one of the best speeches that I have heard in the House of Commons for many a month. During his speech, the Hon. Member referred to the role that Mr. Vander Zalm played, in a sense tripping this whole process that led to this disastrous decision. Would the Hon. Member take a moment or two to elaborate on the role that Premier Vander Zalm played in selling out the forest resource.


James Ross Fulton: I wish to take a moment of the House's time. Last month an article appeared which was written by John Ferguson entitled "Vander Zalm's babbling hurts lumber talks". Let me read it for you, Mr. Speaker, because it is very informative:
The joke ended this week.
Until now, Canadians have smirked in mild amusement at British Columbia Premier Bill Vander Zalm's unique views on the role of women or his attempt to stake out his own provincial foreign policy with South Africa.
But this week Vander Zalm's open-mouth, think-later approach threw a big wrench into the sensitive Canada-U.S. lumber talks, sending precisely the wrong signals to the other side of the bargaining table, a move that could end up costing Canada many millions of dollars.
Trade Minister Pat Carney, whose tolerance level may be higher than most because she comes from B.C., has been rising to a slow boil since last summer because of Vander Zalm's ill-timed and thoughtless interventions in the case. This week, she is said to have been outraged.
And in federal offices and among negotiators in Washington there is the wistful hope the wacko from B.C. might take a slow boat to a remote destination until the lumber talks get wrapped up.
Vander Zalm's latest blunder was to announce from his office in Victoria on Tuesday that a tentative agreement had been reached in Washington in the dispute over U.S. claims that Canadian softwood lumber is being subsidized by the provincial governments.

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Vander Zalm claimed to have received the information from a special adviser in his office. In fact, the tip came from an erroneous local newscast and he had no first hand information at all.
But his premature support of the alleged "deal" couldn't have come at a worse time for Canadian negotiators in Washington who had just received a new proposal from the U.S. lumber coalition fighting the case.
Canada has proposed a 15-per-cent increase in the price of lumber exported to the U.S. to be imposed by a combination export charge and phased-in stumpage increase. That's equal to the level of countervailing tariff recommended in October in a preliminary finding by the U.S. Commerce Department.


John Horton McDermid: The Hon. Member said that in his opinion we could have won the fight somewhere down the road. We won in 1983. Did we really win in 1983? The problem was still with us in 1986. Had we won on the countervail, it would have gone to Congress for legislation. The Hon. Member and I have discussed this at some length. I think that he will admit that this was the best of a bad deal that we could have achieved.
The Japanese have a 12 per cent countervail on their steel. Tomorrow there will be a 200 per cent increase on tariffs against the EEC by the United States. There is a trade war going on. The Americans are playing it very tough with everybody, not just Canada. They are playing hardball with the rest of the world and whoever they trade with. The Hon. Member and I have discussed this before. If he was honest with the people of Canada, he would admit that this was the best of a bad deal that we could get.


James Ross Fulton: I do not agree with that, and I will tell the Hon. Member why. I have followed this issue very carefully for many years now, and I know a considerable amount about it. Members of the House should reflect on the fact that the majority of U.S. buyers have been picking up for quite some time now, in excess of two-thirds, and in some cases in excess of three-quarters of the 15 per cent countervail that they have been posting as bonds. It is all done over the phone. I have been present while these transactions have been taking place with forest companies in my own province. They actually discuss the countervail. We have to keep in focus that this is a very complex matter of price fixing in the United States. It is a very complex way of going about it. There were other ways that we could have gone about it. I have discussed it with lumbermen in most of the provinces in the country, and one of the ways we could have and should have put more effort into it was by dealing with our own volume and our own price on the Canadian side of the border. I am not saying that we should have set up a fancy cartel-


The Acting Speaker (Mr. Paproski):: I regret that the Hon. Member's time has expired. It has been a great exchange, and I know that we will be hearing from the Hon. Member again.
On debate, the Hon. Member for Levis (Mr. Fontaine).


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, before speaking about the substance of this measure, I would like to make a few comments about the statements made by the Hon.
Member for Laval-des-Rapides (Mr. Garneau) who has just spoken, a Quebecer like myself, and the Hon. Member for Skeena (Mr. Fulton), a Canadian like myself. I was very surprised to hear the Hon. Member for Laval-des-Rapides speak about the integrity of Canadian sovereignty since he is a member of the Liberal team which completely ignored the role of Quebec within the Canadian nation. It is very strange to hear these people speak about integrity, respect for Canada as a whole, sovereignty, and so on. The Hon. Member for Laval-des-Rapides also said that the industry was badly disadvantaged by our agreements with the United States. He misinformed the House by saying that the climate in the United States was bad for the lumber market. The American climate will be very good for the lumber market in the next few years and so will the Canadian climate. A few Canadian companies may have problems, but generally speaking, most Canadian companies will benefit a lot from the success of our negotiations.
The Hon. Member for Laval-des-Rapides spoke about the workers and the fact that they disagreed with the results of our negotiations, but I would like to remind him that the IWA has
31,000	members, which is over half of the 60,000 people who now work for the lumber industry. All these workers have said that they are very satisfied with our negotiations. I shall have more to say about this later on.
Finally, the Hon. Member for Laval-des-Rapides asked why we made a different decision in 1983. The fact is that, in 1983, the preliminary conclusions of the International Trade Commission were favourable to Canada, but, in 1986, as the Hon. Member would have known if he had been better informed, the preliminary conclusions were not favourable to the Canadian industry. Finally, he asks why we should now have to negotiate such an agreement with the United States. We have to do so because of the mismanagement of the Liberals who were in power before us and who endangered between 300 to 500 types of products which we export to the United States and on which additional duties could be imposed by the Americans.
I would like to ask the Hon. Member for Laval-des-Rapides what he would have done to preserve the 60,000 jobs which we would have lost if we had not succeeded in our negotiations and to protect our $4-billion lumber exports. He would probably have replaced these jobs, as he did when his party was in power, by Canada Works programs financed by the debts of our children and grandchildren. That is how the Liberals used to create jobs. Their solution was not to export to an attractive market.
I would like the Hon. Member for Laval-des-Rapides to send a copy of his speech to his friend the Quebec Premier who, for his part, said that he was very satisfied with our negotiations. If he sent him a copy of this speech, it could reduce his chances of being appointed president of Quebec Hydro.
As for the Hon. Member for Skeena, I would like him to explain to me how he can agree with his colleague from the
January 19, 1987

British Columbia socialist party, the official economic critic of the socialist opposition party in British Columbia, Bob Williams, who has said that he is very satisfied with our agreement. He is a Member of the socialist party, just as the Hon. Member for Skeena. I also wish he would try to explain this to Mr. Munro, the Chairman of this Union with 31,000 members, I would like him to ask Mr. Munro, a Canadian formerly nominated for the leadership of the Socialist Party in British Columbia, and who now agrees with our proposals. Let them therefore begin by putting some order in their own Socialist Party before they come in with theoritical recommendations.
Let me finally deal with the matter of lumber itself. Mr. Speaker, 1 think it is important to explain what lumber means for the benefit of those members of the Socialist Party who have never set foot in a sawmill. Lumber means 2 x 4, 2 x 8, 1 x 3 timber. That is what lumber means. And that is what Canada has been defending through our Government. Let me try to focus on the present context. We now have exports of $95 billion with our best customer, one which buys 80 per cent of our exports, the United States. On the other hand, our imports from the United States amount to $80 billion. We therefore have a profit margin, a trade surplus of $15 billion with the United States. Canadian exports account for about one job out of three in Canada. In other words, one job out of three in Canada depends on exports. Let us try to see where Canadian softwood exports fit in in those $95 billion. They come in third place. First comes the Auto Pact, nothwithstand-ing the position taken by the Socialists at the time, the Auto Pact which ranks first in our exports to the United States with $24 billion. Then come newsprint exports with $4.8 billion, and third our softwood exports with $4 billion, those $4 billion representing 60,000 jobs, 11,000 of which in Quebec, my own province.
What has been our position and what were the highlights in the development of this matter? First of all, during the Summer of 1986, the Americans wanted to impose a duty on the goods that we Canadians were going to ship out to them. They wanted to impose a 36 per cent barrier. Since we export $4 billion worth of softwood, that means that the Americans were going to collect $1.44 billion from the Canadians, to be paid to the US Treasury.
Mr. Speaker, we started looking into this issue and have managed, as a first step, to reduce these 36 per cent to an amount of 15 per cent which the Americans could have charged on our lumber exports to their country. They could have collected 15 per cent on $4 billion, the equivalent of $600 million. But we did not stop there, Mr. Speaker.
We thought that there were other possible avenues. We could have waited for the American Tribunal to hand down its decision, with a chance of losing or winning. We could have appealed this decision, as suggested by the Liberal Government of Ontario. We could have adopted a wait-and-see attitude, but because we are dealing here with a country which
Softwood Lumber Products Export Charge Act
represents some 240 million potential customers, we have decided to negotiate with our main economic partner. We have done so in consultation with the trade unions, the provinces and the industry.
Having explored several possibilities, we have finally decided that, instead of the Americans collecting some 15 per cent on $4 billion of our export, we would collect this 15 per cent on the Canadian border and keep it in this country.
Mr. Speaker, one should realize that an amount of $1.44 billion which we would have paid to the United States is an enormous difference compared with $600 million in taxes that, admittedly, will be charged, but that we will keep in Canada.
This is therefore the result of negotiation by our team and Minister of this conservative government.
Mr. Speaker, you are aware that Premier Vander Zalm of British Columbia and Premier Bourassa of Quebec have indicated they are extremely pleased with this agreement and I believe they have every reason to be, because this represents an increase in revenues of $400 million for British Columbia and some $110 million for my own province of Quebec.
If we had listened to the Ontario Government and Liberal Members of this House, let alone the socialists who are difficult to listen to because we can nearly never understand what they say, if we had decided to wait for the decision of the American Tribunal, our companies would have received the visit of auditors from the United States Department of Commerce anxious to look through their books as well as those of the goverments of Canada. That we did not want.
Contrary to what Members opposite have said, Mr. Speaker, we have had the support of nine provinces, including Quebec. Only the Province of Ontario would have opted for a different solution, but it is not a major exporter of softwood lumber.
Finally, Mr. Speaker, what is important-and this is why again today I fail to understand the position of the socialists, as usual-is that we had the support of the International Woodworkers of America, the IWA, with its 31,000 membership. I have here the letter dated January 5, 1987 addressed to the Hon. Pat Carney, Minister for International Trade, Parliament Buildings, etc. I will read the first paragraph, Mr. Speaker. "Madam Minister:
The International Woodworkers of America want to express general support for the recently negotiated softwood lumber settlement with the United States."
Mr. Munro belongs to this union and, as I said earlier, he once ran for the leadership of the socialist party in British Columbia. The secretary of this union is Mr. Gerry Stoney who happens to be the former president of the provincial wing of the socialist party in British Columbia. So you socialists should listen because I am talking about you and you should not miss that opportunity, seeing you seldom get talked about.
So, Mr. Speaker, we have here the endorsement of 31,000 Canadian softwood lumber industry workers. Meanwhile the

January 19, 1987
Softwood Lumber Products Export Charge Act
New Democratic Party is against the softwood lumber deal, not to mention the fact that, in a wider context, the New Democratic Party is speaking against bilateral trade negotiations as strongly as it voiced opposition to the Auto Pact in 1965. I suggest it is quite ironic that the socialists should be so concerned about the Auto Pact. During the negotiations of 20 years ago, they had the same negative attitude as they now have. At that time the Auto Pact was reached and today, because of the Auto Pact, we are selling to the Americans for $24 billion worth of automotive parts and components, $24 billion out of $95 billion, and if you can count, this represents 25 per cent of our sales, Mr. Speaker.
Finally, when I hear the Socialists Members oppose freer trade, 1 would like to remind them of the New Zealand Government. Because New Zealand is governed by Socialists like you, and because they had a neighbour with five times its population, they negotiated free trade and everybody is happy about it now. So try and get your act together from one province to another and from one country to another. Socialists from around the world, why don't you talk to each other from time to time?
Finally, Mr. Speaker, I am surprised to hear-to return to Mr. Bob Williams, who officially took a stand against the positions taken by Mr. Broadbent, the Leader of the Socialist Party of Canada, on the matter of free trade agreement. You will always be hearing the position taken by the British Columbia Labour Union, a union on which you depend from time to time. Maybe that union will now ask itself a few questions before extending further financial support.
Now, we also have the position of the Liberal Party of Canada. I suggest that instead of trying to utter such futile objections to our deal with the Americans, they should perhaps pay a wee bit more attention-and this is a marginal remark, Mr. Speaker-to their party's financial situation, because their creditors are getting tired of waiting for the refund of those $5 million that have now been outstanding for the past two years. Why don't you look after that, you Liberals?
I am also amazed at the position taken by Liberals, because I see the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) who is totally opposed to negotiations with the Americans; he says he would introduce that through the GATT. Perhaps he is not aware that we have a $250 million client. I would like to compare his position with that of his colleague for Saint-Henri-Westmount (Mr. Johnston). The latter is committed to being open to free trade. As far as their leader is concerned, he would fit nicely on a skating rink, because at times he is for and at other times he is against. Earlier today, I heard the Leader of the Liberal Party of Canada state things in this House that are utterly false. He said it was easy to negotiate when one always backs out. Now he suggests that we have always backed out. This is not true, Mr. Speaker. The Leader of the Official Opposition should be ashamed when he suggests that we are always backing out when, in fact, we have held our own in the face of a population
ten times greater than ours. Now those people wanted to levy a 36 per cent tax on our exports. Firstly, we reduced it to 15 per cent and, secondly, we turned it around, since we will be collecting that 15 per cent tax on our exports. And the leader of the Liberal Party gave incorrect information to the House this afternoon, Mr. Speaker. We did not set any precedent.
Mr. Speaker, for all those reasons, for the soundness of our management and of our negotiations on every issue, some people such as the Auditor General of Canada are saying that our administration is excellent. This is why Mr. Justice Estey said in his review on our involvement with banks that our intervention was appropriate. Because of our sound management, we have 666,000 new jobs today, our unemployment rate has decreased from 11.7 per cent in September 1984 to 9.4 per cent today, while unemployment among young people has decreased by 4 per cent and prime interest rates have been reduced from 12.38 to 8.30 per cent. You remember, Mr. Speaker, that under the Liberal Government interest rates on residential mortgages went up to 22 per cent. Now under our Government, the rate is 9.5 per cent. We have now reached another phase, since the Minister of International Trade (Miss Carney) has opened up a market of 250 million buyers who will create hundreds of thousands of jobs for Canadians. Those new jobs will enable us to collect tax to pay the bill and our debts, the $240 billion which were left to us, to our children and grand-children by the former Liberal Government in September 1984.


Mrs.   Duplessis@: Mr. Speaker, for the information of the House I would ask the Hon. Member for Levis (Mr. Fontaine) to tell us how many jobs would have been lost in Quebec had we not negotiated that deal.


Gabriel Fontaine: Mr. Speaker, the question asked by the Hon. Member for Louis-Hebert (Mrs. Duplessis) who is a Member from Quebec, as I am, has nothing in common with the false and misleading allegations we heard earlier from the Hon. Member from Laval-des-Rapides (Mr. Garneau). I am pleased to inform the House that had it not been for the favourable results of our negotiations with the Americans, Quebec had
11,000	jobs at stake. Those jobs are linked to the lumber business in the Province of Quebec. Those are the results of our agreement, Mr. Speaker.


Brian Vincent Tobin: Mr. Speaker, I rise on a point of order. With the greatest of respect, the Hon. Member for Levis (Mr. Fontaine) has exercised himself and got himself ail excited to the point where he is talking about the Hon. Member for Laval-des-Rapides (Mr. Garneau) having made false and misleading statements. That is unparliamentary, and I would ask the Hon. Member to withdraw-


The Acting Speaker (Mr. Paproski):: That is not what I understood, but I would have to look at Hansard. The Hon. Member for Kamloops-Shuswap (Mr. Riis).
January 19, 1987


Nelson Andrew Riis: Mr. Speaker, I have two questions for the Elon. Member, one in response to the question just asked by his colleague nearby about the number of jobs in Quebec that would have been lost if this agreement had not been made. Could he quote the number of jobs that would have been lost and the source?
Second, would he explain the comment made recently by the Minister for International Trade (Miss Carney) in this House when she said that this decision has concerned us and should concern all of the United States trading partners because we view it as an unacceptable attempt to impose U.S. views on how other governments should manage their natural resources. Furthermore, we feel that this preliminary ruling by the U.S. Commerce Department has no basis in U.S. law, is badly flawed, and is inconsistent with the U.S. obligations under the GATT. That was at a time when she said that we were going to fight this all the way; referring to the original decision.
Today it is lumber. Tomorrow it could be any number of issues. Could the Hon. Member explain what the Minister meant when she said that the Government would fight this all the way? Would he not agree that the Minister for International Trade actually admitted in that statement that the United States was imposing on our sovereignty, particularly as it reflects on softwoods?


Gabriel Fontaine: Mr. Speaker, in answer to the first question asked by the Socialist Member, I will suggest that if he could give more attention to financial newspapers and magazines such as the Financial Post and the Quebec publication Les Affaires, instead of reading Lenin's memoirs, he might have learned there are 11,000 jobs involved in the Province of Quebec.
Concerning his second question, I would like to suggest that contrary to the Socialists, instead of fighting for decades for impossible things and then getting stuck on them, when we negotiate, we try to strike the best deal with our partners, the negotiators, the Americans, and we look at the changing situation in order to keep our markets and develop them. So that was our position, Mr. Speaker.


Nelson Andrew Riis: Mr. Speaker, I have a short supplementary question. I am afraid I missed the response. I asked the Hon. Member for his source, not for some vague reference to a Canadian journal. What was the Hon. Member's source for the number of jobs that would be lost in the Province of Quebec if this deal with the United States had not been cut?


Gabriel Fontaine: Day after day, Mr. Speaker, I have the opportunity, as others have here in this House, to take part in or listen to the oral question period, because usually the questions are asked by Hon. Members opposite. Day after day, Mr. Speaker, I notice that we give appropriate answers to the questions asked by the Socialists, and every time there are
Softwood Lumber Products Export Charge Act
some of them who ask the same question three times, and again others, ask the same question three more times, and often the same question is asked nine times and the same answer always applies. Stop reading Lenin, read specialized magazines dealing with economic matters.


Mr. Rossi:: Mr. Speaker, in his speech, the Hon. Member for Levis (Mr. Fontaine) took a sheet of paper and said-I have
30,000	names supporting that decision. I will therefore ask the Hon. Member for Levis to table that list of 30,000 people.


The Acting Speaker (Mr. Paproski):: I regret to inform the Hon. Member that a private Member cannot table names.

I am sorry, but the period for questions and comments is over. Debate. The Hon. Member for Humber-Port au Port- St. Barbe (Mr. Tobin).


Brian Vincent Tobin: Mr. Speaker, I must say that it is a rare experience to feel a sense of deja vu while participating in today's debate. When driving a car down a small village road in Newfoundland, these little dogs run along behind the car and yap and bark and make a pile of noise. In Newfoundland, we call those little dogs crackies. Little crackies make a pile of noise and bark and yap and go after tires. As soon as you stop the car, put on the brakes and open the door, they scatter to the four winds. They are little, cowardly crackies.
I had a sense of deja vu about those crackies that I normally see on the road in Newfoundland when I heard the House Leader of the NDP ask the Hon. Member for Levis (Mr. Fontaine) not once, as Mr. Smallwood would say, not twice, but three times to provide the source of the information he put forward indicating how many jobs would be lost in Quebec. When challenged on a number of occasions to provide that source, the Hon. Member turned out to be like those little dogs in Newfoundland, nothing but a loud-mouthed cracky. He could not provide the source of the information, obviously because no such source exists. If the Hon. Member would like to provide the source now, I will gladly take my seat.
In the course of speaking on Bill C-37 today, I did not expect to flash back in my memory to those little, mouthy, noisy crackies that chase cars in the rural communities of Newfoundland. However, I did.
Bill C-37 is a Bill that should be entitled: "An Act respecting the imposition of the American administration's will on a weak and vacillating Canadian Tory administration". That is what the Bill should be entitled because that is what it is. It is all about the will of an American administration when met by the lack of resolve of a soft and mushy Canadian Tory administration.

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The will of the American administration came flowing like a Sherman tank across the border. This Government laid down in front of it and provided material for the imprint of the tank's tracks. This Bill is an insult to every single person in Canada who considers himself to be a member of a sovereign nation.
Canadians are not excited neo-nationalists in the American sense of the word. We do not run around stitching the Canadian flag on every jacket, hat, knapsack, baseball mitt and pair of boots we own. We do not run around advertising every single product in the country by saying it is the Canadian way.


John Horton McDermid: Yes, buy Canadian, think Canadian.


Brian Vincent Tobin: No, we do not. We are quiet in our nationalism. We are secure in our pride of nation. However, when Canadians are roused, when they genuinely feel that the ability of their politicians to make laws for Canada and for Canadians is lost, then Canadians get damned angry.
Canadians do not understand a lot of the verbiage in this debate. They do not understand precisely what an excise tax or a 15 per cent export tax is. They do not understand countervailing duties or GATT and international trade remedies. They do not understand any of those things, but they understand that this is merely the latest in a series of capitulations by a Government that claims to speak for Canada. That they understand very well.
Is it not amusing that on Wednesday of this week, in 48-hours' time, the Vice-President of the United States with a cabinet secretary in tow will arrive in Canada? The VicePresident did not come to Canada in a panic when Canadians were screaming about the impact of the cedar shakes and shingles issue. There was no sign of a U.S. presidential aircraft touching down in Ottawa. The Vice-President did not arrive in Canada when we screamed like hell about the imposition of American ice-breakers in Canadian Arctic waters. There was no sign of an American presidential aircraft then. He did not arrive when duties were imposed on pork and fish. He did not even come when we screamed like hell when the softwood lumber deal was signed. But, by God, just one week after the branch plant, the subsidiary of the Republican Party in Canada which is the Tory Party goes to third in the polls and the cursed, frightening socialists go to second, the Vice President with a cabinet secretary in tow will arrive.
Why will he arrive? Is it because he wants to discuss trade issues? Is it because he is concerned that Canadians have been speaking with one angry voice about the treatment we have received at the hands of an insensitive American administration? No, he is arriving because it is the American mentality that when the branch plant is in trouble, the head office goes to visit. When the Canadian subsidiary is not producing up to scratch, the head office goes to see it. Now that the branch plant, the Canadian subsidiary of the American Republican Party, the Progressive Conservative Party of Canada, is in trouble, the Vice-President and a cabinet secretary are riding
in on the big silver wings of the American presidential emblem in an attempt to bail out a Prime Minister who has panicked, pushed the direct line to Washington and said: "Come bail me out". I do not know how successful that is going to be.
I was in Washington a week ago. I want to tell Hon. Members that as much as we are totally absorbed and obsessed, and rightly so, with events which have occurred over the last year, events which have crystallized in this ridiculous Bill through the imposition of an American Government's will on a sovereign Canadian state, in Washington, well, they are not really interested. They hardly know there is an issue here. It is an incredibly frightening realization to see on the front page of every single newspaper in Washington and on every American television network reports about a potential trade war between the U.S. and the EEC. What is at stake? The Americans might impose $250 million in duties on gin and pasta imported from the EEC. That was a front page story. Meanwhile the $500 million in duties imposed on softwood lumber was nowhere to be found. Why would a $250 million tariff threatened against the EEC dominate the imagination of Americans and a $500 million tariff imposed on a Canadian product be studiously ignored? Let me tell you why. Without getting into who is right and who is wrong in that dispute, the EEC has responded to the American threat by telling the Americans that they run the risk of a full-scale trade war if that $250 million tariff is imposed.


John Horton McDermid: Are you suggesting we get into a trade war?


Brian Vincent Tobin: I am suggesting no one should get into a trade war but I am suggesting that we do not get down on bended knee-


John Horton McDermid: Oh, come on.


Brian Vincent Tobin: -like some supplicating protectorate-


John Horton McDermid: You have no suggestions.


Brian Vincent Tobin: The Member should listen quietly. He is an angry and frustrated man who has difficulty listening to the truth.


John Horton McDermid: Why not tell us what you would do?


Brian Vincent Tobin: If the truth bothers him all that much let him go out and yell into the wind. That would certainly do more good than interrupting my speech.


Some Hon. Members:: That is true!


Arthur Jacob (Jake) Epp: You know all about wind.


Brian Vincent Tobin: The difference is that the EEC has said to the Americans that kind of imposition will not be accepted by them. In Canada we have quietly knuckled under and agreed to negotiate, to compromise, to try and find some face-saving
January 19, 1987

gesture which allows the Canadian Government to claim a measure of victory and at the same time meeting precisely the terms and conditions of its masters in Washington.


John Horton McDermid: So you want us to get into a trade war with the U.S?


Brian Vincent Tobin: You must be embarrassed as a Government to be put in such a-


Mr. Blenkarn:: Oh, come on.


Brian Vincent Tobin: I am sorry. It must be embarrassing to behave in such a manner.


An Hon. Member:: Listening to you is an embarrassment.


Brian Vincent Tobin: A former Member of the House, Mr. Jean Chretien-


Some Hon. Members:: Oh, oh!


Brian Vincent Tobin: -used to tell a story-


John Horton McDermid: We know, you were his campaign manager.


Brian Vincent Tobin: -used to tell a story that Members opposite would do well to consider. He used to tell the story about the time in an election in Quebec when Premier Duplessis came to Shawinigan and told the voters, who needed a brand new bridge to cross the river from one side to the other-


Some Hon. Members:: Oh, oh!


Mr. Della Noce:: No, from the top to the bottom.


John Horton McDermid: That is normally the way bridges go.


Brian Vincent Tobin: -that if they voted for the Union Nationale in the election-


The Acting Speaker (Mr. Paproski):: Hon. Members have done a great job today. We only have another 15 minutes before the Adjournment Debate. Please.


Brian Vincent Tobin: Thank you, Mr. Speaker. I think Mr. Chretien's story is worth repeating. Premier Duplessis told the voters that if they voted for the Union Nationale he would build their new bridge. If they did not, he would not build the bridge. A young Jean Chretien went to a microphone and told the Premier of Quebec that as an independent citizen of the Province of Quebec he would rather swim the river on his back than cross the bridge on his knees. The people of Shawinigan did not vote for Premier Duplessis.


Mr. Stewart:: What did he tell Turner?


Brian Vincent Tobin: Perhaps that is a lesson for the Government.


Arthur Jacob (Jake) Epp: He got hit by an iceberg.


Brian Vincent Tobin: At some point the Government had better be prepared to swim the international sea on its back if necessary
Softwood Lumber Products Export Charge Act
rather than cross the bridge on its knees. The Government has set a precedent in this natural resource pricing which will allow the American Government to demand similar treatment in other areas, whether it be pulp and paper, newsprint, agricultural products, or any other specialized field. The Government has entered into an agreement that establishes a precedent which is extremely dangerous for Canada.
We heard the Minister for International Trade (Miss Carney) talk about the sovereignty clause in the agreement. We heard her contend that the letter written by Mr. Baldrige and Mr. Yeutter to Mr. Dennison of the American lumber industry is nothing but a political side-show. It means nothing to the Government of Canada. I want to tell Members that when I was in Washington last week with my colleague from Winnipeg we met with Mr. Alan Woods, the senior American administration-


John Horton McDermid: You would rather believe the Americans than Canadians?


Brian Vincent Tobin: I would rather believe the Americans than believe the Progressive Conservative Party of Canada which daily demonstrates its inability to separate reality from fantasy.


John Horton McDermid: You believe Americans before you believe Canadians.


Brian Vincent Tobin: We have already talked about little crackys. If that noisy big cracky will hold his tongue for a moment, I will continue with my speech.
We talked to Mr. Alan Woods, the American administration official who negotiated this deal. He is quite proud of it. He drafted this letter so we asked him whether or not it represented the American legal interpretation of the agreement which had been signed. His words were that the American administration stood 100 per cent behind the letter.


John Horton McDermid: And the Canadian Government stands behind the agreement.


Brian Vincent Tobin: When the Minister talks about the sovereignty clause in the agreement, she ought to read the sovereignty clauses in this letter.


John Horton McDermid: No, read the agreement.


Brian Vincent Tobin: On at least three or four different occasions the Americans clearly cite their right to put their noses into matters which should be under the jurisdiction of the Government of Canada or the provincial Governments. It talks about the U.S. Government having the right to closely monitor, and the Government of Canada needing the approval of the U.S. Government to carry on with the transfer of the export charge into an increase in stumpage rates. The Government of Canada continues to deny that fact but it is in the letter. I had an opportunity to obtain a legal opinion on this letter and what it means in law.

January 19, 1987
Softwood Lumber Products Export Charge Act


John Horton McDermid: Bugger all.


Brian Vincent Tobin: The Member opposite, a Parliamentary Secretary, says it means bugger all. I think that is hardly the way for an official speaking on behalf of the Government of Canada to describe what is clearly the American interpretation of this agreement. Is the Prime Minister (Mr. Mulroney) about to tell the Vice-President of the U.S. on Wednesday that the American administration interpretation means bugger all?


John Horton McDermid: Yes.


Brian Vincent Tobin: If that is what you think, you do not have an agreement.


John Horton McDermid: We certainly do.


Brian Vincent Tobin: No, we do not have an agreement.


The Acting Speaker (Mr. Paproski):: Order, please. The Hon. Member for York East (Mr. Redway) on a point of order.


Mr. Redway:: Mr. Speaker, I do not know about the term the Hon. Member has used but he has used it three times and I would like you to rule on whether it is or is not parliamentary. In my view it is certainly not.


Victor Fredrich (Vic) Althouse: He is quoting the Parliamentary Secretary.


The Acting Speaker (Mr. Paproski):: I will check it out and I will be able to rule on it tomorrow. The time for the Hon. Member's speech has expired. I will give him an extra three minutes and we will then move on to questions and comments.


Brian Vincent Tobin: Mr. Speaker, I will obviously respect the ruling of the Chair. With respect to the terminology I used, I am just a fellow from Newfoundland. We do not use that kind of terminology down there. The Progressive Conservative Member for Brampton-Georgetown (Mr. McDermid) used the term and I was merely repeating it for the benefit of his colleague who objects to it. I suggest he have a private tete-a-tete with the Hon. Member about his language if he does not like it. I am nothing but an echo, and from time to time a foolish echo, of the insensitive and foolish comments I hear across the way while I am speaking.
It is my belief that the agreement which has been signed between the United States and Canada on the lumber accord is such a bad agreement in terms of its impact on Canadian sovereignty and such a bad agreement in terms of the legal precedent which it sets with respect to the American ability to set prices for our natural resources, that Canada would be better off if it moved to invoke Article 9 of the agreement. That is the article which allows us to terminate the agreement within 30 days. If that means that at that point we have to run the risk of American retaliation, that we have to find enough backbone and resolve to stand up and be a sovereign, independent, mature nation rather than a loose protectorate of
the United States, then so be it. Let us stand up and be counted.
If this nation, in the interest of ensuring that the Prime Minister is able to keep alive the free trade talks which he has committed so much political capital to, has to continue to concede to the Americans and appease them on every single irritant they raise, be it generic drugs, cedar shakes and shingles, lumber, fish, pork, or Arctic sovereignty, the only difference between us and Puerto Rico would be that Puerto Rico is formally a U.S. protectorate and Canada would be a protectorate posturing as a nation. We in this Party will not see that day arrive without a hell of a lot of noise and debate.


Nelson Andrew Riis: Mr. Speaker, I have a short question for the Hon. Member after his excellent presentation. On January 3, 1987, the Canadian Press made the following statement:
Historians, economists and legal scholars give the Mulroney government a failing grade on its handling of the softwood lumber talks with the United States.
They say the government has jeopardized Canada's sovereignty by caving in to American demands to impose a 15-per-cent tax on lumber exports south of the border.
And they say there is no precedent in Canadian history for a deal that gives Washington a voice in how Canada manages its lumber industry.
Maxwell Cohen, one of Canada's foremost experts on international law, said Friday that the lumber deal is a dangerous precedent that threatens Canadian sovereignty.
"It is a strange procedure to allow someone to monitor our own stuff," said Cohen, who was a judge on the International Court of Justice in the Gulf of Maine dispute with the U.S. and a former Canadian chairman of the International Joint Commission.
Does the Hon. Member support the suggestion in this Canadian Press report that this is in fact a very serious erosion of Canadian sovereignty, particularly in the softwood industry?


Brian Vincent Tobin: Mr. Speaker, I want to thank the Hon. Member for his very tough and penetrating question. I will attempt to answer it. There is no doubt that the agreement which has been signed by the Government of Canada, taken on its own merit, is an erosion of sovereignty. This agreement follows a series of other matters which were so-called negotiated between our two nations. We retaliated against the tariff on cedar shakes by putting a tariff on teabags and American books. The Americans applied a tariff to salt fish products in Atlantic Canada. Since only Atlantic Canada was affected, the Government of Canada went to sleep on it. It did not matter.
The American administration sailed an ice-breaker through Arctic waters and, rather than spending its time protesting strongly, making a claim of Canadian sovereignty, or demanding that such an exercise never occur again, the Canadian Government tried to explain that it did not know until after the fact that Americans had moved into our sovereign waters. The Americans have prodded a few times. They sent a ship racing through our sovereign waters and we did nothing. They imposed a 35 per cent tariff on shakes and shingles and we retaliated on teabags. The Americans are not stupid. After a while they begin to learn something. If you poke an animal
January 19, 1987

that is cornered and it only whimpers, it is time to get rough. The Americans got rough. The most humiliating thing about this agreement is not that we whimpered, but that we actually pretended we had won something great.
I grew up on American Air Force bases. My father was employed with the American Air Force for 30 years. Americans are as good a people as you will find anywhere in the world. However, I know that you have a good relationship with anyone when there is mutual respect across the fence. The Americans have no respect for the vacillating Tory administration which they see across the fence.


Mr. Kilgour:: Mr. Speaker, the Member for Kamloops- Shuswap (Mr. Riis) quoted former Judge Cohen. I hope the Member realizes that Professor Cohen is strongly supportive of the bilateral initiative.
I have a two-part question for the Member. What would his Party have done with respect to softwood lumber? Would it have allowed the $600 million to go out of the country? Does it not feel that stumpage fees should be raised in British Columbia and other provinces? Second, bearing in mind that about 2.5 million Canadian citizens depend upon the U.S. market for their livelihood, what is the policy of the Member's Party with respect to the bilateral negotiations with the United States?


Brian Vincent Tobin: Mr. Speaker, I would like to believe that any administration, theoretically even Conservative, although that is doubtful, that demonstrated some resolve, that demonstrated that it took the notion of nationhood seriously, that demonstrated that it took the notion of sovereignty seriously, would not have been confronted with an American administration prepared to make a 360 degree turn from the ruling it made in 1983 to the completely opposite ruling it made in 1986.
What we saw was not an exercise in trade law, as the Hon. Member knows. We saw an exercise in the United States of the lowest form of politics. No commerce department can justify doing a complete flip-flop on the basis of trade law. That could only occur in the face of political heat at home and a consideration by the administration that this kind of action could be taken against Canada because Canada had neither the backbone nor the resolve to respond in a proper way. We would quite likely not have been faced with this problem. If we were, we would not have given up our remedies under countervail law or under international law.


John Horton McDermid: Mr. Speaker, why does the Hon. Member continue to believe in and support the side letter written by the Americans which has nothing to do with the agreement? Those who have negotiated and those who are giving legal advice to the Canadian Government say that that letter is not the agreement. The agreement is the one which was signed. Their interpretation is entirely different. Why does the Member believe the Americans rather than the Canadians? Why does he continue to insist on that?
Adjournment Debate


Brian Vincent Tobin: Mr. Speaker, this is almost amusing. It is not a matter of whether or not I believe the Americans. The fact is that under the agreement which Canada has signed with the United States, Canada has no method of appeal. We have no remedies. We signed them away.


John Horton McDermid: You do have remedies.


Brian Vincent Tobin: No, we do not. The Americans have Section 301 of the American Trade Law which is a huge hammer with which they intend, when necessary, to hit us. It does not matter whether I choose to believe the Americans or the Canadians because the Americans in this agreement are the only ones with the clout under the agreement to hammer our side into submission. The Americans have said publicly to the press and to the media through their ambassador that this is their interpretation of the agreement. If we can find no common ground on what the agreement means, then the Parliamentary Secretary is really admitting we do not have an agreement.


The Acting Speaker (Mr. Paproski):: Order, please.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Alan Redway: Mr. Speaker, I apologize for my croaky voice this evening. I seem to have caught the flu bug or whatever it is that is going around. The appointment of Antonio Arcangel to the Canadian Human Rights Tribunal and his subsequent resignation was the subject matter of my question in the House to the Hon. Minister of Justice (Mr. Hnatyshyn) back in November. It is a question which raises once again a much wider issue. It raises a question which will not go away. That is, the question of the whole appointments process, regardless of the facts in the Antonio Arcangel case and regardless of whether one thinks it is a good appointment or a bad appointment, and there are just as many people who think it was a good appointment as think it was a bad one. As you, Mr. Speaker, and other Members of Parliament may know, the Prime Minister (Mr. Mulroney) has received many letters in support of that appointment. However, regardless of whether it was a good or bad appointment, there is a larger issue which transcends that appointment, or any others, and that is the question of the actual appointment process itself.
You will remember, Mr. Speaker, when this issue was first raised. It was raised originally in the election campaign of 1984 during the famous debate which many people think turned the whole election around. The now Leader of the
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January 19, 1987
Adjournment Debate
Opposition (Mr. Turner), the then Prime Minister, was asked by a questioner whether or not he was required to make certain appointments which were recommended to him by the former Prime Minister, the Right Hon. Pierre Elliott Trudeau. He said: "But I had no choice". The now Prime Minister responded saying: "But you did have a choice", and that was a very turning point in the election campaign. As a result of that statement and that exchange, the Canadian people came to feel, as I firmly believe, that there was a promise made. It was not an express promise but an implied promise that there would be changes in the whole process of appointments.
After the massive election of our majority Government there were apparently some changes. There were appointments made of New Democratic adherents and Liberal adherents to various positions both in the beginning and subsequently. However, as time went on the only thing which appeared in the press time after time was the appointment of people who were adherents of the Progressive Conservative Party. As a result of that the public began to feel that nothing had changed, that all was the same as it was before.
As you and I know, Mr. Speaker, the public came to believe that the people appointed were all affiliated with the Progressive Conservative Party, many friends of the Prime Minister. They came to believe that the process of appointments was not as open as they thought it was going to be. They came to believe that the people being appointed were not the best qualified regardless of whether or not they were well qualified. They began to feel let down and that feeling reinforced the feeling of non-confidence in the Government they had elected.
You and I may very well feel, Mr. Speaker, that there is no reason for Canadians to feel let down because the former Government did the same thing and provincial Governments, whether Liberal or New Democratic, are doing exactly the same thing. However, the public felt there was going to be a change and that change did not occur. They saw the same thing happening. In fact, in September of 1985 the Prime Minister announced a change. He announced that there would be a process of parliamentary review of appointments.
What happened as a result of that parliamentary review process? We had cases such as the Antonio Arcangel case. So while the review process by committee may be a good one, and one which I support whole-heartedly, it is not the entire answer. We need a new type of appointment process, one which I wish to suggest to Hon. Members of the House and to the public tonight.
First, what we need is a public appointments office, one that is not hidden away in the Prime Minister's office or in the office of the Privy Council. It must be one that is open to the public so that the public can see what is going on.
Second, at the beginning of each year we need to place an ad in all daily newspapers and all ethnic newspapers across the country stating that we will be making some appointments this
year to boards and agencies and if anyone is interested then let us know. Then, when Members of the public respond, what we should do is write back to them providing a list of the appointments we will be making and ask them to let us know in which ones they are interested. When they write back to us, we should send them another letter with application forms and job descriptions for particular positions. That is the sort of process which should be taking place.
When the applications are returned, we should review them and make a short list of the best possible candidates regardless of all other circumstances. The choice should then be reviewed by the committee process which is in place and then the appointments should be made.
I do not expect the Parliamentary Secretary to announce that form of appointment process tonight. However, I would like him to take my suggestion to the Prime Minister and to the Minister of Justice (Mr. Hnatyshyn) and return with an answer for me later on.


Mr. Francois Gerin (Parliamentary Secretary to Minister of Justice and Attorney General of Canada):: Mr. Speaker, I am interested in the position that the Hon. Member for York East (Mr. Redway) has put forward.
The House is no doubt aware that on November 3, 1986, and again on November 5, the Hon. Member for Hamilton East (Ms. Copps) raised allegations on the floor of the House of Commons with respect to Antonio Arcangel.

I think that two issues have been raised here, one more specific concerning Mr. Antonio Arcangel, and the other pertaining to a broad principle, namely, the appointment process for people who could hold various positions similar to that which had been entrusted to Mr. Antonio Arcangel. But since reference has been made to the specific case of Mr. Arcangel, I should like to provide the House with a little background information by mentioning that on November 6, the Minister of Justice (Mr. Hnatyshyn) received from Mr. Arcangel the following telegram which read, and I quote:

Dear Minister,
i am hereby withdrawing my name from the list of human rights tribunal panel because Ms. Sheila Copps unfair remarks and unjust allegations have seriously impaired my ability to serve effectively as a member of such a tribunal. I have always been a law-abiding citizen and a firm believer in a democratic process. My efforts as a member of Canada's multicultural society have always been to promote the cause of human rights and equal opportunity. I consider Ms. Copps' allegations and attack as a serious violation of my rights as a citizen of this country. I am most gratified by the tremendous support that I am receiving from across this country from community groups and organizations as a result of her slanderous attack.
I would like to thank you for giving me the opportunity to serve my country.
Yours sincerely,
Antonio Arcangel
January 19, 1987


STATUS OF WOMEN-FUNDING OF WOMEN'S ORGANIZATIONS
Mr. Sid Fraleigh (Lambton-Middlesex):: Mr. Speaker, on December 12 of last year I posed a question to the Secretary of State (Mr. Crombie) to which I received what I consider to be an unsatisfactory answer. The question concerned what I perceived to be a bias in his Department in terms of the funding of women's programs. I might add that same perception is shared by a number of my colleagues in the House, as well as a large number of people in my riding and across Canada.
The question is not whether Government should be funding the many specific worth-while women's projects, but rather whether Government should be supplying sustaining funds to lobby groups. It is my belief that Government should not be funding any lobby group with taxpayers' dollars. Certainly some of the groups applying for and receiving funds specifically under the women's program are just that. However, if Government is going to fund such groups, then it should be done fairly and with balance.
Unfortunately, since I raised the issue the Minister has seen fit to deny funding to one group which has strong views on many women's issues. At the same time, he is maintaining funding to another group that also has strong views, but views that are quite different from the group that was denied funding.
The objective of the women's program of the Secretary of State is to support the full participation of women in all aspects-Mr. Speaker, I wish to repeat that-in all aspects of Canadian society, and to increase the capability of women's organizations and groups working to improve the status of women. In addition, it is also intended to promote increased understanding and action on women's issues among women and the general public in the form of advocacy and information exchange. I fully support that objective. But I do not agree with the interpretation being put on it by the Department or by the Minister.
As I look around the House, I regret that it appears there is no one here to respond on behalf of the Minister. It is a slight to which I as an individual Member have to take exception. Be that as it may, I wish to carry on with my presentation.
In response to my question in the House, the Minister responded: "The process we use at the Department of Secretary of State for assessment of all applications is a just and fair one, and I expect to continue that process". How can a process be just and fair when one group is not allowed the opportunity to participate in that process? The refusal by the Department to send application forms to any group under any program is inexcusable.
I believe that we have a very unjust and unfair process when bureaucrats, who do not share the same philosophy on issues as a significant group of the public, have the power to deny that group access to the process. I was pleased to see in the
Adjournment Debate
Minister's announcement last Thursday that he has acknowledged the shoddy treatment that was accorded to some women's groups in their application for funds. That does not excuse the Department for what has gone on prior to him being appointed Minister. I believe that there are a significant number of women in this country, who, while wanting equality in all areas, have some strong convictions on such issues as child rearing, family role models, sexual orientation and pornography, to name but a few. The promotion of those ideals does not qualify for funding at the present time under the present criteria.
On the other hand, another group receiving approval for funding has policies supporting positions such as withdrawing Canada from NATO and NORAD, declaring Canada a nuclear-free zone, involving all women in the struggle for lesbian rights, and state-run and financed universal day care, again to name but a few.
I believe that I could identify the group which reflects the opinion of a large segment of the population in my riding, and of a great number of other ridings across this country, not only women, but men as well, and it would not be the latter group which would receive that approval.
I apologize for nobody being here to respond on behalf of the Secretary of State (Mr. Crombie).


The Acting Speaker (Mr. Paproski):: I do not think an apology is necessary; there is a Parliamentary Secretary to reply to your question.


Sidney Arthur Fraleigh: I am sorry, I missed him during most of my comments.


Vincent Della Noce: Mr. Speaker, I was on the other side of the House, but I was listening to my hon. friend.
The Hon. Member for Brampton-Middlesex (Mr. Fraleigh) asked a question of the Secretary of State (Mr. Crombie) last December 12 about funding to women's groups by his Department's women's programs. I should now like to tell the House what are the Government's objectives.
The three main objectives the federal Government is pursuing on behalf of women are: economic equality, social justice, and access and participation.
Through economic equality we are trying to ensure that women are economically secure and benefit equally from their contribution to Canadian society. This is a primary objective when one thinks that today 64 per cent of women aged 20 years to 64 years are in the labour force and that they continue to be clustered in low-income occupations. Also, women make up 43 per cent of the total labour force.
The second objective, that of social justice, took on new importance on April 17, 1985 when Article 15 of the Canadian Charter of Rights and Freedoms came into force. This

January 19, 1987
Adjournment Debate
important article deals with equality. In addition to the rulings which courts will apply over the next few years, the objective takes in, among other things, the formulation of new laws, violence directed toward women, pornography, and the stereotyping of women by the media.
The third main objective covers access and participation. It refers to equitable social and economic access, the participation of women in decision-making processes, and the battle against attitudinal discrimination when they occupy nontraditional posts.
There are two types of assistance provided by the women's program of the Department of the Secretary of State- operational funding and project funding. The first is used to promote the ongoing existence of national and regional women's organizations capable of taking co-ordinated action on issues of concern to women. Project funding is given in support of short-term projects linked to current objectives of the Government.
In 1985-86 the program funded more than 500 projects and the administration of 129 organizations. In all these cases, their objective was to remove obstacles to the equality of women in society. You can well understand, Mr. Speaker, that the women's program of the Department of the Secretary of State cannot aid all women's groups. It has to follow the priorities the Government has set for itself.
All requests received by the women's program are examined by criteria, including how a particular project will help women reach equality and the capacity of the requesting group to handle its respective project. As the Secretary of State said himself in the House on December 12, all requests are handled in the same manner-justly and equally.


UNEMPLOYMENT INSURANCE-(A) REQUEST FOR REIMBURSEMENT OF CONTRIBUTIONS TO EARLY RETIREES (B) REQUEST THAT MINISTER MEET REPRESENTATIVES OF INTERESTED PARTIES
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, what we have just seen is not "The decline of the American Empire", but "The decline of the Conservative Government". I can understand why the Conservative Member is disappointed with such a reply. I do not blame the Parliamentary Secretary, but this shows the mess and disorganization within this Conservative Government. In fact, the Secretary's reply was entirely beside the point, and nobody was prepared to reply. This is an insult made to a Member which I will defend, even if he is from the Progressive Conservative Party. I dare hope that I will obtain from the Parliamentary Secretary a better reply to the question I had directed to the Minister of Employment and Immigration concerning the cuts in unemployment insurance benefits to 35,000 early retirees in Canada, including 11,000 in the Province of Quebec. Everybody will recall that, in 1985, any worker who had contributed to a pension scheme through employee-employer
deductions and who lost his job could continue to collect full unemployment insurance benefits while looking for another job. Any person who had accepted to take early retirement to surrender his permanent job to a younger person and seek a second career could continue to collect full unemployment insurance benefits while seeking another job, even while collecting pension benefits for which he or she had contributed through employee-employer deductions for 25, 30 or 35 years of his or her life.
Everybody knows that, unfortunately, the Mulroney Cabinet decided on December 20, 1985, that beginning on January 5, 1986, the Unemployment Insurance Commission would take into account, while computing benefits, all incomes from a private employer-employee pension plan.
All groups throughout Canada got organized, even the Conservative Members, the Liberal Opposition, the New Democratic Party, all people were opposed to this decision. The then Minister and her colleague the Minister of Employment and Immigration said they would heed the Forget Commission recommendation as to whether this regulation ought to be changed.
Mr. Forget released his report on December 3 and his recommendation 26 concerning early retirees was quite clear. With respect to the inclusion of private pension plan benefits in calculating unemployment insurance, recommendation 26 stated clearly that the Government must retroactively rescind this measure, and if in future there should be another such measure concerning pension benefits and unemployment insurance he recommended that it be announced by the Government three years in advance because it is very important that someone who has worked all his life and planned for retirement not be forced to cope with a Government which changes the rules of the game.
On December 5 the Minister of Employment and Immigration said in this House that as a result of the Forget Commission recommendations he would make changes and forthwith direct the Unemployment Insurance Commission to launch a review process designed to reimburse the 35,000 early retirees whose unemployment insurance benefits had been cut off.
Mr. Speaker, nothing has been done to this day. The only action taken was the one I witnessed last week in the Montreal region where 1,000 early retirees who were denied these benefits attended a meeting convened by Quebec City ARSAC representatives. On Thursday this week these people will be in the Saguenay region, in the riding of the Minister of Employment and Immigration, and they have met with residents of Baie-Comeau and the Quebec City region. The only action came from the people themselves who prepared their own reimbursement request form to ensure that the Government would reimburse retroactively all the retirees who have been unfairly penalized.
I trust that the Parliamentary Secretary-and I know that, not only Friday, but also today, at the community centre of my
January 19, 1987

constituency, 300 people from Greater Montreal came, as well as people from the Laval area because they wanted justice.
Unfortunately, in this matter as in many others, the Government is dragging its feet. Yet, we can recall how quickly the Conservative Government passed legislation to reimburse $1 billion to people who had $60,000 deposits in Western banks. In this case, the people involved are workers throughout the country who, for 35 or 25 years, accepted lower wage increases to put away some money in a pension plan each month, but now, all their efforts are being penalized.
Mr. Speaker, I trust that the Parliamentary Secretary will give us a more satisfactory answer than the one he must have had from the Department of the Secretary of State and that he will give us a clear and specific answer about when the Government intends to reimburse these people and find a method to determine the amount of their reimbursement, and second, when the Minister will table a bill to extend eligibility not only to 1985 retirees, but also to 1986 and all future retirees so that, from now on, unemployment insurance premiums will be fully and completely reimbursed to all individuals, whatever their private pension income, since the Government does not make any deduction in the case of an RRSP.


Vincent Della Noce: Mr. Speaker, in turn, I would like to answer on behalf of the Minister of Employment and Immigration and expand on the question the Hon. Member put in the House on October 31, 1986. I am aware of the abiding interest of the Hon. Member for Montreal-Sainte-Marie (Mr. Malepart) in the matter, but unfortunately, I do not have as much time as he did and I will therefore try to be very brief and expeditious. This is our only chance to respond, and I hope the Hon. Member doesn't think I am going to indicate any changes in regulations previously announced by the Minister.
On December 5, 1986, the Minister announced changes in the unemploymenty insurance regulations concerning pension income. These changes will allow workers who take another job after retirement and keep that job long enough to become eligible for unemployment insurance benefits to receive such
Adjournment Debate
benefits without having the amount of their previous pension income subtracted from their benefits.
On November 8, 1984, as my hon. friend said, the Minister of Finance, announced in his agenda for economic renewal the Government's intention to consider pension income as remuneration for the purposes of establishing unemployment insurance benefits. The principle that continues to guide us today is that retired persons should not consider unemployment insurance as an additional source of income. The objective of the Unemployment Insurance Fund is to provide a replacement income to people temporarily out of work. The major policy change announced in November 1984 did not make a clear distinction between those retiring for good and those retiring to start a new career. The best example is provided by military personnel and RCMP officers who must take early retirement. The changes announced December 5 of last year will mean a fair and equitable treatment for this group of people who continue to be part of the labour force. Workers who have started a new career, where they must contribute to unemployment insurance, and subsequently lose their job will be entitled to full unemployment insurance benefits based on their previous pension income.
Besides, as mentioned by my colleague, some retirees who were in receipt of benefits as of January 5, 1986, when the former policy came into effect, lost their rights to benefits and will not regain them if they have left the job market. Some of these people argue that they based their decision to retire on erroneous information provided to them from federal government sources. In order to clear this matter, the Employment and Immigration Commission will review all such cases and reinstitute the right to benefits if the allegations are proven. The review will be done according to the normal procedures for claim settlement and we should note that the Government has always acted that way in similar cases in other social programs. Mr. Speaker, a Bill will be presented to the House in order to implement these measures.


The Acting Speaker (Mr. Paproski):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 3(1).
At 9:29 the House adjourned.

Tuesday, January 20, 1987

' [English]


Mr. Speaker:: I would like to welcome all Hon. Members back with a few words.

Before going on to Routine Proceedings, I would like to express my sincere thanks to all Hon. Members for the support they have given the Chair during the previous three months.
On this occasion I also wish to offer Hon. Members my best wishes and reiterate the commitment I made upon my election last fall.
This session's business promises to be very interesting, and I know that in the course of my duties I shall be able to count on the support of all Hon. Members.

I welcome all Hon. Members back. The Chair is convinced that things will be interesting. I welcome you all back in the best of fraternal amity which I hope will be extended across both sides of the House.


Some Hon. Members:: Hear, hear!