1987-05-13

STATEMENTS PURSUANT TO S.O. 21


Mr. George Henderson (Egmont):: Mr. Speaker, in a statement given here on March 24, 1987, I expressed my strong opposition to the 12 per cent tax on potato chips contained in the February Budget. Since then I have received a number of letters from groups which are also opposed to this measure.
This tax remains a grave concern for the P.E.I. Potato Chip Co-operative, a new and important business in Urbainville, Prince Edward Island. At their annual meeting, the P.E.I. Women in Support of Agriculture passed a resolution requesting the immediate withdrawal of this tax. In addition, the Minister of Finance (Mr. Wilson) has received telexes from the P.E.I. Potato Producers Association and the Prince Edward Island Potato Marketing Board expressing their strong disapproval of the new tax.
The general manager of the marketing board lists the many direct and indirect benefits of the Canadian potato chip industry. He feels the new tax "will contribute to greater pressure on many Canadian farmers". Surely the Minister can see that this short-sighted tax is a serious blow to the entire potato-growing industry on Prince Edward Island. Therefore, I urge the Minister of Finance to revoke the tax immediately.


ABORTION
Mr. Alan Redway (York East):: Mr. Speaker, as you know, many Canadians hold strong strong and diametrically opposing views on the subject of abortion. Often overlooked in this ongoing debate is the impact that abortion has on the
economy and jobs. An example is the number of school classrooms that might have been filled had abortions not taken place.
In September, 1986, the children born in 1980 entered Grade 1. The unborn of 1980 would have filled 1,644 classrooms. Had these children been born, 733 more Grade 1 teachers in Ontario and 871 more Grade 1 teachers across the rest of Canada would have had jobs for the present school year. If there had been no abortions between 1971 and 1981, 14,117 more teachers could have been employed in Canada this year. It does not take much imagination to see the effect of this on the demand for and production of consumer goods and services.
The greatest impact, however, will come a few years from now when a shrinking number of wage earners will be required to provide pensions and health benefits for an increasing number of senior citizens.


SCIENCE AND TECHNOLOGY
Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, the Province of British Columbia is seeking the support of the federal Government to build the world's first KAON factory by upgrading the existing TRIUMF cyclotron at the University of British Columbia. The construction of a KAON factory at the multi-university MESON facility would create jobs for Canadians. It would generate tremendous economic spinoffs both during its construction and its operational phases. The impact on scientific research and related technology development in Canada would be significant.
Building a KAON factory at UBC would also help to redress Canada's poor international standing in terms of the amount of money spent on research and development as well as the low proportion of federal R and D funds directed toward British Columbia. As Canada currently has only a one-year lead over world competition in the pursuit of this project, we should not ignore this vital opportunity to maintain our leadership role in the field of sub-atomic particle physics.

May 13, 1987


O. 21 SENIOR CITIZENS ACTIVITIES OF FREDERICTON SENIOR CITIZENS' CLUB-SUPPORT FOR NEW HORIZONS PROGRAM
Hon. J. Robert Howie (York-Sunbury):: Mr. Speaker, I would like to speak briefly on a subject of some importance to me. While in Fredericton recently, I visited a senior citizens' club which I feel presented a shining example of seniors helping seniors along with the financial assistance of the Government.
Government assistance was being transformed by senior citizens into programs and events for seniors aimed at promoting and enhancing the mental and physical well-being of all concerned. While there, I saw activities such as painting workshops, swimming, and even synchronized swimming, all of which demonstrated to me the active and contributive role seniors are capable of playing if given sufficient resources to do so.
While Budget constraints are a fact of life for this and every other Government, programs such as New Horizons richly deserve the support of the federal Government. I applaud the Government's past support and would urge that that support be continued.


NUCLEAR ENERGY
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, the Manitoba Government has introduced legislation which would prohibit the disposal of high-level nuclear waste in the Province of Manitoba, in keeping with its long-standing position that provinces which generate nuclear waste, such as the Province of Ontario, ought also to be the provinces which take final responsibility for those wastes. The legislation was also introduced in response to the anxiety many Manitobans have about the fact that the Underground Research Laboratory, where AECL has chosen to do research into the deep geological disposal of high-level radioactive waste, exists in Manitoba.
One of the things Manitobans have been concerned about for a long time is that Manitoba ought not to become, either by accident or by design, a final site for disposal. In response to the refusal of this Government to give Manitoba the kind of guarantees it has been seeking for a number of years, guarantees that Manitoba would not be an option for high-level nuclear waste disposal, the Manitoba Government has done the right thing. I hope other non-nuclear provinces will do likewise and thus send a message to Ontario and other nuclear-waste-generating provinces that if they want to continue to produce nuclear waste and pursue the nuclear option, they will have to be responsible for it in the final analysis.


POLICE WEEK
Mrs. Carole Jacques (Montreal-Mercier):: Mr. Speaker, I am very pleased today to take the floor to commend our police officers, both men and women, for their dedicated, courageous and professional work to serve our communities and our country.
The House acknowledges the leading role of police personnel and the need to set a week aside for highlighting their special contribution to Canada. I am sure the House will also want to take this opportunity to pay tribute to the families of police officers.
Too often we hear about a police officer shot dead or seriously injured, a timely reminder of hazards inherent in police work. Still I am convinced that every day relatives of police officers live in anxiety and apprehension as they await the return of their loved one. I sympathize with them, Mr. Speaker.
O)

In conclusion, I call upon this House to pay special tribute to the families of all police officers and especially to those who have lost a loved one in the line of duty.


EXTERNAL AFFAIRS
Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, the Canadian Government has a policy of encouraging visits to Canadian ports by U.S. warships. There is growing concern about this practice and growing public support for a comprehensive public inquiry into this policy.
Recently the Capital Regional District, representing 250,000 people of Greater Victoria and 14 municipalities, passed a resolution saying that the Capital Regional District Board asked the Prime Minister (Mr. Mulroney) to convene a formal public inquiry into all aspects of the issue of nuclear warships visiting Canadian ports.
There is concern about continued low-level radiation leakage, the possibility of a nuclear accident, and about whether or not our Government has any contingency plans in the event of such an accident. I urge the Government to convene that kind of formal public inquiry now.
May 13, 1987


NATIONAL TOURISM WEEK
Mr. William G. Lesick (Edmonton East):: Mr. Speaker, we are currently celebrating National Tourism Week in Canada which runs from May 11 to May 17. The theme is: "Canada grows with tourism". Its objective is to raise the public's understanding of the importance and economic potential of tourism in Canada.
Tourism is a $20 billion a year industry employing over 600,000 people. It is one of the largest and fastest growing industries in Canada, and the third largest in Alberta. The theme in Alberta is: "Smile, you're a tourist attraction". This campaign shows Albertans the importance of extending a friendly welcome to visitors.
The federal Government and the Government of Alberta have signed a five-year subagreement worth $56.3 million to be cost shared on a 50/50 basis. This rapidly growing industry is a key part of our economic diversification strategy and both federal and provincial Governments have demonstrated their commitment to tourism. I would like to take this opportunity to invite you, Mr. Speaker, and all other Members to come and enjoy our Alberta hospitality.


LITERACY
Miss Aideen Nicholson (Trinity):: Mr. Speaker, too little attention has been paid to the alarming fact that large numbers of Canadians are functionally illiterate. Some four million cannot read or write well enough to function in society and a million more cannot read or write at all. Many illiterate Canadians are unemployed and cannot qualify for government-sponsored job training because they lack literacy skills.
Life is filled with obstacles and hazards for those who cannot read labels or street signs, identify emergency telephone numbers, do their own banking, read to their children, or accomplish many other tasks of daily life that most of us take for granted.
As a nation Canada has not come to grips with this crisis as we have with more visible disabilities. Canada lags behind other western countries which have recognized the problem and introduced programs to deal with it.
The key to fighting illiteracy is in heightening public awareness and providing the means to acquire literacy skills. In its last Throne Speech the federal Government indicated it is aware of the problem. What is needed now is the political will to act.


ENVIRONMENTAL AFFAIRS
Mr. Rob Nicholson (Niagara Falls):: Mr. Speaker, a report issued last week again brought attention to the problems of pollution in the Niagara River. That river, indeed the whole Great Lakes system, has been the receptacle of a continuous stream of toxic pollutants for years. I believe this problem and acid rain are the two most important environmental issues this country faces.
It is sad to note that the vast majority of this pollution comes from the U.S. Some progress has been made and more is necessary for the Niagara River. What we are asking of the Americans I do not think is unfair or unreasonable. We are simply asking them to clean up the mess they have made. In helping us they will be protecting themselves from a world in which no one is safe.


CRIMINAL CODE
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, citizens of Vancouver were horrified when four serious criminal incidents involving knives took place on city streets in a recent two-week period. Three incidents resulted in deaths. Of the 10 homicides in Vancouver this year five have involved knives. The same deadly pattern is reported across the country.
This situation is clearly intolerable. For many years community groups and police officers have called for amendments to the Criminal Code which would prohibit the carrying of knives in public and in licensed drinking establishments. Both the Conservative Government and the previous Liberal Government have done nothing while the use of knives in criminal incidents has steadily increased throughout Canada.
I again call upon the federal Government to act now to save lives. Do not wait for more killings. Amend the Criminal Code to protect average citizens from knives.


AGRICULTURE
Mr. Gordon Taylor (Bow River):: Mr. Speaker, the major problems with which our farmers are contending today originated with the high interest rates during 1982 and 1983 and a subsidy war wherein the European Common Market subsidized agricultural products to the hilt, thus accumulating

May 13, 1987
surpluses which it is dumping into every market it can find. The U.S.A. is now doing the same thing thinking that two wrongs can make a right. The Progressive Conservative Government and its Ministers are trying to talk sense into the heads of both the EEC and the U.S.A., but while they are doing so our farmers are suffering.
To reduce necessary subsidization in Canada we should start a new industry to convert surplus wheat and corn into fuel ethanol for blending with methanol and gasoline. This has the potential of creating jobs, helping the gas and oil industry, and providing a brand new market for our farmers. It can contribute to energy security, have significant environmental benefits, and bring buoyancy back to the economy. Will the Government take up the challenge?


CANADIAN TRANSPORT COMMISSION
Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, I rise to express my support for Mr. Fred Turner's request that the Government appoint an independent arbitrator to settle fairly his dispute with the Canadian Transport Commission. At a press conference yesterday hosted by the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) and the Hon. Member for Edmonton-Strathcona (Mr. Kilgour), the former Parliamentary Secretary to the Minister of Transport, Members of Parliament from all three political Parties demonstrated their support for Mr. Fred Turner and their belief in his cause.
Mr. Turner lost his airline business because the Canadian Transport Commission removed his licence unfairly. Ministers of the Government have acknowledged that an error was made because they reinstated his licence and offered him a small ex gratia payment. However, the offer is a pittance compared to the loss of Mr. Fred Turner's livelihood.
I urge the Government to do the just and right thing- appoint an independent arbitrator to examine all aspects of this case and make the appropriate recommendations for a redress of this grievance.


PATRIOTISM
Mrs. Lise Bourgault (Argenteuil-Papineau):: For the
thirty-seventh consecutive year, Mr. Speaker, the Ottawa Rotary Club is organizing a program designed to stimulate more patriotism and citizenship among our youth.
As Member for Argenteuil-Papineau 1 am extremely proud that my riding should be represented by Trent Mell of Lachute. My young constituent will represent all Argenteuil- Papineau youths, Mr. Speaker, and I want to commend him for taking part in this national program.
Mr. Speaker, young people in Quebec and Canada need examples for inspiration to get involved and participate in our country's social, economic and political life.
We should take every means available to encourage and congratulate the Rotary Club of Canada and the National Capital Commission for setting up this constructive patriotism program.
Such commendable and wide-ranging initiatives will make it easier for young Canadians to appreciate the true meaning of their actions in a great country like Canada as we mark the 40th anniversary of Canadian citizenship.


ENVIRONMENTAL AFFAIRS
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, for some time, residents of Glengarry-Prescott- Russell have been working hard to rid the Ottawa River of residue that has accumulated over the years.
Several groups in my region, including the Hawkesbury hunting and fishing club, the Prescott-Russell joint county council, and the tourism association, are doing a large share of the work involved in cleaning up the waters of the Ottawa River and making general improvements in our area.
Unfortunately, some people seem to be completely indifferent to these improvements. Go-Hut Sanitation Services has been charged with dumping toxic waste in the Ottawa River. Even worse, Mr. Speaker, the toxic waste came from the Government of Canada, from four federal agencies, namely the Bank of Canada, the National Research Council, Transport Canada and Supply and Services, each of whom has been a customer of the Go-Hut company, from time to time.
Mr. Speaker, the moral is that when the Conservative Government brags about its record, it is really saying: Do as I say, not as I do.
May 13, 1987


NATIONAL HOCKEY LEAGUE-NON-AVAILABILITY OF TELEVISED BROADCASTS IN PEACE RIVER COUNTRY
Mr. Albert Cooper (Peace River):: Mr. Speaker, as we all know, the best of hockey is presently being played, with two Canadian teams in the semi-finals. Tonight the Edmonton Oilers will be playing a big game at Northlands Coliseum. My concern is that my constituents in the Peace country are unable to view this game.
This problem has existed for some of the previous games played, as well as being the third year in a row that the series has not been aired in my area.
Carling-O'Keefe won out over the CBC in the bidding process for broadcasting rights and have entered into agreements with smaller television networks in order to broadcast the games. In Alberta they have utilized ITV's facilities which do not reach the majority in my riding.
I strongly urge Carling-O'Keefe and the CBC to reach an agreement in the negotiations taking place this week in Toronto to allow those games to be distributed fairly, not only for this series but also for next year's finals. If you think people have strong opinions on capital punishment, Mr. Speaker, try this one!


Some Hon. Members:: Oh, oh!



ORAL QUESTION PERIOD


John Napier Turner: Mr. Speaker, two days ago, a survey of Canada's scientific community revealed that 40 per cent of our best researchers are about to leave the country because of a major reduction in federal funding for research and development. Yesterday, the Minister of State for Science and Technology announced a terrific new initiative, namely that the Government was going to set up a mailing list and ask scientists who are leaving the country to come back to Canada.
I would like to ask the Prime Minister, in the absence of the Minister: Is that the best the Government can do to stop our brain drain? Draw up a mailing list?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, the remark of the Leader of the Opposition on the brain drain are grossly exaggerated. In fact, the Canadian Government has set up a National Advisory Science and Technology Board, which I have the honour of chairing. Last
Oral Questions
night, I met some of our leading scientists who spoke to me in very positive terms, not only about further developments in this area but also about their confidence and faith in the scientific dimension and the technological course Canada intends to take. They felt most encouraged, and I hope the Leader of the Opposition will be as well.


CUTS IN RESEARCH FACILITIES
John Napier Turner: Mr. Speaker, the Prime Minister is obviously not close enough to the scene because he would know-


Mr. Gormley:: You are?


John Napier Turner: Yes, as a matter of fact, I am.


Some Hon. Members:: Oh, oh!


John Kenneth Gormley: Tell us more, John.


John Napier Turner: Forty per cent of our scientists are ready to leave the country because of the lack of support to our scientific community by the Government. All the Government can do is come up with a mailing list prepared by the Minister of State for Science and Technology.
Will the Prime Minister ask the Minister of State for Science and Technology, when he is drawing up his brain drain mailing list, to use that list to inform our scientists why the Government cut the National Research Council laboratories, why it closed the Algonquin observatory, why it is closing down the Bedford Institute and why it is cutting out a number of other leading facilities, including the Canadian Centre for Toxicology at Guelph? Will he explain that to our scientists by using this new mailing list of the Minister in order to keep in touch with the men and women with brains in this country who are leaving because of the Government?


Martin Brian Mulroney: Mr. Speaker, I am really surprised that there would be criticism of the science policy of this or any other Government from a Party that devised the scientific tax scam that took billions of dollars from legitimate investment in Canada in science and technology.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: The Scientific Tax Credit was a disgrace and dishonour that sucked hundreds of millions of dollars-


Mr. Broadbent:: You voted for it.


Martin Brian Mulroney: -from the scientific community in Canada, and the Liberals will forever bear the disgrace of that initiative.

May 13, 1987
Oral Questions
[DOT] (M25)


John Edward Broadbent: You voted for it over there.


Martin Brian Mulroney: We are in the process now of putting together-


John Edward Broadbent: You voted for it.


Martin Brian Mulroney: The Leader of the New Democratic Party should not get too excited. I am getting 24 Sussex all ready for you.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: I even have a pair of shoes to go with that nice new suit.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: I think there is general agreement in the scientific community. I had the honour of chairing the first meeting of the National Advisory Science and Technology Board for a number of hours. I then met at the University of Waterloo with some of our leading scholars and experts in science and technology. Last evening, as I indicated, I had the opportunity again. There is a strong view that collectively, with the co-operation of the provinces, the research institutes and universities and the Government of Canada, we are putting together a national science policy which will allow us to recapture a lot of the time lost over the last number of years and bring Canada to the forefront of science and technology.


REQUEST FOR GOVERNMENT ACTION
John Napier Turner: Why then would 40 per cent of our scientists be prepared to leave this country because they have no faith in this Government understanding Canada's possibilities in the 21st century? Why prepare a mailing list to try to invite our scientists back to Canada once they leave? Why not do something now to persuade them to stay, with a constructive scientific policy in this country?


Martin Brian Mulroney: Mr. Speaker, is the Leader of the Opposition seriously suggesting that 40 per cent of the scientists in Canada are about to leave this country? Three times now-


John Napier Turner: Show him the report.


Martin Brian Mulroney: Does the Leader of the Opposition seriously believe what he has just said, that 40 per cent of the science community of this country-


An Hon. Member:: That's right.


An Hon. Member:: Wake up, Brian.


Martin Brian Mulroney: That is an absolute statement of nonsense. If the Right Hon. Leader of the Opposition does not know that, 1 fear he is in for even worse days ahead.


INSTITUTE FOR MARINE DYNAMICS
Mr. Brian Tobin (Humber-Port au Tort-St. Barbe):: Mr. Speaker, my question is also directed to the Prime Minister. The Prime Minister will know that the National Research Council's Institute for Marine Dynamics is located at St. John's, Newfoundland, and that centre, at a cost of $55 million, gives St. John's and, indeed, Canada, the leading institute of its kind in the world today. Why then has the Government of Canada put at risk the world-class potential and capabilities of this institute by underfunding by as much as $5 million a year the operating budget of that world-class facility?


Hon. Marcel Masse (Minister of Energy, Mines and Resources):: Mr. Speaker, when we signed an agreement with the Newfoundland Government, especially with respect to offshore exploration, we brought a substantial and fundamental contribution to Memorial University and all research centres in Newfoundland. I am convinced that the Member is aware of that fact.
We are now negotiating with the Government of Newfoundland concerning grants for other types of research. I think that the Government of Canada is doing a lot in that field and that without the Government's action in the past, presently and in the future, Memorial University would not enjoy the scientific recognition it now has across Canada.


REQUEST FOR ADDITIONAL FUNDING
Brian Vincent Tobin: The
facility was put there by the previous administration. It was supposed to be the most up to date place in the world to test the seaworthiness of drilling platforms, seagoing oil rigs and ships. The Director of the Institute says: "If we don't get the additional money, I guess what we will have is a great big pool of water". That was said by the Director of the National Research Institute. The kind of answer the Minister has just given is what we have been hearing for the last year.
When will the Government of Canada get serious and provide the dollars necessary for both scientists and basic research at a $55 million facility which can and should be a world leader in that particular kind of scientific research and which currently is not because of a lack of commitment by the Government?


Marcel Masse: Mr. Speaker, I think that the Government of Canada has acted on the issue of research, especially as far as Newfoundland is concerned. I personally had the opportunity to visit the Research Centre mentioned by the Hon. Member and have discussions with the officials and, in the months to come, the Government of Canada in co-operation with the
May 13, 1987

Government of Newfoundland and not unilaterally, will ensure that research centres in Newfoundland maintain their degree of excellence.


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


Some Hon. Members:: Hear, hear!


Mr. Young:: Go get 'em, Eddie!


John Edward Broadbent: Mr. Speaker, I simply want to say that I have not ordered a single new pair of shoes-not one!


Mr. Clark (Yellowhead):: Socialists wear sandals!


Mr. Speaker:: Order, please. The Hon. Member for Oshawa.


PURCHASE OF DOME PETROLEUM BY AMOCO CANADA
John Edward Broadbent: Mr. Speaker, my question is addressed to the Minister of Energy, Mines and Resources. Yesterday I noted in Question Period that the final agreement in the takeover of Dome Petroleum by Amoco could well be signed within 24 hours. As the Minister knows that did in fact take place yesterday afternoon. Is the Minister aware that there is a provision in the takeover agreement which effectively precludes Dome, or any of its shareholders, from considering any other offer in the takeover bid?


Marcel Masse: Mr. Speaker, on April 22 this year, Mr. Macdonald, Chairman of Dome, was very specific in his public statement that under an existing agreement between Amoco and Dome, the latter could not seek competitive bids but would have to consider any bids that would be submitted.
The fiduciary function of the Board of Directors and especially its Chairman, as the person responsible for Dome, is set forth very clearly in the Canada Business Corporations Act, Section 117 (1), first paragraph, which says that every director and officer, in discharging his duties, shall act honestly and in good faith with a view to the best interests of the corporation.
Personally, I am not familiar with the contents of the definitive agreement referred to by the Leader of the New Democratic Party. I believe it is to be submitted to Dome's creditors this afternoon and tomorrow. Subsequently, creditors and shareholders will make a decision, and if they approve the proposal, it will be reviewed by Investment Canada.
This kind of definitive agreement does not constitute the final and irrevocable sale of Dome. It does provide details of financial and other conditions, so that the parties concerned, and above all the owners, in other words, creditors and shareholders, can ascertain the exact value of the offer.
Oral Questions


REQUEST THAT GOVERNMENT INTERVENE
John Edward Broadbent: Mr. Speaker, part of the Minister's answer dealt with the actual question. Considering that our understanding is that the agreement that has been signed effectively precludes Dome and its shareholders from considering another offer, and since we know that Amoco has threatened to sue Imperial Oil as well as potential, would-be competitors with suits that could involve many millions of dollars, does the Government of Canada not think it is time that it intervened in this process and took steps to ensure that not only the interests of the shareholders and creditors are served in this multi-million dollar decision but that the interests of the people of Canada are served? Will the Minister intervene?


Some Hon. Members:: Hear, hear!


Marcel Masse: Mr. Speaker, the Leader of the New Democratic Party should at least acknowledge that we have acted in what we believe to be the best interests of the Canadian people. Dome, which was considered to be bankrupt last year, has now had three bids from three different corporations: Amoco, Esso and TransCanada PipeLines.
Everybody in Canada and anywhere else in the world who had any interest in this question knew that Dome was up for sale. That is why these bids were prepared. It is now up to parties other than Amoco to decide, advised therein by counsel, how they will proceed to make a bid.
However, I repeat what the Chairman of Dome said himself on April 22. Their agreement with Amoco provides that Dome will not seek any bids. On the other hand, Dome's Chairman and its board of directors have a legal responsibility, should a bid be made and they consider it to be in the interests of the shareholders and creditors, to advise the latter accordingly.


MINISTER'S POSITION
John Edward Broadbent: Mr. Speaker, the Government stood back while Amoco got away and finalized its takeover bid of Dome. It is now standing back while the creditors are meeting. As we sit in the House this afternoon the creditors could take a decision that could force Dome into bankruptcy. Having stood back from these two important processes, does the Government believe that the Government of Japan, or the Government of the vast majority of countries in western Europe, would stand back when millions of dollars of their taxpayers' money are at stake and allow a decision such as this to be reached by, and only by, the private sector? Does the Minister believe that for a minute?

May 13, 1987
Oral Questions


Some Hon. Members:: Hear, hear!


Marcel Masse: Mr. Speaker, I realize that the Leader of the New Democratic Party-which is first and foremost a socialist party-would probably rather have the entire private sector in Canada run by the State. That is not the kind of country we live in. There are laws in this country that protect relations within the private sector. And that is the kind of framework in which these transactions are taking place.


ROLE OF INVESTMENT CANADA
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. On the one hand the Minister refuses to differentiate between the fiduciary capacity of the management and directors of Dome with the shareholders of that company and the management and directors' agreement with Amoco Canada on the other. They are two different things.
Yesterday the head of Investment Canada said that he is concerned about the sale of Dome Petroleum, yet he does not have the mandate to be able to review bids other than the bid that comes before it, which would be that of Amoco Canada. Why does the Government not honour its own Canadianization policy and insist that other bids come before Investment Canada instead of selling out the country's natural resources?


Some Hon. Members:: Hear, hear!


Marcel Masse: Mr. Speaker, I would point out that, had it not been for the policies of the Liberal Party, Dome Petroleum might not be up for sale today.
What the Government wants to ensure, Mr. Speaker, is that the sale is made in keeping with Canadian laws and in the interest of Canadians, and the interest of Canadians includes that of Dome management. The law is there, everything is being done in accordance with it, Mr. Speaker, and we are concerned over the sale of Dome. Should a deal be concluded with a foreign controlled company, this company will have to submit its proposal to Investment Canada.
I can assure the House that we will take every step required to make sure that Canadian interests are better protected by this Government than they ever were under the previous administration.


RECORD OF INVESTMENT CANADA DECISIONS
Russell Gregoire MacLellan: Mr. Speaker, why doesn't the Minister of Energy admit that Investment Canada is no deterrent? It has not turned down
one application to date. All it amounts to is an attempt to legitimize the Government's sell-out of our natural resources.


An Hon. Member:: Absolutely.


Marcel Masse: Mr. Speaker, Investment Canada did not have to reject any bid because the offers were the subject of responsible negotiations and Investment Canada made sure that all final offers were in the interest of Canadians.


FORECAST OF ENERGY CRISIS IN I990S
Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. I should like to take up the same line of questioning.
Given that we are going to have an energy crisis in the 1990s, as all of the commentators seem to say, and given that Dome in fact will be selling out this vast pool of oil and gas to Amoco, a big American oil company, would he not agree that this in fact is setting the energy policy for the 1990s, and isn't it a fact that the state that is going to be running the energy policy of Canada in the 1990s, if this deal goes through, is the United States of America?


Marcel Masse: Mr. Speaker, this is not the first time our colleague has predicted a crisis in the energy sector. He has been doing just that for 10 years and, as far as I know, the international problem right now is that we have surpluses in that sector. Besides, the best way to make sure that Canada does not run out of petroleum products is to see to it that Dome will be in a position to exploit the oil patch over which it now holds drilling rights. That is what the Government intends to do, Mr. Speaker.


QUERY CONCERNING POSSIBLE IMPOSITION OF TERMS ON PURCHASE BY AMOCO CANADA
Ian Gardiner Waddell: The Minister should perhaps read the statement of his own Deputy Minister about the oil crisis that is coming up, a statement that was made in Paris yesterday.


An Hon. Member:: He doesn't read such things.


Ian Gardiner Waddell: Let me ask him a question with respect to the meeting of creditors, to be held tomorrow in Toronto.
The Minister has already said in a press conference that he was going to require some terms of Amoco. He said that a couple of weeks ago.
Should he not, therefore, then tell those creditors, and the banks, and the companies which are putting this deal together,
May 13, 1987

what those terms are going to be? Those terms could affect the deal.
So, I would ask the Minister to stand in his place in this House and tell us the terms he intends to put on Amoco in respect of this takeover.


Marcel Masse: Mr. Speaker, I would point out to my colleague that all countries attending yesterday's International Energy Agency meeting were in agreement on a basic principle, namely that energy supply will be guaranteed through a free market economy, a far cry from the proposal of the socialist party across the aisle. As to tomorrow's meeting, Canadian legislation provides that the Government can express its requirements through Investment Canada. Our general requirements have been made public. We are waiting for a proposal to make sure that once the final agreement is signed it is in the interest of Canadians, and the best interest of Canadians is to make sure that drilling operations continue on Dome lands, Mr. Speaker.


LOBBYISTS
Don Boudria: Mr. Speaker, my question is for the Prime Minister, and it concerns the registration of lobbyists.
On September 9, 1985, in an open letter to Members of Parliament and Senators, the Prime Minister wrote:
I have accordingly asked my colleague, the Minister of Consumer and
Corporate Affairs to prepare on an urgent basis, legislation to govern lobbying
activity.
On December 19, 1985, the Minister of Consumer and Corporate Affairs presented a White Paper on lobbying, instead of legislation.
On January 27, 1987, an all-Party committee presented a report recommending the registration of lobbyists.
My question, very simply, is: Where is the Bill?


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: Mr. Speaker, the timetable outlined by the Hon. Member should have also included the fact that in February the House passed a motion agreeing to the committee's report; and based on that motion, I am preparing legislation, which I shall introduce in the House soon.


Don Boudria: So much for the promise of the Prime Minister.
Oral Questions


SALARIES AND EXPENSES OF LOBBYISTS-REQUEST FOR INCLUSION IN TERMS OF PROPOSED LEGISLATION
Don Boudria: Mr. Speaker, my supplementary question is directed to the Prime Minister who had promised to introduce this Bill urgently. Is the Prime Minister now prepared to assure the House that the Bill, when available, will provide for disclosure of lobbyists' salaries and expenses, as well as registration of the Government officials who have rallied to their cause? Is he determined to include these specific provisions in the legislation?


Harvie Andre: Mr. Speaker, the report of the committee, which was unanimously endorsed-and I think the Hon. Member was on the committee-specifically recommended against including fees. Given that fact, I find it strange that this representation would now be made.
A Bill reflecting the deliberations of the committee will be brought forward.
1 hope that the Hon. Member has not changed his mind from the position he took while a member of that committee.


Don Boudria: You don't read Hansard too well, either.


OWNERSHIP OF OIL RESOURCES
Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, my question is also for the Minister of Energy, Mines and Resources.
As the Minister well knows, other oil-producing countries around the world have taken steps to ensure domestic control over that particular aspect of their respective energy sectors. One needs only to consider what has taken place in such countries as Norway, Great Britain, Venezuela, Mexico, as well as all of the countries of the Middle East, and even the United States of America.
Would the Minister indicate to the House and to the people of Canada a single oil-producing country that has not taken steps to ensure that the ownership and control of that critical resource remains in domestic hands? Could he name a single country that falls into that category?


Marcel Masse: Mr. Speaker, this is the most extraordinary question I have ever heard in the House. The energy reserves are on Canadian territory. They are developed under the jurisdiction of Canadian laws, whether in the area of transport, labour or even income tax. Mr. Speaker, all the countries of

May 13, 1987
Oral Questions
the world have organized their respective systems along that line. The royalties are paid to the provinces. They are not paid to the state of California or the state of Louisiana. The labour force operates under Canadian legislation generally and, in particular, under Alberta and Saskatchewan legislation. Mr. Speaker, I can hardly believe that there is a Member of this House who does not know that the energy industry is first and foremost under the control of Canada with the support of the various provinces, which are responsible in this country for natural resources management.


PURCHASE OF DOME PETROLEUM BY AMOCO CANADA- REQUEST FOR COMMITTEE REFERRAL
Nelson Andrew Riis: Mr. Speaker, that is the most extraordinary response I have ever heard in this House. You know full well that Amoco shifted $600 million out of this country in the first few months of this year.


Marcel Masse: You should at least know that. Ask a question about what you do not know, not what you should know.


Nelson Andrew Riis: My supplementary question for the Minister is as follows: The Minister will know that the President of Investment Canada indicated yesterday in committee his personal concern regarding this takeover. He said he was very, very concerned about the implications for Canada.
Considering the importance of this takeover bid, and to ensure fair treatment in the bidding process, would the Minister give consideration to referring this matter to a special committee, to ensure that the three bids do receive consideration and that, whatever the final decision, that decision is in the best interests of Canada and Canadians?


An Hon. Member:: It might even help your Party.


Marcel Masse: Again, Mr. Speaker, it is clear that the Government generally, including our administrators, is determined to make sure through Investment Canada that the proposals which are accepted in the end are in Canada's best interests. I wish to indicate to the House that since our Government came to power in 1984, the proportion of Canadian property has increased from 42.5 percent to 47 percent, and that of Canadian control from 40.5 percent to 48.4 percent. We should be commended for that, Mr. Speaker.


John Edward Broadbent: It goes in reverse, with Dome.


An Hon. Member:: You are inconsistent.


THE DISABLED AND THE HANDICAPPED
Mr. Roland de Corneille (Eglinton-Lawrence):: Mr. Speaker, my question is for the Minister of Employment and Immigration.
The Sub-committee on the Disabled and the Handicapped released recently the Challenge Report, which shows that the Government's employment record for disabled persons is only 2 per cent, compared to 6 per cent for the private sector.
When is the Minister going to take action to follow the guidelines of equality? His own Department's record is one of the worst in the Government, with a one-fiftieth of 1 per cent employment record for the disabled.


Hon. Benoit Bouchard (Minister of Employment and Immigration):: Mr. Speaker, the Government is concerned over the issue of employment for the handicapped, and one of the objectives of the Employment Equity Act was to give various categories or workers ready access to the labour market. I would suggest that the act is being implemented to meet the objectives I have just mentioned.


DEPARTMENT'S RECORD
Roland de Corneille: Mr. Speaker, I am not talking about accessibility, I am talking about the employment rate. When we realize that one in every 17 people in Canada is disabled or handicapped and the Minister is only employing one in every 5,000 in his Department, what kind of guidelines and program for employment is his Department, which is supposed to be the Department of Employment, giving as an example to the rest of the country?


Benoît Bouchard: When we came into office three years ago, Mr. Speaker, federal departments had practically no handicapped employees on their payroll.
When I was Secretary of State we invested $16 million to promote-and this going on now-access not only to employment but also to all economic and other sectors where the handicapped should be represented. The Secretary of State is implementing and will implement other policies.
As to Employment and Immigration Canada, with a staff of 25,000 it is obvious that it is much more complicated to set up facilities accessible to the handicapped.
But I agree with my colleague that even though we are now making every effort in Canada Manpower Centres there is still some way to go. Of course this will take more than three years, given the situation we were faced with when we took over.
May 13, 1987


NATIONAL PARKS
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is for the Prime Minister. I would first like to thank him for his personal determination to preserve South Moresby.


Some Hon. Members:: Hear, hear!


James Ross Fulton: Over two months ago the Prime Minister met with the Premier of British Columbia, sought and found his support for the designation of South Moresby as a national park reserve as demonstrated in the March 9 B.C. Speech from the Throne.
Would the Prime Minister advise this House whether he has been able to resecure the co-operation of British Columbia on this in light of the bad faith demonstrated earlier this week by British Columbia in its proposal to log until 1997 within the proposed park boundaries?


Hon. Tom McMillan (Minister of the Environment):: Mr. Speaker, negotiations are continuing with the Province of B.C. on this very important national and, indeed, international question. I was talking to my opposite number, Bruce Stra-chan, who is responsible for the park system in British Columbia, as recently as a few moments before Question Period. I am awaiting a new proposal from the B.C. Government which, I understand, is being discussed by the B.C. Cabinet even as I speak. It would be premature for me to comment further on this matter except to say that both Governments are negotiating in good faith.
For our part, the entire Cabinet, in fact the entire caucus, including the B.C. caucus, supports the establishment of a national park in what is arguably the most important wilderness treasure in the entire Dominion of Canada.


Mr. Benjamin:: It is not arguable.


James Ross Fulton: I would like to thank the Minister of the Environment publicly. I know he has always negotiated in good faith with the Government of B.C.


REQUEST THAT PRIME MINISTER SEEK END TO LOGGING OPERATIONS
James Ross Fulton: Mr. Speaker, my supplementary question is for the Prime Minister, who I think is the only person who can ensure at this point in time that the Premier of British Columbia's word to the Prime Minister is lived up to, namely, that the area proposed by the Government of Canada is the only part of South Moresby now left that could ensure a national park reserve.
Will the Prime Minister call the Premier of British Columbia today and ask him to live up to his word and not allow any further logging? Will the Prime Minister himself call the Premier of British Columbia and ask for an end to the
Oral Questions
logging, because that is the first step to securing this area as a national park reserve?


Thomas Michael McMillan: Mr. Speaker, because this issue is a government-wide priority, and because of the importance which the Prime Minister himself attaches to the question, in addition to the negotiations that I myself am conducting with my opposite number, the Prime Minister has raised the issue with the Premier, as did the Deputy Prime Minister yesterday.


UNEMPLOYMENT INSURANCE
Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration and it concerns the reimbursement of Unemployment Insurance cheques for 35,000 early retirees in Canada who were unfairly cut off by the Conservative Government in 1985. So that these elderly workers can receive the cheques to which they are entitled, would the Minister, in order to speed up the process, be willing to ask the Unemployment Insurance Commission to start the reimbursement process immediately by advising these 35,000 people to report to the Unemployment Insurance office and start completing their benefit reimbursement card?


Benoît Bouchard: Mr. Speaker, the condition we had set for reimbursing claimants before January 1986 was that they had to fill out the benefit application form. As soon as the form is completed by all persons eligible for the reimbursement, and as soon as the legislation is adopted by the House, the process will start automatically, since the benefit applications are already on record at the Canada Employment Centres.


REQUEST THAT BILL BE DIVIDED
Jean-Claude Malépart: Mr. Speaker, for 18 months these people have been fighting and waiting for their reimbursement, in many cases so they can pay back the money they had to borrow. Will the Minister be willing to let these people receive the unemployment insurance cheques to which they are entitled within a month at the latest, and have the House immediately adopt that part of the Bill that allows for this reimbursement? And if not, why is the Minister holding these 35,000 people hostage to discriminate against other elderly workers?


Benoît Bouchard: Mr. Speaker, how typical of the speeches of the Hon. Member for Montreal-Sainte-Marie, who is always trying to scare people for no reason at all. The Hon. Member

May 13, 1987
Oral Questions
will soon have a chance to vote for the whole Bill, not half and not one quarter, and that is when .. . You have been trying to scare people for a year now. Vote for the Bill and we will take care of reimbursing these people.


PHARMACEUTICAL INDUSTRY
William Lesick: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs concerning Bill C-22. As a pharmacist I believe in the necessity of enhanced patent protection to further research and development in Canada. Earlier we heard the Right Hon. Leader of the Opposition tell us about the supposed exodus of researchers and scientists from Canada with the accompanying loss of millions and millions of dollars.
Could the Minister please tell this House what is the impact of the continued delay of passage of Bill C-22 on research and development in Canada?


Harvie Andre: Mr. Speaker, there is no question but that each day of delay in the passage of and Royal Assent to Bill C-22 is a further delay for those scientists who are waiting for the $800 million of additional research that has already been committed. There are grants to universities included in the amount which are all conditional on the Bill's passage. Each day of delay means a further delay for Canadian scientists who want to get to work in this very important area.


CANADIAN TRANSPORT COMMISSION
Leslie Gordon Benjamin: Mr. Speaker, I have a question for the Minister of Transport. The Saskatchewan Wheat Pool has expressed, to use its words, "disappointment", "shock", "intolerable", concerning the CTC ruling to allow variable grain rates between certain grain companies and the CNR in certain selected locations in Saskatchewan, which flies in the face of a High-Court decision on western grain movement. The only shipper is the Canadian Wheat Board, not the grain companies and not even the farmers.
Since the Sask Pool which represents 80 or more per cent of the farmers in that province and the National Farmers Union have appealed to the Cabinet to overturn that CTC decision, is it the intention to entertain that appeal and when will they get a decision?


Hon. John C. Crosbie (Minister of Transport):: Mr. Speaker, this is an issue of great interest to grain farmers and, of course, there is divided opinion on it as there is on many issues both in western Canada and elsewhere. A number of groups appeared before the CTC supporting the variable innovation, and a number of groups, including the group which the Hon. Member mentioned, opposed it. They have appealed to the Governor in Council. That is now being processed and we will have to make a decision on it. I cannot say very well what the decision will be until we have considered it.
Hearings were held in the west and the experienced persons who make up the CTC have given their views on the matter. Of course they have instituted certain safeguards, including the fact that this is for a trial period of one year.


REQUEST THAT MINISTER OVERTURN DECISION
Leslie Gordon Benjamin: Mr. Speaker, the CTC chose to ignore the evidence. As the Minister is aware, variable rates mean that farmers who live closer to Thunder Bay and Vancouver will pay higher freight rates than those who live farther away because they happen to live at or near a place where there are variable freight rates. Is it the intention of the Government to allow the railways and a few private grain companies to play God, picking and choosing which farmers will pay less and which will pay more? Will he overturn the CTC decision?


John Carnell Crosbie: Mr. Speaker, the Canadian Transport Commission is a quasijudicial body. To have a Member play-acting in the House saying that they ignored the evidence is beyond all comprehension, and is certainly improper, to put it at the very minimum.


John Edward Broadbent: Improper?


John Carnell Crosbie: The hon. gentleman laughs. That is why he will not be first for very long.


CONVERSION OF SURPLUS GRAIN TO ETHANOL
Gordon Edward Taylor: Mr. Speaker, my question is directed to the Hon. Minister of Energy, the best Minister of Energy Canada has ever had.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Gordon Edward Taylor: Given that the use of grain-derived ethanol as an octane enhancing additive for gasoline would use hundreds of ton of wheat and corn, and given that early adoption of U.S. standards in gasoline, plus a reduction in sales tax of two cents
May 13, 1987

per litre on gasoline containing a minimum of 3 per cent ethanol and 5 per cent methanol, would use up large surpluses of wheat and corn and would provide benefits for all of Canada, will the Hon. Minister provide the leadership and action required so all of these good things can happen in a free enterprise way?
[ Translation]


Marcel Masse: Mr. Speaker, I am grateful to my colleague. Indeed truth sounds better from that side than it does from the other side. I can assure my colleague that the Government is aware of the great interest in the use of ethanol and all mixtures like methanol as fuel. This is what my department had in mind recently when it carried out a study on oxygenated fuel in Canada. Being a Government which likes to consult with all interested groups we have sent this analysis to all interested parties to find out exactly what they think of this Government approach. Hopefully their comments will reach me by May 31, and department officials will prepare a summary of their views before making recommendations to the Minister this summer.


ENVIRONMENTAL AFFAIRS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is directed to the Minister of the Environment. Last week we learned from two University of Toronto researchers that as much as 175 tonnes per year of toxic chemicals are released into the air from the mist at Niagara Falls. How can the Minister's Department be of assistance to Canadians who live in the Niagara Peninsula, particularly in relation to their health and to the tourist industry, considering that this year the Department of the Environment has cut its strength by 106 employees, from scientists to technicians and from field workers to administrators? In what way can the Department be of assistance?


Thomas Michael McMillan: Mr. Speaker, this is the kind of question the Hon. Member has raised with me in committee and it is no more valid merely by being repeated in the House of Commons. The fact is that the budget of Environment Canada is now higher than it has ever been in the history of this country except for one fiscal year.


Mr. Caccia:: That does not negate the fact that Environment Canada has lost 106 valuable people.
Tabling of Documents PROPOSED TOXICOLOGY CENTRE


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in light of this rather disturbing development which threatens the health of Canadians who live in a peninsula that is international in scope, will the Government now reconsider its decision to cancel the Toronto-Guelph toxicology centre which was cancelled in November, 1984, and go ahead with the construction of that very necessary establishment?


Thomas Michael McMillan: Mr. Speaker, the premise of the question is that the Government of Canada is neglecting toxicology. The facts are contrary to that premise.
At present 368 person-years are being devoted by the Government of Canada to this important field. We spend $20.4 million every year on toxicology in-house. To boot, we contract out an additional $5.6 million, not to mention the $15 million we cost-share with the provinces. This is one area in which I would have thought the Hon. Member for Davenport would avoid asking questions because the record is good.


Mr. Speaker:: I must advise Hon. Members that the time for Question Period has ended. I regret that there are some Hon. Members to whom we could not get today and I hope we will be able to get to them tomorrow.



ROUTINE PROCEEDINGS


Hon. Barbara McDougall (Minister of State (Privatization)):: Mr. Speaker, pursuant to Standing Order 67, I have the honour to table in both official languages the 1986 annual report of the Canada Development Investment Corporation.


TARIFF BOARD
Hon. Tom Hockin (Minister of State (Finance)):: Mr. Speaker, pursuant to the provisions of Standing Order 67(2), I have the honour to lay upon the table copies in both official languages of a report to the Tariff Board on the Canadian natural sweetener industry.

May 13, 1987
Committee Reports


PETITIONS
Mr. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to the following petitions: 332-1830 to 332-1840 inclusive, 332-1872 to 332-1875 inclusive, 332-1880 to 332-1895 inclusive, 3321901 to 332-1913 inclusive, 332-1922, 332-1927 to 332-1930 inclusive, 332-1936 to 332-1945 inclusive, 332-1952 to 3321959 inclusive, 332-1961 to 332-1963 inclusive, 332-1966 and 332-1968 to 332-1975 inclusive.



SECURITY INTELLIGENCE REVIEW COMMITTEE


Philip Derek Lewis: Mr. Speaker, yesterday the Solicitor General (Mr. Kelleher) undertook to obtain correspondence between the Minister and the Security Intelligence Review Committee and I am pleased at this time to table in both official languages that correspondence.



ENERGY, MINES AND RESOURCES PRESENTATION OF SIXTH REPORT OF STANDING COMMITTEE

["Mr. Speaker, I have the duty and pleasure to table several petitions with over 100 signatures dealing with Motion No. 37 presently before the House.\nThe petitioners indicate that because of the killing of thousands of unborn Canadian children every year for reasons of convenience, they call upon Parliament to approve this Private Members' motion which asks the Government to protect the right to life for the unborn in the Canadian Charter of Rights.\nThe petitioners come from several communities in The Battlefords-Meadow Lake constituency, and I am very pleased to note that the majority of signatures are from John Paul II Collegiate in North Battleford."]
Mrs. Barbara Sparrow (Calgary South):: Mr. Speaker, I have the honour to present the Sixth Report of the Standing Committee on Energy, Mines and Resources in both official languages.



Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, I have a petition from residents of several different areas in my riding. They are petitioning the House of Commons and the Government of Canada and note that the application for variable rates made by Canadian National Railways and six grain companies will lower freight rates which will adversely affect the quality and stability of rural life in Saskatchewan since they will only apply to a few places.
The petitioners say that the expense of hauling grain will fall back on the producer. Longer hauls will increase trucking and fuel costs and increase the upkeep on municipal roads, and will eventually allow the disintegration of the railway branch line network. They humbly call upon Parliament to reject the proposal to apply variable freight rates to 47 delivery points in western Canada.


James Douglas Manly: Mr. Speaker, I have a duly certified petition concerning the report of the commission of inquiry into unemployment insurance, known as the Forget Commission.
The petitioners point out that the Forget proposal to annualize the UI program will reduce benefits to the unemployed by 31 per cent over all, forcing over 62 per cent of the unemployed to live on less than $140 a week.
Therefore the undersigned call upon Parliament to reject any legislation designed to eliminate federal contributions to the unemployment program or reduce UI benefits for unemployed Canadians.


John Kenneth Gormley: Mr. Speaker, I have the duty and pleasure to table several petitions with over 100 signatures dealing with Motion No. 37 presently before the House.
The petitioners indicate that because of the killing of thousands of unborn Canadian children every year for reasons of convenience, they call upon Parliament to approve this Private Members' motion which asks the Government to protect the right to life for the unborn in the Canadian Charter of Rights.
The petitioners come from several communities in The Battlefords-Meadow Lake constituency, and I am very pleased to note that the majority of signatures are from John Paul II Collegiate in North Battleford.



MUTUAL LEGAL ASSISTANCE IN CRIMINAL MATTERS ACT


Hon. Ray Hnatyshyn (Minister of Justice and Attorney General of Canada) moved: for leave to introduce Bill C-58, an Act to provide for the implementation of treaties for mutual legal assistance in criminal matters, to amend the Criminal Code, the Crown Liability Act, and the Immigration Act, 1976.
May 13, 1987


Mr. Speaker:: Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Philip Derek Lewis: Mr. Speaker, question No. 112 will be answered today.


Mr. Howie: 1.	For the fiscal year ending March 31, 1987, did persons in federal
penitentiaries avail themselves of university programs and, if so (a) how many
(b) in what penitentiaries (c) what was the total cost of this program?
2.	In what manner and to what extent were appropriate program objectives
achieved as a result of the program?


Hon. James Kelleher (Solicitor General of Canada):: 1. Yes.
(a)	For the fiscal year ending March 31, 1987, average fulltime equivalent students; 247. Inmates in all institutions could also avail themselves of university correspondence courses. As of March 31, 1987, there were 369 registrations in university correspondence courses.
(b)	In the fiscal year ending March 31, 1987 university programs were offered at Archambault and Cowansville institutions in Quebec; Prison for Women, Kingston Penitentiary, Collins Bay and Millhaven institutions in Ontario; Stony Mountain institution in Manitoba; Saskatchewan Penitentiary in Saskatchewan; Drumheller and Edmonton institutions in Alberta; and Kent, Matsqui, William Head and Mountain institutions in British Columbia.
(c)	The total cost for university programs in 86/87 was $904,000.
2. Educational programs are intended to provide opportunities for academic advancement as well as personal development through goal setting and achievement.
University programs provide an improved ability to find and hold a job thus potentially reducing recidivism. Taking such programs also improves self-image and increases the ability of the inmate to participate in further educational programs. The pursuit and achievement of a university degree has been found to be a positive contributing factor to the rehabilitation of the inmate students.
Question of Privilege-Mr. Masse


Philip Derek Lewis: Mr. Speaker, if Question No. 95 could be made an Order for Return, the return would be tabled immediately.


Mr. Speaker:: The questions mentioned by the Parliamentary Secretary has been answered. Is it the pleasure of the House that Question No. 95 be made an Order for Return?


Some Hon. Members:: Agreed.


Mr. Fulton: For the period September 4, 1984 to March 4, 1987, did Members of Parliament travel outside of Canada at the expense, in whole or in part, of any department of the Government of Canada and, if so, for each Member and each trip what was the (a) sponsoring department (b) purpose (c) destination (d) cost?
Return tabled.


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


Mr. Speaker:: Shall all Notices of Motions stand?


Some Hon. Members:: Agreed.


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


Mr. Speaker:: Shall the remaining questions stand?


Some Hon. Members:: Agreed.


PRIVILEGE
Marcel Masse: Mr. Speaker, I would like to raise a question of privilege with respect to a statement made by the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) during question period yesterday, while I was away from the House.

May 13, 1987
Question of Privilege-Mr. Masse
The Eton. Member said that on May 5 this year, I deliberately misled the Elouse when I said that the agreement between Amoco Canada and Dome Petroleum allowed for other bids to be made.
Yesterday, he said that the agreement prohibits or would prohibit or prohibited other companies from making bids, under threat of a suit.
Mr. Speaker, perhaps I may refer you to the statement made by Dome Chairman Mr. Macdonald, who explained at a press conference in Calgary on April 22 this year that under the agreement with Amoco, Dome could not seek other bids but would nevertheless have to consider any bids it would receive.
In a letter to Imperial Oil dated April 24, 1987, the president of Amoco Canada, Don Stacy, recalled details of the memorandum of agreement concluded by Dome and Amoco, to warn the company not to make a bid. That was what the letter contained. The complete text of the memorandum of agreement was subsequently submitted to the U.S. Securities and Exchange Commission on May 4, 1987.
It will be up to counsel for the parties interested in making bids to interpret the details of this memorandum of agreement. Any conflict between Amoco, Dome and other parties regarding the interpretation of the conditions of the agreement will have to be settled by those parties and not by the Government of Canada.
As I pointed out in a letter I sent last week to the Leader of the New Democratic Party, Mr. Broadbent, according to the legal advice I received from the Department of Justice, I may not intervene in this basically private matter, which should be resolved by the parties themselves.
1 maintain what I said in my answer to the Hon. Member on May 5 and subsequent days. The Government of Canada will examine all bids to purchase Dome Petroleum which are submitted for review under the Investment Canada Act.
Mr. Speaker, that is how we will ensure that the transaction, once it has been accepted by Dome, will provide a net benefit to Canada.


Russell Gregoire MacLellan: Mr. Speaker, on May 5 I did not say the Minister was intentionally misleading the House. I said he was misleading the House. As you will remember, Sir, you rose to state that you hoped I was not implying that he was intentionally misleading the House and I said that I would not do that. That seemed to clarify the issue at that time.
With regard to the Minister's statement, I said "misleading" because in answer to my question the Hon. Minister said:
I can only refer the Hon. Member to the statements made by the President of
Dome Petroleum where the answer is yes.
I had asked, "Does the agreement between Amoco Canada and Dome Petroleum allow for other bids to be made?", and the Minister said yes.
In my opinion and that of others the memorandum of agreement which was signed by the Chairman of Dome Petroleum on April 17 and the President of Amoco Canada on April 18 states that Dome Petroleum will not enter into any agreements with any other bidders, which indicates to me, as do other things in the agreement, that Dome Petroleum cannot entertain any other bids.
Regardless of what the fiduciary responsibilities of the management and directors of Dome are to the shareholders, that is not stated in the agreement. We must look at what is stated in the agreement, which is that Dome Petroleum cannot enter into an agreement with any other party.
My feeling was and still is that the Minister's statement that Dome could entertain other bids was a misleading statement. I still stand by that. I cannot say that the Minister intentionally misled because I do not know whether the Minister actually read that memorandum of agreement. He should have had access to it, but I cannot say whether he read it and I thereby cannot say he intentionally misled. However, I do think this is an important question and I think it is misleading. I certainly am not attributing any clandestine motives to the Hon. Minister.


Hon. Herb Gray (Windsor West):: Mr. Speaker, I want to begin by saying that the Hon. Minister of Energy, Mines and Resources (Mr. Masse) was completely in error when he said that the Member for Cape Breton-The Sydneys (Mr. MacLellan) claimed that the Minister had deliberately misled the House with respect to the agreement in question. At no time, either today or on May 5, did the Hon. Member say anything of the kind. In fact, you were good enough to intervene on May 5 to confirm that it was not the Member's intention to allege that the Minister was deliberately misleading the House.
Second, if the Hon. Minister had a question of privilege about the May 5 question, surely the time to have raised it was on May 5, and the Hon. Minister did not do that.


Marcel Masse: He said that yesterday.


Herbert Eser (Herb) Gray: The Hon. Minister says that he is complaining about what the Member for Cape Breton-The Sydneys said yesterday. I repeat that nowhere in Hansard is it recorded that the Hon. Member claimed that the Hon. Minister deliberately misled the House.
In any event, if I am not mistaken, the Minister's complaint is not the basis for a question of privilege. If he has a complaint, it may be the basis for a point of order. Even then, it is a valid point of order only if, as I have already said, the Hon. Member for Cape Breton-The Sydneys stated that the Hon. Minister deliberately misled the House which, I repeat, he did not say.
May 13, 1987

Also, the Hon. Minister's point is defective because he did not say that if you found a prima facie case of privilege he would move a motion referring the matter to the Standing Committee on Elections, Privileges and Procedure. He has not stated that intention and his point is therefore defective.
Finally, 1 respectfully refer you to page 12 of Beauchesne's, citation 19, which says:
A dispute arising between two Members, as to allegations of facts, does not
fulfil the conditions of parliamentary privilege.
The Hon. Minister has raised a grievance about what the Hon. Member said. I respectfully submit that it cannot be a point of order for the reasons I have stated, and certainly it cannot be a valid question of privilege.
Mir. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council): Mr. Speaker, I would like to make two points, if I may, on this question of privilege. Both of them are directly related to the comments of the House Leader of the Official Opposition.
First, if time were to be of the essence in every question of privilege, as the Member alleges, there would be very few questions of privilege debated. I think the Speaker has been wise in allowing questions of privilege to be aired as a safety valve, as a method of allowing Members to expound upon their points of view. I think we should continue to ignore the time factor in favour of allowing questions of privilege to be brought forward as a safety valve.
Second, I noted with interest my hon. friend's argument that a question of privilege must be concluded with a motion. I welcome his joining me in this argument. He has argued the other side of the case on previous occasions, I believe. I have made the argument time and again that a question of privilege must be concluded with a motion. If not the Member himself, other members of his Party have disagreed with me and I welcome his joining with me on this technical point. The Hon. Minister has made his case. It may indeed be a matter of debate, but I think we have aired it.


Herbert Eser (Herb) Gray: You have erred, that's right.


Philip Derek Lewis: As my colleague has pointed out, no one would suggest for a minute that the Hon. Minister would deliberately mislead the House. I conclude my argument on that point and leave it to you, Mr. Speaker, to decide on the question of privilege.


Ian Gardiner Waddell: Mr. Speaker, as a somewhat dispassionate observer, being neither a member of the Party, a member of which, it is being suggested, has suggested that another person has misled the House, or a member of the Party of the Minister who is making the point, it seems to me that the problem is that there is no point really. In order to mislead the House you must have some leadership in the House. To "mislead" you must have some "lead" and then you mislead.
Question of Privilege-Mrs. Sparrow
The problem is that we are not getting any statements at all from the Minister with respect to this deal. He should stand up and make a statement in the House and not smuggle it in on a question of privilege.


Mr. Speaker:: The Member for Vancouver-Kingsway (Mr. Waddell) has evidenced again his great genius at managing to find ways to make points on behalf of the people he represents. Hon. Members will, of course, appreciate the points which he has made.
I will check the "blues" carefully. I want to thank the Minister and Hon. Members for their representations. I will give them careful consideration.



Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I rise today on a question of privilege with regard to confidential information from an in camera committee hearing being made public. I respectfully refer to Erskine May, Nineteenth Edition, page 146, Chapter X "Breaches of Privilege and Contempts", which reads as follows:
The publication or disclosure of proceedings of committees conducted with closed doors or of draft reports of committees before they have been reported to the House will, however, constitute a breach of privilege or a contempt.
On Tuesday, May 5, 1987, your Standing Committee on Energy, Mines and Resources met in camera to discuss a motion previously adopted. A great deal of debate occurred, and at the termination of this debate a motion was adopted to rescind the previous motion. Approximately 30 to 40 minutes following this meeting the press phoned my office, recited the discussions, the motion, and the exact way the committee voted and then, of course, asked for my comments in reply, to which I said everything was confidential.
On May 6, 1987, the following day, a Canadian Press article appeared in The Calgary Sun which described the committee proceedings on the motion as follows:
At yesterday's review, two Conservatives voted to reverse that decision, a committee member told the Canadian Press. Another Tory and a Liberal MP voted to stick to the original decision. Conservative chairman, Barbara Sparrow, who urged the committee to look at last week's decision again, cast the deciding vote.
Articles also appeared in The Ottawa Citizen and The Edmonton Journal. I have those articles if you wish to see them.
My duties as a Member of Parliament, a member of a Standing Committee of the House and also as a chairman of that Committee have been degraded, curtailed and indeed somewhat inhibited by the leak of confidential information.

May 13, 1987
Question of Privilege-Mrs. Sparrow
The proceedings of my Committee and, by extension, of all other Committees of the House have been jeopardized by this divulgation of in camera deliberations.
If you find there is a prima facie case of privilege, I will be prepared to move that the matter be referred to the Standing Committee on Elections, Privileges and Procedure.


Mr. Paul Gagnon (Calgary North):: Mr. Speaker, 1 was going to address the last point, but I will address this one inasmuch as I was a member of the Committee. I can vouch for the facts as expressed by my colleague, the Member for Calgary South (Mrs. Sparrow).
I also want to point out to the Speaker that on May 5, at page 5777 of Hansard, the Member for Kamloops-Shuswap (Mr. Riis) raised a similar point of order on this very matter, bringing to the attention of the House deliberations that had taken place in camera. I want to emphasize to the Speaker that I find it ironic that the House Leader of the New Democratic Party raised his point on May 5 when the NDP had no member present at either of the votes.


Russell Gregoire MacLellan: Mr. Speaker, as a member of that Committee I do not disagree with what has been stated by the Member for Calgary South (Mrs. Sparrow) and the Member for Calgary North (Mr. Gagnon). However, I want to add some further information.
First, we are talking about two meetings. One meeting, at which certain questions were asked about inviting witnesses, occurred the week before. That was the sum and substance of the in camera meeting the week before and the in camera meeting of May 5.
These meetings were dealing with questions of Steering Committee and a matter of inviting witnesses. Those were the sole topics of conversation of those two meetings.
Shortly after the first meeting it became public as to who would be invited to appear as witnesses. Not only was information leaked from the second meeting, but obviously it became public from the first meeting.
My other point is that before the second meeting a reporter came to me and said, "I understand the witnesses will not be coming, that something else has been arranged". In the case of the second meeting, the press not only knew what might have been said at the first meeting and subsequently knew what was said at the second meeting, they knew what was going to be said at the second meeting before it took place. I believe that this is an embarrassment.
I also have two major concerns about this issue. The first is that the matters discussed were of a steering committee nature. The information from the first meeting about the witnesses to be invited having been made public, there would be a problem if we were just concerned that it became public that the witnesses would not be invited as a result of the second meeting? After all, how will witnesses know not to appear if they are not told not to appear? It is a difficult question.
My third point does not relate to what has been said but I think it is important. If there are to be Steering Committees, then that is what should take place. If there is to be information discussed in Steering Committees, that is where it should take place rather than in in camera meetings.
Holding in camera meetings any time one wishes to keep information private will only exacerbate the leakage of information. We have never experienced this type of situation before. It is unfortunate, but information that pertains to the Steering Committee should be discussed only in the Steering Committee rather than an in camera meeting.


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, the Standing Committee on Energy, Mines and Resources does not have a Steering Committee. There are only seven members present and when we began one and a half years ago it was moved and voted upon by all members present that the full committee would be the Steering Committee.
In addition, I want to refresh the memory of the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan). The meeting that was held two weeks ago was not just in regard to inviting witnesses. We discussed the full agenda in regard to our crude oil reserves and security of supply study.
If you require more information in regard to the two meetings that took place I would be glad to discuss it with you, Mr. Speaker. Obviously there is a leak of confidential information. We rarely hold in camera meetings, having had only three or four.


Herbert Eser (Herb) Gray: Mr. Speaker, the Hon. Member has based her question of privilege on a precedent which she describes as something from Erskine May. I must admit that I may not have heard everything she said, but I presume she was talking about the resolution of the House of Commons of the United Kingdom in 1937 that, in effect, says that documents of the kind she mentions if prematurely disclosed could be a basis for a question of privilege.
However, I want to refer you to page 203 of Beauchesne's Fifth Edition, Citation 647(2) which cites a Speaker's ruling reported in the House of Commons Journals for June 23, 1977 at page 1209. The citation states:
In Canada, when a question of privilege was raised concerning the publication of a committee report before it was presented to the House, the Speaker ruled that the matter could not be resolved as in the British practice because the motion appeared to attack the press for publishing the confidential document but did not attack Members of the House for their attitude in respect of their own confidential documents, and in missing this point, it missed something most important with respect to the privileges of the House.
I do not have the complete ruling to which this edition of Beauchesne refers. There may well be other pertinent paragraphs in it that you may want to consider. However, it struck me, in listening to the Hon. Member, that her motion simply asked the House to refer this matter to the appropriate Committee. It did not contain the essential element apparently required, according to this citation, and that is that there be
May 13, 1987

some attack on Members of the Elouse for their role in this particular matter.
While I understand that the Hon. Member is concerned about this particular issue, I ask the Chair to take into account whether the nature of the Hon. Member's point of privilege, and the motion she says she will present if a prima facie case of privilege were to be found, meets the requirements for a prima facie case of privilege and a proper motion founded thereon, or whether, as I said earlier today in the House of Commons, we are not again seeing a matter of dispute as to facts or of a sense of grievance which may well be in the mind of the Hon. Member a well founded one, but not a bona fide question of privilege?


Philip Derek Lewis: Mr. Speaker, this is the second time in a couple of weeks that the deliberations of an in camera meeting have been discussed as point of privilege on the floor.
With specific reference to the point raised by House Leader of the Official Opposition, and his quoting of Beauchesne's, Section 647(2), it seems to me that on a reading of the substance of that citation, that refers to a privilege of the House being breached because of publication of the deliberations of a committee before they got to the floor of the House. What my colleague, the Hon. Member for Calgary South (Mrs. Sparrow) is specifically complaining about is the disclosure of what took place, the deliberations, the proceedings, at an in camera meeting.
I go back to what I said on that earlier occasion, committees would not be able to function without the ability to hold in camera meetings, to have the give and take which one requires from time to time in this business-in any business, at any level, in fact-away from, and I do not even have to read Beauchesne, the glare of publicity. I think that is what my hon. friend is driving at when she says her privileges as a member of that committee have been breached, and her ability to do her job as a member and chairman of that committee is being derogated by the fact that on this occasion the deliberations of that committee, the proceedings-not the committee report, per se-were disclosed. I respectfully suggest that the final report would be eventually tabled in the House, in any event.
I do not have an awful lot of trouble as to whether or not the media might receive it a half hour before the House. However, I have a great deal of difficulty with the problem the Hon. Member had, and the problem brought up two weeks ago, when Members go behind closed doors to discuss and deliberate, and then find that what was discussed in camera becomes the property of the media and the public. I do not think this
Question of Privilege-Mrs. Sparrow
helps the House or Hon. Members. I think the Hon. Member made an excellent point as to her question of privilege.


Herbert Eser (Herb) Gray: Mr. Speaker, I thank my hon. friend for clarifying the matter of concern. However, I think it is still sound for me to ask the Chair to consider whether the point I raised is not equally relevant to the fact situation, which is the basis for the complaint of the Hon. Member for Calgary South (Mrs. Sparrow).
Are we faced with a complaint which is so vague as to whom it is directed, particularly with respect to the role of Members of Parliament, that the complaint is not a sound basis for a motion to be voted on by this House to refer the matter to the Committee on Elections, Privileges and Procedure? Such a motion, and the investigation by a committee which would flow therefrom, is a serious matter, and one which takes place rarely.
While I understand the Hon. Member's concern, especially now that it has been clarified for me by the Parliamentary Secretary to the Government House Leader, I wonder if it is still not the case, and I would argue that it is, that any motion the Hon. Member for Calgary South would move, if the Speaker found a prima facie case of privilege, would be of such a vague nature it would not be a proper basis for a vote of this House with a resulting inquiry by the Standing Committee on Elections, Privileges and Procedure?


Mr. Speaker:: The Hon. Member for Cape Breton-The Sydneys on the same point?


Russell Gregoire MacLellan: Mr. Speaker, there was just one thing which concerned me and I think it has been made clear by the House Leader of our Party, so I am prepared to let the matter stand.


Mr. Speaker:: 1 thank Hon. Members for their interventions, all of which are helpful to the Chair. I should advise the House that a week or so ago an application, not exactly the same as this, but similar, was brought before the House by the Hon. Member for Selkirk-Interlake (Mr. Holtmann) with respect to a statement made in this House relating to an in camera meeting by the Hon. Member for Kenora-Rainy River (Mr. Parry). I think I should advise Hon. Members that that matter has given the Chair a great deal of difficulty. However, the Chair will be ruling on that matter tomorrow.
With respect to the matter I have heard today, I will be giving it very careful consideration. I can indicate to Hon. Members that there have been enough of these cases now that the Chair feels duty bound to Hon. Members to take the matter very seriously, indeed, and 1 will be returning to the Chamber tomorrow with a ruling.

May 13, 1987
Softwood Lumber Products Export Charge Act



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, as reported (with an amendment) from a legislative committee.
Mr. Deputy Speaker:: As Hon. Members are aware, there are 12 motions on the Notice Paper in amendment to Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products.
Motion No. 1 attempts to import into the Bill provisions found in the Indian Act which were not contemplated at the second reading of the Bill. This amendment falls clearly beyond the scope of the Bill and I must therefore rule it out of order. In doing so, I wish to refer the Hon. Member to Citation 773(1) of Beauchesne's Fifth Edition.

Motion No. 2 was moved in committee and ruled out of order. It falls beyond the scope of the Ways and Means resolution on which the Bill is based. On the basis of Citation 523 of Beauchesne's Fifth Edition, and after careful examination, I must rule this motion out of order.

Motions Nos. 3 and 5 seek to introduce some new kind of mechanism in the establishment of the export charge of 15 per cent. I have come to the conclusion that these motions fall outside the scope of the Bill and the Ways and Means Resolution upon which the Bill is based. No provision for adjustments in the determination of the export charge was contemplated in the resolution of the Bill. Therefore, I have to rule the motions out of order. I refer the Hon. Members to Citation 773(1) of Beauchesne's Fifth Edition which states, and 1 quote:
An amendment is out of order if it is irrelevant to the Bill, beyond its scope or governed by or dependent upon amendments already negatived.

Motion No. 6, which is consequential to Motion No. 3, will not be selected for debate and will not be put to the House.
Motion No. 4 was ruled out of order in committee on the basis that it goes beyond the scope of the Ways and Means resolution by attempting to exempt joint and several liability to a corporation or a region exempt from a charge. I have come to the conclusion that this motion, in attempting to exempt U.S. harvested logs, goes beyond the scope of the Bill and introduces a new concept not contemplated in this Bill. Hon.
Members are referred to Citation 523 of Beauchesne's Fifth Edition which states:
Amendments must not exceed the scope, increase the amount or extend the incidence of any charge upon the public, defined by the terms of the Ways and Means resolutions, by which the provisions proposed to be amended are authorized.
On these grounds I must rule this motion out of order. Motions Nos. 5 and 6 were dealt with earlier.
Motion No. 7 was ruled out of order in the legislative committee. It could be argued that the motion, if carried, might encroach on provincial jurisdiction, although that would be a matter for the courts to decide. However, the Chair recognizes that in procedural terms it is a borderline case. After careful examination the Chair has decided to give the Hon. Member the benefit of the doubt. Therefore, Motion No. 7 will be put to the House, debated and voted on by itself.

Motion No. 8, in the name of the Hon. Member for Skeena (Mr. Fulton), seeks to amend the same clause of the Bill in a manner similar to motion No. 7, in the name of the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), and therefore will not be selected for debate.

Motion No. 9 will be debated and voted on separately. Motions Nos. 10, 11 and 12 will not be selected for debate.


Mr. Axworthy:: Mr. Speaker, I rise on a point of order. I appreciate the Chair having provided us with a written version of its ruling. I wish to draw the attention of the Chair to the apparent discrepancy in the ruling on Motion No. 1. Citation 773(1) of Beauchesne's Fifth Edition is cited as the rationale for ruling this motion to be beyond the scope of the Bill. When we presented a similar amendment in committee the Chair at that time cited Citation 773(10). It is a citation which I would submit might be more subject to debate in re-examination.
I am wondering if the Chair is prepared to clarify why it is now referring to Citation 773(1) as opposed to Citation 773(10) which citation is more appropriate to the decision made by the Chair.


Mr. Deputy Speaker:: The Chair will consider the remarks made by the Hon. Member for Winnipeg-Fort Garry and come back to the matter. In the meantime we will proceed with debate.


James Ross Fulton: Mr. Speaker, I rise on a point of order in relation to the Chair's ruling on Motion No. 4. The Chair has quoted Citation 523 which states:
Amendments must not exceed the scope, increase the amount or extend the incidence of any charge upon the public, defined by the terms of the Ways and Means resolutions, by which the provisions to be amended are authorized.
I ask, Mr. Speaker, that you look at what I propose in Subclause (3) and Subclause (4). In Subclause (3) the attempt is to exempt those wholesalers who are temporarily holding softwood lumber which comes from corporations that are
May 13, 1987

exempt under the Schedule in Bill C-37. If the softwood lumber was going directly from the exempt mill into the United States then it would be exempt all the way.
What I am attempting to do is not to increase the scope. All I am attempting to do is ensure that those wholesalers who move ribboned lumber, lumber which has been sawn in an exempt mill, held temporarily on their site but which is going to the United States, are not required to pay the 15 per cent export tax because that wood was, and always is throughout its movement to the United States, exempt.
In Subclause (4) I am not attempting to expand the scope. What I am attempting to do particularly is in relation to the border mills. It refers to trees that are grown in the United States and harvested there and for which the U.S. countervailing action never sought to go after. The Americans have never contended that their stumpage system was subsidized. That wood is brought into Canada, milled in Canadian mills, principally the 13 border mills in the Province of Quebec, and then as it goes from the site or from a wholesaler back into the United States it is presently subject to the 15 per cent export charge.
1 have been through the Memorandum of Understanding with a fine-tooth comb. I am unable to find language which leads me to believe that either our negotiators or the American negotiators ever intended, because it was not put into the Memorandum of Understanding, to catch either this wood from the Quebec mills that was grown in the United States, or to capture our wholesalers who were simply temporarily, and at times not even physically, holding the wood. They would simply order the wood from an exempt mill. It would come through. They would ribbon strip it for their buyers in the United States. So I do not believe, from my understanding of Citation 523, that either of these two subclauses would expand or exceed the scope.
I also do not find wording in the Memorandum of Understanding, or as a result of the extensive committee hearings which we held for six weeks, that these commodities and these Canadian businesses were intended to be captured by the 15 per cent export tax.
If you could have another look at this matter, Mr. Speaker, it would be helpful. I think the cost being added on, both to the border mills and to the wholesalers, is inappropriate. This is the only way that Bill C-37 can be remedied.


Mr. McDermid:: Mr. Speaker, I rise on the same point of order. 1 admire the ingenious way in which the Hon. Member for Skeena (Mr. Fulton) got his point to the floor of the House of Commons after it had been ruled out of order by the Speaker. I can tell you, Mr. Speaker, that because it is not in the Memorandum of Understanding we cannot create other issues. That would be in violation of the memorandum of understanding, something which the Hon. Member understands and knows.
He also understands that a commitment was made by the Minister and by her staff members that these points would be
Softwood Lumber Products Export Charge Act
raised in negotiations with the Americans once this Bill is under way and passed. The ruling is accurate. The amendments would increase the scope of the legislation. Therefore the Memorandum of Understanding stands and the rulings are correct.


Lloyd Axworthy: Mr. Speaker, I rise on a point of order. I wish to go back to Motion No. 1. The Parliamentary Secretary who is in the Chamber will recall that during the committee hearings I raised a question as to which took precedence, the Indian Affairs Act or the Income Tax Act. Under the Indian Affairs Act, natives on reserve land or in the territory of band councils are given exemptions from provisions of the Income Tax Act. We had asked for a ruling by Revenue Canada which I think would go to the whole point of the amendment that we presented. We are trying to help the Government to be legal and not to abrogate or to eliminate provisions of the Indian Act which, in my understanding, might take precedence over this particular proposal dealing with an imposition of a tax upon native or aboriginal peoples. I am wondering if at this time the Parliamentary Secretary is in a position to provide us with the ruling from Revenue Canada.


John Horton McDermid: Mr. Speaker, I can make inquiries in that regard. I do not have the ruling with me at this particular moment. Certainly, I think it can be obtained fairly quickly.


James Ross Fulton: Mr. Speaker, on the same point of order, I would ask the Chair to reflect for a moment on the point just made by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy).
The Chair is ruling Motion No. 1 out of order on procedural grounds. The point raised by the Hon. Member for Winnipeg

Fort Garry is fundamentally important. I was in attendance when the Hon. Member raised the point during committee consideration. I believe the Deputy Minister for Revenue Canada was in attendance. That was on March 23 last, some seven weeks ago now. The Government has had sufficient opportunity to find out whether or not the Indian Act, in terms of this particular taxation matter, is a more powerful piece of legislation.
The attempt here is simply to protect aboriginal people who might in some way now, or in the near future, be operating logging operations, harvesting operations, sawmilling operations, and particularly where they are exporting lumber to the United States.
Certainly Revenue Canada is abundantly aware of the ruling of less than a year ago, the famed Nowachut case; and certainly I am sure the Parliamentary Secretary is also aware of the March, 1987 ruling of Revenue Canada in relation to aboriginal peoples, status Indian and Inuit people in Canada, pursuant to which it is no longer simply the case of their being employed on or paid on reserve lands where they do not have to pay taxes, whether export taxes, or otherwise, but where the moneys are paid to an establishment on the reserve.

May 13, 1987
Softwood Lumber Products Export Charge Act
In fact, I met with the Minister of National Revenue (Mr. MacKay) yesterday and it is my understanding that where aboriginal people are working off the reserve but the funds earned are paid to an establishment on the reserve, no taxes are payable.
In respect of the logging and sawmilling operations in my own constituency, and elsewhere in the country, this is a fundamentally important amendment. The proposed amendment reads:
"or temporary license but does not include a person within the meaning of the
Indian Act,"-
The purpose of the amendment, as the Hon. Member for Winnipeg-Fort Garry has pointed out, is simply to ensure that Bill C-37, when passed, does not have to come back to the House for amendment because that particular section would be ultra vires.


John Horton McDermid: Mr. Speaker, I do not wish to prolong the debate, but my recollection is that Revenue Canada made a ruling on that point at the hearing, stating that in fact the export tax was applicable to everyone, including Indian people who export lumber; that the tax situation that both Hon. Members have referred to pertained to the reserve and the reserve lands and the use of the particular material on the reserve.
Once the material is moved off the reserve it is subject to taxation. Once it is exported it is subject to the excise tax regime.
As I understand it, Indian people making an export would have to pay the export tax, in the same way as any other exporter. They would be the exporter of record and licensed to export and in fact would have to pay the export tax. That ruling was given by an ADM of Revenue Canada at the committee hearing.
I will leave it in your good hands, Mr. Speaker, to look at that, as you said you would, and suggest that we get on with the debate on the two amendments that have been accepted by the Chair.


Mr. Deputy Speaker:: I have looked into the matters raised by the Hon. Member for Winnipeg-Fort Garry and the Hon. Member for Skeena.
With respect to the matter raised by the Hon. Member for Winnipeg-Fort Garry, I should like to advise him that in fact the citation of Beauchesne concerning Motion No. 1 is in fact 773(1), as set out in the decision of the Speaker.
Let me now deal with the matter raised by the Hon. Member for Skeena. I thank the Hon. Member for his argument. However, the ruling made by the Speaker on this matter will stand.
We will now proceed with the two motions that have been accepted, Motion No. 7 and Motion No. 9.
We will first deal with Motion No. 7, which will be debated and voted on separately.


Lloyd Axworthy: Motion No. 7
That Bill C-37, be amended in Clause 14 by adding immediately after line 29
at page 10 the following:
"(4) Revenue derived by Canada from the charge imposed on softwood lumber products under this Act and payable to the provinces according to subsection (2) may be applied by the province to the awarding of contracts for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis."
He said: Mr. Speaker, I believe that this amendment goes to the heart of the debate that has emerged over Bill C-37. It is one that is related directly to the right of this Parliament, in its time-honoured tradition, to designate how tax moneys raised by this Parliament should be spent.
The importance of this amendment goes back to the controversy surrounding the introduction of the Memorandum of Agreement by this Government on that famous cold wintry day of December 30 last when, in a last-ditch effort, the Government signed an agreement with the United States pursuant to which there arose the obligation of imposing a tax upon Canadian softwood lumber producers.
Subsequent to that, there was provided a letter written by the Secretary of Commerce, a very substantial official in the U.S. system, along with the Chief Trade Negotiator, Mr. Yeutter, to Mr. Dennison, the head of the Coalition for Fair Lumber Imports in the United States. In that letter, the writers made a very clear commitment as to how the funds raised by the Canadian Government could or could not be used. In specific reference, they said that moneys raised by the Government could not be used for the "awarding of contracts for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis".
At that time, Mr. Speaker, we raised the matter of the very clear infringement upon the sovereignty of this country that such a limitation on how Canadian tax moneys could be spent would represent. We were given assurances that it was only the "musings of the Secretary of Commerce of the United States", that it did not have any clear standing in law and that it was not a formal part of the Memorandum of Agreement.
But, Mr. Speaker, the fact is, a major signatory to that Agreement, the Secretary of Commerce, as well as the Chief Trade Negotiator, put in writing a clear commitment to their own lumber lobby in terms of what they interpreted to be the meaning and significance of that Agreement.
Certainly that has provided a number of Canadians, both in the industry and without, a real reservation. If one regards the statements made by the provincial Ministers, there is a feeling, as well, that there is delineation, a prescription, as to how the $500 million to $600 million raised through this new tax in fact can be used.
If the Government of Canada has agreed implicitly to the kind of interpretation provided by Mr. Baldrige and Mr. Yeutter in their letter to Mr. Dennison, then certainly in my view it is clear that it has agreed to limit a very fundamental right. But, because the Government did so is no reason why the
May 13, 1987

Parliament of Canada should do so. As a sovereign body able to make our own laws, we should ensure that there is no ambiguity or any implicit or accepted argument for the way in which tax moneys can be spent in this country.
Therefore, I have introduced an amendment that specifically authorizes the expenditure of money in those areas, such as silviculture, roadbuilding and recreation mentioned in the Yeutter-Baldrige letter. That does not mean to say the provinces must spend the money in those areas, but it clearly says that they may spend it in those areas and there should be no hesitation or reservation on the part of the provinces, thinking they would be abrogating the treaty or the understandings reached by using the tax moneys thereby raised in these important areas.
Let me point out that we are talking, for example, relating to the matters of silviculture and roadbuilding, about two of the most important activities in the whole program of reforestation that we have been promised. One of the original arguments used by the Minister for International Trade (Miss Carney) and the Minister of State for Forestry and Mines (Mr. Merrithew) for keeping the money here in Canada was for reforestation purposes.
As I recall, the Minister for International Trade said that she thought the forests of British Columbia were some kind of a slum, and this initiative of the Government would be to invest in these important activities, silviculture, roadbuilding et cetera.


Mrs. Finestone:: What is the et cetera?


Lloyd Axworthy: But that question mark hovers over the whole understanding. When you have a letter written by one partner to the agreement saying the money cannot be used for these reasons, and if it is they can apply Section 301 of the U.S. trade Bill-which would be a kind of automatic trade penalty imposed by the President of the United States-one assumes there would be a lot of nervous people saying that we better not trifle with it, that we better not take the risk or have the American President zap us with some kind of effective penalty, so we will not do it.
I make the case to you, Mr. Speaker, that unless this amendment is accepted, the letter to Mr. Dennison signed by the Secretary of Commerce and the Chief Trade Representative of the President will stand as a clear signal as to how Canadian tax money must or can be used. The only way we can erase that reservation or answer that question is through this amendment. If the Parliament of Canada accepts it, then we are clearly saying that we are a sovereign body, we have the right to raise taxes and we also have the right to spend that tax money, as Canadians, as we see fit. We do not care about what the Secretary of Commerce has to say or the chief negotiator of the president, we decide for our own right.
Softwood Lumber Products Export Charge Act
This is particularly important because as we enter into the broader trade negotiations one of the question marks hovering over that whole negotiation is how far and in what way will the sovereignty of Canada be limited. How will Parliament deal with the various kinds of understandings, reservations and limitations put upon our ability to decide for ourselves? How will we manage the economy or decide on industrial support? Will we instead be accepting a whole series of prescriptions determined in Washington rather than in Ottawa?
I make the case as strongly as I can, that if the Government of Canada is being forthright in saying that the Baldrige letter is of no importance, then the Government should have absolutely no reason for not accepting this amendment, because it would simply clarify and make clear that the letter has no standing. It would not in any way interfere with Government policy. It would reinforce it. It would support it and it would give the mandate and stamp of approval of Parliament to statements that have been made. If, however, the Conservatives reject this amendment and vote against it, we will know that we have surrendered part of our sovereignty and that the Government is simply trying to fool Canadians.


James Ross Fulton: Mr. Speaker, I am pleased to speak very much in favour of Motion No. 7. The letter just referred to by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) is a crucial document, and the Government has tried to downplay what it might or might not mean. We have to provide some specific wording in Bill C-37 to give assurance to the provinces, the people of Canada and those who work in the forest industry.
The U.S. trade representative, Clayton Yeutter, signed this letter on December 30, 1986, along with the Secretary of Commerce, Malcolm Baldrige, two Cabinet level members of the Reagan administration. It is worth putting a couple of points on the record, and then I will direct myself to the specific wording.
In the third paragraph of the letter addressed to Mr. Stanley S. Dennison, Chairman of the Coalition for Fair Lumber Imports in Washington, D.C., we find the following:
-the U.S. Government will monitor closely the operation of this agreement to insure that the amounts collected through the export charge or replacement measures are not returned to or otherwise used to benefit producers or exporters of Canadian softwood lumber.
Then it goes on to the really crucial language that you find in the amendment now before us. At the bottom of page 2 we find:
We would consider that the follow-up actions by the governmental bodies in Canada could have the effect of offsetting or reducing the export charge or replacement measures within the meaning of Paragraph 6 of the Understanding.
Then it lists rebates, remissions and so on. More crucial language comes in point number 7 right above the signatures of Mr. Yeutter and Mr. Baldrige where it says:
-awarding contracts for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis.

May 13, 1987
Softwood Lumber Products Export Charge Act
We find those same words in the amendment by the Hon. Member for Winnipeg-Fort Garry, namely, silviculture, roadbuilding, recreation and other foresting activities on a non-competitive basis.
We went through this matter at some length in the committee. We could not get some of the expert witnesses that we wanted, but I attempted, as you will note in Motion No. 8, to do the same form of clarification by stating definitively that for further clarification forest management includes silviculture, conifer release, reforestation, site stabilization and general forest rehabilitation. I also state:
The revenue derived by Canada from the charge imposed on softwood lumber products under this Act shall be used for the purposes of forest management in the regions from which those revenues are derived.
As Members of this House will know, the Minister for International Trade (Miss Carney) pointed out quite accurately that the Province of British Columbia, the largest producer of softwood lumber used not only in Canada but exported to the United States has become a silvicultural slum. We are aware on the coast that we have only, according to Dr. Peter Pierce, 14 years of forest supply left. We have Bill Ewing's report in relation to Prince George and the northern Cariboo, which report said very much the same thing as Dr. Pierce, that by the year 2000 we will be out of wood. Clearly in British Columbia we need to use all of that $300 million a year to get cracking on forest rehabilitation. While the Government claims that the letter outlining the U.S. Government's interpretation of the export tax agreement has no weight, let us keep in mind that the letter was sent the same day the Memorandum of Understanding was signed. It was cranked up the same day and given to the Coalition as the U.S. Government's interpretation.
Now that we have waived our opportunities to go before a GATT panel we have put ourselves in the position that if we do not live up to the expectations of the United States the Americans can slap Section 301 on us 30 days after they back out of this agreement.
Let us look at what was said by Max Cohen, one of Canada's foremost experts on international law, once a judge on the international Court of Justice and former chairman of the International Joint Commission. In evidence given before the Standing Committee on Banking, Trade and Commerce on February 19 he said:
I conclude by saying to you that in my view it would be very difficult for the legal adviser of the U.S. State Department to deny the effect of the interpretation given by Mr. Baldrige or Mr. Yeutter.
In International Trade of January 3, 1987, Mr. Cohen went on to state:
It is a strange procedure to allow someone to monitor our own stuff.
The committee did try, but did not get very far, to have the Chair accept these amendments while we were still in committee some six weeks ago. Of course, at that time, the Government felt it was urgent that we finish the committee process so that this could return to the House, but that was six weeks ago.
The committee sent a letter signed by the Hon. Member for Prince Edward-Hastings (Mr. Ellis), the Chairman of the committee, drafted on March 25 and addressed to the Hon. Minister for International Trade. In that letter, point number five made by the Chairman with the unanimous support of the members present asked that an attempt be made during negotiations to clarify the confusion as to the application of tax revenues brought about by the so-called Dennison letter. The House now has the opportunity to do that.
We have before us the evidence of internationally renowned legal expert Max Cohen. We have before us the letter signed by Malcolm Baldrige and Clayton Yeutter. We have before us an amendment and we know what the committee sought unanimously. The committee still has not received a response from the Minister for International Trade on what kind of clarification there has been from the U.S. to the Minister for International Trade on the Baldrige-Yeutter letter to Mr. Dennison. This leaves us with only one opportunity.
I am quite certain that we on this side of the House will vote unanimously for the motion and I hope that government Members do not get nervous because this amendment is brought forward by the Opposition. 1 hope that they will think coolly and carefully about this. Canada's sovereignty was massively invaded by this whole process. Even if government Members do not believe that this will have an impact on sovereignty, then there will be no reason for not voting in favour of the motion. I would encourage government Members to speak in favour of this amendment and also, when they have the opportunity, to vote in favour of it.
It is very important that we send that signal from the House of Commons to Washington and to the U.S. coalition. As well, we should send a nice clear message back to British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, the maritime provinces, the Northwest Territories and Yukon.
This House has a vital responsibility to pass an amendment like this, making it clear that the money gathered under Bill C-37 and returned to the provinces can be used for rehabilitative work, silviculture, roadbuilding or anything else the provinces are planning to do, using either their own revenues, revenues that will be returned to them from the 15 per cent export tax or revenues from any new measures that might be brought in, like a provincial export tax or an increase in stumpage fees. If nothing else, that will protect our sovereignty. If nothing else other than that, it will send a clear smoke signal to Washington, indicating that we will not be shillyshallied about on sovereign issues like taking care of our own forests and natural resources.


B. Keith Penner: Mr. Speaker, I would like to say a few words in support of the amendment to
May 13, 1987

Bill C-37 that has been proposed by my hon. friend and colleague, the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy). In speaking in favour of this amendment I would like to underline what the two previous speakers have said.
The failure to approve this amendment and have it become a part of Bill C-37 will make it possible for the very long arm of Washington to reach into provincial administrations and, in fact, to dictate forest resource policy. I do not think Hon. Members opposite want to see Ontario's forest management policy dictated from Washington.


John Horton McDermid: You're dictating from Ottawa.


B. Keith Penner: If my hon. friend thinks that that is acceptable, then he has not properly understood the effects of Bill C-37.
I submit as well that Mr. Baldrige and Mr. Yeutter, in making the argument they made in their letter to the Coalition for Fair Lumber Imports, that somehow silviculture activities, roadbuilding into places where wood is overripe and would otherwise be subject to blow-downs and be lost entirely or engaging in some sort of assistance for the recreational use of forests, is considered to have the effect of offsetting or reducing the export charge, have made an argument that escapes me entirely. For example, we know that there are forest-management agreements in the Province of Ontario at the present time. These agreements place upon the companies an obligation to reforest.
In accepting certain timber limits, the companies agree with the provincial administration that they will undertake certain obligations in the restoration of the cut-over area. However, it has not always been so. There was a time when the Ontario Ministry of Natural Resources assumed that responsibility itself. At that time, seedling nurseries were entirely operated by the Ministry of Natural Resources. Now that particular obligation has been passed to the private sector. The private sector grows the seedlings which are then sold to the companies that are obligated to plant them.
I must tell the House that the Ontario forest management agreements are experimental in nature. It is believed that they will be more successful than entirely government-operated ventures had been in the past. However, that is a philosophical discussion and all of the facts have not yet been submitted. We do not know for a fact at this point in time if forest management agreements are a better method than operations entirely within the scope of the Ministry of Natural Resources.
The point I am making is that if at some point in time it were to be decided that forest management agreements were not as successful as some have argued they will be and the Government of Ontario or any other provincial administration wanted to assume this obligation for itself, there could be a direct challenge to the provincial authorities on the legality of this if this amendment is not passed. The very fact that that possibility exists is the reason Members of my Party and Members on the government benches must approve this amendment. Approving this amendment will leave the door
Softwood Lumber Products Export Charge Act
entirely open for provincial administrations to make these decisions.
We know that in the past there have been agreements between the provinces and the federal Government under the Department of Regional Industrial Expansion to undertake road and bridge construction in isolated areas, where the costs are enormous or in fact prohibitive, in order to access a resource that is ready to be harvested. If you cannot access that resource, if industry finds the cost prohibitive, then the province and its people have lost a resource which could otherwise be used.
What will happen to it? During a lightening storm a fire will start and will be allowed to run its course because it is in an isolated area as sometimes happens in northern Ontario, or there will be exceedingly expensive operations to put the fire out. That is why it was decided in agreements between the Government of Canada and the provincial Governments that these overripe areas should be accessed and that they have a joint responsibility to assist the industry so that the resource can be used.
Now we are saying, if we accept the arguments of Mr. Baldrige and Mr. Yeutter, that this can no longer be done. The responsibility is totally that of the industry. Spruce Falls Power and Paper, Domtar, or Abitibi-Price must bear that cost themselves and somehow recoup it in the sale of their products.


John Horton McDermid: Do they now?


B. Keith Penner: It has already been proven in many cases that the industry cannot bear that cost.


John Horton McDermid: Do they now?


B. Keith Penner: What choice do we have? We can let the trees stand and either suffer a blowdown from high winds, a fire, or rot. In any case it is a waste. It is stupidity. It is bad forest management policy and something no one will accept.
Why would we want to prohibit the provincial Governments from making those kinds of decisions? How can it possibly be argued that to access an overripe resource and make use of it is in some way offsetting this 15 per cent charge on the production of softwood lumber? It makes no sense at all. If it does not make sense for those reasons, then how even more remote is it to argue that a provincial Government cannot make use of its resource by spending tax dollars for recreational purposes? How would we be offsetting the 15 per cent charge by opening up a lake, for example, through the provincial Ministry of Natural Resources so that cottagers can, under a Crown lease arrangement, erect a cabin or residence for summer use? How would that be offensive?
My friend seems most anxious to speak, so he will have answers to all this.

May 13, 1987
Softwood Lumber Products Export Charge


John Horton McDermid: On a point of order, Mr. Speaker, I just wanted to ask my hon. friend, who is waxing eloquent-


B. Keith Penner: I am not waxing eloquent. I am speaking about a concern in the region I represent. Get it straight, John.


John Horton McDermid: I meant that as a compliment, so I am not sure why the Hon. Member is sc uptight. I want to find out if he will accept a question at this time.


B. Keith Penner: You are on your feet, so don't waste time.


John Horton McDermid: Will you accept it?


B. Keith Penner: Certainly.


John Horton McDermid: Mr. Speaker, 1 understand the Hon. Member is talking about his region. My question is: Do the provincial Governments build those roads now? Did they before the agreement was reached? Was that part of the Ontario provincial Government's program before this tax came in? Did they put those roads in to access forests and cottages before the agreement of December 30?


B. Keith Penner: The answer is that it has been done, it is being done, and they want to continue doing it.


John Horton McDermid: Fine. They can.


B. Keith Penner: The letter I am referring to from the U.S. Secretary of Commerce and the U.S. trade representative argues that this kind of activity violates the agreement between Canada and the U.S. with respect to the 15 per cent export tax. In the region of Ontario that I represent there is great concern that the freedom to make policy in these areas is being restricted by an agreement we have negotiated with the U.S.
I come back to the point I made at the very outset. Forest management policy is, to a very significant extent, being restricted and controlled by Washington. In the province from which I come, and more particularly the region I represent, we find this to be offensive.
We are not arguing that this is a partisan issue. We are arguing that this is a reasonable amendment, and I am delighted that Your Honour has accepted it although I understand that you are concerned it may be in the provincial domain. I do not think it is. We are not entering the provincial domain by this amendment. We are saying that we should not enter the provincial domain by an agreement we made with the Americans. This amendment is quite the opposite. It leaves the door open for the provinces to make important decisions concerning a resource that belongs to them and not to Ottawa. We should not be making agreements with Washington which limit provincial government policies.
I argue that Members opposite would be assisting the region I come from and acting in the best interests of the Province of
Ontario if they agreed to support this very reasonable amendment put forward by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy).


Mr. Alain Tardif (Richmond-Wolfe):: Mr. Speaker, 1 am also very happy to join my predecessors in unreservedly supporting this amendment, which to me seems more than reasonable in the circumstances. I view the amendment as improving what was simply and squarely shameful. For discussion's sake, Mr. Speaker, let me read the amendment, which is more than reasonable in my view. It states:
"(4) Revenue derived by Canada from the charge imposed on softwood lumber products under this Act and payable to the provinces according to subsection (2) may be applied by the province to the awarding of contracts for silviculture, roadbuilding, recreational and other foresting activities on a noncompetitive basis."
Here, Mr. Speaker, you have an amendment which beyond the shadow of a doubt would make an interesting and reasonable improvement to something that is totally unacceptable. When the Government signed that agreement, of course the arguments used by myself and other Members on this side of the House were quite numerous, in the sense that we deplored that in a way we had been "had" financially, in a way we had given our American friends what clearly we would not have had to pay had we left things on the course that had been taken.
Here is an agreement that in effect forces producers to pay inordinate amounts. I submit, Mr. Speaker, that as far as I am concerned, although the Government in fact signed in a hurry, in a sense it has been "had" financially, this is something that can always be repaired, something that can always be remedied. But where sovereignty is involved, Mr. Speaker, this is a matter of untangible, undisputable principle. It is my sincere belief that the amendment now before us results in a direct improvement to the most offensive aspect of the Bill in my view. Improvement in the sense that we would say to our American friends: Look here, this is our land, our country, we want to use that revenue, that money as we see fit. And the amendment proposes that the money be spent in specified areas to the benefit of all provinces which in fact will be collecting the tax.
With your permission, Mr. Speaker, I would like to go back a little in time, since this is the most important aspect in my view. As I said earlier the question of money is important because the amounts at stake are considerable. But what made all opponents mad was the aspect of sovereignty, and if I may, Mr. Speaker, I should like to refer to certain comments concerning that part of the agreement, to the effect that letting somebody else control what belongs to us in the first place is a rather bizarre process. They maintained the unilateral aspect of something which in fact we share in common, for the Americans have the right to know everything about Canadian activities, be it with respect to information or anything else. Of course, these were the comments of Mr. Maxwell Cohen.
May 13, 1987

And then the Premier of Ontario is telling us that we have let another sovereign country gain control not only over our resources and taxation policies but also, to a certain extent, over our employment and regional development policies, which is a dangerous precedent.
Somebody has suggested that the agreement can only encourage the United States to extend their protectionist measures to other sectors.
Or that natural resources constitute an absolute right which should not be abandoned to any foreign government.
The final argument is that even if Canada were to lose the case it would be well-advised to state its position immediately lest it might jeopardize our sovereignty for years to come.
Mr. Speaker, the comments and criticism I just mentioned went beyond the purely financial aspect and straight to the crux of the problem raised by this agreement, namely that Canada's sovereignty is at risk, and that from now on our American friends will be able to call the shots in this country, which is particularly dramatic in an industry that is of strategic importance to the Canadian economy, to the economy of the provinces and to local economies.
The Elon. Member's amendment is eminently reasonable and fair, and I think the Government has no choice here, if it was at all sincere and honest at the time when, in answer to the Opposition's comments about the sovereignty issue, it said: No, our sovereignty is not at stake. No, we will continue to manage this natural resource. No, the Americans will have no authority to intervene in the management of this resource. Mr. Speaker, if they were at all honest and sincere at the time, they could hardly object to the Elouse adopting an amendment of this nature, because I think this is a perfectly reasonable proposal which would show that Canada intends to continue to be the master of its own house and to manage its own affairs like any sovereign country.
The Government is saying that they got back $500 million which would otherwise have gone to our American friends. The point as such may or may not be acceptable, but it is not unreasonable.
But with respect to the question of sovereignty the only statements to which we were entitled were fuzzy, confused and ambiguous. I think that in the next few days we will see the true nature of the Government and find out whether Members over there really intend to show that Canadians are masters in their own home and can indeed lay claim to the autonomy which any sovereign country enjoys. Mr. Speaker, should the Government fail to accept this amendment it will reveal for everyone to see that it is altogether indifferent and could not care less about such indecent interference flowing from this agreement which allows our American friends to tell us what we should do, how we should plan, and what approach we should take with respect to so basic a natural resource as softwood lumber.
Softwood Lumber Products Export Charge Act
As I see it, Mr. Speaker, it is altogether normal, reasonable, fair and equitable that the producers expect that money, collected from the producing provinces, to be spent in this area.
From my standpoint the amendment of my colleague is more than reasonable. I wanted to echo the views of others who spoke before me and express unqualified support for what seems to me to be more than reasonable. 1 sincerely hope that the Government will lay its cards on the table and agree to this amendment.


BUSINESS OF THE HOUSE
Philip Derek Lewis: Mr. Speaker, I wish to advise the House that the Government will designate tomorrow as an allotted day.


SOFTWOOD LUMBER PRODUCTS EXPORT CHARGE ACT
[Stage Direction]
The House resumed consideration of Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, as reported (with an amendment) from a legislative committee.
Sheila Finestone: 1 heard the Hon. Member talking about calling the shots, and I think that is a very good point. Are we going to call the shots in this country or will they be called elsewhere, in Washington, for instance? The point is whether we are going to be masters in our own house or whether others are going to decide how we are going to run things. It is a matter of cultural and economic sovereignty.

It is strange that this question arises today. It seems to me that the cultural and economic sovereignty of Canada has been on our plate time and time again. The Government has not the courage to talk back to the Americans and say that we are who we are, that these are the things we stand for and this is what we believe in. An example is the film distribution Bill. That Bill has curried great favour and could be well received. If the Government only had the courage of its convictions, the film distribution Bill would be in the House today. This is as is

May 13, 1987
Softwood Lumber Products Export Charge Act
usual in Canada because the Government has not said no to American pressure, and we have seen what they can do in one industry.
Before the issue of the film industry came up we had the issue of the softwood lumber industry. It is a sad day when we have to debate the extremely intelligent, well thought out and reasoned amendment of my colleague, the Member for Winnipeg-Fort Garry (Mr. Axworthy). I urge all Members of the House to support this amendment to Bill C-37 as it makes intelligent, good sense. We want the right to stipulate how tax dollars raised on our goods will be spent.
I am going to read into the record a letter which was sent to Mr. Dennison by Mr. Clayton Yeutter and Mr. Malcolm Baldrige. According to that letter, we are talking about $500 million to $600 million. That is not peanuts. That is a lot of money. It could be used to rebuild our forests, to build roads, to expand Canada as we see fit. The provincial Governments, on whose territory this money will be raised, should be able to use this money in the manner in which they determine.
The question is whether we will show broad-mindedness or narrow-mindedness by accepting or rejecting this very sound amendment which would tell the Americans to stay home, that we know how to look after our own business. The amendment would tell the Americans that we know how to manage our own economy, not to tell us how, that we wish to determine for ourselves through our provincial Governments how we are going to handle our money, that we are not passing the buck to them and did not ask them to stick their nose into our business. That is essentially what we will be doing by saying yes to this amendment.
My colleague, the Member for Winnipeg-Fort Garry, said that we are talking about the role of Government and the role of the Parliament of Canada. He was calling upon all of us to be parliamentarians, to forget about our partisan point of view in this instance and think about the well-being of Canada.
1 see that one of my hon. friends opposite is not particularly pleased. That is unfortunate.
Let us consider the letter that was sent to Stanley Dennison, Chairman of the Coalition for Fair Lumber Imports, on behalf of Secretary of Commerce Malcolm Baldrige and U.S. Trade Representative Clayton Yeutter. It indicates that when the export tax is removed, future provincial stumpage increases must raise lumber prices at the border by an amount equivalent to the 15 per cent export tax.
The letter further indicates that certain actions will be considered to be in violation of the agreement, including the awarding of contracts for silviculture, road building, recreational, and other forestry activities on a non-competitive basis.
The provincial Governments have stated that they wish to use the funds from the export tax for reforestation, among other uses. If one interprets the United States position correctly, the letter seems to indicate that some of these uses
may be regarded as indirect subsidies to the industry. The Government should have taken the issue to GATT originally. The Americans went to GATT on the corn issue, but the Government did not see fit to use that route with respect to softwood lumber.
Now the Americans are trying to tell us what we should do with what they perceive to be an indirect subsidy.
The Canadian Government has declared that the letter has no standing in Canada and that the document does not reflect the terms agreed upon in the memorandum of understanding. The letter states:
Dear Mr. Dennison:
Several questions have arisen in the course of the negotiation of the recently signed U.S./Canadian softwood lumber agreement. We record here the understanding of the U.S. Government with respect to several of the key provisions of the agreement. These understandings have been conveyed to the Government of Canada although they have not been explicitly expressed in that agreement.
First they twist our arm and tell us what they think, then they tell us how to proceed. The letter continues:
First, as the 15 per cent export charge is a substitute for a countervailing duty, and is being imposed for the purpose of offsetting Canadian stumpage subsidies, the U.S. Government intends that collection of the charge will begin immediately upon withdrawal of the countervailing duty petition, effective on cessation of bonding. The charge may be collected by either the Government of Canada or the Government of the United States. We intend that the charge will be collected until agreed replacement measures have the equivalent economic impact on average on each unit of exports to the United States as the 15 per cent charge or that portion of it which is being replaced.
The United States would not object to replacement measures being implemented by individual provinces and the export charge being reduced or eliminated accordingly for such provinces.
Second, the U.S. Government will monitor closely the operation of this agreement to insure that the amounts collected through the export charge or replacement measures are not returned to or otherwise used to benefit producers or exporters of Canadian softwood lumber.
We will see later that they list 10 areas in which they will absolutely not agree to our having any say about how we should handle our undertakings.
They point out that the export charge represents at least $500 million and they want a right to have a say in what should be done. In point 10 they state that they would consider that the follow-up actions by the governmental bodies in Canada could have the effect of offsetting or reducing the export charge or replacement measures within the meaning of paragraph 6 of the understanding. They specifically point out the measures that they will find unacceptable. I do not have time to read them all, but point 7 is the awarding of contracts for silviculture, road building, recreational, and other foresting activities on a non-competitive basis.
The letter is signed on behalf of Clayton Yeutter, U.S. Trade Representative and Malcolm Baldrige, Secretary of Commerce.
Is this a fair and unbiased situation in which to place the industry, the Government and the House of Commons?
May 13, 1987

I urge all Members of the House to support Motion No. 7, moved by the Hon. Member for Winnipeg-Fort Garry, which states:
That Bill C-37, be amended in Clause 14 by adding immediately after line 29
at page 10 the following:
"(4) Revenue derived by Canada from the charge imposed on softwood lumber products under this Act and payable to the provinces according to subsection (2) may be applied by the province to the awarding of contracts for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis".
That is the way to send a message to the United States,

-that we are masters in our own house.


Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, I want to participate in this report stage debate on a Bill that has extreme importance to my constituency of Thunder Bay- Atikokan and all of northwestern Ontario. It is one area of the country that depends on the forest industry for much of our economic livelihood.
The Government's decision which has resulted in this Bill has a very great impact on us. We have already seen softwood lumber mills close as a direct result of the tax, and others are in jeopardy.
The amendment moved by the Member for Winnipeg-Fort Garry (Mr. Axworthy) is very similar to the motion that was moved by my colleague, the Hon. Member for Skeena (Mr. Fulton), but ruled out of order.
This motion basically allows the provinces to spend the revenue for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis.
Clearly, the provinces must be able to use this revenue to assist in the reforestation and ensure their longevity.
Over the years we have argued about policies of provincial Governments as well as harvesting companies and whether or not enough is being done for reforestation, recreational use of the forests and the construction of roads.
The Canada-Ontario forest agreement provides for federal funding for silviculture, for road construction, and other aspects of providing for our forests. It is very sensible to ensure that the funds being extracted from our forest industry can be recycled in that industry. I do not believe this will jeopardize the ability of the Americans to compete with us if they have a quality product and the dollar is such that there is balanced competition. However, I believe it is very important that the legislation state that the provinces have a right to spend the money in the forest industry. If not, the money will be diverted to other areas at the expense of the forest-based industry.
It is my understanding that this amendment arises from a letter from Malcolm Baldrige, U.S. Secretary of Commerce, and Clayton Yeutter, U.S. Trade Representative. Mr. Yeutter is the United States Trade Representative. In a letter to the
Softwood Lumber Products Export Charge Act
Chairman of the Coalition for Fair Lumber Imports he states, and I quote:
We would consider that the follow-up actions by the governmental bodies in Canada could have the effect of offsetting or reducing the export charge or replacement measures within the meaning of paragraph 6 of the Understanding.
He lists some of them, including awarding contracts for silviculture, road building, recreational and other foresting activities on a non-competitive basis. Those are very interesting words. What he is trying to say is that the United States does not want us to be able to do that, and that the lobby for the lumber industry in the United States is in effect telling its Government to dictate to our Government and, therefore, to the people of Canada, how we should manage our forests and how we should spend the money which we are duly collecting supposedly on behalf of the people of Canada.
I think that is an insult to the integrity of the Government and the people of Canada. I would hope that all Hon. Members will agree to accept this amendment so we can give that right- it does not say the provinces must do it but that they may do it-to spend the money on matters directly related to the forest industry.


Mr. Maurice Foster (Algoma):: Mr. Speaker, this is an important amendment before us, as the entire Bill is important and the whole issue is important, because it really sets a tone for the relationship between the Government of Canada and the United States, which has been essentially designed to appease in every way any relationship where Canada might be standing up as a sovereign nation. The entire legislation and the approach of the Minister and the Government has been that way since last June when this issue first got under way.
The amendment before us at report stage was moved by the Hon. member for Winnipeg Fort Garry (Mr. Axworthy). It is an amendment to Clause 14 of the Bill. It provides that:
Revenue derived by Canada from the charge imposed on softwood lumber products under this Act and payable to the provinces according to subsection (2) may be applied by the province to the awarding of contracts for silviculture, roadbuilding, recreational, and other foresting activities on a noncompetitive basis.
I think that is an amendment which should be passed just to show that the provinces will not be intimidated by the actions of the United States. If the Government does not accept this amendment we will know that it is really scared and totally intimidated by the letter which was sent by Mr. Yeutter. The letter is dated December 30, 1986. I do not believe he spent New Year's Eve preparing it. He outlines in very clear terms that the United States will move against Canada under Section 301 as provided for in the agreement if Canada moves to support the provinces with the export charge with regard to roadbuilding and those other activities.
The letter states very clearly under item 10, and I quote:
We would consider that the follow-up actions by the governmental bodies in Canada could have the effect of offsetting or reducing the export charge or

May 13, 1987
Softwood Lumber Products Export Charge Act
replacement measures within the meaning of paragraph 6 of the Understanding.
It then cites item 7, awarding contracts for silviculture, roadbuilding, recreational and other foresting activities on a non-competitive basis. It is that letter, signed by both the U.S. Secretary of Commerce and the U.S. Trade Representative, sent to Stanley Dennison, Chairman of the Coalition for Fair Lumber Imports, we are trying to overcome. We want to ensure that Canada says to these two representatives of the United States that regardless of how acquiescent the Government is, regardless of the fact that the United States snaps its fingers and we have higher drug prices in this country, and regardless of whatever other actions have been taken in the past year, this legislation will not bypass the laws of Canada and tell the provincial Governments what they can or cannot do.
I thought Premier Peterson of Ontario put it very succinctly in an article reported in The Globe and Mail, on January 6, 1987 that "they-the U.S. Government-will have the thumbscrews on us at all times and if we do not behave they will put the blocks to us. I do not like a deal like that". In an article in the Ottawa Citizen on January 6 he stated:
We've turned not only our resource and taxation policies but in a sense our regional development and employment policies over to another sovereign country. It is a dangerous precedent.
I think that is what Hon. Members from Northern Ontario are extremely concerned about. We have seen a pro-active Government during the last two years in Ontario. It has tried every possible device to develop roads, and our tourism potential because we have not shared in the tremendous growth of economic activity of southern Ontario, for instance.
Since January 1, in my constituency alone, every month SI million dollars from one company alone goes to the federal Government. It does not get anything for it. It just gets the incompetence of the Government in negotiating this arrangement. If the Government had fought it all the way in the United States trade tribunals, if the Government had fought it in the GATT, this company would not have to send a cheque every month to the Government of Canada.
What this motion seeks to do is to say no to Mr. Yeutter and Mr. Baldrige. It is saying: "We are the sovereign nation. If this export tax is passed on to the provinces, it can be used for roadbuilding, recreational development and for all those other uses". Obviously, the Government of Canada is extremely concerned that the agreement is binding, and it intends to knuckle under to the threats and intimidation of the U.S. Secretary of Commerce and the U.S. Trade Representative.
I would like to read a paragraph of a legal opinion concerning the Dennison letter, and I quote:
The Dennison letter is a contemporaneous expression of the understanding of one of the parties to the Agreement. Therefore, to the extent the language of the Agreement itself fails to resolve any disagreement between the parties, the letter may be used to construe the Agreement. If the U.S. industry were to file a Section 301 case it almost certainly would submit the Dennison letter as evidence of the meaning of the Agreement, and the Administration would be hard pressed, both legally and politically, to disavow its own interpretation as
expressed in the letter. Even before a more objective body, such as a GATT panel, the letter would be strong evidence of the meaning of the Agreement.
Thus, to the extent the Canadian Government's interpretation of the Agreement differs from the interpretation expressed by the U.S. government, it should seriously consider stating publicly the Canadian position, perhaps in a letter to the Department of commerce and the United States Trade Representative.
The Government has not taken that action. The House of Commons can take such action. I believe that as a sovereign nation we are obligated to take this action by adopting the amendment to the Bill and by placing it right in the legislation. In this way it will be clear to the Americans, to the Provinces of Ontario, B.C., Alberta and Quebec, that they will not be bound by that United States letter. In this way we will know, and everyone will know, that we are masters in our own house and that we will not be intimidated by that letter from United States cabinet Ministers. It is essential that the Parliamentary Secretary accept the amendment.


John Horton McDermid: Mr. Speaker, I will be brief. I have been sitting listening to the debate this afternoon on this particular amendment brought forward by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy). I would first like to make a couple of points, if I might, just to cover the sovereignty issue.
1 think a country loses its sovereignty when laws of another country are brought forward to force a country to do certain things within one's country. Had the countervailing duty proceeded it would have allowed the American Government to come into Canada to check the books of the Government. It would have been able to check the books of individual exporters. To my way of thinking that would have damaged the sovereignty of Canada.
When two sovereign nations such as the United States and Canada sit down to negotiate an agreement that is not losing sovereignty, that is putting into practice sovereign rights. That is exactly what the Government did. It negotiated an agreement with the United States which allowed Canada to place an export tax on lumber and to keep the money in Canada, money which will go to the provinces.
In our federation the provinces own the resources, that is, the lumber. In co-operation with the provinces, and with the consent of the provinces with the exception of one, we proceeded in this manner. We have agreed with the provinces that the money from the federal Government will go to them, with the exception of a small administration charge.
There was a great deal of talk about who can spend the money and what can be done and so on. I enjoy members of the Opposition quoting Clayton Yeutter and Malcolm Baldrige's letter to Dennison which has nothing to do with the memorandum of understanding whatsoever. It has no legal status whatsoever. It may be their interpretation of what they think the memorandum of understanding states. But we have
May 13, 1987

also made our interpretation of what is stated, and I have not heard any disagreement from the United States with respect to our interpretations.


James Ross Fulton: Oh, come on.


John Horton McDermid: I sat and listened very patiently all afternoon to my hon. friends opposite. I have been restraining myself all afternoon. I thought I was pretty good. I have behaved myself very well. I did not interrupt Eton. Members but sat and listened attentively to them. I find it interesting that they concentrate more on the American letter than on what the Minister has said and on what our Government's interpretation of the agreement is.
I can tell Elon. Members this. If the provincial Governments planted trees before and did silviculture before, then they can do it with this money. If they built roads with it before, then they can build roads again with this money. They can use it for employee adjustment. They can do these things with this money as long as it does not form a grant back to the industry, a direct grant, or something that could be considered to circumvent the memorandum of understanding. We said that. We said it in committee. Hon. Members who were there and who are in the House today know full well that that was said in committee.
I find it rather amusing that the amendment was drafted by Malcolm Baldrige and Clayton Yeutter and not by the Hon. Member for Winnipeg-Fort Garry. The amendment is word for word out of their letter. It is not original on the part of the Hon. Member. I do not want him to take credit for it.


B. Keith Penner: Come on, John, you can do better than that.


John Horton McDermid: I find it interesting that Malcolm Baldrige and Clayton Yeutter drafted this particular amendment. It has been lifted from the last few lines of their letter.


B. Keith Penner: What has that to do with anything?


John Horton McDermid: We cannot accept this amendment. It would be inconsistent with our understanding with the provinces for federal legislation to state how the provinces may spend revenues arising from the export charge.


B. Keith Penner: It is just the opposite, and you know better than that, John.


John Horton McDermid: My friend opposite can sit and argue all he wants. He can holler and yell and rant and rave. It is inconsistent with the agreement we have with the provinces in this regard. There is no stipulation in the Bill, no conditions whatsoever, with respect to what use the provinces may put the revenues generated from the export charge. It is not in the Bill. We are not going to limit them. We are not going to give them permission or anything else. They know how they can spend the moneys. It is their money because it is their resources about which we are talking.
Softwood Lumber Products Export Charge Act
The Minister for International Trade (Miss Carney) and the Minister of State for Forestry and Mines (Mr. Merrithew) have already stated very clearly many times that they hope the provinces will use this money for reforestation and silviculture. They have stated that many times.
All I can say is that the amendment would be inconsistent with the agreement that we have with the provinces. Therefore, on behalf of the Government, I say that we cannot accept the amendment. We will be voting against it.


B. Keith Penner: May I ask a question of the Hon. Member, Mr. Speaker?


Mr. Deputy Speaker:: Is there unanimous consent to allow the Hon. Member for Cochrane-Superior (Mr. Penner) to ask a question?


Some Hon. Members:: Agreed.


B. Keith Penner: Mr. Speaker, I have one question for my hon. friend. He mentioned in his remarks to the House something about the possibility of the countervailing duty having proceeded. Of course there is no proof that that in fact would have ever happened. Spokesmen in the industry argue that they could have won that countervail action. They argue that they could have been successful, as they were in the past.
My friend also suggests that to negotiate is a sovereign act. I agree with that. But will he not accept the fact that it is possible in those negotiations to bargain away a portion of one's sovereignty?
My real question is this. The amendment proposed by the Hon. Member for Winnipeg-Fort Garry puts no obligations on the provinces at all. It says that they may be applied. The letter from which the Hon. Member for Winnipeg-Fort Garry gets this concern states that this is an interpretation of the Government. The Parliamentary Secretary says: "We have a different interpretation". I wish to ask the Parliamentary Secretary this. How do we know which interpretation will prevail? Does he not agree that it would make good sense to put this amendment in, so that we have greater certainty? Would the Hon. Member not agree with that?


John Horton McDermid: In the first place, I do not think it offers greater certainty-


B. Keith Penner: That is exactly what it does.


John Horton McDermid: To answer the first question, when two sovereign countries negotiate an agreement, sign an agreement, each gives up a little something. There is no question about that.


B. Keith Penner: What did the Americans give up?


John Horton McDermid: What have they given up?-$600 million, or $500 million, or however much they would have received by way of a countervail duty.

May 13, 1987
Softwood Lumber Products Export Charge Act


B. Keith Penner: Oh, come on!


John Horton McDermid: The Hon. Member makes the assertion that we would have won the case. The best advice we could receive, advice which came from the same people who were involved in the 1983 case, was that we were not going to win. That was the advice we got, and that was from the same people who worked on the 1983 case. They told us we were not going to win it, and we were not going to win it because of the change in attitude in the United States.
Everyone knows that the protectionist mood in the United States has grown rather dramatically over the last number of years, and particularly so since the 1983 case.
At the time of the 1983 case, there was a different mood in the U.S., a different Government, a different mind-set entirely.
The Hon. Member is a great crystal ball gazer. It was a judgment call by the provinces and by this Government. In fact, if one takes the time to go back and check, one will find that the lumber producers themselves suggested a negotiated agreement. That is well documented.
The sovereignty issue Hon. Members opposite keep raising is, to my mind, a smoke and mirrors type of argument.


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


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on Motion No. 7 standing in the name of Mr. Axworthy.
Is it the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Pursuant to Standing Order 114(11), a recorded division on the proposed motion stands deferred.
The next motion is Motion No. 9, standing in the name of Mr. Fulton.


James Ross Fulton: Motion No. 9
That Bill C-37, be amended in Clause 15 by striking out lines 4 and 5 at page
11 and substituting the following therefor:
"Act;
(c)	conditionally or unconditionally exempt any softwood lumber products from corporations that can demonstrate that they meet the requirements met by those corporations presently exempt from the charges of this Act;
(d)	conditionally or unconditionally exempt any softwood lumber products from corporations that can demonstrate that their raw log supply comes from regions not named rn the 1986 U.S. Countervailing Duty action.
For greater certainty this includes those areas outside of B.C., Alberta, Ontario and Quebec; and
(e)	conditionally or unconditionally exempt those softwood products such as remanufactured products which were not named in the 1986 U.S. Countervailing Duty Action."
He said: I am pleased to speak to Motion No. 9. The proposed paragraph (c) is as follows:
(c) conditionally or unconditionally exempt any softwood lumber products from corporations that can demonstrate that they meet the requirements met by those corporations presently exempt from the charges of this Act;-
As many Members of this House will know, there are some two dozen corporations that have been exempted. Those corporations are not set out by way of appendix or annex to the Bill, notwithstanding the suggestion in the committee that that be done. They are, however, to be found in the memorandum of understanding.
During committee consideration of the Bill, we heard time and time again from witnesses from across the country the fact that over the course of last summer some companies happened to hear about the procedures to be undertaken to obtain an exemption, and in fact did so, but that others simply were not aware of it.
It has never been entirely clarified as to who was responsible for getting this information out. 1 am not laying blame on anyone's doorstep. However, as a consequence, many firms simply were unaware of the steps to be taken to obtain an exemption.
By the time the preliminary determination came down on October 16, 1986, it was too late for them, and certainly by December 30, 1986, at which point the negotiations were over and the memorandum of understanding signed, many companies had not taken the necessary steps to be exempted from the 15 per cent export tax.
What has happened is that in some parts of the Atlantic Provinces, a very substantial percentage of the companies are on the exempt list. In some regions, notably in the Province of New Brunswick, over 90 per cent of the forest lands held by corporations are exempt, with the percentage in other parts of the country being much lower.
As a consequence, we have something that we do not find across the landscape of Canada in any other sector that I am aware of, that being that there can be two forest products companies operating on opposite sides of the street, both harvesting the same species, paying the same wages, and selling product into the same markets, one of which is exempt from the 15 per cent export tax and the other not.
What we discovered happened was that during the negotiations it was decided that the short list of those corporations
May 13, 1987

which had gone through the earlier process to obtain exemption were those who were subsequently included on the exempt list.
Subsequent to December 30, 1986, the Minister of State for Forestry and Mines (Mr. Merrithew) commented how great it was that he had been able to do such good work for the Maritime region in obtaining these exemptions-and that is something that irritated me. He is a Member from that region and as such he has every right to get out and provide information to corporations, small or large, as to how they should go about getting exempt status. During committee consideration, it became abundantly clear to us that this kind of unfairness of treatment could not go on.
If a company is exempt, whether that company is based in British Columbia, Alberta, Ontario, Quebec, or the Maritime region, it has an unfair advantage over the non-exempt company when it comes to shipping product into the U.S. market. Given two companies in exactly the same circumstance-the same wage rate structure, cost structure, taxation structure-one exempt and one not exempt, we are faced with an unfair situation.
If we as a Parliament cannot find a way to remedy that unfairness, a number of things will ensue. The banks are obviously going to be more inclined to advance funds to the company with the exemption, with the result that over time that company will buy up the forest lands of the non-exempt company, ultimately ending up with the market and operations of that company.
We heard evidence from companies right across the country, and there were very few if any that could say they were making a 15 per cent profit. Most said they were barely keeping their heads above water, and that what little profit they were making would be eroded by the 15 per cent export tax.
Those who are exempt from this export tax are in a position to take over the operations of those who are not. Those companies without the exemption are going to have to cut corners, perhaps leading to lower safety standards, lower production levels, and the seeking of other markets.
Strictly from the point of view of fairness, this situation needs to be remedied. Canada has always at least attempted to have its tax laws operate fairly.
It has never, of course, been a level playing field, as Sam Gibbons and others like to call it, but at least there has been an attempt to have tax measures apply reasonably fairly cross the landscape.
I am not proposing a mandatory provision that all forestry companies are immediately exempted; what I am proposing, through this amendment, is that the Minister, as is provided in Clause 15, be given the opportunity to grant exemption. It would provide the opportunity for corporations to demonstrate that they meet the requirements to be conditionally or
Softwood Lumber Products Export Charge Act
unconditionally exempt in respect of the charges under this legislation.
This is crucially important, and particularly so for the Maritime region, where we do have the situation where it is only the large corporations that are exempt. In many cases, the smaller operations, operations that have been owned in many cases by the same family for many generations, find themselves in the situation where they either did not apply at all or just missed gaining exempt status. I think it important that the Government accept this amendment.
The next paragraph (d) reads:
Conditionally or unconditionally exempt any softwood lumber products from
corporations that can demonstrate that their raw log supply comes from
regions not named in the 1986 U.S. Countervailing Duty action.
I have very broad support for this amendment from right across the country because, as I point out;
For greater certainty this includes those areas outside of B.C., Alberta,
Ontario and Quebec.
This would provide an exemption to those companies operating in Saskatchewan that were not named in the U.S. CVD action which provides exemptions for all of Maritime Canada, and should products from Yukon or NWT start to come on the market, it gives them an exemption. The United States and the U.S. coalition in the CVD action went after the four provinces which they felt were subsidizing logging and trees, namely B.C., Alberta, Ontario and Quebec, so this would provide the opportunity for the Minister conditionally or unconditionally to exempt the products.
It also does another thing which I raised earlier today, namely, the matter of wood coming from south of the border. These are trees grown in the United States. The Americans never named the United States in their own CVD action. Wood comes into western Canada, and particularly into the Province of Quebec, to the 13 border mills. They get almost all of their wood from the United States, and clearly that wood was never named in the U.S. CVD action. That wood was never named during the negotiations in Washington leading up to that fateful agreement of December 30. It seems highly odd to me that in committee we did not find some fertile ground on the government side to provide the kind of opportunity for conditional or unconditional exemptions that I am suggesting here for wood produced in those regions.
I would like to hear from government Members who participated in this process. I find it interesting that on the last day of our committee, the Minister for International Trade (Mr. Carney) happened to be in New Zealand, just as on December 30 we happened to find her in Hawaii, and we found that the Conservative Members who had participated earlier in the committee process had suddenly vanished. Once again, today, we find that those government Members, particularly from the west but also from Ontario and other parts of the country who had participated in the hearings are not here in this debate. This disturbs me profoundly and

May 13, 1987
Softwood Lumber Products Export Charge Act
should profoundly disturb those million workers right across the country who are involved in Canada's largest industry, the forestry sector, which is the largest source of revenue in our balance of trade. Why is it that the Government urged us to hurry through the committee stage in hearing all of the witnesses and made us finish on March 24 to hurry the Bill into the House? Yet here we are another six weeks later dealing with it supposedly because the U.S. is considering a Section 301 action. We still have not heard from the Minister for International Trade on our unanimous requests from the committee.
Part of my amendment is contained in the request that went to the Minister for International Trade (Miss Carney) on March 25. Supposedly negotiations were going on in Washington and supposedly we were going to get some added exemptions in terms of corporate exemptions, regional exemptions and exemptions of remanufactured products. But there has been no action, Mr. Speaker. It somehow demonstrates the inactivity on the government side on this issue.
We know about the 10 per cent one time only offer. We know about the bungling and the incompetence. It is sad that those government Members who did participate in the committee process have found it impossible once again to participate in public debate, to tell the public where they really stand and whether or not they support those corporations which are duly deserving of the exemption. Where do these Members stand? I hoped they would support that. They always claim so privately. I hope to hear that support on the record today. What about the U.S. logs that are being milled in our mills and re-exported to the United States? Why are they not being provided with the pathway and the opportunity to obtain the exemption?
Paragraph (e) reads:
Conditionally or unconditionally exempt those softwood products such as remanufactured products which were not named in the 1986 U.S. Countervailing Duty action.
We listed those in our unanimous letter to the Minister for International Trade. They are the following:
Specialty Remanufactured Cut Stock (including precut pallet stock; precut spring mattress frame components; crating stock; box stock; cleat stock and blanks; turning squares). Furring Strips/Roofing Strips, Remanufactured Studs, Softwood Lumber Pressure Treated with Preservative or Fire Retardant Chemicals With Respect to the Value Added by the Pressure Treatment, Tongue and Groove Roof and Floor Decking, Remanufactured Cedar and Pine Boards, Industrial Clears and Shop (Remanufactured)(Shop and Better) Edge-Glued Panels, Select Fascia, Custom Kiln Dried/Custom Planed Lumber, Finger-Jointed Lumber, Car Lining and Decking, Machine Stress Rated (MSR) Lumber, Bridging, Vegetable Stakes, Spruce Patterns.
In paragraph (e) I am suggesting those products which we have now finally added.
For the reason they were not in the memorandum of understanding and are not to be found in the schedules of exemptions in Bill C-37 we can only go back to the evidence given to us. Some of the witnesses made it very clear that they were never given an opportunity to provide a complete list that could have been added. We have learned that it is hundreds of
millions of dollars, close to a billion dollars in product that has been thrown into the hopper for an added 15 per cent export tax, simply because the Government did not have a proper negotiating process at that time leading up to that fateful day of December 30.
This amendment, Motion No. 9, speaks for itself. It provides for anomalies that never should have been included in the memorandum of understanding. They were never sought by the U.S. Coalition for Fair Lumber Imports. They were never sought by Mr. Baldrige, Mr. Yeutter or Ronald Reagan. They were thrown into the hopper. What this amendment does is to provide a pathway within Clause 15 for the Minister to take that opportunity conditionally or unconditionally to exempt those products that I have identified.


Lloyd Axworthy: Mr. Speaker, I want to remind the House of the words of the Minister for International Trade (Miss Carney). When she arrived back from the shores of Hawaii she said, "This is a good deal for Canada". You will find it very hard to convince people in the Maritime regions, the very large number of firms across Canada in remanufacturing that this is a good deal for Canada, Mr. Speaker. They are now in danger of losing their jobs, their businesses and their livelihood. One can hardly call it a good deal. The Government negotiates an agreement which puts a penalty on its own citizens.
Let me quote from the submission made to the Senate Finance Committee on behalf of the British Columbia Secondary Softwood Lumber Manufacturers. It reads:
Unfortunately, the B.C. secondary softwood lumber industry is finding that the agreement is seriously flawed from a technical standpoint. Due to the Government's insistence upon proceeding alone with the negotiations, Canadian officials did not enjoy the same benefits of industry expertise as did their U.S. counterparts. As a result, the Understanding is damaging the future viability of our industry.
Let me quote another submission, this one from the Coalition Against Unfair Labour Taxes, basically the organization representing the Maritimes softwood lumber people. It says that a survey of 79 members of the Maritime Lumber Bureau indicates that 57 per cent of those employed by nonexempt firms will be laid off within one year of the imposition of the tax. This amounts to 4,167 of a total of 11,000 direct industry employees.
It is hardly a fair description to say that this was a good deal for Canada when in fact those very industries directly affected, in their words, have pointed out how seriously flawed this may be.
This amendment which we support and endorse proposes a way of correcting that particular exclusion by providing within the Bill the clear power to add substantially for exclusions those in the Maritimes region in particular and, for the remanufacturing people, those products which are not presently excluded.
May 13, 1987

I heard the Parliamentary Secretary say that we did not lose our sovereignty. It is interesting to see the process we are now going through. The United States Government and the United States lumber industry is saying that they will not negotiate changes in the agreement until we pass the Bill. Even the Minister for International Trade has almost come to her senses and said that she thinks the Americans are violating the spirit of this agreement. On the other hand, we are faced with the comments of the famous Mr. Dennison who says that they will not negotiate anything until the legislation is passed. Then, according to the Vancouver Sun of April 9, 1987, he said that nothing will be done until the legislation is passed. He said that there are changes the coalition wants too and that there are companies completely excluded from the tax that do not deserve to be excluded. He said that some of them are just wholesalers and he thinks they will want to take them off the list.
The Government is in fact asking us to give it a blank cheque removing the leverage provided by this legislation so that the Minister for International Trade, who at this point might be on the shores of the Fiji Islands will have her negotiators begin negotiating with the Americans so we will have to give up more than we gave up originally. We know the kind of negotiation of which the Minister is capable, and that is simply to surrender.
Now we are faced with what can only be called a form of international blackmail. We are told to pass the Bill so that the American industry can be totally satisfied that it gets everything it wants. It is prepared to negotiate after that, but it has taken a new bargaining position which is that it wants to eliminate companies that have already been granted exclusions. We are in a classic Catch-22 situation.
The Parliamentary Secretary wants a further explanation. Perhaps he is busily involved in matters of great substance, so let me repeat for him that Mr. Dennison, the chief lobbyist for the U.S. lumber industry, has said they will not do anything until the legislation is passed, and then he went on to say that they want changes in the legislation and the memorandum of agreement because there are Canadian companies completely excluded from the tax that do not deserve to be excluded and they want them off the list. That sets off warning bells suggesting that the next stage of negotiations will be one further stage of retreat.


John Horton McDermid: Oh, oh!


Lloyd Axworthy: Apparently I struck a funny-bone in the arm of the Parliamentary Secretary. How else would he explain that when the original negotiations took place, certain companies gained exclusion and others did not? According to the brief presented by the Maritime Lumber Bureau, 57 per cent of them are facing a loss of close to 4,100 jobs because the Government did not do an effective job when the original negotiations took place. That is hardly a laughing matter. It is hardly something that would cause great hilarity.
Softwood Lumber Products Export Charge Act
We are now being faced with the obvious conclusion that one of the results of this negotiation will be that Canadians will lose jobs. Members of the industry have detailed exactly how that will happen. In the remanufacturing industry, 300 or 400 lay-offs are taking place in British Columbia already. A number of firms have already indicated that they will move their operations to the other side of the border. They say they are doing that because when the Government negotiated this, it held no consultations with the industry and somehow forgot to put them on the list.
Let me remind Hon. Members of the incredible mistake that was made during negotiations to compound the injury. When the original countervailing duty was imposed, U.S. authorities made it clear that the value-added portion of any remanufactured product would not be included in the assessment of duty. The Minister for International Trade was such a great negotiator that she managed to include Canadian secondary lumber manufacturers in the deal, and the tax is now imposed on them. That $500 million industry was put in jeopardy because of the skill of that negotiation. That has to go down as one of the most brilliant negotiations in the annals of Canadian commercial relations.
This amendment seeks what we have sought throughout, and that is, to say that it is proper for the Parliament of Canada to assert its own right to protect its own citizens. If we are as sovereign as the Parliamentary Secretary has said we are, then surely this Parliament has a right to say that Canadian businesses and citizens will be hurt by this agreement. Therefore, we have a right to make an amendment that will protect those businesses and citizens against the mistakes that were made in the original negotiations.
I would only say to Hon. Members opposite that it is beyond belief that they could vote against such an amendment when that is its clear purpose and intent. Perhaps they are basically saying once again that that memorandum of agreement so circumscribes the powers of Parliament that we do not have the right to defend our citizens and to offer them the kind of protection they need against the stupid actions of the Government.


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


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on Motion No. 9 standing in the name of the Hon. Member for Skeena (Mr. Fulton).
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.

May 13, 1987
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Mr. Deputy Speaker:: All those opposed please say nay.


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Pursuant to Section 11 of Standing Order 114, the recorded division on the proposed motion stands deferred.
I have been asked by the government Whip to defer the vote. Is that the position of the Parliamentary Secretary?


John Horton McDermid: Mr. Speaker, I understood that consultations had taken place and that we would proceed to third reading immediately. I would imagine that if we do proceed to third reading, we would naturally vote on the motions before we did so.


Mr. Fennell:: Mr. Speaker, I am sorry, I did not know that we would finish this quickly and I had a phone call. I was going to speak to the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy).


Lloyd Axworthy: It is too late.


Thomas Scott Fennell: Will this be on division or do you request a vote?


Lloyd Axworthy: Mr. Speaker, you know how co-operative we want to be in helping the Government manage the affairs of this House. We are certainly prepared to have these two amendments go on division. We are prepared as well to consent to move on to third reading. However, I want to say to the Parliamentary Secretaries collectively that we do not think it would be possible to complete third reading today.


James Ross Fulton: Mr. Speaker, I think it would be appropriate to do it on division. You have just been advised there is another problem as well, and doing it on division for that reason as well may be the most appropriate way to go.


Mr. Deputy Speaker:: I gather there is consent to have Motion No. 7 and Motion No. 9 negatived on division. Is that agreed?


Some Hon. Members:: Agreed.
Motion No. 7 (Mr. Axworthy) negatived.
Motion No. 9 (Mr. Fulton) negatived.


John Carnell Crosbie: that the Bill be concurred in.


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


Some Hon. Members:: On division.


[Stage Direction]
Motion agreed to.
John Carnell Crosbie: that the Bill be read the third time and passed.


John Horton McDermid: Mr. Speaker, first I want to thank my friends in the Liberal Party and the NDP for their cooperation so we could move into third reading. I appreciate that very much.
The Softwood Lumber Products Export Charge Act, Bill C-37, now before the House for third reading, comes at the end of a long, complex and very important trade action in which the Government had to make a very difficult choice among the alternatives open to it. I would like to review briefly the background to our agreement with the U.S., and then comment on the initiatives the Government has taken since the end of December.
As you know, we argued strongly against the acceptance of the U.S. countervailing duty petition when it was filed some 10 months ago. Despite our strong representations, we were not successful. It was not because of a lack of effort. Our representations were very strong and I know Members on the other side of the House in meetings with their U.S. counterparts also made strong representations on behalf of the Canadian lumber industry.
Last October 16, the U.S. Department of Commerce reversed its 1983 decision and determined that stumpage was in fact a subsidy subject to countervailing duty and imposed a preliminary duty of 15 per cent. In a formal note the Government of Canada characterized this finding as: "Flawed in law, inconsistent with established U.S. practice and, in several important respects, based on erroneous assumptions". Nevertheless we had to face the fact that the ruling had gone against us. The Hon. Member for Cochrane-Superior (Mr. Penner) and I had a discussion today as to what would have happened if. All I can say is that if he knows what would have happened if, he is far better than I am. Perhaps he is anyway, but if he can see into the future and what might have happened if, he is certainly wasting his time in doing what he is doing today.
By early November it was becoming increasingly apparent that the final ruling would almost certainly go against us as well. I explained that when we discussed one of the amendments a little earlier. The best advice we received from those involved intimately with the 1983 decision was that we were not going to win. We were going to end up with a countervailing duty, and it seemed prudent to try to resolve the issue before that decision could be handed down.
The subsequent negotiations, which were the subject of a lot of debate this afternoon, were not easy. Initially, the petitioners held out for much more stringent terms than we were prepared to accept. They were talking about 30 per cent or 32 per cent as the starting point along with a number of other demands. However, these demands were successfully resisted. I have to give credit to the negotiating team. They did an excellent job under some very tough circumstances.
May 13, 1987

In its fundamentals the eventual agreement was in line with the terms proposed by Canada and met all of Canada's declared objectives. It was signed without prejudice to our position	that	stumpage	programs	and practices are	notsubsidies	subject to countervailing	duty. It avoided	theestablishment of a potentially dangerous legal precedent. It ensured that any additional revenues would be retained in Canada.	It	maintained provincial	sovereignty over	themanagement of their natural resources. The only matter which was to be the subject of further consultation and agreement between	the	Canadian	and U.S.	Governments was	the
calculation of the value of any replacement measures in relation to the export charge.
The memorandum of understanding embodies the agreement reached between Canada and the U.S., implementation of which requires authority to collect the export charge. That authority is contained in Bill C-37 which reflects the elements of the memorandum of understanding.
Committees of both the House and the other place have completed several weeks of hearings on Bill C-37. I believe we worked on it for about six weeks in committee. We heard from a broad and impressive group of witnesses. Certain aspects of the agreement on which the Bill is based came under close scrutiny in both committees. I believe the committees' major
Softwood Lumber Products Export Charge Act
concerns are being addressed through initiatives we have taken in discussions with the U.S.
Many of the other issues of concern will undoubtedly become less significant as the export charge is replaced by provincial measures as allowed by the legislation and the memorandum of understanding.
The Canadian Council of Forest Ministers has taken a lead in developing a national package of replacement measures. The provinces are co-operating on replacement measures, and the Minister's report progress is being made in this direction. I appreciate and fully support the efforts of the council and look forward to the Minister's next report which should be in June.
It is six o'clock, Mr. Speaker. I will finish my remarks when the Bill is brought back to the House. I know the Minister of State for Forestry and Mines (Mr. Merrithew) wants to participate as do my friends on the other side of the House. Again I want to thank them very much for their co-operation.


Mr. Deputy Speaker:: It being six o'clock, this House stands adjourned until eleven o'clock tomorrow.


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

Thursday, May 14, 1987
[Stage Direction]
Prayers


George Roland Henderson: Mr. Speaker, in a statement given here on March 24, 1987, I expressed my strong opposition to the 12 per cent tax on potato chips contained in the February Budget. Since then I have received a number of letters from groups which are also opposed to this measure.
This tax remains a grave concern for the P.E.I. Potato Chip Co-operative, a new and important business in Urbainville, Prince Edward Island. At their annual meeting, the P.E.I. Women in Support of Agriculture passed a resolution requesting the immediate withdrawal of this tax. In addition, the Minister of Finance (Mr. Wilson) has received telexes from the P.E.I. Potato Producers Association and the Prince Edward Island Potato Marketing Board expressing their strong disapproval of the new tax.
The general manager of the marketing board lists the many direct and indirect benefits of the Canadian potato chip industry. He feels the new tax "will contribute to greater pressure on many Canadian farmers". Surely the Minister can see that this short-sighted tax is a serious blow to the entire potato-growing industry on Prince Edward Island. Therefore, I urge the Minister of Finance to revoke the tax immediately.



ABORTION


Alan Redway: Mr. Speaker, as you know, many Canadians hold strong strong and diametrically opposing views on the subject of abortion. Often overlooked in this ongoing debate is the impact that abortion has on the
economy and jobs. An example is the number of school classrooms that might have been filled had abortions not taken place.
In September, 1986, the children born in 1980 entered Grade 1. The unborn of 1980 would have filled 1,644 classrooms. Had these children been born, 733 more Grade 1 teachers in Ontario and 871 more Grade 1 teachers across the rest of Canada would have had jobs for the present school year. If there had been no abortions between 1971 and 1981, 14,117 more teachers could have been employed in Canada this year. It does not take much imagination to see the effect of this on the demand for and production of consumer goods and services.
The greatest impact, however, will come a few years from now when a shrinking number of wage earners will be required to provide pensions and health benefits for an increasing number of senior citizens.



SCIENCE AND TECHNOLOGY


John Napier Turner: Mr. Speaker, the Province of British Columbia is seeking the support of the federal Government to build the world's first KAON factory by upgrading the existing TRIUMF cyclotron at the University of British Columbia. The construction of a KAON factory at the multi-university MESON facility would create jobs for Canadians. It would generate tremendous economic spinoffs both during its construction and its operational phases. The impact on scientific research and related technology development in Canada would be significant.
Building a KAON factory at UBC would also help to redress Canada's poor international standing in terms of the amount of money spent on research and development as well as the low proportion of federal R and D funds directed toward British Columbia. As Canada currently has only a one-year lead over world competition in the pursuit of this project, we should not ignore this vital opportunity to maintain our leadership role in the field of sub-atomic particle physics.

May 13, 1987
O.	21



SENIOR CITIZENS


J. Robert Howie: Mr. Speaker, I would like to speak briefly on a subject of some importance to me. While in Fredericton recently, I visited a senior citizens' club which I feel presented a shining example of seniors helping seniors along with the financial assistance of the Government.
Government assistance was being transformed by senior citizens into programs and events for seniors aimed at promoting and enhancing the mental and physical well-being of all concerned. While there, I saw activities such as painting workshops, swimming, and even synchronized swimming, all of which demonstrated to me the active and contributive role seniors are capable of playing if given sufficient resources to do so.
While Budget constraints are a fact of life for this and every other Government, programs such as New Horizons richly deserve the support of the federal Government. I applaud the Government's past support and would urge that that support be continued.



NUCLEAR ENERGY


William Alexander (Bill) Blaikie: Mr. Speaker, the Manitoba Government has introduced legislation which would prohibit the disposal of high-level nuclear waste in the Province of Manitoba, in keeping with its long-standing position that provinces which generate nuclear waste, such as the Province of Ontario, ought also to be the provinces which take final responsibility for those wastes. The legislation was also introduced in response to the anxiety many Manitobans have about the fact that the Underground Research Laboratory, where AECL has chosen to do research into the deep geological disposal of high-level radioactive waste, exists in Manitoba.
One of the things Manitobans have been concerned about for a long time is that Manitoba ought not to become, either by accident or by design, a final site for disposal. In response to the refusal of this Government to give Manitoba the kind of guarantees it has been seeking for a number of years, guarantees that Manitoba would not be an option for high-level nuclear waste disposal, the Manitoba Government has done the right thing. I hope other non-nuclear provinces will do likewise and thus send a message to Ontario and other nuclear-waste-generating provinces that if they want to continue to produce nuclear waste and pursue the nuclear option, they will have to be responsible for it in the final analysis.



POLICE WEEK


Carole Jacques: Mr. Speaker, I am very pleased today to take the floor to commend our police officers, both men and women, for their dedicated, courageous and professional work to serve our communities and our country.
The House acknowledges the leading role of police personnel and the need to set a week aside for highlighting their special contribution to Canada. I am sure the House will also want to take this opportunity to pay tribute to the families of police officers.
Too often we hear about a police officer shot dead or seriously injured, a timely reminder of hazards inherent in police work. Still I am convinced that every day relatives of police officers live in anxiety and apprehension as they await the return of their loved one. I sympathize with them, Mr. Speaker.
O)

In conclusion, I call upon this House to pay special tribute to the families of all police officers and especially to those who have lost a loved one in the line of duty.



EXTERNAL AFFAIRS


James Douglas Manly: Mr. Speaker, the Canadian Government has a policy of encouraging visits to Canadian ports by U.S. warships. There is growing concern about this practice and growing public support for a comprehensive public inquiry into this policy.
Recently the Capital Regional District, representing 250,000 people of Greater Victoria and 14 municipalities, passed a resolution saying that the Capital Regional District Board asked the Prime Minister (Mr. Mulroney) to convene a formal public inquiry into all aspects of the issue of nuclear warships visiting Canadian ports.
There is concern about continued low-level radiation leakage, the possibility of a nuclear accident, and about whether or not our Government has any contingency plans in the event of such an accident. I urge the Government to convene that kind of formal public inquiry now.
May 13, 1987



NATIONAL TOURISM WEEK


William Lesick: Mr. Speaker, we are currently celebrating National Tourism Week in Canada which runs from May 11 to May 17. The theme is: "Canada grows with tourism". Its objective is to raise the public's understanding of the importance and economic potential of tourism in Canada.
Tourism is a $20 billion a year industry employing over 600,000 people. It is one of the largest and fastest growing industries in Canada, and the third largest in Alberta. The theme in Alberta is: "Smile, you're a tourist attraction". This campaign shows Albertans the importance of extending a friendly welcome to visitors.
The federal Government and the Government of Alberta have signed a five-year subagreement worth $56.3 million to be cost shared on a 50/50 basis. This rapidly growing industry is a key part of our economic diversification strategy and both federal and provincial Governments have demonstrated their commitment to tourism. I would like to take this opportunity to invite you, Mr. Speaker, and all other Members to come and enjoy our Alberta hospitality.



LITERACY


Aideen Nicholson: Mr. Speaker, too little attention has been paid to the alarming fact that large numbers of Canadians are functionally illiterate. Some four million cannot read or write well enough to function in society and a million more cannot read or write at all. Many illiterate Canadians are unemployed and cannot qualify for government-sponsored job training because they lack literacy skills.
Life is filled with obstacles and hazards for those who cannot read labels or street signs, identify emergency telephone numbers, do their own banking, read to their children, or accomplish many other tasks of daily life that most of us take for granted.
As a nation Canada has not come to grips with this crisis as we have with more visible disabilities. Canada lags behind other western countries which have recognized the problem and introduced programs to deal with it.
The key to fighting illiteracy is in heightening public awareness and providing the means to acquire literacy skills. In its last Throne Speech the federal Government indicated it is aware of the problem. What is needed now is the political will to act.



ENVIRONMENTAL AFFAIRS


Rob Nicholson: Mr. Speaker, a report issued last week again brought attention to the problems of pollution in the Niagara River. That river, indeed the whole Great Lakes system, has been the receptacle of a continuous stream of toxic pollutants for years. I believe this problem and acid rain are the two most important environmental issues this country faces.
It is sad to note that the vast majority of this pollution comes from the U.S. Some progress has been made and more is necessary for the Niagara River. What we are asking of the Americans I do not think is unfair or unreasonable. We are simply asking them to clean up the mess they have made. In helping us they will be protecting themselves from a world in which no one is safe.



CRIMINAL CODE


Margaret Anne Mitchell: Mr. Speaker, citizens of Vancouver were horrified when four serious criminal incidents involving knives took place on city streets in a recent two-week period. Three incidents resulted in deaths. Of the 10 homicides in Vancouver this year five have involved knives. The same deadly pattern is reported across the country.
This situation is clearly intolerable. For many years community groups and police officers have called for amendments to the Criminal Code which would prohibit the carrying of knives in public and in licensed drinking establishments. Both the Conservative Government and the previous Liberal Government have done nothing while the use of knives in criminal incidents has steadily increased throughout Canada.
I again call upon the federal Government to act now to save lives. Do not wait for more killings. Amend the Criminal Code to protect average citizens from knives.



AGRICULTURE


Gordon Edward Taylor: Mr. Speaker, the major problems with which our farmers are contending today originated with the high interest rates during 1982 and 1983 and a subsidy war wherein the European Common Market subsidized agricultural products to the hilt, thus accumulating

May 13, 1987
surpluses which it is dumping into every market it can find. The U.S.A. is now doing the same thing thinking that two wrongs can make a right. The Progressive Conservative Government and its Ministers are trying to talk sense into the heads of both the EEC and the U.S.A., but while they are doing so our farmers are suffering.
To reduce necessary subsidization in Canada we should start a new industry to convert surplus wheat and corn into fuel ethanol for blending with methanol and gasoline. This has the potential of creating jobs, helping the gas and oil industry, and providing a brand new market for our farmers. It can contribute to energy security, have significant environmental benefits, and bring buoyancy back to the economy. Will the Government take up the challenge?



CANADIAN TRANSPORT COMMISSION


B. Keith Penner: Mr. Speaker, I rise to express my support for Mr. Fred Turner's request that the Government appoint an independent arbitrator to settle fairly his dispute with the Canadian Transport Commission. At a press conference yesterday hosted by the Hon. Member for Humber-Port au Port-St. Barbe (Mr. Tobin) and the Hon. Member for Edmonton-Strathcona (Mr. Kilgour), the former Parliamentary Secretary to the Minister of Transport, Members of Parliament from all three political Parties demonstrated their support for Mr. Fred Turner and their belief in his cause.
Mr. Turner lost his airline business because the Canadian Transport Commission removed his licence unfairly. Ministers of the Government have acknowledged that an error was made because they reinstated his licence and offered him a small ex gratia payment. However, the offer is a pittance compared to the loss of Mr. Fred Turner's livelihood.
I urge the Government to do the just and right thing- appoint an independent arbitrator to examine all aspects of this case and make the appropriate recommendations for a redress of this grievance.



PATRIOTISM


Lise Bourgault: For the
thirty-seventh consecutive year, Mr. Speaker, the Ottawa Rotary Club is organizing a program designed to stimulate more patriotism and citizenship among our youth.
As Member for Argenteuil-Papineau 1 am extremely proud that my riding should be represented by Trent Mell of Lachute. My young constituent will represent all Argenteuil- Papineau youths, Mr. Speaker, and I want to commend him for taking part in this national program.
Mr. Speaker, young people in Quebec and Canada need examples for inspiration to get involved and participate in our country's social, economic and political life.
We should take every means available to encourage and congratulate the Rotary Club of Canada and the National Capital Commission for setting up this constructive patriotism program.
Such commendable and wide-ranging initiatives will make it easier for young Canadians to appreciate the true meaning of their actions in a great country like Canada as we mark the 40th anniversary of Canadian citizenship.



ENVIRONMENTAL AFFAIRS


Don Boudria: Mr. Speaker, for some time, residents of Glengarry-Prescott- Russell have been working hard to rid the Ottawa River of residue that has accumulated over the years.
Several groups in my region, including the Hawkesbury hunting and fishing club, the Prescott-Russell joint county council, and the tourism association, are doing a large share of the work involved in cleaning up the waters of the Ottawa River and making general improvements in our area.
Unfortunately, some people seem to be completely indifferent to these improvements. Go-Hut Sanitation Services has been charged with dumping toxic waste in the Ottawa River. Even worse, Mr. Speaker, the toxic waste came from the Government of Canada, from four federal agencies, namely the Bank of Canada, the National Research Council, Transport Canada and Supply and Services, each of whom has been a customer of the Go-Hut company, from time to time.
Mr. Speaker, the moral is that when the Conservative Government brags about its record, it is really saying: Do as I say, not as I do.
May 13, 1987



NATIONAL HOCKEY LEAGUE-NON-AVAILABILITY OF TELEVISED BROADCASTS IN PEACE RIVER COUNTRY

Albert Glen Cooper: Mr. Speaker, as we all know, the best of hockey is presently being played, with two Canadian teams in the semi-finals. Tonight the Edmonton Oilers will be playing a big game at Northlands Coliseum. My concern is that my constituents in the Peace country are unable to view this game.
This problem has existed for some of the previous games played, as well as being the third year in a row that the series has not been aired in my area.
Carling-O'Keefe won out over the CBC in the bidding process for broadcasting rights and have entered into agreements with smaller television networks in order to broadcast the games. In Alberta they have utilized ITV's facilities which do not reach the majority in my riding.
I strongly urge Carling-O'Keefe and the CBC to reach an agreement in the negotiations taking place this week in Toronto to allow those games to be distributed fairly, not only for this series but also for next year's finals. If you think people have strong opinions on capital punishment, Mr. Speaker, try this one!


Some Hon. Members:: Oh, oh!



ORAL QUESTION PERIOD


John Napier Turner: Mr. Speaker, two days ago, a survey of Canada's scientific community revealed that 40 per cent of our best researchers are about to leave the country because of a major reduction in federal funding for research and development. Yesterday, the Minister of State for Science and Technology announced a terrific new initiative, namely that the Government was going to set up a mailing list and ask scientists who are leaving the country to come back to Canada.
I would like to ask the Prime Minister, in the absence of the Minister: Is that the best the Government can do to stop our brain drain? Draw up a mailing list?


Martin Brian Mulroney: Mr. Speaker, the remark of the Leader of the Opposition on the brain drain are grossly exaggerated. In fact, the Canadian Government has set up a National Advisory Science and Technology Board, which I have the honour of chairing. Last
Oral Questions
night, I met some of our leading scientists who spoke to me in very positive terms, not only about further developments in this area but also about their confidence and faith in the scientific dimension and the technological course Canada intends to take. They felt most encouraged, and I hope the Leader of the Opposition will be as well.


CUTS IN RESEARCH FACILITIES
John Napier Turner: Mr. Speaker, the Prime Minister is obviously not close enough to the scene because he would know-


John Kenneth Gormley: You are?


John Napier Turner: Yes, as a matter of fact, I am.


Some Hon. Members:: Oh, oh!


John Kenneth Gormley: Tell us more, John.


John Napier Turner: Forty per cent of our scientists are ready to leave the country because of the lack of support to our scientific community by the Government. All the Government can do is come up with a mailing list prepared by the Minister of State for Science and Technology.
Will the Prime Minister ask the Minister of State for Science and Technology, when he is drawing up his brain drain mailing list, to use that list to inform our scientists why the Government cut the National Research Council laboratories, why it closed the Algonquin observatory, why it is closing down the Bedford Institute and why it is cutting out a number of other leading facilities, including the Canadian Centre for Toxicology at Guelph? Will he explain that to our scientists by using this new mailing list of the Minister in order to keep in touch with the men and women with brains in this country who are leaving because of the Government?


Martin Brian Mulroney: Mr. Speaker, I am really surprised that there would be criticism of the science policy of this or any other Government from a Party that devised the scientific tax scam that took billions of dollars from legitimate investment in Canada in science and technology.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: The Scientific Tax Credit was a disgrace and dishonour that sucked hundreds of millions of dollars-


John Edward Broadbent: You voted for it.


Martin Brian Mulroney: -from the scientific community in Canada, and the Liberals will forever bear the disgrace of that initiative.

May 13, 1987
Oral Questions
[DOT] (M25)


John Edward Broadbent: You voted for it over there.


Martin Brian Mulroney: We are in the process now of putting together-


John Edward Broadbent: You voted for it.


Martin Brian Mulroney: The Leader of the New Democratic Party should not get too excited. I am getting 24 Sussex all ready for you.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: I even have a pair of shoes to go with that nice new suit.


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: I think there is general agreement in the scientific community. I had the honour of chairing the first meeting of the National Advisory Science and Technology Board for a number of hours. I then met at the University of Waterloo with some of our leading scholars and experts in science and technology. Last evening, as I indicated, I had the opportunity again. There is a strong view that collectively, with the co-operation of the provinces, the research institutes and universities and the Government of Canada, we are putting together a national science policy which will allow us to recapture a lot of the time lost over the last number of years and bring Canada to the forefront of science and technology.


REQUEST FOR GOVERNMENT ACTION
John Napier Turner: Why then would 40 per cent of our scientists be prepared to leave this country because they have no faith in this Government understanding Canada's possibilities in the 21st century? Why prepare a mailing list to try to invite our scientists back to Canada once they leave? Why not do something now to persuade them to stay, with a constructive scientific policy in this country?


Martin Brian Mulroney: Mr. Speaker, is the Leader of the Opposition seriously suggesting that 40 per cent of the scientists in Canada are about to leave this country? Three times now-


John Napier Turner: Show him the report.


Martin Brian Mulroney: Does the Leader of the Opposition seriously believe what he has just said, that 40 per cent of the science community of this country-


An Hon. Member:: That's right.


An Hon. Member:: Wake up, Brian.


Martin Brian Mulroney: That is an absolute statement of nonsense. If the Right Hon. Leader of the Opposition does not know that, 1 fear he is in for even worse days ahead.


INSTITUTE FOR MARINE DYNAMICS
Brian Vincent Tobin: Mr. Speaker, my question is also directed to the Prime Minister. The Prime Minister will know that the National Research Council's Institute for Marine Dynamics is located at St. John's, Newfoundland, and that centre, at a cost of $55 million, gives St. John's and, indeed, Canada, the leading institute of its kind in the world today. Why then has the Government of Canada put at risk the world-class potential and capabilities of this institute by underfunding by as much as $5 million a year the operating budget of that world-class facility?


Marcel Masse: Mr. Speaker, when we signed an agreement with the Newfoundland Government, especially with respect to offshore exploration, we brought a substantial and fundamental contribution to Memorial University and all research centres in Newfoundland. I am convinced that the Member is aware of that fact.
We are now negotiating with the Government of Newfoundland concerning grants for other types of research. I think that the Government of Canada is doing a lot in that field and that without the Government's action in the past, presently and in the future, Memorial University would not enjoy the scientific recognition it now has across Canada.


REQUEST FOR ADDITIONAL FUNDING
Brian Vincent Tobin: The
facility was put there by the previous administration. It was supposed to be the most up to date place in the world to test the seaworthiness of drilling platforms, seagoing oil rigs and ships. The Director of the Institute says: "If we don't get the additional money, I guess what we will have is a great big pool of water". That was said by the Director of the National Research Institute. The kind of answer the Minister has just given is what we have been hearing for the last year.
When will the Government of Canada get serious and provide the dollars necessary for both scientists and basic research at a $55 million facility which can and should be a world leader in that particular kind of scientific research and which currently is not because of a lack of commitment by the Government?


Marcel Masse: Mr. Speaker, I think that the Government of Canada has acted on the issue of research, especially as far as Newfoundland is concerned. I personally had the opportunity to visit the Research Centre mentioned by the Hon. Member and have discussions with the officials and, in the months to come, the Government of Canada in co-operation with the
May 13, 1987

Government of Newfoundland and not unilaterally, will ensure that research centres in Newfoundland maintain their degree of excellence.


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


Some Hon. Members:: Hear, hear!


Neil Young: Go get 'em, Eddie!


John Edward Broadbent: Mr. Speaker, I simply want to say that I have not ordered a single new pair of shoes-not one!


Charles Joseph Clark: Socialists wear sandals!


Mr. Speaker:: Order, please. The Hon. Member for Oshawa.


PURCHASE OF DOME PETROLEUM BY AMOCO CANADA
John Edward Broadbent: Mr. Speaker, my question is addressed to the Minister of Energy, Mines and Resources. Yesterday I noted in Question Period that the final agreement in the takeover of Dome Petroleum by Amoco could well be signed within 24 hours. As the Minister knows that did in fact take place yesterday afternoon. Is the Minister aware that there is a provision in the takeover agreement which effectively precludes Dome, or any of its shareholders, from considering any other offer in the takeover bid?


Marcel Masse: Mr. Speaker, on April 22 this year, Mr. Macdonald, Chairman of Dome, was very specific in his public statement that under an existing agreement between Amoco and Dome, the latter could not seek competitive bids but would have to consider any bids that would be submitted.
The fiduciary function of the Board of Directors and especially its Chairman, as the person responsible for Dome, is set forth very clearly in the Canada Business Corporations Act, Section 117 (1), first paragraph, which says that every director and officer, in discharging his duties, shall act honestly and in good faith with a view to the best interests of the corporation.
Personally, I am not familiar with the contents of the definitive agreement referred to by the Leader of the New Democratic Party. I believe it is to be submitted to Dome's creditors this afternoon and tomorrow. Subsequently, creditors and shareholders will make a decision, and if they approve the proposal, it will be reviewed by Investment Canada.
This kind of definitive agreement does not constitute the final and irrevocable sale of Dome. It does provide details of financial and other conditions, so that the parties concerned, and above all the owners, in other words, creditors and shareholders, can ascertain the exact value of the offer.
Oral Questions


REQUEST THAT GOVERNMENT INTERVENE
John Edward Broadbent: Mr. Speaker, part of the Minister's answer dealt with the actual question. Considering that our understanding is that the agreement that has been signed effectively precludes Dome and its shareholders from considering another offer, and since we know that Amoco has threatened to sue Imperial Oil as well as potential, would-be competitors with suits that could involve many millions of dollars, does the Government of Canada not think it is time that it intervened in this process and took steps to ensure that not only the interests of the shareholders and creditors are served in this multi-million dollar decision but that the interests of the people of Canada are served? Will the Minister intervene?


Some Hon. Members:: Hear, hear!


Marcel Masse: Mr. Speaker, the Leader of the New Democratic Party should at least acknowledge that we have acted in what we believe to be the best interests of the Canadian people. Dome, which was considered to be bankrupt last year, has now had three bids from three different corporations: Amoco, Esso and TransCanada PipeLines.
Everybody in Canada and anywhere else in the world who had any interest in this question knew that Dome was up for sale. That is why these bids were prepared. It is now up to parties other than Amoco to decide, advised therein by counsel, how they will proceed to make a bid.
However, I repeat what the Chairman of Dome said himself on April 22. Their agreement with Amoco provides that Dome will not seek any bids. On the other hand, Dome's Chairman and its board of directors have a legal responsibility, should a bid be made and they consider it to be in the interests of the shareholders and creditors, to advise the latter accordingly.


MINISTER'S POSITION
John Edward Broadbent: Mr. Speaker, the Government stood back while Amoco got away and finalized its takeover bid of Dome. It is now standing back while the creditors are meeting. As we sit in the House this afternoon the creditors could take a decision that could force Dome into bankruptcy. Having stood back from these two important processes, does the Government believe that the Government of Japan, or the Government of the vast majority of countries in western Europe, would stand back when millions of dollars of their taxpayers' money are at stake and allow a decision such as this to be reached by, and only by, the private sector? Does the Minister believe that for a minute?

May 13, 1987
Oral Questions


Some Hon. Members:: Hear, hear!


Marcel Masse: Mr. Speaker, I realize that the Leader of the New Democratic Party-which is first and foremost a socialist party-would probably rather have the entire private sector in Canada run by the State. That is not the kind of country we live in. There are laws in this country that protect relations within the private sector. And that is the kind of framework in which these transactions are taking place.


ROLE OF INVESTMENT CANADA
Russell Gregoire MacLellan: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. On the one hand the Minister refuses to differentiate between the fiduciary capacity of the management and directors of Dome with the shareholders of that company and the management and directors' agreement with Amoco Canada on the other. They are two different things.
Yesterday the head of Investment Canada said that he is concerned about the sale of Dome Petroleum, yet he does not have the mandate to be able to review bids other than the bid that comes before it, which would be that of Amoco Canada. Why does the Government not honour its own Canadianization policy and insist that other bids come before Investment Canada instead of selling out the country's natural resources?


Some Hon. Members:: Hear, hear!


Marcel Masse: Mr. Speaker, I would point out that, had it not been for the policies of the Liberal Party, Dome Petroleum might not be up for sale today.
What the Government wants to ensure, Mr. Speaker, is that the sale is made in keeping with Canadian laws and in the interest of Canadians, and the interest of Canadians includes that of Dome management. The law is there, everything is being done in accordance with it, Mr. Speaker, and we are concerned over the sale of Dome. Should a deal be concluded with a foreign controlled company, this company will have to submit its proposal to Investment Canada.
I can assure the House that we will take every step required to make sure that Canadian interests are better protected by this Government than they ever were under the previous administration.


RECORD OF INVESTMENT CANADA DECISIONS
Russell Gregoire MacLellan: Mr. Speaker, why doesn't the Minister of Energy admit that Investment Canada is no deterrent? It has not turned down
one application to date. All it amounts to is an attempt to legitimize the Government's sell-out of our natural resources.


An Hon. Member:: Absolutely.


Marcel Masse: Mr. Speaker, Investment Canada did not have to reject any bid because the offers were the subject of responsible negotiations and Investment Canada made sure that all final offers were in the interest of Canadians.


FORECAST OF ENERGY CRISIS IN I990S
Ian Gardiner Waddell: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. I should like to take up the same line of questioning.
Given that we are going to have an energy crisis in the 1990s, as all of the commentators seem to say, and given that Dome in fact will be selling out this vast pool of oil and gas to Amoco, a big American oil company, would he not agree that this in fact is setting the energy policy for the 1990s, and isn't it a fact that the state that is going to be running the energy policy of Canada in the 1990s, if this deal goes through, is the United States of America?


Marcel Masse: Mr. Speaker, this is not the first time our colleague has predicted a crisis in the energy sector. He has been doing just that for 10 years and, as far as I know, the international problem right now is that we have surpluses in that sector. Besides, the best way to make sure that Canada does not run out of petroleum products is to see to it that Dome will be in a position to exploit the oil patch over which it now holds drilling rights. That is what the Government intends to do, Mr. Speaker.


QUERY CONCERNING POSSIBLE IMPOSITION OF TERMS ON PURCHASE BY AMOCO CANADA
Ian Gardiner Waddell: The Minister should perhaps read the statement of his own Deputy Minister about the oil crisis that is coming up, a statement that was made in Paris yesterday.


An Hon. Member:: He doesn't read such things.


Ian Gardiner Waddell: Let me ask him a question with respect to the meeting of creditors, to be held tomorrow in Toronto.
The Minister has already said in a press conference that he was going to require some terms of Amoco. He said that a couple of weeks ago.
Should he not, therefore, then tell those creditors, and the banks, and the companies which are putting this deal together,
May 13, 1987

what those terms are going to be? Those terms could affect the deal.
So, I would ask the Minister to stand in his place in this House and tell us the terms he intends to put on Amoco in respect of this takeover.


Marcel Masse: Mr. Speaker, I would point out to my colleague that all countries attending yesterday's International Energy Agency meeting were in agreement on a basic principle, namely that energy supply will be guaranteed through a free market economy, a far cry from the proposal of the socialist party across the aisle. As to tomorrow's meeting, Canadian legislation provides that the Government can express its requirements through Investment Canada. Our general requirements have been made public. We are waiting for a proposal to make sure that once the final agreement is signed it is in the interest of Canadians, and the best interest of Canadians is to make sure that drilling operations continue on Dome lands, Mr. Speaker.


LOBBYISTS
Don Boudria: Mr. Speaker, my question is for the Prime Minister, and it concerns the registration of lobbyists.
On September 9, 1985, in an open letter to Members of Parliament and Senators, the Prime Minister wrote:
I have accordingly asked my colleague, the Minister of Consumer and
Corporate Affairs to prepare on an urgent basis, legislation to govern lobbying
activity.
On December 19, 1985, the Minister of Consumer and Corporate Affairs presented a White Paper on lobbying, instead of legislation.
On January 27, 1987, an all-Party committee presented a report recommending the registration of lobbyists.
My question, very simply, is: Where is the Bill?


Harvie Andre: Mr. Speaker, the timetable outlined by the Hon. Member should have also included the fact that in February the House passed a motion agreeing to the committee's report; and based on that motion, I am preparing legislation, which I shall introduce in the House soon.


Don Boudria: So much for the promise of the Prime Minister.
Oral Questions


SALARIES AND EXPENSES OF LOBBYISTS-REQUEST FOR INCLUSION IN TERMS OF PROPOSED LEGISLATION
Don Boudria: Mr. Speaker, my supplementary question is directed to the Prime Minister who had promised to introduce this Bill urgently. Is the Prime Minister now prepared to assure the House that the Bill, when available, will provide for disclosure of lobbyists' salaries and expenses, as well as registration of the Government officials who have rallied to their cause? Is he determined to include these specific provisions in the legislation?


Harvie Andre: Mr. Speaker, the report of the committee, which was unanimously endorsed-and I think the Hon. Member was on the committee-specifically recommended against including fees. Given that fact, I find it strange that this representation would now be made.
A Bill reflecting the deliberations of the committee will be brought forward.
1 hope that the Hon. Member has not changed his mind from the position he took while a member of that committee.


Don Boudria: You don't read Hansard too well, either.


OWNERSHIP OF OIL RESOURCES
Nelson Andrew Riis: Mr. Speaker, my question is also for the Minister of Energy, Mines and Resources.
As the Minister well knows, other oil-producing countries around the world have taken steps to ensure domestic control over that particular aspect of their respective energy sectors. One needs only to consider what has taken place in such countries as Norway, Great Britain, Venezuela, Mexico, as well as all of the countries of the Middle East, and even the United States of America.
Would the Minister indicate to the House and to the people of Canada a single oil-producing country that has not taken steps to ensure that the ownership and control of that critical resource remains in domestic hands? Could he name a single country that falls into that category?


Marcel Masse: Mr. Speaker, this is the most extraordinary question I have ever heard in the House. The energy reserves are on Canadian territory. They are developed under the jurisdiction of Canadian laws, whether in the area of transport, labour or even income tax. Mr. Speaker, all the countries of

May 13, 1987
Oral Questions
the world have organized their respective systems along that line. The royalties are paid to the provinces. They are not paid to the state of California or the state of Louisiana. The labour force operates under Canadian legislation generally and, in particular, under Alberta and Saskatchewan legislation. Mr. Speaker, I can hardly believe that there is a Member of this House who does not know that the energy industry is first and foremost under the control of Canada with the support of the various provinces, which are responsible in this country for natural resources management.


PURCHASE OF DOME PETROLEUM BY AMOCO CANADA- REQUEST FOR COMMITTEE REFERRAL
Nelson Andrew Riis: Mr. Speaker, that is the most extraordinary response I have ever heard in this House. You know full well that Amoco shifted $600 million out of this country in the first few months of this year.


Marcel Masse: You should at least know that. Ask a question about what you do not know, not what you should know.


Nelson Andrew Riis: My supplementary question for the Minister is as follows: The Minister will know that the President of Investment Canada indicated yesterday in committee his personal concern regarding this takeover. He said he was very, very concerned about the implications for Canada.
Considering the importance of this takeover bid, and to ensure fair treatment in the bidding process, would the Minister give consideration to referring this matter to a special committee, to ensure that the three bids do receive consideration and that, whatever the final decision, that decision is in the best interests of Canada and Canadians?


An Hon. Member:: It might even help your Party.


Marcel Masse: Again, Mr. Speaker, it is clear that the Government generally, including our administrators, is determined to make sure through Investment Canada that the proposals which are accepted in the end are in Canada's best interests. I wish to indicate to the House that since our Government came to power in 1984, the proportion of Canadian property has increased from 42.5 percent to 47 percent, and that of Canadian control from 40.5 percent to 48.4 percent. We should be commended for that, Mr. Speaker.


John Edward Broadbent: It goes in reverse, with Dome.


An Hon. Member:: You are inconsistent.


THE DISABLED AND THE HANDICAPPED
Roland de Corneille: Mr. Speaker, my question is for the Minister of Employment and Immigration.
The Sub-committee on the Disabled and the Handicapped released recently the Challenge Report, which shows that the Government's employment record for disabled persons is only 2 per cent, compared to 6 per cent for the private sector.
When is the Minister going to take action to follow the guidelines of equality? His own Department's record is one of the worst in the Government, with a one-fiftieth of 1 per cent employment record for the disabled.


Benoît Bouchard: Mr. Speaker, the Government is concerned over the issue of employment for the handicapped, and one of the objectives of the Employment Equity Act was to give various categories or workers ready access to the labour market. I would suggest that the act is being implemented to meet the objectives I have just mentioned.


DEPARTMENT'S RECORD
Roland de Corneille: Mr. Speaker, I am not talking about accessibility, I am talking about the employment rate. When we realize that one in every 17 people in Canada is disabled or handicapped and the Minister is only employing one in every 5,000 in his Department, what kind of guidelines and program for employment is his Department, which is supposed to be the Department of Employment, giving as an example to the rest of the country?


Benoît Bouchard: When we came into office three years ago, Mr. Speaker, federal departments had practically no handicapped employees on their payroll.
When I was Secretary of State we invested $16 million to promote-and this going on now-access not only to employment but also to all economic and other sectors where the handicapped should be represented. The Secretary of State is implementing and will implement other policies.
As to Employment and Immigration Canada, with a staff of 25,000 it is obvious that it is much more complicated to set up facilities accessible to the handicapped.
But I agree with my colleague that even though we are now making every effort in Canada Manpower Centres there is still some way to go. Of course this will take more than three years, given the situation we were faced with when we took over.
May 13, 1987


NATIONAL PARKS
James Ross Fulton: Mr. Speaker, my question is for the Prime Minister. I would first like to thank him for his personal determination to preserve South Moresby.


Some Hon. Members:: Hear, hear!


James Ross Fulton: Over two months ago the Prime Minister met with the Premier of British Columbia, sought and found his support for the designation of South Moresby as a national park reserve as demonstrated in the March 9 B.C. Speech from the Throne.
Would the Prime Minister advise this House whether he has been able to resecure the co-operation of British Columbia on this in light of the bad faith demonstrated earlier this week by British Columbia in its proposal to log until 1997 within the proposed park boundaries?


Thomas Michael McMillan: Mr. Speaker, negotiations are continuing with the Province of B.C. on this very important national and, indeed, international question. I was talking to my opposite number, Bruce Stra-chan, who is responsible for the park system in British Columbia, as recently as a few moments before Question Period. I am awaiting a new proposal from the B.C. Government which, I understand, is being discussed by the B.C. Cabinet even as I speak. It would be premature for me to comment further on this matter except to say that both Governments are negotiating in good faith.
For our part, the entire Cabinet, in fact the entire caucus, including the B.C. caucus, supports the establishment of a national park in what is arguably the most important wilderness treasure in the entire Dominion of Canada.


Leslie Gordon Benjamin: It is not arguable.


James Ross Fulton: I would like to thank the Minister of the Environment publicly. I know he has always negotiated in good faith with the Government of B.C.


REQUEST THAT PRIME MINISTER SEEK END TO LOGGING OPERATIONS
James Ross Fulton: Mr. Speaker, my supplementary question is for the Prime Minister, who I think is the only person who can ensure at this point in time that the Premier of British Columbia's word to the Prime Minister is lived up to, namely, that the area proposed by the Government of Canada is the only part of South Moresby now left that could ensure a national park reserve.
Will the Prime Minister call the Premier of British Columbia today and ask him to live up to his word and not allow any further logging? Will the Prime Minister himself call the Premier of British Columbia and ask for an end to the
Oral Questions
logging, because that is the first step to securing this area as a national park reserve?


Thomas Michael McMillan: Mr. Speaker, because this issue is a government-wide priority, and because of the importance which the Prime Minister himself attaches to the question, in addition to the negotiations that I myself am conducting with my opposite number, the Prime Minister has raised the issue with the Premier, as did the Deputy Prime Minister yesterday.


UNEMPLOYMENT INSURANCE
Jean-Claude Malépart: Mr. Speaker, my question is directed to the Minister of Employment and Immigration and it concerns the reimbursement of Unemployment Insurance cheques for 35,000 early retirees in Canada who were unfairly cut off by the Conservative Government in 1985. So that these elderly workers can receive the cheques to which they are entitled, would the Minister, in order to speed up the process, be willing to ask the Unemployment Insurance Commission to start the reimbursement process immediately by advising these 35,000 people to report to the Unemployment Insurance office and start completing their benefit reimbursement card?


Benoît Bouchard: Mr. Speaker, the condition we had set for reimbursing claimants before January 1986 was that they had to fill out the benefit application form. As soon as the form is completed by all persons eligible for the reimbursement, and as soon as the legislation is adopted by the House, the process will start automatically, since the benefit applications are already on record at the Canada Employment Centres.


REQUEST THAT BILL BE DIVIDED
Jean-Claude Malépart: Mr. Speaker, for 18 months these people have been fighting and waiting for their reimbursement, in many cases so they can pay back the money they had to borrow. Will the Minister be willing to let these people receive the unemployment insurance cheques to which they are entitled within a month at the latest, and have the House immediately adopt that part of the Bill that allows for this reimbursement? And if not, why is the Minister holding these 35,000 people hostage to discriminate against other elderly workers?


Benoît Bouchard: Mr. Speaker, how typical of the speeches of the Hon. Member for Montreal-Sainte-Marie, who is always trying to scare people for no reason at all. The Hon. Member

May 13, 1987
Oral Questions
will soon have a chance to vote for the whole Bill, not half and not one quarter, and that is when .. . You have been trying to scare people for a year now. Vote for the Bill and we will take care of reimbursing these people.


PHARMACEUTICAL INDUSTRY
William Lesick: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs concerning Bill C-22. As a pharmacist I believe in the necessity of enhanced patent protection to further research and development in Canada. Earlier we heard the Right Hon. Leader of the Opposition tell us about the supposed exodus of researchers and scientists from Canada with the accompanying loss of millions and millions of dollars.
Could the Minister please tell this House what is the impact of the continued delay of passage of Bill C-22 on research and development in Canada?


Harvie Andre: Mr. Speaker, there is no question but that each day of delay in the passage of and Royal Assent to Bill C-22 is a further delay for those scientists who are waiting for the $800 million of additional research that has already been committed. There are grants to universities included in the amount which are all conditional on the Bill's passage. Each day of delay means a further delay for Canadian scientists who want to get to work in this very important area.


CANADIAN TRANSPORT COMMISSION
Leslie Gordon Benjamin: Mr. Speaker, I have a question for the Minister of Transport. The Saskatchewan Wheat Pool has expressed, to use its words, "disappointment", "shock", "intolerable", concerning the CTC ruling to allow variable grain rates between certain grain companies and the CNR in certain selected locations in Saskatchewan, which flies in the face of a High-Court decision on western grain movement. The only shipper is the Canadian Wheat Board, not the grain companies and not even the farmers.
Since the Sask Pool which represents 80 or more per cent of the farmers in that province and the National Farmers Union have appealed to the Cabinet to overturn that CTC decision, is it the intention to entertain that appeal and when will they get a decision?


John Carnell Crosbie: Mr. Speaker, this is an issue of great interest to grain farmers and, of course, there is divided opinion on it as there is on many issues both in western Canada and elsewhere. A number of groups appeared before the CTC supporting the variable innovation, and a number of groups, including the group which the Hon. Member mentioned, opposed it. They have appealed to the Governor in Council. That is now being processed and we will have to make a decision on it. I cannot say very well what the decision will be until we have considered it.
Hearings were held in the west and the experienced persons who make up the CTC have given their views on the matter. Of course they have instituted certain safeguards, including the fact that this is for a trial period of one year.


REQUEST THAT MINISTER OVERTURN DECISION
Leslie Gordon Benjamin: Mr. Speaker, the CTC chose to ignore the evidence. As the Minister is aware, variable rates mean that farmers who live closer to Thunder Bay and Vancouver will pay higher freight rates than those who live farther away because they happen to live at or near a place where there are variable freight rates. Is it the intention of the Government to allow the railways and a few private grain companies to play God, picking and choosing which farmers will pay less and which will pay more? Will he overturn the CTC decision?


John Carnell Crosbie: Mr. Speaker, the Canadian Transport Commission is a quasijudicial body. To have a Member play-acting in the House saying that they ignored the evidence is beyond all comprehension, and is certainly improper, to put it at the very minimum.


John Edward Broadbent: Improper?


John Carnell Crosbie: The hon. gentleman laughs. That is why he will not be first for very long.


CONVERSION OF SURPLUS GRAIN TO ETHANOL
Gordon Edward Taylor: Mr. Speaker, my question is directed to the Hon. Minister of Energy, the best Minister of Energy Canada has ever had.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Gordon Edward Taylor: Given that the use of grain-derived ethanol as an octane enhancing additive for gasoline would use hundreds of ton of wheat and corn, and given that early adoption of U.S. standards in gasoline, plus a reduction in sales tax of two cents
May 13, 1987

per litre on gasoline containing a minimum of 3 per cent ethanol and 5 per cent methanol, would use up large surpluses of wheat and corn and would provide benefits for all of Canada, will the Hon. Minister provide the leadership and action required so all of these good things can happen in a free enterprise way?
[ Translation]


Marcel Masse: Mr. Speaker, I am grateful to my colleague. Indeed truth sounds better from that side than it does from the other side. I can assure my colleague that the Government is aware of the great interest in the use of ethanol and all mixtures like methanol as fuel. This is what my department had in mind recently when it carried out a study on oxygenated fuel in Canada. Being a Government which likes to consult with all interested groups we have sent this analysis to all interested parties to find out exactly what they think of this Government approach. Hopefully their comments will reach me by May 31, and department officials will prepare a summary of their views before making recommendations to the Minister this summer.


ENVIRONMENTAL AFFAIRS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is directed to the Minister of the Environment. Last week we learned from two University of Toronto researchers that as much as 175 tonnes per year of toxic chemicals are released into the air from the mist at Niagara Falls. How can the Minister's Department be of assistance to Canadians who live in the Niagara Peninsula, particularly in relation to their health and to the tourist industry, considering that this year the Department of the Environment has cut its strength by 106 employees, from scientists to technicians and from field workers to administrators? In what way can the Department be of assistance?


Thomas Michael McMillan: Mr. Speaker, this is the kind of question the Hon. Member has raised with me in committee and it is no more valid merely by being repeated in the House of Commons. The fact is that the budget of Environment Canada is now higher than it has ever been in the history of this country except for one fiscal year.


Charles L. Caccia: That does not negate the fact that Environment Canada has lost 106 valuable people.
Tabling of Documents PROPOSED TOXICOLOGY CENTRE


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in light of this rather disturbing development which threatens the health of Canadians who live in a peninsula that is international in scope, will the Government now reconsider its decision to cancel the Toronto-Guelph toxicology centre which was cancelled in November, 1984, and go ahead with the construction of that very necessary establishment?


Thomas Michael McMillan: Mr. Speaker, the premise of the question is that the Government of Canada is neglecting toxicology. The facts are contrary to that premise.
At present 368 person-years are being devoted by the Government of Canada to this important field. We spend $20.4 million every year on toxicology in-house. To boot, we contract out an additional $5.6 million, not to mention the $15 million we cost-share with the provinces. This is one area in which I would have thought the Hon. Member for Davenport would avoid asking questions because the record is good.


Mr. Speaker:: I must advise Hon. Members that the time for Question Period has ended. I regret that there are some Hon. Members to whom we could not get today and I hope we will be able to get to them tomorrow.



ROUTINE PROCEEDINGS


Barbara Jean McDougall: Mr. Speaker, pursuant to Standing Order 67, I have the honour to table in both official languages the 1986 annual report of the Canada Development Investment Corporation.


TARIFF BOARD
Thomas Hockin: Mr. Speaker, pursuant to the provisions of Standing Order 67(2), I have the honour to lay upon the table copies in both official languages of a report to the Tariff Board on the Canadian natural sweetener industry.

May 13, 1987
Committee Reports


PETITIONS
Philip Derek Lewis: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to the following petitions: 332-1830 to 332-1840 inclusive, 332-1872 to 332-1875 inclusive, 332-1880 to 332-1895 inclusive, 3321901 to 332-1913 inclusive, 332-1922, 332-1927 to 332-1930 inclusive, 332-1936 to 332-1945 inclusive, 332-1952 to 3321959 inclusive, 332-1961 to 332-1963 inclusive, 332-1966 and 332-1968 to 332-1975 inclusive.



SECURITY INTELLIGENCE REVIEW COMMITTEE


Philip Derek Lewis: Mr. Speaker, yesterday the Solicitor General (Mr. Kelleher) undertook to obtain correspondence between the Minister and the Security Intelligence Review Committee and I am pleased at this time to table in both official languages that correspondence.



ENERGY, MINES AND RESOURCES PRESENTATION OF SIXTH REPORT OF STANDING COMMITTEE

["Mr. Speaker, I have the duty and pleasure to table several petitions with over 100 signatures dealing with Motion No. 37 presently before the House.\nThe petitioners indicate that because of the killing of thousands of unborn Canadian children every year for reasons of convenience, they call upon Parliament to approve this Private Members' motion which asks the Government to protect the right to life for the unborn in the Canadian Charter of Rights.\nThe petitioners come from several communities in The Battlefords-Meadow Lake constituency, and I am very pleased to note that the majority of signatures are from John Paul II Collegiate in North Battleford."]
Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I have the honour to present the Sixth Report of the Standing Committee on Energy, Mines and Resources in both official languages.



Victor Fredrich (Vic) Althouse: Mr. Speaker, I have a petition from residents of several different areas in my riding. They are petitioning the House of Commons and the Government of Canada and note that the application for variable rates made by Canadian National Railways and six grain companies will lower freight rates which will adversely affect the quality and stability of rural life in Saskatchewan since they will only apply to a few places.
The petitioners say that the expense of hauling grain will fall back on the producer. Longer hauls will increase trucking and fuel costs and increase the upkeep on municipal roads, and will eventually allow the disintegration of the railway branch line network. They humbly call upon Parliament to reject the proposal to apply variable freight rates to 47 delivery points in western Canada.


James Douglas Manly: Mr. Speaker, I have a duly certified petition concerning the report of the commission of inquiry into unemployment insurance, known as the Forget Commission.
The petitioners point out that the Forget proposal to annualize the UI program will reduce benefits to the unemployed by 31 per cent over all, forcing over 62 per cent of the unemployed to live on less than $140 a week.
Therefore the undersigned call upon Parliament to reject any legislation designed to eliminate federal contributions to the unemployment program or reduce UI benefits for unemployed Canadians.


John Kenneth Gormley: Mr. Speaker, I have the duty and pleasure to table several petitions with over 100 signatures dealing with Motion No. 37 presently before the House.
The petitioners indicate that because of the killing of thousands of unborn Canadian children every year for reasons of convenience, they call upon Parliament to approve this Private Members' motion which asks the Government to protect the right to life for the unborn in the Canadian Charter of Rights.
The petitioners come from several communities in The Battlefords-Meadow Lake constituency, and I am very pleased to note that the majority of signatures are from John Paul II Collegiate in North Battleford.



MUTUAL LEGAL ASSISTANCE IN CRIMINAL MATTERS ACT


Ramon John Hnatyshyn: for leave to introduce Bill C-58, an Act to provide for the implementation of treaties for mutual legal assistance in criminal matters, to amend the Criminal Code, the Crown Liability Act, and the Immigration Act, 1976.
May 13, 1987


Mr. Speaker:: Shall the Hon. Minister have leave to introduce the Bill?


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Philip Derek Lewis: Mr. Speaker, question No. 112 will be answered today.


Mr. Howie: 1.	For the fiscal year ending March 31, 1987, did persons in federal
penitentiaries avail themselves of university programs and, if so (a) how many
(b) in what penitentiaries (c) what was the total cost of this program?
2.	In what manner and to what extent were appropriate program objectives
achieved as a result of the program?


James Francis Kelleher: 1. Yes.
(a)	For the fiscal year ending March 31, 1987, average fulltime equivalent students; 247. Inmates in all institutions could also avail themselves of university correspondence courses. As of March 31, 1987, there were 369 registrations in university correspondence courses.
(b)	In the fiscal year ending March 31, 1987 university programs were offered at Archambault and Cowansville institutions in Quebec; Prison for Women, Kingston Penitentiary, Collins Bay and Millhaven institutions in Ontario; Stony Mountain institution in Manitoba; Saskatchewan Penitentiary in Saskatchewan; Drumheller and Edmonton institutions in Alberta; and Kent, Matsqui, William Head and Mountain institutions in British Columbia.
(c)	The total cost for university programs in 86/87 was $904,000.
2. Educational programs are intended to provide opportunities for academic advancement as well as personal development through goal setting and achievement.
University programs provide an improved ability to find and hold a job thus potentially reducing recidivism. Taking such programs also improves self-image and increases the ability of the inmate to participate in further educational programs. The pursuit and achievement of a university degree has been found to be a positive contributing factor to the rehabilitation of the inmate students.
Question of Privilege-Mr. Masse


Philip Derek Lewis: Mr. Speaker, if Question No. 95 could be made an Order for Return, the return would be tabled immediately.


Mr. Speaker:: The questions mentioned by the Parliamentary Secretary has been answered. Is it the pleasure of the House that Question No. 95 be made an Order for Return?


Some Hon. Members:: Agreed.


Mr. Fulton: For the period September 4, 1984 to March 4, 1987, did Members of Parliament travel outside of Canada at the expense, in whole or in part, of any department of the Government of Canada and, if so, for each Member and each trip what was the (a) sponsoring department (b) purpose (c) destination (d) cost?
Return tabled.


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


Mr. Speaker:: Shall all Notices of Motions stand?


Some Hon. Members:: Agreed.


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


Mr. Speaker:: Shall the remaining questions stand?


Some Hon. Members:: Agreed.


PRIVILEGE
Marcel Masse: Mr. Speaker, I would like to raise a question of privilege with respect to a statement made by the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan) during question period yesterday, while I was away from the House.

May 13, 1987
Question of Privilege-Mr. Masse
The Eton. Member said that on May 5 this year, I deliberately misled the Elouse when I said that the agreement between Amoco Canada and Dome Petroleum allowed for other bids to be made.
Yesterday, he said that the agreement prohibits or would prohibit or prohibited other companies from making bids, under threat of a suit.
Mr. Speaker, perhaps I may refer you to the statement made by Dome Chairman Mr. Macdonald, who explained at a press conference in Calgary on April 22 this year that under the agreement with Amoco, Dome could not seek other bids but would nevertheless have to consider any bids it would receive.
In a letter to Imperial Oil dated April 24, 1987, the president of Amoco Canada, Don Stacy, recalled details of the memorandum of agreement concluded by Dome and Amoco, to warn the company not to make a bid. That was what the letter contained. The complete text of the memorandum of agreement was subsequently submitted to the U.S. Securities and Exchange Commission on May 4, 1987.
It will be up to counsel for the parties interested in making bids to interpret the details of this memorandum of agreement. Any conflict between Amoco, Dome and other parties regarding the interpretation of the conditions of the agreement will have to be settled by those parties and not by the Government of Canada.
As I pointed out in a letter I sent last week to the Leader of the New Democratic Party, Mr. Broadbent, according to the legal advice I received from the Department of Justice, I may not intervene in this basically private matter, which should be resolved by the parties themselves.
1 maintain what I said in my answer to the Hon. Member on May 5 and subsequent days. The Government of Canada will examine all bids to purchase Dome Petroleum which are submitted for review under the Investment Canada Act.
Mr. Speaker, that is how we will ensure that the transaction, once it has been accepted by Dome, will provide a net benefit to Canada.


Russell Gregoire MacLellan: Mr. Speaker, on May 5 I did not say the Minister was intentionally misleading the House. I said he was misleading the House. As you will remember, Sir, you rose to state that you hoped I was not implying that he was intentionally misleading the House and I said that I would not do that. That seemed to clarify the issue at that time.
With regard to the Minister's statement, I said "misleading" because in answer to my question the Hon. Minister said:
I can only refer the Hon. Member to the statements made by the President of
Dome Petroleum where the answer is yes.
I had asked, "Does the agreement between Amoco Canada and Dome Petroleum allow for other bids to be made?", and the Minister said yes.
In my opinion and that of others the memorandum of agreement which was signed by the Chairman of Dome Petroleum on April 17 and the President of Amoco Canada on April 18 states that Dome Petroleum will not enter into any agreements with any other bidders, which indicates to me, as do other things in the agreement, that Dome Petroleum cannot entertain any other bids.
Regardless of what the fiduciary responsibilities of the management and directors of Dome are to the shareholders, that is not stated in the agreement. We must look at what is stated in the agreement, which is that Dome Petroleum cannot enter into an agreement with any other party.
My feeling was and still is that the Minister's statement that Dome could entertain other bids was a misleading statement. I still stand by that. I cannot say that the Minister intentionally misled because I do not know whether the Minister actually read that memorandum of agreement. He should have had access to it, but I cannot say whether he read it and I thereby cannot say he intentionally misled. However, I do think this is an important question and I think it is misleading. I certainly am not attributing any clandestine motives to the Hon. Minister.


Herbert Eser (Herb) Gray: Mr. Speaker, I want to begin by saying that the Hon. Minister of Energy, Mines and Resources (Mr. Masse) was completely in error when he said that the Member for Cape Breton-The Sydneys (Mr. MacLellan) claimed that the Minister had deliberately misled the House with respect to the agreement in question. At no time, either today or on May 5, did the Hon. Member say anything of the kind. In fact, you were good enough to intervene on May 5 to confirm that it was not the Member's intention to allege that the Minister was deliberately misleading the House.
Second, if the Hon. Minister had a question of privilege about the May 5 question, surely the time to have raised it was on May 5, and the Hon. Minister did not do that.


Marcel Masse: He said that yesterday.


Herbert Eser (Herb) Gray: The Hon. Minister says that he is complaining about what the Member for Cape Breton-The Sydneys said yesterday. I repeat that nowhere in Hansard is it recorded that the Hon. Member claimed that the Hon. Minister deliberately misled the House.
In any event, if I am not mistaken, the Minister's complaint is not the basis for a question of privilege. If he has a complaint, it may be the basis for a point of order. Even then, it is a valid point of order only if, as I have already said, the Hon. Member for Cape Breton-The Sydneys stated that the Hon. Minister deliberately misled the House which, I repeat, he did not say.
May 13, 1987

Also, the Hon. Minister's point is defective because he did not say that if you found a prima facie case of privilege he would move a motion referring the matter to the Standing Committee on Elections, Privileges and Procedure. He has not stated that intention and his point is therefore defective.
Finally, 1 respectfully refer you to page 12 of Beauchesne's, citation 19, which says:
A dispute arising between two Members, as to allegations of facts, does not
fulfil the conditions of parliamentary privilege.
The Hon. Minister has raised a grievance about what the Hon. Member said. I respectfully submit that it cannot be a point of order for the reasons I have stated, and certainly it cannot be a valid question of privilege.
Mir. Doug Lewis (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council): Mr. Speaker, I would like to make two points, if I may, on this question of privilege. Both of them are directly related to the comments of the House Leader of the Official Opposition.
First, if time were to be of the essence in every question of privilege, as the Member alleges, there would be very few questions of privilege debated. I think the Speaker has been wise in allowing questions of privilege to be aired as a safety valve, as a method of allowing Members to expound upon their points of view. I think we should continue to ignore the time factor in favour of allowing questions of privilege to be brought forward as a safety valve.
Second, I noted with interest my hon. friend's argument that a question of privilege must be concluded with a motion. I welcome his joining me in this argument. He has argued the other side of the case on previous occasions, I believe. I have made the argument time and again that a question of privilege must be concluded with a motion. If not the Member himself, other members of his Party have disagreed with me and I welcome his joining with me on this technical point. The Hon. Minister has made his case. It may indeed be a matter of debate, but I think we have aired it.


Herbert Eser (Herb) Gray: You have erred, that's right.


Philip Derek Lewis: As my colleague has pointed out, no one would suggest for a minute that the Hon. Minister would deliberately mislead the House. I conclude my argument on that point and leave it to you, Mr. Speaker, to decide on the question of privilege.


Ian Gardiner Waddell: Mr. Speaker, as a somewhat dispassionate observer, being neither a member of the Party, a member of which, it is being suggested, has suggested that another person has misled the House, or a member of the Party of the Minister who is making the point, it seems to me that the problem is that there is no point really. In order to mislead the House you must have some leadership in the House. To "mislead" you must have some "lead" and then you mislead.
Question of Privilege-Mrs. Sparrow
The problem is that we are not getting any statements at all from the Minister with respect to this deal. He should stand up and make a statement in the House and not smuggle it in on a question of privilege.


Mr. Speaker:: The Member for Vancouver-Kingsway (Mr. Waddell) has evidenced again his great genius at managing to find ways to make points on behalf of the people he represents. Hon. Members will, of course, appreciate the points which he has made.
I will check the "blues" carefully. I want to thank the Minister and Hon. Members for their representations. I will give them careful consideration.



Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I rise today on a question of privilege with regard to confidential information from an in camera committee hearing being made public. I respectfully refer to Erskine May, Nineteenth Edition, page 146, Chapter X "Breaches of Privilege and Contempts", which reads as follows:
The publication or disclosure of proceedings of committees conducted with closed doors or of draft reports of committees before they have been reported to the House will, however, constitute a breach of privilege or a contempt.
On Tuesday, May 5, 1987, your Standing Committee on Energy, Mines and Resources met in camera to discuss a motion previously adopted. A great deal of debate occurred, and at the termination of this debate a motion was adopted to rescind the previous motion. Approximately 30 to 40 minutes following this meeting the press phoned my office, recited the discussions, the motion, and the exact way the committee voted and then, of course, asked for my comments in reply, to which I said everything was confidential.
On May 6, 1987, the following day, a Canadian Press article appeared in The Calgary Sun which described the committee proceedings on the motion as follows:
At yesterday's review, two Conservatives voted to reverse that decision, a committee member told the Canadian Press. Another Tory and a Liberal MP voted to stick to the original decision. Conservative chairman, Barbara Sparrow, who urged the committee to look at last week's decision again, cast the deciding vote.
Articles also appeared in The Ottawa Citizen and The Edmonton Journal. I have those articles if you wish to see them.
My duties as a Member of Parliament, a member of a Standing Committee of the House and also as a chairman of that Committee have been degraded, curtailed and indeed somewhat inhibited by the leak of confidential information.

May 13, 1987
Question of Privilege-Mrs. Sparrow
The proceedings of my Committee and, by extension, of all other Committees of the House have been jeopardized by this divulgation of in camera deliberations.
If you find there is a prima facie case of privilege, I will be prepared to move that the matter be referred to the Standing Committee on Elections, Privileges and Procedure.


Paul Gagnon: Mr. Speaker, 1 was going to address the last point, but I will address this one inasmuch as I was a member of the Committee. I can vouch for the facts as expressed by my colleague, the Member for Calgary South (Mrs. Sparrow).
I also want to point out to the Speaker that on May 5, at page 5777 of Hansard, the Member for Kamloops-Shuswap (Mr. Riis) raised a similar point of order on this very matter, bringing to the attention of the House deliberations that had taken place in camera. I want to emphasize to the Speaker that I find it ironic that the House Leader of the New Democratic Party raised his point on May 5 when the NDP had no member present at either of the votes.


Russell Gregoire MacLellan: Mr. Speaker, as a member of that Committee I do not disagree with what has been stated by the Member for Calgary South (Mrs. Sparrow) and the Member for Calgary North (Mr. Gagnon). However, I want to add some further information.
First, we are talking about two meetings. One meeting, at which certain questions were asked about inviting witnesses, occurred the week before. That was the sum and substance of the in camera meeting the week before and the in camera meeting of May 5.
These meetings were dealing with questions of Steering Committee and a matter of inviting witnesses. Those were the sole topics of conversation of those two meetings.
Shortly after the first meeting it became public as to who would be invited to appear as witnesses. Not only was information leaked from the second meeting, but obviously it became public from the first meeting.
My other point is that before the second meeting a reporter came to me and said, "I understand the witnesses will not be coming, that something else has been arranged". In the case of the second meeting, the press not only knew what might have been said at the first meeting and subsequently knew what was said at the second meeting, they knew what was going to be said at the second meeting before it took place. I believe that this is an embarrassment.
I also have two major concerns about this issue. The first is that the matters discussed were of a steering committee nature. The information from the first meeting about the witnesses to be invited having been made public, there would be a problem if we were just concerned that it became public that the witnesses would not be invited as a result of the second meeting? After all, how will witnesses know not to appear if they are not told not to appear? It is a difficult question.
My third point does not relate to what has been said but I think it is important. If there are to be Steering Committees, then that is what should take place. If there is to be information discussed in Steering Committees, that is where it should take place rather than in in camera meetings.
Holding in camera meetings any time one wishes to keep information private will only exacerbate the leakage of information. We have never experienced this type of situation before. It is unfortunate, but information that pertains to the Steering Committee should be discussed only in the Steering Committee rather than an in camera meeting.


Barbara Jane (Bobbie) Sparrow: Mr. Speaker, the Standing Committee on Energy, Mines and Resources does not have a Steering Committee. There are only seven members present and when we began one and a half years ago it was moved and voted upon by all members present that the full committee would be the Steering Committee.
In addition, I want to refresh the memory of the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan). The meeting that was held two weeks ago was not just in regard to inviting witnesses. We discussed the full agenda in regard to our crude oil reserves and security of supply study.
If you require more information in regard to the two meetings that took place I would be glad to discuss it with you, Mr. Speaker. Obviously there is a leak of confidential information. We rarely hold in camera meetings, having had only three or four.


Herbert Eser (Herb) Gray: Mr. Speaker, the Hon. Member has based her question of privilege on a precedent which she describes as something from Erskine May. I must admit that I may not have heard everything she said, but I presume she was talking about the resolution of the House of Commons of the United Kingdom in 1937 that, in effect, says that documents of the kind she mentions if prematurely disclosed could be a basis for a question of privilege.
However, I want to refer you to page 203 of Beauchesne's Fifth Edition, Citation 647(2) which cites a Speaker's ruling reported in the House of Commons Journals for June 23, 1977 at page 1209. The citation states:
In Canada, when a question of privilege was raised concerning the publication of a committee report before it was presented to the House, the Speaker ruled that the matter could not be resolved as in the British practice because the motion appeared to attack the press for publishing the confidential document but did not attack Members of the House for their attitude in respect of their own confidential documents, and in missing this point, it missed something most important with respect to the privileges of the House.
I do not have the complete ruling to which this edition of Beauchesne refers. There may well be other pertinent paragraphs in it that you may want to consider. However, it struck me, in listening to the Hon. Member, that her motion simply asked the House to refer this matter to the appropriate Committee. It did not contain the essential element apparently required, according to this citation, and that is that there be
May 13, 1987

some attack on Members of the Elouse for their role in this particular matter.
While I understand that the Hon. Member is concerned about this particular issue, I ask the Chair to take into account whether the nature of the Hon. Member's point of privilege, and the motion she says she will present if a prima facie case of privilege were to be found, meets the requirements for a prima facie case of privilege and a proper motion founded thereon, or whether, as I said earlier today in the House of Commons, we are not again seeing a matter of dispute as to facts or of a sense of grievance which may well be in the mind of the Hon. Member a well founded one, but not a bona fide question of privilege?


Philip Derek Lewis: Mr. Speaker, this is the second time in a couple of weeks that the deliberations of an in camera meeting have been discussed as point of privilege on the floor.
With specific reference to the point raised by House Leader of the Official Opposition, and his quoting of Beauchesne's, Section 647(2), it seems to me that on a reading of the substance of that citation, that refers to a privilege of the House being breached because of publication of the deliberations of a committee before they got to the floor of the House. What my colleague, the Hon. Member for Calgary South (Mrs. Sparrow) is specifically complaining about is the disclosure of what took place, the deliberations, the proceedings, at an in camera meeting.
I go back to what I said on that earlier occasion, committees would not be able to function without the ability to hold in camera meetings, to have the give and take which one requires from time to time in this business-in any business, at any level, in fact-away from, and I do not even have to read Beauchesne, the glare of publicity. I think that is what my hon. friend is driving at when she says her privileges as a member of that committee have been breached, and her ability to do her job as a member and chairman of that committee is being derogated by the fact that on this occasion the deliberations of that committee, the proceedings-not the committee report, per se-were disclosed. I respectfully suggest that the final report would be eventually tabled in the House, in any event.
I do not have an awful lot of trouble as to whether or not the media might receive it a half hour before the House. However, I have a great deal of difficulty with the problem the Hon. Member had, and the problem brought up two weeks ago, when Members go behind closed doors to discuss and deliberate, and then find that what was discussed in camera becomes the property of the media and the public. I do not think this
Question of Privilege-Mrs. Sparrow
helps the House or Hon. Members. I think the Hon. Member made an excellent point as to her question of privilege.


Herbert Eser (Herb) Gray: Mr. Speaker, I thank my hon. friend for clarifying the matter of concern. However, I think it is still sound for me to ask the Chair to consider whether the point I raised is not equally relevant to the fact situation, which is the basis for the complaint of the Hon. Member for Calgary South (Mrs. Sparrow).
Are we faced with a complaint which is so vague as to whom it is directed, particularly with respect to the role of Members of Parliament, that the complaint is not a sound basis for a motion to be voted on by this House to refer the matter to the Committee on Elections, Privileges and Procedure? Such a motion, and the investigation by a committee which would flow therefrom, is a serious matter, and one which takes place rarely.
While I understand the Hon. Member's concern, especially now that it has been clarified for me by the Parliamentary Secretary to the Government House Leader, I wonder if it is still not the case, and I would argue that it is, that any motion the Hon. Member for Calgary South would move, if the Speaker found a prima facie case of privilege, would be of such a vague nature it would not be a proper basis for a vote of this House with a resulting inquiry by the Standing Committee on Elections, Privileges and Procedure?


Mr. Speaker:: The Hon. Member for Cape Breton-The Sydneys on the same point?


Russell Gregoire MacLellan: Mr. Speaker, there was just one thing which concerned me and I think it has been made clear by the House Leader of our Party, so I am prepared to let the matter stand.


Mr. Speaker:: 1 thank Hon. Members for their interventions, all of which are helpful to the Chair. I should advise the House that a week or so ago an application, not exactly the same as this, but similar, was brought before the House by the Hon. Member for Selkirk-Interlake (Mr. Holtmann) with respect to a statement made in this House relating to an in camera meeting by the Hon. Member for Kenora-Rainy River (Mr. Parry). I think I should advise Hon. Members that that matter has given the Chair a great deal of difficulty. However, the Chair will be ruling on that matter tomorrow.
With respect to the matter I have heard today, I will be giving it very careful consideration. I can indicate to Hon. Members that there have been enough of these cases now that the Chair feels duty bound to Hon. Members to take the matter very seriously, indeed, and 1 will be returning to the Chamber tomorrow with a ruling.

May 13, 1987
Softwood Lumber Products Export Charge Act



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, as reported (with an amendment) from a legislative committee.
Mr. Deputy Speaker:: As Hon. Members are aware, there are 12 motions on the Notice Paper in amendment to Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products.
Motion No. 1 attempts to import into the Bill provisions found in the Indian Act which were not contemplated at the second reading of the Bill. This amendment falls clearly beyond the scope of the Bill and I must therefore rule it out of order. In doing so, I wish to refer the Hon. Member to Citation 773(1) of Beauchesne's Fifth Edition.

Motion No. 2 was moved in committee and ruled out of order. It falls beyond the scope of the Ways and Means resolution on which the Bill is based. On the basis of Citation 523 of Beauchesne's Fifth Edition, and after careful examination, I must rule this motion out of order.

Motions Nos. 3 and 5 seek to introduce some new kind of mechanism in the establishment of the export charge of 15 per cent. I have come to the conclusion that these motions fall outside the scope of the Bill and the Ways and Means Resolution upon which the Bill is based. No provision for adjustments in the determination of the export charge was contemplated in the resolution of the Bill. Therefore, I have to rule the motions out of order. I refer the Hon. Members to Citation 773(1) of Beauchesne's Fifth Edition which states, and 1 quote:
An amendment is out of order if it is irrelevant to the Bill, beyond its scope or governed by or dependent upon amendments already negatived.

Motion No. 6, which is consequential to Motion No. 3, will not be selected for debate and will not be put to the House.
Motion No. 4 was ruled out of order in committee on the basis that it goes beyond the scope of the Ways and Means resolution by attempting to exempt joint and several liability to a corporation or a region exempt from a charge. I have come to the conclusion that this motion, in attempting to exempt U.S. harvested logs, goes beyond the scope of the Bill and introduces a new concept not contemplated in this Bill. Hon.
Members are referred to Citation 523 of Beauchesne's Fifth Edition which states:
Amendments must not exceed the scope, increase the amount or extend the incidence of any charge upon the public, defined by the terms of the Ways and Means resolutions, by which the provisions proposed to be amended are authorized.
On these grounds I must rule this motion out of order. Motions Nos. 5 and 6 were dealt with earlier.
Motion No. 7 was ruled out of order in the legislative committee. It could be argued that the motion, if carried, might encroach on provincial jurisdiction, although that would be a matter for the courts to decide. However, the Chair recognizes that in procedural terms it is a borderline case. After careful examination the Chair has decided to give the Hon. Member the benefit of the doubt. Therefore, Motion No. 7 will be put to the House, debated and voted on by itself.

Motion No. 8, in the name of the Hon. Member for Skeena (Mr. Fulton), seeks to amend the same clause of the Bill in a manner similar to motion No. 7, in the name of the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy), and therefore will not be selected for debate.

Motion No. 9 will be debated and voted on separately. Motions Nos. 10, 11 and 12 will not be selected for debate.


Lloyd Axworthy: Mr. Speaker, I rise on a point of order. I appreciate the Chair having provided us with a written version of its ruling. I wish to draw the attention of the Chair to the apparent discrepancy in the ruling on Motion No. 1. Citation 773(1) of Beauchesne's Fifth Edition is cited as the rationale for ruling this motion to be beyond the scope of the Bill. When we presented a similar amendment in committee the Chair at that time cited Citation 773(10). It is a citation which I would submit might be more subject to debate in re-examination.
I am wondering if the Chair is prepared to clarify why it is now referring to Citation 773(1) as opposed to Citation 773(10) which citation is more appropriate to the decision made by the Chair.


Mr. Deputy Speaker:: The Chair will consider the remarks made by the Hon. Member for Winnipeg-Fort Garry and come back to the matter. In the meantime we will proceed with debate.


James Ross Fulton: Mr. Speaker, I rise on a point of order in relation to the Chair's ruling on Motion No. 4. The Chair has quoted Citation 523 which states:
Amendments must not exceed the scope, increase the amount or extend the incidence of any charge upon the public, defined by the terms of the Ways and Means resolutions, by which the provisions to be amended are authorized.
I ask, Mr. Speaker, that you look at what I propose in Subclause (3) and Subclause (4). In Subclause (3) the attempt is to exempt those wholesalers who are temporarily holding softwood lumber which comes from corporations that are
May 13, 1987

exempt under the Schedule in Bill C-37. If the softwood lumber was going directly from the exempt mill into the United States then it would be exempt all the way.
What I am attempting to do is not to increase the scope. All I am attempting to do is ensure that those wholesalers who move ribboned lumber, lumber which has been sawn in an exempt mill, held temporarily on their site but which is going to the United States, are not required to pay the 15 per cent export tax because that wood was, and always is throughout its movement to the United States, exempt.
In Subclause (4) I am not attempting to expand the scope. What I am attempting to do particularly is in relation to the border mills. It refers to trees that are grown in the United States and harvested there and for which the U.S. countervailing action never sought to go after. The Americans have never contended that their stumpage system was subsidized. That wood is brought into Canada, milled in Canadian mills, principally the 13 border mills in the Province of Quebec, and then as it goes from the site or from a wholesaler back into the United States it is presently subject to the 15 per cent export charge.
1 have been through the Memorandum of Understanding with a fine-tooth comb. I am unable to find language which leads me to believe that either our negotiators or the American negotiators ever intended, because it was not put into the Memorandum of Understanding, to catch either this wood from the Quebec mills that was grown in the United States, or to capture our wholesalers who were simply temporarily, and at times not even physically, holding the wood. They would simply order the wood from an exempt mill. It would come through. They would ribbon strip it for their buyers in the United States. So I do not believe, from my understanding of Citation 523, that either of these two subclauses would expand or exceed the scope.
I also do not find wording in the Memorandum of Understanding, or as a result of the extensive committee hearings which we held for six weeks, that these commodities and these Canadian businesses were intended to be captured by the 15 per cent export tax.
If you could have another look at this matter, Mr. Speaker, it would be helpful. I think the cost being added on, both to the border mills and to the wholesalers, is inappropriate. This is the only way that Bill C-37 can be remedied.


John Horton McDermid: Mr. Speaker, I rise on the same point of order. 1 admire the ingenious way in which the Hon. Member for Skeena (Mr. Fulton) got his point to the floor of the House of Commons after it had been ruled out of order by the Speaker. I can tell you, Mr. Speaker, that because it is not in the Memorandum of Understanding we cannot create other issues. That would be in violation of the memorandum of understanding, something which the Hon. Member understands and knows.
He also understands that a commitment was made by the Minister and by her staff members that these points would be
Softwood Lumber Products Export Charge Act
raised in negotiations with the Americans once this Bill is under way and passed. The ruling is accurate. The amendments would increase the scope of the legislation. Therefore the Memorandum of Understanding stands and the rulings are correct.


Lloyd Axworthy: Mr. Speaker, I rise on a point of order. I wish to go back to Motion No. 1. The Parliamentary Secretary who is in the Chamber will recall that during the committee hearings I raised a question as to which took precedence, the Indian Affairs Act or the Income Tax Act. Under the Indian Affairs Act, natives on reserve land or in the territory of band councils are given exemptions from provisions of the Income Tax Act. We had asked for a ruling by Revenue Canada which I think would go to the whole point of the amendment that we presented. We are trying to help the Government to be legal and not to abrogate or to eliminate provisions of the Indian Act which, in my understanding, might take precedence over this particular proposal dealing with an imposition of a tax upon native or aboriginal peoples. I am wondering if at this time the Parliamentary Secretary is in a position to provide us with the ruling from Revenue Canada.


John Horton McDermid: Mr. Speaker, I can make inquiries in that regard. I do not have the ruling with me at this particular moment. Certainly, I think it can be obtained fairly quickly.


James Ross Fulton: Mr. Speaker, on the same point of order, I would ask the Chair to reflect for a moment on the point just made by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy).
The Chair is ruling Motion No. 1 out of order on procedural grounds. The point raised by the Hon. Member for Winnipeg

Fort Garry is fundamentally important. I was in attendance when the Hon. Member raised the point during committee consideration. I believe the Deputy Minister for Revenue Canada was in attendance. That was on March 23 last, some seven weeks ago now. The Government has had sufficient opportunity to find out whether or not the Indian Act, in terms of this particular taxation matter, is a more powerful piece of legislation.
The attempt here is simply to protect aboriginal people who might in some way now, or in the near future, be operating logging operations, harvesting operations, sawmilling operations, and particularly where they are exporting lumber to the United States.
Certainly Revenue Canada is abundantly aware of the ruling of less than a year ago, the famed Nowachut case; and certainly I am sure the Parliamentary Secretary is also aware of the March, 1987 ruling of Revenue Canada in relation to aboriginal peoples, status Indian and Inuit people in Canada, pursuant to which it is no longer simply the case of their being employed on or paid on reserve lands where they do not have to pay taxes, whether export taxes, or otherwise, but where the moneys are paid to an establishment on the reserve.

May 13, 1987
Softwood Lumber Products Export Charge Act
In fact, I met with the Minister of National Revenue (Mr. MacKay) yesterday and it is my understanding that where aboriginal people are working off the reserve but the funds earned are paid to an establishment on the reserve, no taxes are payable.
In respect of the logging and sawmilling operations in my own constituency, and elsewhere in the country, this is a fundamentally important amendment. The proposed amendment reads:
"or temporary license but does not include a person within the meaning of the
Indian Act,"-
The purpose of the amendment, as the Hon. Member for Winnipeg-Fort Garry has pointed out, is simply to ensure that Bill C-37, when passed, does not have to come back to the House for amendment because that particular section would be ultra vires.


John Horton McDermid: Mr. Speaker, I do not wish to prolong the debate, but my recollection is that Revenue Canada made a ruling on that point at the hearing, stating that in fact the export tax was applicable to everyone, including Indian people who export lumber; that the tax situation that both Hon. Members have referred to pertained to the reserve and the reserve lands and the use of the particular material on the reserve.
Once the material is moved off the reserve it is subject to taxation. Once it is exported it is subject to the excise tax regime.
As I understand it, Indian people making an export would have to pay the export tax, in the same way as any other exporter. They would be the exporter of record and licensed to export and in fact would have to pay the export tax. That ruling was given by an ADM of Revenue Canada at the committee hearing.
I will leave it in your good hands, Mr. Speaker, to look at that, as you said you would, and suggest that we get on with the debate on the two amendments that have been accepted by the Chair.


Mr. Deputy Speaker:: I have looked into the matters raised by the Hon. Member for Winnipeg-Fort Garry and the Hon. Member for Skeena.
With respect to the matter raised by the Hon. Member for Winnipeg-Fort Garry, I should like to advise him that in fact the citation of Beauchesne concerning Motion No. 1 is in fact 773(1), as set out in the decision of the Speaker.
Let me now deal with the matter raised by the Hon. Member for Skeena. I thank the Hon. Member for his argument. However, the ruling made by the Speaker on this matter will stand.
We will now proceed with the two motions that have been accepted, Motion No. 7 and Motion No. 9.
We will first deal with Motion No. 7, which will be debated and voted on separately.


Lloyd Axworthy: Motion No. 7
That Bill C-37, be amended in Clause 14 by adding immediately after line 29
at page 10 the following:
"(4) Revenue derived by Canada from the charge imposed on softwood lumber products under this Act and payable to the provinces according to subsection (2) may be applied by the province to the awarding of contracts for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis."
He said: Mr. Speaker, I believe that this amendment goes to the heart of the debate that has emerged over Bill C-37. It is one that is related directly to the right of this Parliament, in its time-honoured tradition, to designate how tax moneys raised by this Parliament should be spent.
The importance of this amendment goes back to the controversy surrounding the introduction of the Memorandum of Agreement by this Government on that famous cold wintry day of December 30 last when, in a last-ditch effort, the Government signed an agreement with the United States pursuant to which there arose the obligation of imposing a tax upon Canadian softwood lumber producers.
Subsequent to that, there was provided a letter written by the Secretary of Commerce, a very substantial official in the U.S. system, along with the Chief Trade Negotiator, Mr. Yeutter, to Mr. Dennison, the head of the Coalition for Fair Lumber Imports in the United States. In that letter, the writers made a very clear commitment as to how the funds raised by the Canadian Government could or could not be used. In specific reference, they said that moneys raised by the Government could not be used for the "awarding of contracts for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis".
At that time, Mr. Speaker, we raised the matter of the very clear infringement upon the sovereignty of this country that such a limitation on how Canadian tax moneys could be spent would represent. We were given assurances that it was only the "musings of the Secretary of Commerce of the United States", that it did not have any clear standing in law and that it was not a formal part of the Memorandum of Agreement.
But, Mr. Speaker, the fact is, a major signatory to that Agreement, the Secretary of Commerce, as well as the Chief Trade Negotiator, put in writing a clear commitment to their own lumber lobby in terms of what they interpreted to be the meaning and significance of that Agreement.
Certainly that has provided a number of Canadians, both in the industry and without, a real reservation. If one regards the statements made by the provincial Ministers, there is a feeling, as well, that there is delineation, a prescription, as to how the $500 million to $600 million raised through this new tax in fact can be used.
If the Government of Canada has agreed implicitly to the kind of interpretation provided by Mr. Baldrige and Mr. Yeutter in their letter to Mr. Dennison, then certainly in my view it is clear that it has agreed to limit a very fundamental right. But, because the Government did so is no reason why the
May 13, 1987

Parliament of Canada should do so. As a sovereign body able to make our own laws, we should ensure that there is no ambiguity or any implicit or accepted argument for the way in which tax moneys can be spent in this country.
Therefore, I have introduced an amendment that specifically authorizes the expenditure of money in those areas, such as silviculture, roadbuilding and recreation mentioned in the Yeutter-Baldrige letter. That does not mean to say the provinces must spend the money in those areas, but it clearly says that they may spend it in those areas and there should be no hesitation or reservation on the part of the provinces, thinking they would be abrogating the treaty or the understandings reached by using the tax moneys thereby raised in these important areas.
Let me point out that we are talking, for example, relating to the matters of silviculture and roadbuilding, about two of the most important activities in the whole program of reforestation that we have been promised. One of the original arguments used by the Minister for International Trade (Miss Carney) and the Minister of State for Forestry and Mines (Mr. Merrithew) for keeping the money here in Canada was for reforestation purposes.
As I recall, the Minister for International Trade said that she thought the forests of British Columbia were some kind of a slum, and this initiative of the Government would be to invest in these important activities, silviculture, roadbuilding et cetera.


Sheila Finestone: What is the et cetera?


Lloyd Axworthy: But that question mark hovers over the whole understanding. When you have a letter written by one partner to the agreement saying the money cannot be used for these reasons, and if it is they can apply Section 301 of the U.S. trade Bill-which would be a kind of automatic trade penalty imposed by the President of the United States-one assumes there would be a lot of nervous people saying that we better not trifle with it, that we better not take the risk or have the American President zap us with some kind of effective penalty, so we will not do it.
I make the case to you, Mr. Speaker, that unless this amendment is accepted, the letter to Mr. Dennison signed by the Secretary of Commerce and the Chief Trade Representative of the President will stand as a clear signal as to how Canadian tax money must or can be used. The only way we can erase that reservation or answer that question is through this amendment. If the Parliament of Canada accepts it, then we are clearly saying that we are a sovereign body, we have the right to raise taxes and we also have the right to spend that tax money, as Canadians, as we see fit. We do not care about what the Secretary of Commerce has to say or the chief negotiator of the president, we decide for our own right.
Softwood Lumber Products Export Charge Act
This is particularly important because as we enter into the broader trade negotiations one of the question marks hovering over that whole negotiation is how far and in what way will the sovereignty of Canada be limited. How will Parliament deal with the various kinds of understandings, reservations and limitations put upon our ability to decide for ourselves? How will we manage the economy or decide on industrial support? Will we instead be accepting a whole series of prescriptions determined in Washington rather than in Ottawa?
I make the case as strongly as I can, that if the Government of Canada is being forthright in saying that the Baldrige letter is of no importance, then the Government should have absolutely no reason for not accepting this amendment, because it would simply clarify and make clear that the letter has no standing. It would not in any way interfere with Government policy. It would reinforce it. It would support it and it would give the mandate and stamp of approval of Parliament to statements that have been made. If, however, the Conservatives reject this amendment and vote against it, we will know that we have surrendered part of our sovereignty and that the Government is simply trying to fool Canadians.


James Ross Fulton: Mr. Speaker, I am pleased to speak very much in favour of Motion No. 7. The letter just referred to by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) is a crucial document, and the Government has tried to downplay what it might or might not mean. We have to provide some specific wording in Bill C-37 to give assurance to the provinces, the people of Canada and those who work in the forest industry.
The U.S. trade representative, Clayton Yeutter, signed this letter on December 30, 1986, along with the Secretary of Commerce, Malcolm Baldrige, two Cabinet level members of the Reagan administration. It is worth putting a couple of points on the record, and then I will direct myself to the specific wording.
In the third paragraph of the letter addressed to Mr. Stanley S. Dennison, Chairman of the Coalition for Fair Lumber Imports in Washington, D.C., we find the following:
-the U.S. Government will monitor closely the operation of this agreement to insure that the amounts collected through the export charge or replacement measures are not returned to or otherwise used to benefit producers or exporters of Canadian softwood lumber.
Then it goes on to the really crucial language that you find in the amendment now before us. At the bottom of page 2 we find:
We would consider that the follow-up actions by the governmental bodies in Canada could have the effect of offsetting or reducing the export charge or replacement measures within the meaning of Paragraph 6 of the Understanding.
Then it lists rebates, remissions and so on. More crucial language comes in point number 7 right above the signatures of Mr. Yeutter and Mr. Baldrige where it says:
-awarding contracts for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis.

May 13, 1987
Softwood Lumber Products Export Charge Act
We find those same words in the amendment by the Hon. Member for Winnipeg-Fort Garry, namely, silviculture, roadbuilding, recreation and other foresting activities on a non-competitive basis.
We went through this matter at some length in the committee. We could not get some of the expert witnesses that we wanted, but I attempted, as you will note in Motion No. 8, to do the same form of clarification by stating definitively that for further clarification forest management includes silviculture, conifer release, reforestation, site stabilization and general forest rehabilitation. I also state:
The revenue derived by Canada from the charge imposed on softwood lumber products under this Act shall be used for the purposes of forest management in the regions from which those revenues are derived.
As Members of this House will know, the Minister for International Trade (Miss Carney) pointed out quite accurately that the Province of British Columbia, the largest producer of softwood lumber used not only in Canada but exported to the United States has become a silvicultural slum. We are aware on the coast that we have only, according to Dr. Peter Pierce, 14 years of forest supply left. We have Bill Ewing's report in relation to Prince George and the northern Cariboo, which report said very much the same thing as Dr. Pierce, that by the year 2000 we will be out of wood. Clearly in British Columbia we need to use all of that $300 million a year to get cracking on forest rehabilitation. While the Government claims that the letter outlining the U.S. Government's interpretation of the export tax agreement has no weight, let us keep in mind that the letter was sent the same day the Memorandum of Understanding was signed. It was cranked up the same day and given to the Coalition as the U.S. Government's interpretation.
Now that we have waived our opportunities to go before a GATT panel we have put ourselves in the position that if we do not live up to the expectations of the United States the Americans can slap Section 301 on us 30 days after they back out of this agreement.
Let us look at what was said by Max Cohen, one of Canada's foremost experts on international law, once a judge on the international Court of Justice and former chairman of the International Joint Commission. In evidence given before the Standing Committee on Banking, Trade and Commerce on February 19 he said:
I conclude by saying to you that in my view it would be very difficult for the legal adviser of the U.S. State Department to deny the effect of the interpretation given by Mr. Baldrige or Mr. Yeutter.
In International Trade of January 3, 1987, Mr. Cohen went on to state:
It is a strange procedure to allow someone to monitor our own stuff.
The committee did try, but did not get very far, to have the Chair accept these amendments while we were still in committee some six weeks ago. Of course, at that time, the Government felt it was urgent that we finish the committee process so that this could return to the House, but that was six weeks ago.
The committee sent a letter signed by the Hon. Member for Prince Edward-Hastings (Mr. Ellis), the Chairman of the committee, drafted on March 25 and addressed to the Hon. Minister for International Trade. In that letter, point number five made by the Chairman with the unanimous support of the members present asked that an attempt be made during negotiations to clarify the confusion as to the application of tax revenues brought about by the so-called Dennison letter. The House now has the opportunity to do that.
We have before us the evidence of internationally renowned legal expert Max Cohen. We have before us the letter signed by Malcolm Baldrige and Clayton Yeutter. We have before us an amendment and we know what the committee sought unanimously. The committee still has not received a response from the Minister for International Trade on what kind of clarification there has been from the U.S. to the Minister for International Trade on the Baldrige-Yeutter letter to Mr. Dennison. This leaves us with only one opportunity.
I am quite certain that we on this side of the House will vote unanimously for the motion and I hope that government Members do not get nervous because this amendment is brought forward by the Opposition. 1 hope that they will think coolly and carefully about this. Canada's sovereignty was massively invaded by this whole process. Even if government Members do not believe that this will have an impact on sovereignty, then there will be no reason for not voting in favour of the motion. I would encourage government Members to speak in favour of this amendment and also, when they have the opportunity, to vote in favour of it.
It is very important that we send that signal from the House of Commons to Washington and to the U.S. coalition. As well, we should send a nice clear message back to British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, the maritime provinces, the Northwest Territories and Yukon.
This House has a vital responsibility to pass an amendment like this, making it clear that the money gathered under Bill C-37 and returned to the provinces can be used for rehabilitative work, silviculture, roadbuilding or anything else the provinces are planning to do, using either their own revenues, revenues that will be returned to them from the 15 per cent export tax or revenues from any new measures that might be brought in, like a provincial export tax or an increase in stumpage fees. If nothing else, that will protect our sovereignty. If nothing else other than that, it will send a clear smoke signal to Washington, indicating that we will not be shillyshallied about on sovereign issues like taking care of our own forests and natural resources.


B. Keith Penner: Mr. Speaker, I would like to say a few words in support of the amendment to
May 13, 1987

Bill C-37 that has been proposed by my hon. friend and colleague, the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy). In speaking in favour of this amendment I would like to underline what the two previous speakers have said.
The failure to approve this amendment and have it become a part of Bill C-37 will make it possible for the very long arm of Washington to reach into provincial administrations and, in fact, to dictate forest resource policy. I do not think Hon. Members opposite want to see Ontario's forest management policy dictated from Washington.


John Horton McDermid: You're dictating from Ottawa.


B. Keith Penner: If my hon. friend thinks that that is acceptable, then he has not properly understood the effects of Bill C-37.
I submit as well that Mr. Baldrige and Mr. Yeutter, in making the argument they made in their letter to the Coalition for Fair Lumber Imports, that somehow silviculture activities, roadbuilding into places where wood is overripe and would otherwise be subject to blow-downs and be lost entirely or engaging in some sort of assistance for the recreational use of forests, is considered to have the effect of offsetting or reducing the export charge, have made an argument that escapes me entirely. For example, we know that there are forest-management agreements in the Province of Ontario at the present time. These agreements place upon the companies an obligation to reforest.
In accepting certain timber limits, the companies agree with the provincial administration that they will undertake certain obligations in the restoration of the cut-over area. However, it has not always been so. There was a time when the Ontario Ministry of Natural Resources assumed that responsibility itself. At that time, seedling nurseries were entirely operated by the Ministry of Natural Resources. Now that particular obligation has been passed to the private sector. The private sector grows the seedlings which are then sold to the companies that are obligated to plant them.
I must tell the House that the Ontario forest management agreements are experimental in nature. It is believed that they will be more successful than entirely government-operated ventures had been in the past. However, that is a philosophical discussion and all of the facts have not yet been submitted. We do not know for a fact at this point in time if forest management agreements are a better method than operations entirely within the scope of the Ministry of Natural Resources.
The point I am making is that if at some point in time it were to be decided that forest management agreements were not as successful as some have argued they will be and the Government of Ontario or any other provincial administration wanted to assume this obligation for itself, there could be a direct challenge to the provincial authorities on the legality of this if this amendment is not passed. The very fact that that possibility exists is the reason Members of my Party and Members on the government benches must approve this amendment. Approving this amendment will leave the door
Softwood Lumber Products Export Charge Act
entirely open for provincial administrations to make these decisions.
We know that in the past there have been agreements between the provinces and the federal Government under the Department of Regional Industrial Expansion to undertake road and bridge construction in isolated areas, where the costs are enormous or in fact prohibitive, in order to access a resource that is ready to be harvested. If you cannot access that resource, if industry finds the cost prohibitive, then the province and its people have lost a resource which could otherwise be used.
What will happen to it? During a lightening storm a fire will start and will be allowed to run its course because it is in an isolated area as sometimes happens in northern Ontario, or there will be exceedingly expensive operations to put the fire out. That is why it was decided in agreements between the Government of Canada and the provincial Governments that these overripe areas should be accessed and that they have a joint responsibility to assist the industry so that the resource can be used.
Now we are saying, if we accept the arguments of Mr. Baldrige and Mr. Yeutter, that this can no longer be done. The responsibility is totally that of the industry. Spruce Falls Power and Paper, Domtar, or Abitibi-Price must bear that cost themselves and somehow recoup it in the sale of their products.


John Horton McDermid: Do they now?


B. Keith Penner: It has already been proven in many cases that the industry cannot bear that cost.


John Horton McDermid: Do they now?


B. Keith Penner: What choice do we have? We can let the trees stand and either suffer a blowdown from high winds, a fire, or rot. In any case it is a waste. It is stupidity. It is bad forest management policy and something no one will accept.
Why would we want to prohibit the provincial Governments from making those kinds of decisions? How can it possibly be argued that to access an overripe resource and make use of it is in some way offsetting this 15 per cent charge on the production of softwood lumber? It makes no sense at all. If it does not make sense for those reasons, then how even more remote is it to argue that a provincial Government cannot make use of its resource by spending tax dollars for recreational purposes? How would we be offsetting the 15 per cent charge by opening up a lake, for example, through the provincial Ministry of Natural Resources so that cottagers can, under a Crown lease arrangement, erect a cabin or residence for summer use? How would that be offensive?
My friend seems most anxious to speak, so he will have answers to all this.

May 13, 1987
Softwood Lumber Products Export Charge


John Horton McDermid: On a point of order, Mr. Speaker, I just wanted to ask my hon. friend, who is waxing eloquent-


B. Keith Penner: I am not waxing eloquent. I am speaking about a concern in the region I represent. Get it straight, John.


John Horton McDermid: I meant that as a compliment, so I am not sure why the Hon. Member is sc uptight. I want to find out if he will accept a question at this time.


B. Keith Penner: You are on your feet, so don't waste time.


John Horton McDermid: Will you accept it?


B. Keith Penner: Certainly.


John Horton McDermid: Mr. Speaker, 1 understand the Hon. Member is talking about his region. My question is: Do the provincial Governments build those roads now? Did they before the agreement was reached? Was that part of the Ontario provincial Government's program before this tax came in? Did they put those roads in to access forests and cottages before the agreement of December 30?


B. Keith Penner: The answer is that it has been done, it is being done, and they want to continue doing it.


John Horton McDermid: Fine. They can.


B. Keith Penner: The letter I am referring to from the U.S. Secretary of Commerce and the U.S. trade representative argues that this kind of activity violates the agreement between Canada and the U.S. with respect to the 15 per cent export tax. In the region of Ontario that I represent there is great concern that the freedom to make policy in these areas is being restricted by an agreement we have negotiated with the U.S.
I come back to the point I made at the very outset. Forest management policy is, to a very significant extent, being restricted and controlled by Washington. In the province from which I come, and more particularly the region I represent, we find this to be offensive.
We are not arguing that this is a partisan issue. We are arguing that this is a reasonable amendment, and I am delighted that Your Honour has accepted it although I understand that you are concerned it may be in the provincial domain. I do not think it is. We are not entering the provincial domain by this amendment. We are saying that we should not enter the provincial domain by an agreement we made with the Americans. This amendment is quite the opposite. It leaves the door open for the provinces to make important decisions concerning a resource that belongs to them and not to Ottawa. We should not be making agreements with Washington which limit provincial government policies.
I argue that Members opposite would be assisting the region I come from and acting in the best interests of the Province of
Ontario if they agreed to support this very reasonable amendment put forward by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy).


Alain Tardif: Mr. Speaker, 1 am also very happy to join my predecessors in unreservedly supporting this amendment, which to me seems more than reasonable in the circumstances. I view the amendment as improving what was simply and squarely shameful. For discussion's sake, Mr. Speaker, let me read the amendment, which is more than reasonable in my view. It states:
"(4) Revenue derived by Canada from the charge imposed on softwood lumber products under this Act and payable to the provinces according to subsection (2) may be applied by the province to the awarding of contracts for silviculture, roadbuilding, recreational and other foresting activities on a noncompetitive basis."
Here, Mr. Speaker, you have an amendment which beyond the shadow of a doubt would make an interesting and reasonable improvement to something that is totally unacceptable. When the Government signed that agreement, of course the arguments used by myself and other Members on this side of the House were quite numerous, in the sense that we deplored that in a way we had been "had" financially, in a way we had given our American friends what clearly we would not have had to pay had we left things on the course that had been taken.
Here is an agreement that in effect forces producers to pay inordinate amounts. I submit, Mr. Speaker, that as far as I am concerned, although the Government in fact signed in a hurry, in a sense it has been "had" financially, this is something that can always be repaired, something that can always be remedied. But where sovereignty is involved, Mr. Speaker, this is a matter of untangible, undisputable principle. It is my sincere belief that the amendment now before us results in a direct improvement to the most offensive aspect of the Bill in my view. Improvement in the sense that we would say to our American friends: Look here, this is our land, our country, we want to use that revenue, that money as we see fit. And the amendment proposes that the money be spent in specified areas to the benefit of all provinces which in fact will be collecting the tax.
With your permission, Mr. Speaker, I would like to go back a little in time, since this is the most important aspect in my view. As I said earlier the question of money is important because the amounts at stake are considerable. But what made all opponents mad was the aspect of sovereignty, and if I may, Mr. Speaker, I should like to refer to certain comments concerning that part of the agreement, to the effect that letting somebody else control what belongs to us in the first place is a rather bizarre process. They maintained the unilateral aspect of something which in fact we share in common, for the Americans have the right to know everything about Canadian activities, be it with respect to information or anything else. Of course, these were the comments of Mr. Maxwell Cohen.
May 13, 1987

And then the Premier of Ontario is telling us that we have let another sovereign country gain control not only over our resources and taxation policies but also, to a certain extent, over our employment and regional development policies, which is a dangerous precedent.
Somebody has suggested that the agreement can only encourage the United States to extend their protectionist measures to other sectors.
Or that natural resources constitute an absolute right which should not be abandoned to any foreign government.
The final argument is that even if Canada were to lose the case it would be well-advised to state its position immediately lest it might jeopardize our sovereignty for years to come.
Mr. Speaker, the comments and criticism I just mentioned went beyond the purely financial aspect and straight to the crux of the problem raised by this agreement, namely that Canada's sovereignty is at risk, and that from now on our American friends will be able to call the shots in this country, which is particularly dramatic in an industry that is of strategic importance to the Canadian economy, to the economy of the provinces and to local economies.
The Elon. Member's amendment is eminently reasonable and fair, and I think the Government has no choice here, if it was at all sincere and honest at the time when, in answer to the Opposition's comments about the sovereignty issue, it said: No, our sovereignty is not at stake. No, we will continue to manage this natural resource. No, the Americans will have no authority to intervene in the management of this resource. Mr. Speaker, if they were at all honest and sincere at the time, they could hardly object to the Elouse adopting an amendment of this nature, because I think this is a perfectly reasonable proposal which would show that Canada intends to continue to be the master of its own house and to manage its own affairs like any sovereign country.
The Government is saying that they got back $500 million which would otherwise have gone to our American friends. The point as such may or may not be acceptable, but it is not unreasonable.
But with respect to the question of sovereignty the only statements to which we were entitled were fuzzy, confused and ambiguous. I think that in the next few days we will see the true nature of the Government and find out whether Members over there really intend to show that Canadians are masters in their own home and can indeed lay claim to the autonomy which any sovereign country enjoys. Mr. Speaker, should the Government fail to accept this amendment it will reveal for everyone to see that it is altogether indifferent and could not care less about such indecent interference flowing from this agreement which allows our American friends to tell us what we should do, how we should plan, and what approach we should take with respect to so basic a natural resource as softwood lumber.
Softwood Lumber Products Export Charge Act
As I see it, Mr. Speaker, it is altogether normal, reasonable, fair and equitable that the producers expect that money, collected from the producing provinces, to be spent in this area.
From my standpoint the amendment of my colleague is more than reasonable. I wanted to echo the views of others who spoke before me and express unqualified support for what seems to me to be more than reasonable. 1 sincerely hope that the Government will lay its cards on the table and agree to this amendment.


BUSINESS OF THE HOUSE
Philip Derek Lewis: Mr. Speaker, I wish to advise the House that the Government will designate tomorrow as an allotted day.


SOFTWOOD LUMBER PRODUCTS EXPORT CHARGE ACT
[Stage Direction]
The House resumed consideration of Bill C-37, an Act respecting the imposition of a charge on the export of certain softwood lumber products, as reported (with an amendment) from a legislative committee.
Sheila Finestone: 1 heard the Hon. Member talking about calling the shots, and I think that is a very good point. Are we going to call the shots in this country or will they be called elsewhere, in Washington, for instance? The point is whether we are going to be masters in our own house or whether others are going to decide how we are going to run things. It is a matter of cultural and economic sovereignty.

It is strange that this question arises today. It seems to me that the cultural and economic sovereignty of Canada has been on our plate time and time again. The Government has not the courage to talk back to the Americans and say that we are who we are, that these are the things we stand for and this is what we believe in. An example is the film distribution Bill. That Bill has curried great favour and could be well received. If the Government only had the courage of its convictions, the film distribution Bill would be in the House today. This is as is

May 13, 1987
Softwood Lumber Products Export Charge Act
usual in Canada because the Government has not said no to American pressure, and we have seen what they can do in one industry.
Before the issue of the film industry came up we had the issue of the softwood lumber industry. It is a sad day when we have to debate the extremely intelligent, well thought out and reasoned amendment of my colleague, the Member for Winnipeg-Fort Garry (Mr. Axworthy). I urge all Members of the House to support this amendment to Bill C-37 as it makes intelligent, good sense. We want the right to stipulate how tax dollars raised on our goods will be spent.
I am going to read into the record a letter which was sent to Mr. Dennison by Mr. Clayton Yeutter and Mr. Malcolm Baldrige. According to that letter, we are talking about $500 million to $600 million. That is not peanuts. That is a lot of money. It could be used to rebuild our forests, to build roads, to expand Canada as we see fit. The provincial Governments, on whose territory this money will be raised, should be able to use this money in the manner in which they determine.
The question is whether we will show broad-mindedness or narrow-mindedness by accepting or rejecting this very sound amendment which would tell the Americans to stay home, that we know how to look after our own business. The amendment would tell the Americans that we know how to manage our own economy, not to tell us how, that we wish to determine for ourselves through our provincial Governments how we are going to handle our money, that we are not passing the buck to them and did not ask them to stick their nose into our business. That is essentially what we will be doing by saying yes to this amendment.
My colleague, the Member for Winnipeg-Fort Garry, said that we are talking about the role of Government and the role of the Parliament of Canada. He was calling upon all of us to be parliamentarians, to forget about our partisan point of view in this instance and think about the well-being of Canada.
1 see that one of my hon. friends opposite is not particularly pleased. That is unfortunate.
Let us consider the letter that was sent to Stanley Dennison, Chairman of the Coalition for Fair Lumber Imports, on behalf of Secretary of Commerce Malcolm Baldrige and U.S. Trade Representative Clayton Yeutter. It indicates that when the export tax is removed, future provincial stumpage increases must raise lumber prices at the border by an amount equivalent to the 15 per cent export tax.
The letter further indicates that certain actions will be considered to be in violation of the agreement, including the awarding of contracts for silviculture, road building, recreational, and other forestry activities on a non-competitive basis.
The provincial Governments have stated that they wish to use the funds from the export tax for reforestation, among other uses. If one interprets the United States position correctly, the letter seems to indicate that some of these uses
may be regarded as indirect subsidies to the industry. The Government should have taken the issue to GATT originally. The Americans went to GATT on the corn issue, but the Government did not see fit to use that route with respect to softwood lumber.
Now the Americans are trying to tell us what we should do with what they perceive to be an indirect subsidy.
The Canadian Government has declared that the letter has no standing in Canada and that the document does not reflect the terms agreed upon in the memorandum of understanding. The letter states:
Dear Mr. Dennison:
Several questions have arisen in the course of the negotiation of the recently signed U.S./Canadian softwood lumber agreement. We record here the understanding of the U.S. Government with respect to several of the key provisions of the agreement. These understandings have been conveyed to the Government of Canada although they have not been explicitly expressed in that agreement.
First they twist our arm and tell us what they think, then they tell us how to proceed. The letter continues:
First, as the 15 per cent export charge is a substitute for a countervailing duty, and is being imposed for the purpose of offsetting Canadian stumpage subsidies, the U.S. Government intends that collection of the charge will begin immediately upon withdrawal of the countervailing duty petition, effective on cessation of bonding. The charge may be collected by either the Government of Canada or the Government of the United States. We intend that the charge will be collected until agreed replacement measures have the equivalent economic impact on average on each unit of exports to the United States as the 15 per cent charge or that portion of it which is being replaced.
The United States would not object to replacement measures being implemented by individual provinces and the export charge being reduced or eliminated accordingly for such provinces.
Second, the U.S. Government will monitor closely the operation of this agreement to insure that the amounts collected through the export charge or replacement measures are not returned to or otherwise used to benefit producers or exporters of Canadian softwood lumber.
We will see later that they list 10 areas in which they will absolutely not agree to our having any say about how we should handle our undertakings.
They point out that the export charge represents at least $500 million and they want a right to have a say in what should be done. In point 10 they state that they would consider that the follow-up actions by the governmental bodies in Canada could have the effect of offsetting or reducing the export charge or replacement measures within the meaning of paragraph 6 of the understanding. They specifically point out the measures that they will find unacceptable. I do not have time to read them all, but point 7 is the awarding of contracts for silviculture, road building, recreational, and other foresting activities on a non-competitive basis.
The letter is signed on behalf of Clayton Yeutter, U.S. Trade Representative and Malcolm Baldrige, Secretary of Commerce.
Is this a fair and unbiased situation in which to place the industry, the Government and the House of Commons?
May 13, 1987

I urge all Members of the House to support Motion No. 7, moved by the Hon. Member for Winnipeg-Fort Garry, which states:
That Bill C-37, be amended in Clause 14 by adding immediately after line 29
at page 10 the following:
"(4) Revenue derived by Canada from the charge imposed on softwood lumber products under this Act and payable to the provinces according to subsection (2) may be applied by the province to the awarding of contracts for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis".
That is the way to send a message to the United States,

-that we are masters in our own house.


Iain Francis Angus: Mr. Speaker, I want to participate in this report stage debate on a Bill that has extreme importance to my constituency of Thunder Bay- Atikokan and all of northwestern Ontario. It is one area of the country that depends on the forest industry for much of our economic livelihood.
The Government's decision which has resulted in this Bill has a very great impact on us. We have already seen softwood lumber mills close as a direct result of the tax, and others are in jeopardy.
The amendment moved by the Member for Winnipeg-Fort Garry (Mr. Axworthy) is very similar to the motion that was moved by my colleague, the Hon. Member for Skeena (Mr. Fulton), but ruled out of order.
This motion basically allows the provinces to spend the revenue for silviculture, roadbuilding, recreational, and other foresting activities on a non-competitive basis.
Clearly, the provinces must be able to use this revenue to assist in the reforestation and ensure their longevity.
Over the years we have argued about policies of provincial Governments as well as harvesting companies and whether or not enough is being done for reforestation, recreational use of the forests and the construction of roads.
The Canada-Ontario forest agreement provides for federal funding for silviculture, for road construction, and other aspects of providing for our forests. It is very sensible to ensure that the funds being extracted from our forest industry can be recycled in that industry. I do not believe this will jeopardize the ability of the Americans to compete with us if they have a quality product and the dollar is such that there is balanced competition. However, I believe it is very important that the legislation state that the provinces have a right to spend the money in the forest industry. If not, the money will be diverted to other areas at the expense of the forest-based industry.
It is my understanding that this amendment arises from a letter from Malcolm Baldrige, U.S. Secretary of Commerce, and Clayton Yeutter, U.S. Trade Representative. Mr. Yeutter is the United States Trade Representative. In a letter to the
Softwood Lumber Products Export Charge Act
Chairman of the Coalition for Fair Lumber Imports he states, and I quote:
We would consider that the follow-up actions by the governmental bodies in Canada could have the effect of offsetting or reducing the export charge or replacement measures within the meaning of paragraph 6 of the Understanding.
He lists some of them, including awarding contracts for silviculture, road building, recreational and other foresting activities on a non-competitive basis. Those are very interesting words. What he is trying to say is that the United States does not want us to be able to do that, and that the lobby for the lumber industry in the United States is in effect telling its Government to dictate to our Government and, therefore, to the people of Canada, how we should manage our forests and how we should spend the money which we are duly collecting supposedly on behalf of the people of Canada.
I think that is an insult to the integrity of the Government and the people of Canada. I would hope that all Hon. Members will agree to accept this amendment so we can give that right- it does not say the provinces must do it but that they may do it-to spend the money on matters directly related to the forest industry.


Maurice Brydon Foster: Mr. Speaker, this is an important amendment before us, as the entire Bill is important and the whole issue is important, because it really sets a tone for the relationship between the Government of Canada and the United States, which has been essentially designed to appease in every way any relationship where Canada might be standing up as a sovereign nation. The entire legislation and the approach of the Minister and the Government has been that way since last June when this issue first got under way.
The amendment before us at report stage was moved by the Hon. member for Winnipeg Fort Garry (Mr. Axworthy). It is an amendment to Clause 14 of the Bill. It provides that:
Revenue derived by Canada from the charge imposed on softwood lumber products under this Act and payable to the provinces according to subsection (2) may be applied by the province to the awarding of contracts for silviculture, roadbuilding, recreational, and other foresting activities on a noncompetitive basis.
I think that is an amendment which should be passed just to show that the provinces will not be intimidated by the actions of the United States. If the Government does not accept this amendment we will know that it is really scared and totally intimidated by the letter which was sent by Mr. Yeutter. The letter is dated December 30, 1986. I do not believe he spent New Year's Eve preparing it. He outlines in very clear terms that the United States will move against Canada under Section 301 as provided for in the agreement if Canada moves to support the provinces with the export charge with regard to roadbuilding and those other activities.
The letter states very clearly under item 10, and I quote:
We would consider that the follow-up actions by the governmental bodies in Canada could have the effect of offsetting or reducing the export charge or

May 13, 1987
Softwood Lumber Products Export Charge Act
replacement measures within the meaning of paragraph 6 of the Understanding.
It then cites item 7, awarding contracts for silviculture, roadbuilding, recreational and other foresting activities on a non-competitive basis. It is that letter, signed by both the U.S. Secretary of Commerce and the U.S. Trade Representative, sent to Stanley Dennison, Chairman of the Coalition for Fair Lumber Imports, we are trying to overcome. We want to ensure that Canada says to these two representatives of the United States that regardless of how acquiescent the Government is, regardless of the fact that the United States snaps its fingers and we have higher drug prices in this country, and regardless of whatever other actions have been taken in the past year, this legislation will not bypass the laws of Canada and tell the provincial Governments what they can or cannot do.
I thought Premier Peterson of Ontario put it very succinctly in an article reported in The Globe and Mail, on January 6, 1987 that "they-the U.S. Government-will have the thumbscrews on us at all times and if we do not behave they will put the blocks to us. I do not like a deal like that". In an article in the Ottawa Citizen on January 6 he stated:
We've turned not only our resource and taxation policies but in a sense our regional development and employment policies over to another sovereign country. It is a dangerous precedent.
I think that is what Hon. Members from Northern Ontario are extremely concerned about. We have seen a pro-active Government during the last two years in Ontario. It has tried every possible device to develop roads, and our tourism potential because we have not shared in the tremendous growth of economic activity of southern Ontario, for instance.
Since January 1, in my constituency alone, every month SI million dollars from one company alone goes to the federal Government. It does not get anything for it. It just gets the incompetence of the Government in negotiating this arrangement. If the Government had fought it all the way in the United States trade tribunals, if the Government had fought it in the GATT, this company would not have to send a cheque every month to the Government of Canada.
What this motion seeks to do is to say no to Mr. Yeutter and Mr. Baldrige. It is saying: "We are the sovereign nation. If this export tax is passed on to the provinces, it can be used for roadbuilding, recreational development and for all those other uses". Obviously, the Government of Canada is extremely concerned that the agreement is binding, and it intends to knuckle under to the threats and intimidation of the U.S. Secretary of Commerce and the U.S. Trade Representative.
I would like to read a paragraph of a legal opinion concerning the Dennison letter, and I quote:
The Dennison letter is a contemporaneous expression of the understanding of one of the parties to the Agreement. Therefore, to the extent the language of the Agreement itself fails to resolve any disagreement between the parties, the letter may be used to construe the Agreement. If the U.S. industry were to file a Section 301 case it almost certainly would submit the Dennison letter as evidence of the meaning of the Agreement, and the Administration would be hard pressed, both legally and politically, to disavow its own interpretation as
expressed in the letter. Even before a more objective body, such as a GATT panel, the letter would be strong evidence of the meaning of the Agreement.
Thus, to the extent the Canadian Government's interpretation of the Agreement differs from the interpretation expressed by the U.S. government, it should seriously consider stating publicly the Canadian position, perhaps in a letter to the Department of commerce and the United States Trade Representative.
The Government has not taken that action. The House of Commons can take such action. I believe that as a sovereign nation we are obligated to take this action by adopting the amendment to the Bill and by placing it right in the legislation. In this way it will be clear to the Americans, to the Provinces of Ontario, B.C., Alberta and Quebec, that they will not be bound by that United States letter. In this way we will know, and everyone will know, that we are masters in our own house and that we will not be intimidated by that letter from United States cabinet Ministers. It is essential that the Parliamentary Secretary accept the amendment.


John Horton McDermid: Mr. Speaker, I will be brief. I have been sitting listening to the debate this afternoon on this particular amendment brought forward by the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy). I would first like to make a couple of points, if I might, just to cover the sovereignty issue.
1 think a country loses its sovereignty when laws of another country are brought forward to force a country to do certain things within one's country. Had the countervailing duty proceeded it would have allowed the American Government to come into Canada to check the books of the Government. It would have been able to check the books of individual exporters. To my way of thinking that would have damaged the sovereignty of Canada.
When two sovereign nations such as the United States and Canada sit down to negotiate an agreement that is not losing sovereignty, that is putting into practice sovereign rights. That is exactly what the Government did. It negotiated an agreement with the United States which allowed Canada to place an export tax on lumber and to keep the money in Canada, money which will go to the provinces.
In our federation the provinces own the resources, that is, the lumber. In co-operation with the provinces, and with the consent of the provinces with the exception of one, we proceeded in this manner. We have agreed with the provinces that the money from the federal Government will go to them, with the exception of a small administration charge.
There was a great deal of talk about who can spend the money and what can be done and so on. I enjoy members of the Opposition quoting Clayton Yeutter and Malcolm Baldrige's letter to Dennison which has nothing to do with the memorandum of understanding whatsoever. It has no legal status whatsoever. It may be their interpretation of what they think the memorandum of understanding states. But we have
May 13, 1987

also made our interpretation of what is stated, and I have not heard any disagreement from the United States with respect to our interpretations.


James Ross Fulton: Oh, come on.


John Horton McDermid: I sat and listened very patiently all afternoon to my hon. friends opposite. I have been restraining myself all afternoon. I thought I was pretty good. I have behaved myself very well. I did not interrupt Eton. Members but sat and listened attentively to them. I find it interesting that they concentrate more on the American letter than on what the Minister has said and on what our Government's interpretation of the agreement is.
I can tell Elon. Members this. If the provincial Governments planted trees before and did silviculture before, then they can do it with this money. If they built roads with it before, then they can build roads again with this money. They can use it for employee adjustment. They can do these things with this money as long as it does not form a grant back to the industry, a direct grant, or something that could be considered to circumvent the memorandum of understanding. We said that. We said it in committee. Hon. Members who were there and who are in the House today know full well that that was said in committee.
I find it rather amusing that the amendment was drafted by Malcolm Baldrige and Clayton Yeutter and not by the Hon. Member for Winnipeg-Fort Garry. The amendment is word for word out of their letter. It is not original on the part of the Hon. Member. I do not want him to take credit for it.


B. Keith Penner: Come on, John, you can do better than that.


John Horton McDermid: I find it interesting that Malcolm Baldrige and Clayton Yeutter drafted this particular amendment. It has been lifted from the last few lines of their letter.


B. Keith Penner: What has that to do with anything?


John Horton McDermid: We cannot accept this amendment. It would be inconsistent with our understanding with the provinces for federal legislation to state how the provinces may spend revenues arising from the export charge.


B. Keith Penner: It is just the opposite, and you know better than that, John.


John Horton McDermid: My friend opposite can sit and argue all he wants. He can holler and yell and rant and rave. It is inconsistent with the agreement we have with the provinces in this regard. There is no stipulation in the Bill, no conditions whatsoever, with respect to what use the provinces may put the revenues generated from the export charge. It is not in the Bill. We are not going to limit them. We are not going to give them permission or anything else. They know how they can spend the moneys. It is their money because it is their resources about which we are talking.
Softwood Lumber Products Export Charge Act
The Minister for International Trade (Miss Carney) and the Minister of State for Forestry and Mines (Mr. Merrithew) have already stated very clearly many times that they hope the provinces will use this money for reforestation and silviculture. They have stated that many times.
All I can say is that the amendment would be inconsistent with the agreement that we have with the provinces. Therefore, on behalf of the Government, I say that we cannot accept the amendment. We will be voting against it.


B. Keith Penner: May I ask a question of the Hon. Member, Mr. Speaker?


Mr. Deputy Speaker:: Is there unanimous consent to allow the Hon. Member for Cochrane-Superior (Mr. Penner) to ask a question?


Some Hon. Members:: Agreed.


B. Keith Penner: Mr. Speaker, I have one question for my hon. friend. He mentioned in his remarks to the House something about the possibility of the countervailing duty having proceeded. Of course there is no proof that that in fact would have ever happened. Spokesmen in the industry argue that they could have won that countervail action. They argue that they could have been successful, as they were in the past.
My friend also suggests that to negotiate is a sovereign act. I agree with that. But will he not accept the fact that it is possible in those negotiations to bargain away a portion of one's sovereignty?
My real question is this. The amendment proposed by the Hon. Member for Winnipeg-Fort Garry puts no obligations on the provinces at all. It says that they may be applied. The letter from which the Hon. Member for Winnipeg-Fort Garry gets this concern states that this is an interpretation of the Government. The Parliamentary Secretary says: "We have a different interpretation". I wish to ask the Parliamentary Secretary this. How do we know which interpretation will prevail? Does he not agree that it would make good sense to put this amendment in, so that we have greater certainty? Would the Hon. Member not agree with that?


John Horton McDermid: In the first place, I do not think it offers greater certainty-


B. Keith Penner: That is exactly what it does.


John Horton McDermid: To answer the first question, when two sovereign countries negotiate an agreement, sign an agreement, each gives up a little something. There is no question about that.


B. Keith Penner: What did the Americans give up?


John Horton McDermid: What have they given up?-$600 million, or $500 million, or however much they would have received by way of a countervail duty.

May 13, 1987
Softwood Lumber Products Export Charge Act


B. Keith Penner: Oh, come on!


John Horton McDermid: The Hon. Member makes the assertion that we would have won the case. The best advice we could receive, advice which came from the same people who were involved in the 1983 case, was that we were not going to win. That was the advice we got, and that was from the same people who worked on the 1983 case. They told us we were not going to win it, and we were not going to win it because of the change in attitude in the United States.
Everyone knows that the protectionist mood in the United States has grown rather dramatically over the last number of years, and particularly so since the 1983 case.
At the time of the 1983 case, there was a different mood in the U.S., a different Government, a different mind-set entirely.
The Hon. Member is a great crystal ball gazer. It was a judgment call by the provinces and by this Government. In fact, if one takes the time to go back and check, one will find that the lumber producers themselves suggested a negotiated agreement. That is well documented.
The sovereignty issue Hon. Members opposite keep raising is, to my mind, a smoke and mirrors type of argument.


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


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on Motion No. 7 standing in the name of Mr. Axworthy.
Is it the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.


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


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Pursuant to Standing Order 114(11), a recorded division on the proposed motion stands deferred.
The next motion is Motion No. 9, standing in the name of Mr. Fulton.


James Ross Fulton: Motion No. 9
That Bill C-37, be amended in Clause 15 by striking out lines 4 and 5 at page
11 and substituting the following therefor:
"Act;
(c)	conditionally or unconditionally exempt any softwood lumber products from corporations that can demonstrate that they meet the requirements met by those corporations presently exempt from the charges of this Act;
(d)	conditionally or unconditionally exempt any softwood lumber products from corporations that can demonstrate that their raw log supply comes from regions not named rn the 1986 U.S. Countervailing Duty action.
For greater certainty this includes those areas outside of B.C., Alberta, Ontario and Quebec; and
(e)	conditionally or unconditionally exempt those softwood products such as remanufactured products which were not named in the 1986 U.S. Countervailing Duty Action."
He said: I am pleased to speak to Motion No. 9. The proposed paragraph (c) is as follows:
(c) conditionally or unconditionally exempt any softwood lumber products from corporations that can demonstrate that they meet the requirements met by those corporations presently exempt from the charges of this Act;-
As many Members of this House will know, there are some two dozen corporations that have been exempted. Those corporations are not set out by way of appendix or annex to the Bill, notwithstanding the suggestion in the committee that that be done. They are, however, to be found in the memorandum of understanding.
During committee consideration of the Bill, we heard time and time again from witnesses from across the country the fact that over the course of last summer some companies happened to hear about the procedures to be undertaken to obtain an exemption, and in fact did so, but that others simply were not aware of it.
It has never been entirely clarified as to who was responsible for getting this information out. 1 am not laying blame on anyone's doorstep. However, as a consequence, many firms simply were unaware of the steps to be taken to obtain an exemption.
By the time the preliminary determination came down on October 16, 1986, it was too late for them, and certainly by December 30, 1986, at which point the negotiations were over and the memorandum of understanding signed, many companies had not taken the necessary steps to be exempted from the 15 per cent export tax.
What has happened is that in some parts of the Atlantic Provinces, a very substantial percentage of the companies are on the exempt list. In some regions, notably in the Province of New Brunswick, over 90 per cent of the forest lands held by corporations are exempt, with the percentage in other parts of the country being much lower.
As a consequence, we have something that we do not find across the landscape of Canada in any other sector that I am aware of, that being that there can be two forest products companies operating on opposite sides of the street, both harvesting the same species, paying the same wages, and selling product into the same markets, one of which is exempt from the 15 per cent export tax and the other not.
What we discovered happened was that during the negotiations it was decided that the short list of those corporations
May 13, 1987

which had gone through the earlier process to obtain exemption were those who were subsequently included on the exempt list.
Subsequent to December 30, 1986, the Minister of State for Forestry and Mines (Mr. Merrithew) commented how great it was that he had been able to do such good work for the Maritime region in obtaining these exemptions-and that is something that irritated me. He is a Member from that region and as such he has every right to get out and provide information to corporations, small or large, as to how they should go about getting exempt status. During committee consideration, it became abundantly clear to us that this kind of unfairness of treatment could not go on.
If a company is exempt, whether that company is based in British Columbia, Alberta, Ontario, Quebec, or the Maritime region, it has an unfair advantage over the non-exempt company when it comes to shipping product into the U.S. market. Given two companies in exactly the same circumstance-the same wage rate structure, cost structure, taxation structure-one exempt and one not exempt, we are faced with an unfair situation.
If we as a Parliament cannot find a way to remedy that unfairness, a number of things will ensue. The banks are obviously going to be more inclined to advance funds to the company with the exemption, with the result that over time that company will buy up the forest lands of the non-exempt company, ultimately ending up with the market and operations of that company.
We heard evidence from companies right across the country, and there were very few if any that could say they were making a 15 per cent profit. Most said they were barely keeping their heads above water, and that what little profit they were making would be eroded by the 15 per cent export tax.
Those who are exempt from this export tax are in a position to take over the operations of those who are not. Those companies without the exemption are going to have to cut corners, perhaps leading to lower safety standards, lower production levels, and the seeking of other markets.
Strictly from the point of view of fairness, this situation needs to be remedied. Canada has always at least attempted to have its tax laws operate fairly.
It has never, of course, been a level playing field, as Sam Gibbons and others like to call it, but at least there has been an attempt to have tax measures apply reasonably fairly cross the landscape.
I am not proposing a mandatory provision that all forestry companies are immediately exempted; what I am proposing, through this amendment, is that the Minister, as is provided in Clause 15, be given the opportunity to grant exemption. It would provide the opportunity for corporations to demonstrate that they meet the requirements to be conditionally or
Softwood Lumber Products Export Charge Act
unconditionally exempt in respect of the charges under this legislation.
This is crucially important, and particularly so for the Maritime region, where we do have the situation where it is only the large corporations that are exempt. In many cases, the smaller operations, operations that have been owned in many cases by the same family for many generations, find themselves in the situation where they either did not apply at all or just missed gaining exempt status. I think it important that the Government accept this amendment.
The next paragraph (d) reads:
Conditionally or unconditionally exempt any softwood lumber products from
corporations that can demonstrate that their raw log supply comes from
regions not named in the 1986 U.S. Countervailing Duty action.
I have very broad support for this amendment from right across the country because, as I point out;
For greater certainty this includes those areas outside of B.C., Alberta,
Ontario and Quebec.
This would provide an exemption to those companies operating in Saskatchewan that were not named in the U.S. CVD action which provides exemptions for all of Maritime Canada, and should products from Yukon or NWT start to come on the market, it gives them an exemption. The United States and the U.S. coalition in the CVD action went after the four provinces which they felt were subsidizing logging and trees, namely B.C., Alberta, Ontario and Quebec, so this would provide the opportunity for the Minister conditionally or unconditionally to exempt the products.
It also does another thing which I raised earlier today, namely, the matter of wood coming from south of the border. These are trees grown in the United States. The Americans never named the United States in their own CVD action. Wood comes into western Canada, and particularly into the Province of Quebec, to the 13 border mills. They get almost all of their wood from the United States, and clearly that wood was never named in the U.S. CVD action. That wood was never named during the negotiations in Washington leading up to that fateful agreement of December 30. It seems highly odd to me that in committee we did not find some fertile ground on the government side to provide the kind of opportunity for conditional or unconditional exemptions that I am suggesting here for wood produced in those regions.
I would like to hear from government Members who participated in this process. I find it interesting that on the last day of our committee, the Minister for International Trade (Mr. Carney) happened to be in New Zealand, just as on December 30 we happened to find her in Hawaii, and we found that the Conservative Members who had participated earlier in the committee process had suddenly vanished. Once again, today, we find that those government Members, particularly from the west but also from Ontario and other parts of the country who had participated in the hearings are not here in this debate. This disturbs me profoundly and

May 13, 1987
Softwood Lumber Products Export Charge Act
should profoundly disturb those million workers right across the country who are involved in Canada's largest industry, the forestry sector, which is the largest source of revenue in our balance of trade. Why is it that the Government urged us to hurry through the committee stage in hearing all of the witnesses and made us finish on March 24 to hurry the Bill into the House? Yet here we are another six weeks later dealing with it supposedly because the U.S. is considering a Section 301 action. We still have not heard from the Minister for International Trade on our unanimous requests from the committee.
Part of my amendment is contained in the request that went to the Minister for International Trade (Miss Carney) on March 25. Supposedly negotiations were going on in Washington and supposedly we were going to get some added exemptions in terms of corporate exemptions, regional exemptions and exemptions of remanufactured products. But there has been no action, Mr. Speaker. It somehow demonstrates the inactivity on the government side on this issue.
We know about the 10 per cent one time only offer. We know about the bungling and the incompetence. It is sad that those government Members who did participate in the committee process have found it impossible once again to participate in public debate, to tell the public where they really stand and whether or not they support those corporations which are duly deserving of the exemption. Where do these Members stand? I hoped they would support that. They always claim so privately. I hope to hear that support on the record today. What about the U.S. logs that are being milled in our mills and re-exported to the United States? Why are they not being provided with the pathway and the opportunity to obtain the exemption?
Paragraph (e) reads:
Conditionally or unconditionally exempt those softwood products such as remanufactured products which were not named in the 1986 U.S. Countervailing Duty action.
We listed those in our unanimous letter to the Minister for International Trade. They are the following:
Specialty Remanufactured Cut Stock (including precut pallet stock; precut spring mattress frame components; crating stock; box stock; cleat stock and blanks; turning squares). Furring Strips/Roofing Strips, Remanufactured Studs, Softwood Lumber Pressure Treated with Preservative or Fire Retardant Chemicals With Respect to the Value Added by the Pressure Treatment, Tongue and Groove Roof and Floor Decking, Remanufactured Cedar and Pine Boards, Industrial Clears and Shop (Remanufactured)(Shop and Better) Edge-Glued Panels, Select Fascia, Custom Kiln Dried/Custom Planed Lumber, Finger-Jointed Lumber, Car Lining and Decking, Machine Stress Rated (MSR) Lumber, Bridging, Vegetable Stakes, Spruce Patterns.
In paragraph (e) I am suggesting those products which we have now finally added.
For the reason they were not in the memorandum of understanding and are not to be found in the schedules of exemptions in Bill C-37 we can only go back to the evidence given to us. Some of the witnesses made it very clear that they were never given an opportunity to provide a complete list that could have been added. We have learned that it is hundreds of
millions of dollars, close to a billion dollars in product that has been thrown into the hopper for an added 15 per cent export tax, simply because the Government did not have a proper negotiating process at that time leading up to that fateful day of December 30.
This amendment, Motion No. 9, speaks for itself. It provides for anomalies that never should have been included in the memorandum of understanding. They were never sought by the U.S. Coalition for Fair Lumber Imports. They were never sought by Mr. Baldrige, Mr. Yeutter or Ronald Reagan. They were thrown into the hopper. What this amendment does is to provide a pathway within Clause 15 for the Minister to take that opportunity conditionally or unconditionally to exempt those products that I have identified.


Lloyd Axworthy: Mr. Speaker, I want to remind the House of the words of the Minister for International Trade (Miss Carney). When she arrived back from the shores of Hawaii she said, "This is a good deal for Canada". You will find it very hard to convince people in the Maritime regions, the very large number of firms across Canada in remanufacturing that this is a good deal for Canada, Mr. Speaker. They are now in danger of losing their jobs, their businesses and their livelihood. One can hardly call it a good deal. The Government negotiates an agreement which puts a penalty on its own citizens.
Let me quote from the submission made to the Senate Finance Committee on behalf of the British Columbia Secondary Softwood Lumber Manufacturers. It reads:
Unfortunately, the B.C. secondary softwood lumber industry is finding that the agreement is seriously flawed from a technical standpoint. Due to the Government's insistence upon proceeding alone with the negotiations, Canadian officials did not enjoy the same benefits of industry expertise as did their U.S. counterparts. As a result, the Understanding is damaging the future viability of our industry.
Let me quote another submission, this one from the Coalition Against Unfair Labour Taxes, basically the organization representing the Maritimes softwood lumber people. It says that a survey of 79 members of the Maritime Lumber Bureau indicates that 57 per cent of those employed by nonexempt firms will be laid off within one year of the imposition of the tax. This amounts to 4,167 of a total of 11,000 direct industry employees.
It is hardly a fair description to say that this was a good deal for Canada when in fact those very industries directly affected, in their words, have pointed out how seriously flawed this may be.
This amendment which we support and endorse proposes a way of correcting that particular exclusion by providing within the Bill the clear power to add substantially for exclusions those in the Maritimes region in particular and, for the remanufacturing people, those products which are not presently excluded.
May 13, 1987

I heard the Parliamentary Secretary say that we did not lose our sovereignty. It is interesting to see the process we are now going through. The United States Government and the United States lumber industry is saying that they will not negotiate changes in the agreement until we pass the Bill. Even the Minister for International Trade has almost come to her senses and said that she thinks the Americans are violating the spirit of this agreement. On the other hand, we are faced with the comments of the famous Mr. Dennison who says that they will not negotiate anything until the legislation is passed. Then, according to the Vancouver Sun of April 9, 1987, he said that nothing will be done until the legislation is passed. He said that there are changes the coalition wants too and that there are companies completely excluded from the tax that do not deserve to be excluded. He said that some of them are just wholesalers and he thinks they will want to take them off the list.
The Government is in fact asking us to give it a blank cheque removing the leverage provided by this legislation so that the Minister for International Trade, who at this point might be on the shores of the Fiji Islands will have her negotiators begin negotiating with the Americans so we will have to give up more than we gave up originally. We know the kind of negotiation of which the Minister is capable, and that is simply to surrender.
Now we are faced with what can only be called a form of international blackmail. We are told to pass the Bill so that the American industry can be totally satisfied that it gets everything it wants. It is prepared to negotiate after that, but it has taken a new bargaining position which is that it wants to eliminate companies that have already been granted exclusions. We are in a classic Catch-22 situation.
The Parliamentary Secretary wants a further explanation. Perhaps he is busily involved in matters of great substance, so let me repeat for him that Mr. Dennison, the chief lobbyist for the U.S. lumber industry, has said they will not do anything until the legislation is passed, and then he went on to say that they want changes in the legislation and the memorandum of agreement because there are Canadian companies completely excluded from the tax that do not deserve to be excluded and they want them off the list. That sets off warning bells suggesting that the next stage of negotiations will be one further stage of retreat.


John Horton McDermid: Oh, oh!


Lloyd Axworthy: Apparently I struck a funny-bone in the arm of the Parliamentary Secretary. How else would he explain that when the original negotiations took place, certain companies gained exclusion and others did not? According to the brief presented by the Maritime Lumber Bureau, 57 per cent of them are facing a loss of close to 4,100 jobs because the Government did not do an effective job when the original negotiations took place. That is hardly a laughing matter. It is hardly something that would cause great hilarity.
Softwood Lumber Products Export Charge Act
We are now being faced with the obvious conclusion that one of the results of this negotiation will be that Canadians will lose jobs. Members of the industry have detailed exactly how that will happen. In the remanufacturing industry, 300 or 400 lay-offs are taking place in British Columbia already. A number of firms have already indicated that they will move their operations to the other side of the border. They say they are doing that because when the Government negotiated this, it held no consultations with the industry and somehow forgot to put them on the list.
Let me remind Hon. Members of the incredible mistake that was made during negotiations to compound the injury. When the original countervailing duty was imposed, U.S. authorities made it clear that the value-added portion of any remanufactured product would not be included in the assessment of duty. The Minister for International Trade was such a great negotiator that she managed to include Canadian secondary lumber manufacturers in the deal, and the tax is now imposed on them. That $500 million industry was put in jeopardy because of the skill of that negotiation. That has to go down as one of the most brilliant negotiations in the annals of Canadian commercial relations.
This amendment seeks what we have sought throughout, and that is, to say that it is proper for the Parliament of Canada to assert its own right to protect its own citizens. If we are as sovereign as the Parliamentary Secretary has said we are, then surely this Parliament has a right to say that Canadian businesses and citizens will be hurt by this agreement. Therefore, we have a right to make an amendment that will protect those businesses and citizens against the mistakes that were made in the original negotiations.
I would only say to Hon. Members opposite that it is beyond belief that they could vote against such an amendment when that is its clear purpose and intent. Perhaps they are basically saying once again that that memorandum of agreement so circumscribes the powers of Parliament that we do not have the right to defend our citizens and to offer them the kind of protection they need against the stupid actions of the Government.


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


Some Hon. Members:: Question.


Mr. Deputy Speaker:: The question is on Motion No. 9 standing in the name of the Hon. Member for Skeena (Mr. Fulton).
Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


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


Some Hon. Members:: Yea.

May 13, 1987
Softwood Lumber Products Export Charge Act


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


Some Hon. Members:: Nay.


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


Mr. Deputy Speaker:: Pursuant to Section 11 of Standing Order 114, the recorded division on the proposed motion stands deferred.
I have been asked by the government Whip to defer the vote. Is that the position of the Parliamentary Secretary?


John Horton McDermid: Mr. Speaker, I understood that consultations had taken place and that we would proceed to third reading immediately. I would imagine that if we do proceed to third reading, we would naturally vote on the motions before we did so.


Thomas Scott Fennell: Mr. Speaker, I am sorry, I did not know that we would finish this quickly and I had a phone call. I was going to speak to the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy).


Lloyd Axworthy: It is too late.


Thomas Scott Fennell: Will this be on division or do you request a vote?


Lloyd Axworthy: Mr. Speaker, you know how co-operative we want to be in helping the Government manage the affairs of this House. We are certainly prepared to have these two amendments go on division. We are prepared as well to consent to move on to third reading. However, I want to say to the Parliamentary Secretaries collectively that we do not think it would be possible to complete third reading today.


James Ross Fulton: Mr. Speaker, I think it would be appropriate to do it on division. You have just been advised there is another problem as well, and doing it on division for that reason as well may be the most appropriate way to go.


Mr. Deputy Speaker:: I gather there is consent to have Motion No. 7 and Motion No. 9 negatived on division. Is that agreed?


Some Hon. Members:: Agreed.
Motion No. 7 (Mr. Axworthy) negatived.
Motion No. 9 (Mr. Fulton) negatived.


John Carnell Crosbie: that the Bill be concurred in.


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


Some Hon. Members:: On division.


[Stage Direction]
Motion agreed to.
John Carnell Crosbie: that the Bill be read the third time and passed.


John Horton McDermid: Mr. Speaker, first I want to thank my friends in the Liberal Party and the NDP for their cooperation so we could move into third reading. I appreciate that very much.
The Softwood Lumber Products Export Charge Act, Bill C-37, now before the House for third reading, comes at the end of a long, complex and very important trade action in which the Government had to make a very difficult choice among the alternatives open to it. I would like to review briefly the background to our agreement with the U.S., and then comment on the initiatives the Government has taken since the end of December.
As you know, we argued strongly against the acceptance of the U.S. countervailing duty petition when it was filed some 10 months ago. Despite our strong representations, we were not successful. It was not because of a lack of effort. Our representations were very strong and I know Members on the other side of the House in meetings with their U.S. counterparts also made strong representations on behalf of the Canadian lumber industry.
Last October 16, the U.S. Department of Commerce reversed its 1983 decision and determined that stumpage was in fact a subsidy subject to countervailing duty and imposed a preliminary duty of 15 per cent. In a formal note the Government of Canada characterized this finding as: "Flawed in law, inconsistent with established U.S. practice and, in several important respects, based on erroneous assumptions". Nevertheless we had to face the fact that the ruling had gone against us. The Hon. Member for Cochrane-Superior (Mr. Penner) and I had a discussion today as to what would have happened if. All I can say is that if he knows what would have happened if, he is far better than I am. Perhaps he is anyway, but if he can see into the future and what might have happened if, he is certainly wasting his time in doing what he is doing today.
By early November it was becoming increasingly apparent that the final ruling would almost certainly go against us as well. I explained that when we discussed one of the amendments a little earlier. The best advice we received from those involved intimately with the 1983 decision was that we were not going to win. We were going to end up with a countervailing duty, and it seemed prudent to try to resolve the issue before that decision could be handed down.
The subsequent negotiations, which were the subject of a lot of debate this afternoon, were not easy. Initially, the petitioners held out for much more stringent terms than we were prepared to accept. They were talking about 30 per cent or 32 per cent as the starting point along with a number of other demands. However, these demands were successfully resisted. I have to give credit to the negotiating team. They did an excellent job under some very tough circumstances.
May 13, 1987

In its fundamentals the eventual agreement was in line with the terms proposed by Canada and met all of Canada's declared objectives. It was signed without prejudice to our position	that	stumpage	programs	and practices are	notsubsidies	subject to countervailing	duty. It avoided	theestablishment of a potentially dangerous legal precedent. It ensured that any additional revenues would be retained in Canada.	It	maintained provincial	sovereignty over	themanagement of their natural resources. The only matter which was to be the subject of further consultation and agreement between	the	Canadian	and U.S.	Governments was	the
calculation of the value of any replacement measures in relation to the export charge.
The memorandum of understanding embodies the agreement reached between Canada and the U.S., implementation of which requires authority to collect the export charge. That authority is contained in Bill C-37 which reflects the elements of the memorandum of understanding.
Committees of both the House and the other place have completed several weeks of hearings on Bill C-37. I believe we worked on it for about six weeks in committee. We heard from a broad and impressive group of witnesses. Certain aspects of the agreement on which the Bill is based came under close scrutiny in both committees. I believe the committees' major
Softwood Lumber Products Export Charge Act
concerns are being addressed through initiatives we have taken in discussions with the U.S.
Many of the other issues of concern will undoubtedly become less significant as the export charge is replaced by provincial measures as allowed by the legislation and the memorandum of understanding.
The Canadian Council of Forest Ministers has taken a lead in developing a national package of replacement measures. The provinces are co-operating on replacement measures, and the Minister's report progress is being made in this direction. I appreciate and fully support the efforts of the council and look forward to the Minister's next report which should be in June.
It is six o'clock, Mr. Speaker. I will finish my remarks when the Bill is brought back to the House. I know the Minister of State for Forestry and Mines (Mr. Merrithew) wants to participate as do my friends on the other side of the House. Again I want to thank them very much for their co-operation.


Mr. Deputy Speaker:: It being six o'clock, this House stands adjourned until eleven o'clock tomorrow.


[Stage Direction]
The House adjourned at 6 p.m.
[Stage Direction]
Thursday, May 14, 1987