1988-05-27

[Stage Direction]
The House resumed from Wednesday, May 25, consideration of the motion of Mr. Hockin that Bill C-126, an Act to amend the Bretton Woods and Related Agreements Act, be read the second time and referred to a legislative committee, and the amendment of Mr. Skelly:
That the motion be amended by deleting all the words after the word "That" and substituting the following therefor:
"Bill C-126, An Act to amend the Bretton Woods and Related Agreements Act, be not now read a second time but that it be read a second time this day six months hence."
The Acting Speaker (Mrs. Champagne):: When the House rose on Wednesday, May 25, 1988 there were nine minutes remaining in the question and comment period following the speech of the Hon. Member for Comox-Powell River (Mr. Skelly). I see that the Hon. Member is not present. Resuming debate. The Hon. Member for Skeena (Mr. Fulton).


Mr. Jim Fulton (Skeena):: Madam Speaker, the Bill before us today, Bill C-126, is an Act to amend the Bretton Woods and Related Agreements Act. It provides for two amounts, one of $550 million and one of $250 million. The terms of the loans are favourable but will be used mainly to service existing debts. Third World debt, as many Canadians know, is over $1 trillion and rising. In 1987 Third World countries paid the IMF $5.9 billion more than they received and commercial banks now take more than they lend, a situation that has been going on for some time. Development assistance is drying up and, despite what our Secretary of State for External Affairs (Mr. Clark) promised, which was to reach .7 per cent of our Gross National Product by 1990, that goal was moved to 1995 and has now been moved on into the 21st century, a promise which the Government of Canada should clearly have met. Stephen Lewis, our Ambassador to the United Nations, said in an interview with the Vancouver Sun on May 9:
The West is betraying the African continent.
The debts of sub-Sahara and African countries are not as large in absolute numbers as those of, say, Brazil or Mexico, but when expressed as a percentage of their Gross National Product or their debt service to export ratio, the debts are devastating. The IMF imposes structural reforms on these nations, and as one official put it, "cheaper money for stricter policies". These social costs of adjustment are borne most heavily by the very poor. The policies that were passed by my Party at its most recent convention deal directly with the social problems that were created by the coercion of the IMF and of developed nations on Third World nations. Our Convention Policy, B.3.2, reads in part:
... The IMF, in pursuit of monetarist objectives has imposed conditions upon Third World countries which have led to drastic devaluation of currencies, reduction of already low wage levels, elimination of food subsidies and cut-backs in social services. Enforcement of these unpopular policies has required repressive internal security measures which are directly counter to development...
It goes on to call upon the Canadian Government to respond positively to Third World proposals for immediate debt relief such as the repayment of a rate equal to a ceiling of 10 per cent of export earnings proposed by Peruvian President, Alan Garcia.
Specifically, we oppose tying a debt to domestic export development. What developing countries need most is a commitment from countries like Canada to long-term infrastructural development assistance of the kind that will allow a broad based and self-sustainable economic and social development in the recipient countries. That was put on the record some time ago, in fact on September 10 of last year, by our House Leader from Kamloops

Shuswap.
The IMF is not a neutral economic instrument, benevolently assisting Third World nations in a disinterested fashion. Voting on the IMF executive board is weighted by size of contribution, meaning that the United States has a predominant influence, and hence the emphasis on structural reform meaning a tax on social programs, on local self-development and so on. This Government has not opposed the use of the international banking system for right wing purposes, as we saw with the refusal of loans to Nicaragua.
It is time to develop a new system of international credit. The Bretton Woods agreement no longer works. It was developed in 1944 under very different economic conditions. The United States was the mainstay of that system. It had a commitment to multilateralism and the U.S. dollar was the

May 27, 1988
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unassailable basis of world currency. However, the U.S. no longer operates on a truly multilateral basis. Instead, multilateral institutions are seen under the Reagan administration as an extension of domestic policy. The U.S. dollar no longer serves to stabilize and facilitate the world economy. The current function of the market system serves to drive down world commodity prices, worsening Third World Governments' balance of payment problems.
An example is one of the areas hardest hit, as pointed out by Stephen Lewis, and that is the sub-Sahara of Africa and certainly the whole of the continent of Africa. We have seen a fall in commodity prices there. They fell from a base of 100 in 1980 to 61.1 by 1986, and the fall continues. The solution of export-driven development simply serves to increase problems.
The Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly), who has done a great deal of work in relation to CIDA and Third World problems for our Party, has said:
When prices drop for Third World countries they often respond by
producing more. Our whole economic system is based on the fact that in order
to compete people have to produce more.
When everybody produces more it creates a glut on the market and, as a
result, commodity prices fall further.
The Bill before us today, Bill C-126, provides funds in two different ways to a particular section of the IMF with which I will deal in a moment. Canada's record is not good in this area. As I said, the Secretary of State for External Affairs has not been able to get the assistance of his Cabinet colleagues on the Treasury Board to move forward with a more substantive role in dealing with the debts of the Third World. While our record in that area is not good, it is still better than that of most industrialized countries. There is clearly a need for a new international economic order, and I am saddened that this Government and this country have not taken more seriously, either in terms of within Canada-


The Acting Speaker (Mrs. Champagne):: I am sure that the discussion that is taking place on the floor is very important, but it is getting a bit noisy, and the Chair wishes to hear the Hon. Member who has the floor.


James Ross Fulton: Thank you, Madam Speaker. That was very helpful.
Many Canadians were hoping that the Government would take more seriously the recommendations of the World Commission on the Environment chaired by Prime Minister Brundtland which brought forward in a very real way the problems of the globe as a whole and why we need to move more vigorously toward the concept of sustainable development, not only within Canada but around the world. One of the problems faced on the African continent and in other Third World countries is the fact that the nature of the IMF loan process does not allow for or promote the concept of sustainable development.
Bill C-126 provides a loan base up to $550 million to the Enhanced Structural Adjustment Facility, known as the
ESAF, of the International Monetary Fund. ESAF was initiated at the 1987 Venice Summit of the G-7. It called for an increase to $10 billion, more than double the amount that was sought in 1986.
Second, Bill C-126 provides for a grant of up to $250 million to the same body. The $550 million in the first part of the Bill is a loan that can be made through the ESAF at market interest rates and then the money is loaned by the IMF on concessional terms. This money is for the highly indebted and poor countries, largely in the south Sahara of Africa. The money is used to support structural adjustment programs aimed at restoring the balance of payments and promoting economic growth.
It is good to provide help, but often the structural adjustment programs are too stringent or promote developments that are overly export oriented and not sustainable and provide little if any real benefit to local populations. As we have noted in many countries around the world, the local populations in fact have to give up wages, housing conditions and even food in order to meet the structural adjustment programs imposed upon them by the IMF.
Canada's expense in relation to the Bill is the difference between the loan rates of, say, .5 per cent in terms of the loan to a Third World country and what would have been received commercially, and that will work out to about $30 million per year to be added to our $2.7 billion foreign aid programs.
I would like to spend a moment dealing with what some of those so-called foreign aid programs are. They are often raised by my constituents, and I know in the past, they have been raised by Members of the House. Canadians generally support very strongly the provision of assistance, whether through funds like the one before us today or through our foreign aid programs.
On November 10, 1987, I received a letter from the Secretary of State for External Affairs, which reads:
Dear Jim:
Thank you for your letter of October 15, 1987 requesting a complete
summary of all federal government funding to forest and/or mining ventures
outside Canada from September 1984 to September 1987.
I am enclosing a list of Export Development Corporation, CIDA and PEMD
financial projects. I hope you find this information helpful.
I am sure Hon. Members will find it helpful, because I think many know what was supposed to occur within Canada. I see that the Minister of State for Science and Technology (Mr. Oberle) is here. He was one of the great promoters of a full Ministry of Forests in Canada. Forestry is our largest industry. More than one million Canadians are directly or indirectly employed in the forest sector. I think it is worth taking a look at what kind of assistance the Government is providing outside Canada that it refuses to provide inside Canada.
Let me deal first with the funding provided for mining. Funding is going to Chile, to the Chuquicamata copper mine. A very substantial amount of money is going there. Funds are
May 27, 1988

going to New Guinea, again to Chile and to Brazil. Under the CIDA projects, there is funding going to Botswana for mining, Botswana for training of diamond drillers, Ivory Coast and Ghana for gold mining.
There has been a fair amount of coverage in Canada and in North America generally about the problems that are being found in Brazil through this particular kind of funding, funding provided for small-scale gold exploration and for the training in mineral exploration by the Government of Canada to Brazil. There has been rather notorious coverage given to the fact that there is wholesale slaughter and murder of the indigenous populations in Brazil in the midst of the gold rush in that country. In fact, experts on the impact of these kinds of projects on the forests and on the indigenous people were here in Ottawa just a few weeks ago, pointing out how terrible the impact is on the indigenous and aboriginal populations in South America of some of the kinds of so-called booms that are going on. It is extremely short-sighted of Canada to be involved in funding projects which are part of the murderous slaughter of aboriginal people in South America.
Many Canadians would also be interested to know that the Government of Canada is funding a geochemical survey and various forms of technical assistance in Jamaica on the impoundment of bauxite tailings and metallic mineral surveys. Many, if not most, Canadians know that Alcan and others are the principal beneficiaries of bauxite mining in Jamaica. The Government of Canada, through so-called foreign aid, is doing what Alcan and others would like to see done in terms of such developments.
With regard to the problems which Third World countries are having in meeting their loan payments, as I said, Third World countries paid the IMF $5.9 billion more than they received last year with commercial banks taking more than they loaned. Let us look at the kinds of projects Canada has been funding in some of these countries.
In the Asian region, on forest projects alone, Canada has supplied $98,766 million in funding, a very substantial amount of money. Some of the funded projects are good and I think all Canadians would support them. For example, $46,250 million was spent in India on social forestry.
The harvesting of wood and the over-consumption of plants by various ungulates, whether goats, cattle, or whatever, has created a serious problem of desertification in many areas of the world. I am sure all Canadians support programs which lead toward soil conservation, the redevelopment of forest bases, and all that comes with them in terms of genetic diversity and so on.
Many Canadians scratch their heads when they realize the level of funding being provided by the Government for programs for the training of forest industry workers outside of Canada, which programs are also needed in Canada but are not available here. Let me give some examples of that. In
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Indonesia we fund a forest industry vocational school as well as programs in fire management, forest management, and rural development and forestry. As I said the funding for that amounts to over $98 million at the present time. In Anglo Africa, Canada is providing $19.4 million for forest equipment credit, agriforestry nursery and extension in the Sudan, and institutional buildings and training in Rwanda.
In Francophone Africa the region total is $139.45 million. In the Cameroun, for example, we provide a forest equipment credit of $12 million. In Zaire we fund charcoal production technology as well as professional forestry training at $3.2 million. Institutional buildings are being constructed in Niger at a cost of $12.1 million.
It is quite proper that we are providing this program funding to Third World countries which require this assistance, but it is amazing that in our country our largest industry does not have a national Minister of Forests. In fact, the Minister of Forests has been delegated responsibilities for mining, and the Canadian Forest Service has been much downgraded since the Government took office.
Funding in the Americas and the Caribbean total $68,365 million. An example which drew my attention is the funding going to St. Lucia, an area about one-tenth the size of South Moresby. This year, $5.5 million is being provided for management and conservation of forests there. That is an interesting expenditure when various regions of British Columbia have been asking for program funds for postsecondary institutional training for forest workers and cannot get it. We have been looking for funding for dealing more extensively with what is known as the not satisfactorily restocked backlog and cannot get additional funding for that.
Nine of the ten federal-provincial agreements are coming up for renegotiation. It appears that the Government is not planning to carry on that A-base funding for five-year commitments to reforestation in Canada but seems to be able to find hundreds of millions for outside of Canada.
In Honduras $12.3 million is being provided this year for tropical forest development and management. In Peru $3.85 million is being provided for forestry university buildings. Peru is being given an equipment line of credit of $26 million and $6.1 million for forestry technical schools.
It is interesting that the Government provides funding to institutions outside of Canada for post-doctoral studies in forestry and does not provide it to a single university or college in Canada. It is a very interesting concept that many kinds of post-secondary educational development is fully funded by Canada outside our country but is not provided to Canadians unless they want to leave Canada.
I think Canadians would be interested in hearing about EDC financing. Let us keep in mind that the Secretary of State for External Affairs and others in the Government of Canada cite $2.7 billion as financing for foreign aid programs in Third World countries.

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As an example, $19 million is going to Compania de Carbones of Chile for the construction of an open-pit mine and a bulk loading marine coal terminal. In addition, they are getting $874,000 for coal handling and ship loading, $79,000 for six 120-D and seven 35-D rear dump trucks. Millions of dollars are being spent on electrostatic precipitators, hydraulic rock breakers, mobile rock breakers, coal mining equipment, traction thickeners, flotation mechanisms, and two sag mills with liners. The list goes on and on. Seventy-six million dollars is being spent on mining equipment for the BAO coal project in China.
We must keep in mind that this funding is called foreign aid. Which Canadian companies are getting the foreign aid? Spar Aerospace is getting $765,000 to put in satellite ground station equipment in China. De Havilland is getting $1.6 million for Twin Otter aircraft and spares to go to China. Euclid is getting foreign aid which is going to the United Mizrahi Bank in Israel to acquire seven 100 ton rear-haul dump trucks. The Bank Hapoalim, again in Israel, is getting funding for wire screening line. The lists go on and on. Millions and millions of dollars are going to all kinds of Canadian companies to assist the borrower to buy equipment which will quite often, particularly in the mining sector, go into direct competition with Canadian operations.
Another example is Timberjack which is getting funding to provide seven Model-380 Timberjack log skidders to Chile. That is interesting in light of the human rights allegations our own Secretary of State of State for External Affairs has made against Chile.
I will conclude with just one more example. I know that the Minister of Science and Technology is interested in this because he used very similar information in boondoggling the Liberals in British Columbia prior to the last election. I will just remind the Minister that $900 million of the record profits two years in a row of MacMillan Bloedel is going to Tasmania to open a pulp mill.
The Government is putting no new money into reforestation, silviculture, post-secondary education or anything else in British Columbia. Where are the great promises of the Government to provide at least the the kinds of programs and assistance to post-secondary education within Canada which it provides so glowingly to countries outside of Canada?


Mr. Kilgour:: Madam Speaker, while listening to the Member's remarks I wondered whether there is any limit on irresponsibility or unfairness for Members in this House. The Member and I went to the same school together many years ago, although he is much older than I. To hear that kind of piffle makes me wonder whether he even read the Brundtland report. I put it to him that based on his remarks it is very doubtful that he has. If he had, the nonsense and irresponsible extremism that he was muttering in this House would not have been muttered. Can a Member get up and say anything with no sense of responsibility or knowledge and no sense of the developing world? As a westerner it makes me wince to think
that he would get up as a western Member and utter the kind of gibberish he was uttering.
To take one example of his nonsensical speech, he seems to criticize CIDA for giving aid to Zaire. Maybe he does not like projects going to French-speaking Africa, maybe that is the root of his problem. However, I would point out to him that one project CIDA is funding, which I had occasion to visit, is creating jobs for between five and six hundred citizens of that country. We are providing schooling for children in northern Zaire. What that, may I say it, idiotic Member is suggesting is that Canada should not be giving aid to any part of the world.
I put it to him, and hope he will have something sensible to say in reply, that he should just give a little bit of thought before he gets up and sounds like a cannon going off in the atmosphere of this House.


James Ross Fulton: Madam Speaker, I guess we have just heard from John Turner's brother-in-law.


Mr. Prud'homme:: Don't-


James Ross Fulton: That is the kind of idiocy we have come to expect from that Member.


Mr. McDermid:: Get out of here!


James Ross Fulton: I challenge the Hon. Member to get up and say that he has read the Brundtland report from cover to cover, because I have.


David Kilgour: Point of order, Madam Speaker. I did a review of the report and I assure the Hon. Member it is not very easy reading. His Grade 8 mentality would find it even harder. I did a review for a Foreign Service officers publication called Bout De Papier.


John Horton McDermid: Have you read it, Jim?


Marcel Prud'homme: Madam Speaker, I would just like to kindly ask my friend to leave family matters aside when we debate issues of major importance.


Some Hon. Members:: Hear, hear!


Mrs. Mailly:: Typical NDP.


The Acting Speaker (Mrs. Champagne):: Shall we return to debating whatever is at hand here? The Hon. Member for Skeena (Mr. Fulton) wanted to continue his answer.


James Ross Fulton: Madam Speaker, the Hon. Member for Edmonton-Strathcona (Mr. Kilgour) has proven once again to be a rather foul-mouthed and narrow little person.


Some Hon. Members:: Oh, oh!
May 27, 1988


James Ross Fulton: Oh, oh! Unlike the Hon. Member, I have read the Brundtland report. In fact, just a few weeks ago I sat on a panel at the University of British Columbia-


Claudy Mailly: You sat on it all right.


James Ross Fulton: -with a Member from Vancouver who happens to be quite knowledgeable about it. I would be interested in knowing why the Government of which the Hon. Member from Edmonton is a member has done nothing to implement the Brundtland report in Canada. It has been publicly endorsed but there is no funding and no movement toward implementing sustainable development. The tone of my remarks was in relation to the fact that if we are going to move toward the very thoughtful, important and globally required recommendations of the Brundtland Commission, we need to have some kind of realistic and sustainable funding. The Government, albeit it speaks glowingly of the marvellous Brundtland report, does not put forward any funding or any kind of institutional development to actually implement it.
The reason I made the remarks I did in relation to what the Secretary of State for External Affairs provided to me was because the Hon. Member's own colleagues during the last election campaign made wide use of the very same sort of information. I think it is important that accurate information be put on the record as to exactly what the levels of funding are, what projects are good, and what kinds of problems Third World countries, particularly those in the sub-Sahara, are finding with some of the strict requirements placed on them by the IMF where they have to give up all kinds of existing operations, even those that provide them with food.
One example that I gave was in relation to Brazil. If the Hon. Member had read the Brundtland report, he would know about the very good example provided in that report which dealt with the forest management planning going on in Brazil. The tropical forests are being cut down and palm-oil plantations are planted. As the Brundtland report pointed out, a particular vine that grows naturally in the tropical rain forest can and does provide a better quality oil in larger quantities per hectare in its natural growing state than you get after you harvest those same hectares and plant palm-oil trees.
Many of the assistance programs offered through the IMF and from a country such as Canada have proven to have had a negative and deleterious effect not only on the forests of Brazil and other countries, but in particular on the economies of those indigenous people who have made use of those areas for so long.
The Hon. Member would like to paint my remarks as somehow being against the provision of funds for certain projects in Zaire and so on. Nothing could be further from the truth. He certainly did not sustain any kind of argument. He just popped up out of his seat and said the Hon. Member for Skeena is opposed to funding in Zaire. What hypocrisy. The facts of the matter are that his Government has not moved realistically to establish even the very limited target put
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forward by the Secretary of State for External Affairs of .7 per cent of GNP. Now that Minister says maybe sometime in the 21st century we will start to approach .7 per cent of GNP. Push it off five years. Push it off 10 years. Push it off 15 years.
I think what Stephen Lewis had to say, that the West is betraying the African Continent, is true. I would like to hear the Hon. Member get up and sustain some kind of logical and harmonious debate in this House about why his Government has done nothing about Brundtland. It has not been able to achieve even .7 per cent of the GNP. It has not been able, either through CIDA or EDC or any of the other forums that we participate in, to actually get some movement on sustainable development. I think the Member got up and shot off a bunch of hot air without knowing what he is talking about.


The Acting Speaker (Mrs. Champagne):: Further questions or comments? Resuming debate.


Mr. Simon de Jong (Regina East):: Madam Speaker, we are discussing an Act to amend the Bretton Woods and Related Agreements Act. The contribution I would like to make to the debate concerns the effect the arms race has on economic policies and conditions in both developed and underdeveloped countries. It is important to point out, particularly to Canadians who feel they do not contribute very much to the arms race, that that is not true. We are almost like prisoners of war because of the arms race. Our standard of living has been reduced because of the arms race.
The world spends well over $1 trillion a year on arms. It is estimated that in the U.S. over $500 million a day is spent on arms production. You cannot take $1 trillion out of the world's economy without reducing everyone's standard of living. Let me illustrate how we in Canada pay for the arms race and because we do we are economic prisoners of war.
Normally interest rates are generally one or two points above inflation. We now have an inflation rate of approximately 4 per cent and interest rates should be around 6 per cent. Indeed, a 6 per cent interest rate on mortgages, government debt, and farm debt, would alleviate much of the hardship that working men and women, including farmers, in Canada experience. Certainly a 6 per cent interest rate would make mortgages much less expensive. Today, families often require two income earners in order to provide the basic necessity of a roof over one's head, when only one income earner was needed in previous generations.
Why are interest rates so high? I maintain that it is because of the arms race. The deficit in the United States is so large that interest on that deficit requires 90 per cent of total U.S. savings, including individuals, corporations and businesses, just to service that debt. The United States must have a strong American dollar to provide for its capital needs and therefore must have high interest rates to attract international capital. Of course, Canada's interest rate is directly tied to the American interest rate. We also need a higher interest rate to

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maintain capital at home and attract capital from abroad. For that reason, our interest rate is substantially more than the 2 per cent or 3 per cent over the inflation rate. That is the way in which Canadians pay for the arms race. If it was not for the arms race, our mortgage payments would be less, debt payments for farmers would be less, and the debt payments of the Government would be less. It is estimated that for every one percentage drop in interest rates the public treasury in Canada saves $1 billion. The arms race affects us all because it costs money and reduces our standard of living.
We live in an age of unprecedented abundance, with a technological ability to produce that is unparalleled in the history of the human race. Yet we live in an age of scarcity, when there is not enough money to provide decent housing, medical attention, educational facilities, and old age facilities for our society. We cannot afford to provide decent health care or decent housing for our old and our infirm. We cannot look after our mentally disabled because the Government says it does not have the resources in an age of cut-backs and restrictions. The poor and disabled of society are the ones who suffer the most. Why do we live in an age of scarcity when we should be enjoying the benefits of abundance? Again, it is because of the arms race. The arms race sucks wealth from every country and channels it into the most useless form of production-arms production-at the expense of our farmers, home owners, our sick, young and disabled.
One hopeful result of the stock market crash last year is that perhaps the superpowers began to realize the economic limits to the arms race. That crash occurred because the arms race caused the United States to become the greatest debtor nation in the world. It could no longer continue to borrow money without international lenders realizing there was a limit.
The crisis of that stock market crash has not been resolved and the world economy stands on the brink of a major recession, if not a depression. It is more than a question of confidence, it is a question of how much longer the superpowers can continue spending so much money on arms production.
I believe they have reached the limit. Certainly the Soviet Union has realized it has reached that limit. The Soviet Union spends about as much on arms production as the United States but has half the gross domestic product. It can even less afford the arms build-up.
I suggest that if we are really interested in arms reduction and disarmament agreements, rather than send generals and diplomats to the negotiations, we should send officials from the Department of Finance and Treasury Board to determine how to reduce arms expenditures. I think people from the Finance Department and Treasury Board could find ways to reduce the arms expenditures that generals and diplomats have difficulty determining.
The Government has taken another step in human folly and stupidity with its venture into the big league by ordering nuclear submarines. When the world is beginning to realize the economic limits to the arms race, the Government believes it
can afford $11 billion or $12 billion for nuclear submarines to patrol our Arctic. That is insanity.
I appreciate this opportunity to link the arms race to the problems not only in Third World countries but in western industrialized countries as well. I appreciate this opportunity to talk about the cut-backs and restrictions that are taking place during this age of abundance. I realize the road to disarmament will be long and rough. Yet perhaps it is economic necessity that will force us down that road and I believe that once we take that step there will be some very hopeful signs for the human race.
We have the potential to produce enough for every man, woman and child so that we can provide clean water, decent health facilities and decent housing. We have the potential to overcome pestilence, disease and hunger. We only need to redirect that wealth away from the death machine and its production of armaments into what I call the human machine, the human race stands on the brink of a marvellous future.
I sincerely hope that this Parliament and Canada will play its part in helping humankind find a new and better direction.


Mr. Ouellet:: Madam Speaker, I want to compliment the Hon. Member on his speech. He referred to the Government's plan to buy nuclear submarines. Clearly, this is a very ill-advised policy and many questions must be asked in relation to this unbelievable project. Will the Hon. Member comment a little further on this policy? Can we afford them, and more important, why do we need these submarines?
As the Hon. Member knows, the Conservative Government is taking a very sharp turn from the traditional direction of the Canadian Government in this regard. Therefore, will these submarines undermine Canada's stance against the threat of nuclear arms? How can the Government justify such an action at this time when the world is talking about disarmament? We see the President of the United States and Secretary General Gorbachev meeting in an effort to bring peace to the world. How can our Government go in a different direction?


Simon Leendert de Jong: Madam Speaker, I totally agree with my colleague. It is insane. The rest of the world, hopefully, is moving in the direction of disarmament, of lessening the arms race, in large part forced by economic necessity. The deficit in the United States is so high it just cannot continue with the arms build-up. It is, as are the Russians, being forced to sit down and begin negotiations to cut back. Meanwhile we are going way out in some strange field and buying these submarines as if we can afford them.
Every night in the City of Regina there are kids who go to bed hungry. Hospitals are being shut down because there is not enough money to keep them in operation. University programs are being cut back because there is not enough money for them. And we are spending billions of dollars for nuclear submarines. It is obscene. Of course, we cannot afford it. Of
May 27, 1988

course, our priorities are totally out of kilter. Future generations and civilizations will look back at us and scratch their heads and wonder what our priorities were all about.
Here we are spending billions of dollars on nuclear submarines and on this dangerous technology in order to defend ourselves, yet what we are defending is decaying within because we do not have the resources to feed our hungry, to look after our needy and to do the basic human Christian things which are what a good society is all about. So we are protecting ourselves at the expense of what we feel we are really all about. There is some strange logic in that.


Claudy Mailly: Madam Speaker, I would like to congratulate my colleague from Papineau (Mr. Ouellet) and my colleague from Regina East (Mr. de Jong) for their good acting talents. They speak with much emotion about very complex issues, in a very simplistic way, and it is very easy then to get an audience's attention. But the fact is that a country like ours does not live in a vacuum, all by itself. It is part of the world community and pious wishes cannot solve the problems. We should consider some facts that the Hon. Member for Regina East did not mention; for example, our Government cancelled Third World debt at the Francophone Summit. We finally had a Francophone Summit. We managed to make peace between France and Canada on our role in the French-speaking world and at this second Summit held in Quebec City, we reached an agreement to cancel Third World debt. This is something much more practical and it does much more to ease poverty in the Third World; it also gives an example to the world community of something practical to do, rather than make passionate speeches in the abstract, quite comfortably in this beautiful Chamber. Problems are solved out in the field.
So I find it most unfortunate that on such a major issue of practical importance, Hon. Members choose to play petty politics where the needs are so great.
They talk about poverty as if it were a soap opera. They talk about aid for the Third World; they talk about nuclear submarines as if it were a Rambo movie. It is really regrettable that for the past few minutes, they have lowered the level of this debate on such an important issue by petty politicking. So I would ask my colleague from Regina East (Mr. de Jong) why he forgot to mention in his presentation that we, the Progressive Conservative Government of Canada, took the first step to cancelling the Third World debt. We converted the loans to grants and that is what the Third World was asking us to do, because we believe that we should give people what they want and not what we want to give them.


Simon Leendert de Jong: Madam Speaker, unfortunately, I understand there is a House agreement that very soon the question will be put. Therefore, I do not think I have the full time to answer the concerns expressed by the Hon. Member. Let me just say, however, that if the Hon. Member thought I was dealing with the issue in a petty and partisan way, I apologize, because I
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really attempted not to do that. I think the issues with which we are dealing today are way beyond partisan or ideological politics.
In my remarks I tried to remain very balanced in terms of the insanity of both the left and the right with respect to the arms build-up. The Member accuses me, perhaps, of being over simplistic. I agree that in many ways these are very complex issues. Yet at some stage we must surely be able to draw some basic, general conclusions and ask the question, is this right or wrong?
We are spending these billions of dollars on nuclear submarines, a technology which is very questionable, and I know in my City of Regina there are kids who are going to bed hungry tonight. Is this right? It might be simplistic, yet I feel I would be remiss if I do not ask that question on behalf of those kids who are going to bed hungry. I think it is a question of priorities. Perhaps is is simplistic, but surely the basic priorities are what set the agenda and, as such, I cannot agree with the government's agenda.


Some Hon. Members:: Question.


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


Marcel Prud'homme: Madam Speaker, we will have time for the question. Debate. It is not eleven o'clock.


The Acting Speaker (Mrs. Champagne):: The Hon. Member for Saint-Denis on debate (Mr. Prud'homme)?


Mr. Fennell:: Come on!


Marcel Prud'homme: If you keep talking, you will not get your agreement. You will get your agreement. I wanted to participate in the debate. I regret that the Hon. Member for Gatineau (Mrs. Mailly) took the floor and started the debate again. I will sit down, but I wanted to participate in the debate in a positive way, not to reduce the debate to the level she did earlier. I wanted to enhance the debate, to participate, and to follow the good agreement that took place.
I will follow the rules. We agreed to vote before eleven o'clock. We will vote before eleven o'clock. But I want to be on record that I disagree with the second-last intervention of the Hon. Member for Gatineau who reduced the level of this debate that we wanted to enhance.


Some Hon. Members:: Question.


The Acting Speaker (Mrs. Champagne):: The question is on the amendment. Is it the pleasure of the House to adopt the amendment?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mrs. Champagne):: On division?

May 27, 1988


Some Hon. Members:: On division.


The Acting Speaker (Mrs. Champagne):: Carried on division.


Mr. Hawkes:: Point of order?


The Acting Speaker (Mrs. Champagne):: The amendment was negatived on division.
Amendment (Mr. Skelly) negatived.


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


Some Hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, Bill read the second time and referred to a legislative committee.
The Acting Speaker (Mrs. Champagne):: It being 11 a.m., pursuant to Standing Order 19(4) the House will now proceed to Statements by Members pursuant to Standing Order 21.



STATEMENTS PURSUANT TO S. O. 21


Marcel Prud'homme: Mr. Speaker, tomorrow is May 28, the day that marks the seventieth anniversary of the establishment of the Republic of Armenia. This will be a day of celebration for a nation whose resilience and cohesiveness endure in spite of the tragedies which it has encountered.
I thank Hon. Members of the House in all Parties who attended a meeting yesterday with members of the Armenian community of Canada. It was the best attended meeting we have ever had over the years. I was asked by members of the Armenian community to thank Hon. Members for having attended their meeting and to remind them that tomorrow will be the seventieth anniversary of the celebration.
I also wish to remind Canadians that we are very proud to have among us in Canada close to 50,000 Canadians of Armenian origin who have helped us to build a new country in which everyone feels secure and equal,

where in a Canada that is growing and developing, we can show the rest of the world what all of us together, belonging to different races, groups and nationalities, are able to do.



NATIONAL ENVIRONMENT WEEK


Mr. Andrew Witer (Parkdale-High Park):: Mr. Speaker, next week is National Environment Week, a chance for Canadians to reaffirm their commitment to "our common future", a chance to explore our natural heritage and work together to conserve and protect the environment.
In Parkdale-High Park, National Environment Week provides a focus for concerns over the water quality of Lake Ontario and the Humber River, pollution of the Western Beaches, and environmental safety in the Junction Triangle, while underscoring our commitment to a comprehensive cleanup.
Across Canada hundreds of activities are planned from St. John's, Newfoundland, to Dawson City, Yukon. Canadians will plant trees, clean up litter, attend films and lectures, meet fellow environmentalists, and take the time to enjoy nature- by bicycle, boat, or on foot.
National Environment Week provides a chance for everyone to take an active role. It is up to all of us-federal, provincial, municipal Governments, and concerned citizens-to work together to preserve and conserve our environment.



CANADA-UNITED STATES FREE TRADE AGREEMENT-CONTENT OF IMPLEMENTING LEGISLATION

Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, just when it was safe for Canadians to go to bed again, just when we were beginning to feel safe about walking the streets again, it happened. Canadians were just beginning to relax, content in the security of the Prime Minister's (Mr. Mulroney) promise that our country would not be sold out to the Americans, that we would not become the fifty-first State. Then it happened. The legislation was tabled.
I was going to send a copy of the legislation to some of my constituents who are particularly interested in this matter. Thus I was browsing through it the other night to make sure that there was nothing that would disturb them unduly. And then I saw it, page 99: "every reference in those provisions to Canadian shall be read and construed as a reference to American." I could not believe it so I read on: "every reference to-Canadian-controlled shall be read-as	Americancontrolled." The Prime Minister's promise began to dim.
It went on: "the reference to Canada shall be read and construed as a reference to the United States." The real purpose of the trade deal began to crystallize.


May 27, 1988

Then, finally: "Where two persons, one being a Canadian and the other being an American, own equally all of the voting shares of a corporation, the corporation is deemed to be American-controlled."
I finally understood what the Americans had accomplished with this trade deal. It is summed up in the old adage: What's yours is mine, and what's mine is my own.



RESEARCH AND DEVELOPMENT


Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, I am pleased that the federal Government will be spending an additional half a billion dollars over the next five years to nurture and enhance research and development in Canadian universities.
The Minister of Regional Industrial Expansion (Mr. de Cotret) and the Minister of State for Science and Technology (Mr. Oberle) announced Wednesday a $240 million program to establish Centres of Excellence, and a $200 million increase in the base budgets of the university research granting councils.
The Centres of Excellence will encourage a partnership between the universities, industry, and government, a partnership in world-class research and Canadian competitiveness, a partnership in progress.
New federal funding for the Natural Sciences and Engineering Research Council, the Medical Research Council, and the Social Sciences and Humanities Research Council is welcome support for research and training in Canadian universities.
These two new federal government initiatives are good for the universities, and good for Canada, for it is in our Canadian universities where new ideas are developed and where the skills of young Canadians are honed.



EXTERNAL AFFAIRS


André Ouellet: Mr. Speaker, it is a great relief to see that Soviet soldiers have finally started to leave Afghanistan. For too long, the Soviet Union tried to support the Communist regime in Kabul.
As in the case of U.S. intervention in South East Asia during the sixties and seventies, the Soviets became involved in a brutal, senseless war.
After tens of thousands of Soviet soldiers were wounded or killed, it finally became clear the situation could not go on.
A captain in the Soviet army recently wondered why this had to happen. The question may never be answered, not in Vietnam and not in Afghanistan.
Secretary General Gorbachev is to be commended for his decision to withdraw from Afghanistan, and we hope the Soviet authorities have learned a lesson from this unfortunate experience.
Yesterday Vietnam, today Afghanistan. Let us hope the superpowers will understand they should influence the peoples of this world through their outstanding achievements in science, medicine and the arts, not with bayonets.

[English)



RESEARCH AND DEVELOPMENT


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, the Government of Canada now provides over half a billion dollars annually to the university research granting councils.
The day before yesterday the Minister of Regional Industrial Expansion (Mr. de Cotret) and the Minister of State for Science and Technology (Mr. Oberle) announced a $200 million increase in the base budgets for these councils. Moreover, they also announced the details of a $240 million program for the establishment of the National Network of Centres of Excellence. These centres will promote university-industry partnership to enhance world-class research, and to support Canada's long-term international competitiveness.
When it comes to supporting Canadian research and development, the Government is deadly serious. It is backing its commitment with hard cash.



NATIONAL PARKS


Mr. Rod Murphy (Churchill):: Mr. Speaker, I was phoned by some school children from my riding who live in the community of The Pas. Two groups of 75 children wanted to drive the six-hour trip from The Pas to Riding Mountain National Park.
They asked Parks Canada officials if they could have a staff person to travel with them and to guide them through the park, a service which used to be provided. However, the regional office told us that as a result of cutbacks the regional

May 27, 1988
office told us that the Government has taken away all the staff previously available to do school tours.
I call upon the Minister of the Environment (Mr. McMillan) to look into the situation and to ensure that in our national parks across the land our school children can get a guided tour. I think that is very reasonable in this country.



CANADA-UNITED STATES FREE TRADE AGREEMENT-EFFECT ON WESTERN CANADA

Mr. Don Ravis (Saskatoon East):: Mr. Speaker, most analysts agree that the free trade agreement will benefit western Canada. For the past four years the Canada West Foundation, a non-profit western based research institute, has done extensive research on the free trade issue. Its study confirms what others have said, that is, the free trade agreement is good for western Canada.
The study indicates that 15.3 per cent of the labour force will benefit directly from the free trade agreement. However, the importance of this is shown by the fact that these sectors represent 25 per cent of the combined output of the Gross Domestic Product of the four western provinces. Only 1 per cent of the sectors are negatively affected.
The biggest winners will be agriculture and energy. Livestock producers in western Canada are regarded as the clear winners. In energy, oil, gas, and electricity, producers support the enhanced access to and secure market of the U.S. Easing National Energy Board export regulations under the free trade agreement is a positive development for the western Canadian economy.
In my own province of Saskatchewan sectors directly benefiting from the free trade agreement account for 20 per cent of the provincial Gross Domestic Product, and only 1 per cent of the industries will be adversely affected.
I urge people of western Canada to get a copy of this report and read it. It is very informative, and I think it spells out the major advantages of what the free trade agreement will accomplish for us in the West.



EMPLOYMENT


Mr. Gilles Grondin (Saint-Maurice):: Mr. Speaker, I would like to know whether, the Government, through the Minister of State (Youth) (Mr. Charest), will finally impose a moratorium, so that Quebec campuses and CEGEPS can expect placement officers with Canada Employment Centres will continue to provide the same service.
So far, representations have been made and a reassessment of the service is planned, and I agree with that reassessment, except that I don't want this to lead to a decline in the quality of service.
In recent years, placement officers have spent less time on campuses and in the CEGEPS, so that this year, I wish the Government would impose a moratorium to prevent a further decline in service.



CANADA-UNITED STATES FREE TRADE AGREEMENT-IMPACT ON BRITISH COLUMBIA

Mrs. Mary Collins (Capilano):: Mr. Speaker, we in British Columbia often like to ask the federal Government: "What have you done for us lately?" I am proud to reply: "The Canada-U.S. Free Trade Agreement".
This has recently been confirmed by the prestigious Canada West Foundation's report on the impact of the free trade agreement on the West. In that report, the Foundation found that in British Columbia the sectors directly benefiting from the free trade agreement account for 18 per cent of the province's gross domestic product, while those which might be adversely affected account for only 2.4 per cent.
In that report it is also pointed out that secure access to U.S. markets should facilitate investment, production, and job growth in forestry products, natural gas, minerals, precious metals, and in other sectors.
While all regions of the province will benefit, Vancouver can particularly expect to gain as a result of its proximity to the large U.S. Pacific markets and its excellent range of transportation services for exporters.
I have not even talked about the potential new capital investment that will be attracted from the Pacific Rim. What it all adds up to is that this free trade agreement creates the prospects for British Columbia to fulfil, not only its natural resource potential, but the resource of its people.
What is my advice? Go West, young men and women.
May 27, 1988



AGRICULTURE


Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, it has been another dry week on most of the southern prairies. According to a PFRA water supply update, conditions are so severe that the South Saskatchewan River at Medicine Hat, Alberta, is flowing at a rate of 31 cubic metres a second. Historically it moves at a minimum of 133 cubic feet a second and up to 435 cubic feet per second.
Shallow wells are going dry in southwest Saskatchewan and southeast Alberta. On-farm water supplies are low. Shallow wells generally provide the best drinking water; towns and villages are watching these sources disappear.
The situation is particularly crucial for ranchers who are having to truck water and feed to livestock. Cattlemen in the British Columbia interior are also affected.
The area was hit by a drought in 1981, 1984, 1985, and again this year. After the 1985 drought the federal Government gave $150 million to producers of grain and forage, plus $48 million to livestock producers. Given the odds, Canada will have to find at least another $200 million this year to provide assistance with water and feed.



THE STANLEY CUP


Mr. William G. Lesick (Edmonton East):: Mr. Speaker, on occasion an Hon. Member will stand in the House and extol the virtues of one or more of his or her constituents. Since the Northlands Coliseum is in my riding of Edmonton East, I would like to say a word about 20 of my own constituents who work at Northlands. Of course I am referring to the Edmonton Oilers, who last night captured their second consecutive Stanley Cup, and what a feat!
I could go on and on about Sather, Gretzky, Messier, Fuhr, and the rest of the boys. Instead, I would like to say a few words about Edmonton, the City of Champions.
I suppose that Edmontonians can no longer claim that we are not getting our "fair share". Along with the Oilers' four Stanley Cups in the past five years, the Edmonton Eskimos have long been a CFL powerhouse, and their 1987 Grey Cup win over Toronto proved that Canadian football is as exciting and viable as any sport anywhere.
Let us not forget Edmonton's Pat Ryan, whose rink last year captured the Canadian Brier, Canada's National Men's Curling Championship.
I trust that Canadians will not begrudge Edmonton for commandeering so many of our treasured national sports titles.
I hope that they recognize the Alberta capital for what it consistently is-the City of Champions!



NATIONAL DEFENCE


James Ross Fulton: Mr. Speaker, more than two-thirds of Canadians are opposed to the Mulroney plan to purchase nuclear submarines for Canada. The price tag will run to at least $16 billion and Canadians oppose both the purposes and the price.
On Wednesday of this week we learned of the fact that on at least 63 occasions warships and submarines carrying nuclear weapons visited Canada. Federal government records show 18 such visits at Halifax during 1987, 11 visits at Nanoose on Vancouver Island, 10 visits at Vancouver, and 24 at Esquimalt.
The United States is violating Canada's sovereignty in our ports, and it is violating the spirit of Canada's position of not having nuclear weapons on our territory, by bringing nuclear weapons into the downtown areas of some of our major cities.
The nuclear arms race at sea is accelerating. By the end of 1987, 1,101 ships and submarines, and more than 3,250 aircraft could fire, transport, or service nuclear weapons.
Do Canadians want to join in the race to Armageddon or to peace? Two-thirds of Canadians think that the purchase of nuclear submarines is wrong. Canada's Arctic, and all of the Arctic, must become demilitarized and denuclearized.
Our tax dollars would be better spent on a peace institute and serious moves to disengage constructively from warlike activity and development.



CANADA-UNITED STATES FREE TRADE AGREEMENT- CANADIAN WATER RESOURCES

Mr. John Reimer (Kitchener):: Mr. Speaker, apparently the Liberals' policy making agenda is set by whatever they happen to read in the morning newspapers or can dig out of weekly magazines. The latest example of such an approach is the completely unfounded claim that Canada's water resources are a part of the free trade agreement. This unabashed exercise in disinformation and fearmongering cannot go unchallenged.
Canada's water resources are not-repeat not-included in the free trade agreement. Furthermore, the Liberal logic suggests that, since water resources are not explicitly excluded from the free trade agreement, therefore, they are implicitly

May 27, 1988
Oral Questions
included. That is tantamount to arguing that the sun, moon, and stars are also in the free trade agreement.
It is a measure of the bankruptcy of the Liberal Party that, for no other reason that crass political expediency, it will attempt to mislead the Canadian people on a matter so fundamental to this country's socio-economic well-being.



ORAL QUESTION PERIOD


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, my question is directed to the Minister for International Trade. The Justice Department in the United States, together with the Chief General Counsel in the U.S. Trade Representative's Office has now concluded that the dispute settlement mechanism as it is constituted in the implementing legislation in the U.S. Congress is unconstitutional and unworkable.
In fact, Miss Judith Bello, the Chief General Counsel in the U.S. Trade Representative's Office, has stated that the first time there is a case before the trade dispute mechanism it will go to the Supreme Court and will lose.
How can this Parliament go ahead and implement the trade legislation, the keystone of which is this proposed dispute settlement mechanism, when the U.S. administration itself considers it to be unworkable and unconstitutional? Does that not simply mean that the entire trade Bill is null and void, and will not do the job that the Government says it will do?


Hon. John C. Crosbie (Minister for International Trade):: Mr. Speaker, this is another instance of the hon. gentleman crying wolf. On everything that occurs in the United States, every opinion of any person that could cause any difficulty, he is on his feet trying to spread it around and cause alarm.
The U.S. administration has not said-let us be very clear on this-that the dispute resolution mechanism is unworkable or that it is unconstitutional. I have seen legal opinions from very respected U.S. lawyers of my own-


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: Not of my own.


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: I don't own a lawyer by the way, Mr. Speaker. They are too expensive. And they won't stay bought-not only are they too expensive-


Some Hon. Members:: Oh, oh!


John Carnell Crosbie: I have seen opinions of other eminent lawyers to the exact opposite effect. I suggest to the hon. gentleman that he not be alarmed by this.
Certainly if the U.S. administration advises us of this problem then we hope that administration can find a way to resolve it, because the Americans have entered into an agreement with Canada and we expect them to live up to it.


U.S. LEGAL OFFICER'S OPINION
Lloyd Axworthy: Mr. Speaker, the people who are offering these opinions are not some trifling lawyers. Miss Judith Bello, Chief General Counsel to the U.S. Trade Representative's Office, has said specifically that unless the U.S. Congress gives presidential powers of discretion which would totally politicize the whole impact then it will be considered to be unconstitutional and will be struck down by the Supreme Court the same way the Gramm-Rudman Act was struck down.
That is the comment of the chief legal officer of the U.S. Trade Representative's Office. It would seem to me that this Minister should give some countenance to that kind of opinion coming from a senior legal official in the U.S. administration.
What is the Minister going to do about this? What kind of examination, interpretation, investigation will he give to this kind of assertion made by the U.S. administration? Will we be faced with another cave-in by the Government and an agreement that, in the future, the President of the United States will have the power to intervene in the dispute settlement mechanism? Will the Canadian people end up facing a repoliticization of the whole dispute settlement mechanism?


John Carnell Crosbie: The hon. gentleman gives an opinion that he has come across of some lawyer in the United States. I have not seen the opinion. It is about U.S. constitutional law and it is about a U.S. problem as to whether the Americans can implement or carry out the Canada-U.S. Free Trade Agreement. That is a matter for the U.S. Government to deal with. The Americans have advised us that the dispute settlement mechanism is in order as far as they are concerned.
The hon. gentleman asks me what am I going to do about this. I am certainly not going to reprimand Miss Bello. Presumably this is her opinion.
I will make an inquiry, of course, of Mr. Yeutter, and tell him that the hon. gentleman is concerned, and is worried that the free trade agreement may be in jeopardy, and that he wants reassurances on this point. I will ask Mr. Yeutter to see if I can calm down the affairs of the hon. gentleman.


Lloyd Axworthy: Mr. Speaker, we know the Minister takes orders from Mr. Yeutter. Perhaps while he is getting his daily instructions he might find out a little bit more about this particular matter. It is a terrible admission for a Minister to
May 27, 1988

make that he sort of jumps to the tune of Mr. Yeutter on a daily basis.


John Carnell Crosbie: You asked me to check.


PROCUREMENT REVIEW BOARD-CONTRACTS AWARDED TO ATLANTIC CANADA
Lloyd Axworthy: Mr. Speaker, I have a second supplementary question for the Minister. It has to do with the proposed government procurement review board in the legislation. It is clear in reading the Bill that this new government review board will preclude any Canadian Government from using procurement as a tool of regional development.
In September, 1987, the Department of Supply and Services stated its policy on Atlantic development as follows: the Government has set as a target for the Atlantic Opportunities Program to raise its level of contracting in Atlantic Canada by $600 million.
How can the the Government on the one hand make that kind of a claim when it is now introducing legislation that will totally and completely prohibit the Government of Canada from using any preferential contracting or procurement to help Atlantic Canada, northern Ontario, or western Canada? In other words, why are you once again contradicting yourself in your claim that regional development is not touched by this Bill when clearly it is?


Mr. Speaker:: I would ask Hon. Members to address each other through the Chair. The Hon. Minister.


John Carnell Crosbie: Mr. Speaker, in the first part of the Hon. Member's question I suppose it was, he queried why I would contact Mr. Yeutter. The Hon. Member advises me that a lawyer to Mr. Yeutter in the U.S. Trade Representative's Office has given an opinion and he is alarmed about it. When I said I would contact Mr. Yeutter, the Member tried to make fun of this and that I am somehow beholding to Mr. Yeutter. It is Mr. Yeutter's lawyer about whom the hon. gentleman is concerned. I am not a Yeutter fighter as the hon. gentleman is, so I will inquire of Mr. Yeutter. When I have inquired of Mr. Yeutter, I will advise the hon. gentleman.
With respect to the procurement question, again it is a totally false impression which the hon. gentleman tries to give. The procurement rules are only for procurement of a certain value between certain limits.
It does not apply to the Department of Transport, it does not apply to procurement in Fisheries, it does not apply to Crown corporations. We would prefer to have a much more extensive procurement provision because we would then have the right to compete for U.S. procurement to all of their government agencies, which is what any sensible person would want.
I can assure you, Mr. Speaker, that our policies to favour the regions with respect to procurement still remain in effect.
Oral Questions
This is a new departure, about which the hon. gentleman did not worry when he was in government a few years ago.


BILL C-l 30-PROTECTION OF OUTLYING REGIONS-MINISTER'S POSITION
Mr. Jacques Guilbault (Saint-Jacques):: Mr. Speaker, I would like to pursue the same matter and ask the Minister whether he is trying to give us the assurance that the Government will still be able to provide support to outlying regions through its procurement policies. Could he explain to the House why Bill C-l30 contains provisions that specifically allow U.S. companies to appeal to a Procurement Review Board if they believe they have been denied equal access? The Minister says one thing but the Bill says the exact opposite. Why did he create a board whose specific purpose is to protect American companies, when we want to protect outlying regions?


John Carnell Crosbie: Mr. Speaker, the hon. gentleman is asking a question about Bill C-l30 which will be debated in the House and will then go to a committee of this House.
The procurement position is that, under the Canada-U.S. Free Trade Agreement, American citizens will have certain rights to attempt to be successful for procurement to certain government Departments here in Canada. We will have the same rights in the United States. There will be an appeal procedure for them. Under the wording of the clauses in the Bill, as I recall it, the same procedures will be available to Canadians so that they can appeal decisions in connection with procurement and have the same kind of opportunities and rights as American citizens will have. I trust that answers the gentleman's question.


Lloyd Axworthy: It confirms it.


QUERY WHETHER CERTAIN PROVISIONS ARE NOT FAVOURING AMERICAN CORPORATIONS
Jacques Guilbault: Mr. Speaker, his answer may have been very clever, but the Minister admits that a number of provisions in clauses 9 to 16 in this legislation-there are five or six-give U.S. suppliers the right to appeal to a board that may reverse decisions made in Canada, thus deciding in favour of U.S. companies and giving them access to Canadian markets. Mr. Speaker, I want to ask the Minister to admit he is giving U.S. suppliers special treatment and is putting at risk this country's previous policy aimed at providing support for our developing regions by giving them Government contracts, as the government sees fit.


John Carnell Crosbie: Mr. Speaker, the Hon. Members opposite are so one-sided in

May 27, 1988
Oral Questions
their prejudices and in their terrible anxiety to stop the free trade agreement.
Under the Canada-U.S. Free Trade Agreement our Canadian exporters will have the right to compete in American procurement situations to sell their goods and services to agencies of the U.S. Government. In return they are given the right to compete with respect to certain agencies of the Canadian Government. It is too bad that these provisions are not much broader than they are. There are certain limits-I do not have the exact limits here before me today-in value where you can do this.
The legislation will give an aggrieved American supplier the right to go to a procurement appeal board. It also gives an aggrieved Canadian supplier the right to go to the procurement appeal board. Canadians, of course, will have reciprocal rights in the United States of America.


U.S. CONGRESSIONAL COMMITTEES-PLYWOOD ISSUE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I also have a question for the Minister for International Trade. As the Minister is aware, two congressional committees in the United States have agreed on some items to be in the American implementation legislation. These two congressional committees are calling for a number of changes, and one is about plywood. They want to change the deal as it affects plywood, as the Minister is aware, and I know that the Minister has protested this possible change on behalf of Canada.
What will the Minister do to make sure that the Canadian position is protected? Does the Minister consider this to be a violation of the free trade agreement as drafted?


John Carnell Crosbie: Mr. Speaker, I think I had already made it clear to the House that the proposal of the Senate Finance Committee with respect to plywood, which I believe the administration is assisting them with, is in our view a violation of the terms of the free trade agreement. We have sent a protest note pointing that out. I have pointed it out myself orally on several occasions to Mr. Yeutter, and it has been pointed out to other persons as well.
Yes, we regard it as being contrary to, inconsistent with, the free trade agreement. I have told the House, and I repeat again, that if Congress persists, and that provision stays in the legislation and is enacted by the U.S. Congress, then we will take the necessary action to counter that ourselves when the free trade agreement goes into effect. We will certainly not accept it, because we think it is inconsistent with the obligations the Americans undertook in the free trade agreement.
The conference between these two committees has just finished. We have not seen their final report yet. The administration will then have to decide what Bill it finally puts to the
Congress in June, so until all that occurs we do not know what the final result is.


CULTURAL INDUSTRIES-ENERGY INVESTMENT-CANADIAN POSITION
Lorne Edmund Nystrom: Mr. Speaker, yesterday there were also reports of other items the Americans want changed in the free trade agreement. For example, they want to eliminate the exemption we had negotiated for Canadian cultural industries, and they want to eliminate all kinds of screening possibilities for investment by Americans in the Canadian energy sector.
I want to know whether or not the Minister will admit that the Americans are now putting us on notice that they intend to hammer us in the second round of negotiations. What does he intend to do to stand up for Canada?


John Carnell Crosbie: Mr. Speaker, the first question one must ask oneself if one wants to take a reasonable approach to the situation is: "what is the alternative to the free trade agreement that we are proposing with the United States of America?" If we adopt the course of the hon. gentleman opposite, we will be defenceless next year before the protectionist sentiments and impulses of individual Senators and Congressmen.
The references the hon. gentleman makes are to individual Congressmen proposing everything under the sun. They want x, they wanty. Why are they doing this? Because they want to go home and get re-elected. That is presumably why the hon. gentleman gets up with this kind of nonsense in the House, because he wants to go home and get re-elected.


GOVERNMENT POLICY
Lorne Edmund Nystrom: Mr. Speaker, with respect, these are not individual Congressmen, these are two very important Congressional committees which form an important part of the American governmental administration. The Minister knows that.
The Minister has now said that there is a violation relating to plywood. They are now calling for the elimination of exemptions for energy and for cultural industries. The Minister of State for External Affairs has also said in the House there has been a violation of the agreement relating to agricultural subsidies and exports to third countries.
What does the Canadian Government intend to do when the Americans violate the trade agreement which has not even been implemented yet? If they continue to violate the trade agreement, what are we going to do about it?


John Carnell Crosbie: Mr. Speaker, the hon. gentleman finally came to an important point. The Canada-U.S. Free Trade Agreement is not implemented yet, and to be implemented the Congress has to pass legislation which we find to be satisfactory with respect to the U.S. administration carrying out its obligations. This
May 27, 1988

Parliament has to pass legislation, and then on January 1 it has to be implemented.
If at that time the Americans have violated the provisions of the agreement concerning plywood, we will initiate a dispute. We will start the dispute resolution mechanism going, or we may also take steps ourselves to counter whatever action they take. If they do not reduce the tariffs on plywood, we will take a counter action ourselves.
This is all problematical. This agreement is not in effect yet. Hon. gentlemen opposite are doing everything they can in their frenzy to stop it from going into effect. How can they complain about it already when they do not even want it to go into effect?


AIR SAFETY
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, my question is for the Acting Prime Minister, whomever that may be. Canadian air travellers were shocked to read this morning that close call incidents in the air have quadrupled since 1983. There were 42 in 1983, and 173 incidents in 1987.
According to the President of the Air Traffic Control Association, this is principally due to increased traffic in the air and a serious shortage of controllers. The President said today that we are 41 controllers short in Toronto, 27 short in Gander, 11 short in the Moncton region, and 21 short in the Montreal region, which makes a shortfall of 30 per cent. This is due to the cuts made by the Minister of Finance in 1985.
For the sake of safety in the air, will the Government order an immediate change in this policy and announce an expanded recruitment and training program for air traffic controllers right now?
John Carnell Crosbie: Mr. Speaker, we do not have to announce an expanded program of training for air traffic controllers right now because we announced it months ago, and because the program is already under way. What happened, as the hon. gentleman knows, is that air traffic unexpectedly declined, or did not increase at the rate forecast, for three or four years. He will remember from his Mirabel experience how that affected government policy. It was decided that a certain level of training for air traffic controllers was necessary, because at that time there was a surplus.
Now, unexpectedly, air traffic has increased tremendously in the last two or three years and there is a scramble to catch up again. We are in that process.
With respect to near misses, this is a technical matter-
Oral Questions


Ms. Copps:: Shut him off.


John Carnell Crosbie: This is supposed to be a serious question, and I hear heckling from the Hon. Member for Hamilton East who does not have the good grace to be a little quiet while the subject is being responded to.


NEAR MISS INCIDENTS-PROTECTION OF AIR TRAVELLERS
[Stage Direction]
Hon. Warren Allmand (Notre-Dame-de-Grace-Lachine
East): Mr. Speaker, this is what happens when we have a doctrinaire Conservative Government that makes across the board cuts without concern for safety and health.
Just recently, after several years with no training program, the Government introduced a program for 200 air traffic controllers, but it takes from two to three years to train an air traffic controller and the success rate is only 30 per cent. That means that after two years there will only be 60 air traffic controllers when we are short nearly 200 right now.
What will the Government do to protect Canadian air travellers right now in the interim, in these years when the shortage is in place? For the Minister to make light of 173 incidents last year is ridiculous. This is an important and serious matter for Canadians.
John Carnell Crosbie: Mr. Speaker, if the hon. gentleman were seriously concerned, he would go to the House of Commons Standing Committee on Transport and have it call in an Assistant Deputy Minister in charge of this whole area and a serious discussion on the facts could be presented, not the alarming position the hon. gentleman tries to take.
With respect to cuts, what about the cut of $1 billion the hon. gentleman's Party was trying to make in the Atlantic Canada Opportunities Agency legislation? You voted against it in the House to save $1 billion. How dare you talk about cuts, you hypocrite.


CANADA POST CORPORATION
Mr. Cyril Keeper (Winnipeg North Centre):: Mr. Speaker, my question is for the Minister responsible for the Post Office. Yesterday Canada Post, in its hasty retreat from the postal code debacle, said: "We have become a service oriented organization and we are sensitive to our customers". Yet Canada Post continues to tail the Rural Dignity caravan whose sole purpose is to protect rural post offices.
Does this Minister consider this harassment of Rural Dignity by the bully boys of Canada Post to be "sensitive to

May 27, 1988
Oral Questions
our customers"? How much is this program of sending management employees to every meeting of Rural Dignity costing, and would it not be more "sensitive" to use that money to help keep open at least one rural post office?


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: Mr. Speaker, the Hon. Member talks about Rural Dignity, which is another name for the Postmasters' Union which is sponsoring them. I wonder about the dignity of the untruths and misinformation they are spreading around the country. How do they justify that?
However, the Hon. Member's question gives me an opportunity to make a point about some changes in postal service in rural Manitoba which were opposed by the hon. gentleman's Party, the Postmasters' Union, and so on. Wordsworth Communication Services did a survey of the people affected where changes were made in the rural communities of Blumenort, St. Francois-Xavier, and Aubigny, and found that 85 per cent felt that the service was now better or the same.
The changes are improving the service according to the people affected, which is not what Rural Dignity is claiming. They are just spreading false information. They are telling lies about what the Post Office is intending to do, and Post Office officials are out there talking to the press so the people are not misinformed.


ALLEGED HARASSMENT OF RURAL DIGNITY-MINISTER'S POSITION
Cyril Keeper: Mr. Speaker, is the Minister prepared to put all the facts on the table?
The Minister did not answer my question about the harassment of Rural Dignity by Canada Post. Is the Minister aware of the fact that Canada Post held up Rural Dignity's mail, not for three days, as I said the other day, but for ten days? Now will the Minister investigate the harassment of Rural Dignity by Canada Post?


Harvie Andre: Mr. Speaker, the Hon. Member again stands up and says that mail from Rural Dignity was delayed for 10 days. The spokesman for Rural Dignity said it was delayed for 36 hours. That is what the spokesman said, and the Hon. Member stands up and says it was delayed for 10 days. It is that kind of harassment through the lies being told by the Hon. Member and others that is at fault here.


Some Hon. Members:: Oh, oh!


Mr. Speaker:: I know the Hon. Minister will of course withdraw that last remark.


Harvie Andre: Of course, Mr. Speaker. I recognize that is unparliamentary. There are a number of things in Beauchesne's that I recognize ought to be done with respect to Question Period.


Some Hon. Members:: Withdraw!


Harvie Andre: Let me tell the Hon. Member that it is not at all helpful for misinformation to be spread around the country. The harassment that Rural Dignity is engaged in now is contrary to the best interests of Canadians in general.


AGRICULTURE
Donald Paul Ravis: Mr. Speaker, my question is directed to the Minister of State for the Wheat Board. Over the past two days a number of statements have been made about comments the Prime Minister made regarding support for Canadian farmers in comparison to what highly subsidized European farmers receive for their products.
We in western Canada, indeed farmers across Canada, are under the impression that our assistance does not compare favourably with the Europeans whatsoever. I ask the Minister to clarify the situation.
Hon. Charles Mayer (Minister of State (Grains and
Oilseeds)): Mr. Speaker, the Hon. Member raises an important issue. Unfortunately, subsidies have become a major part of agriculture production and trade in the last number of years and this has led to some pretty large surpluses in the European Community. As a result, they have been dumped on world markets.
It is a favourite ploy of the Europeans to talk about numbers and use percentages. People should be aware of the facts and I will just give three examples to the Hon. Member.
A Canadian wheat farmer now receives about $2.91 a bushel. The European farmer receives $7.13 a bushel.
A Canadian farmer receives about $1.10 for a bushel of Canadian Wheat Board barley, although the off-board market is up a little bit. The European producer receives $5.42 a bushel.
Canadian farmers receive almost $7 a bushel for soy-beans, but in Europe it is about three times that amount.
We should look at the real numbers and compare what a European farmer gets as opposed to what a Canadian farmer gets, and get away from percentages and the kind of games the Europeans like to play. If we do that, we realize that the Europeans are being subsidized substantially more than Canadians.
What we really want to do is encourage the Prime Minister to bring about a resolution of this nonsense going on in Europe. That is exactly what he is doing and he deserves credit, and is supported by all farmers in his efforts to do so.
May 27, 1988


DISASTERS
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is directed to the Acting Minister of Transport and pertains again to the Gander air crash which resulted in the deaths of 250 people.
It is now known that we have serious disagreements between members of the Canadian Aviation Safety Board about the causes of the accident. The former chairman of the board resigned over the dispute. The Minister of Transport appointed his own person to take over, and then sent a letter to other members of the board telling them that they were expected to obey the new chairman.
Is it still the position of the Government that the Canadian Aviation Safety Board is an independent, autonomous body, as two Ministers have been saying over the last few days in this House? Or, does the fact that this letter was sent to members of the board not make a mockery of the whole system?


Hon. Flora MacDonald (Acting Prime Minister):: Mr. Speaker, the Hon. Member is pursuing his natural bent for distortion and misinformation. It is no secret that among the former members of the board there was a less than harmonious relationship.
When the new Minister was appointed he wrote to members of the board, as is his right, encouraging them to work together. Obviously the Hon. Member does not believe that should happen. However, the letter to which he refers says: "Every effort must be made to ensure the board functions well and co-operatively." Obviously the Hon. Member does not want to see that happen.
The Minister said: "I trust you will support Mr. Thorney-croft and your fellow members in the fulfillment of your important collective responsibility to advance aviation safety in Canada". Obviously the Hon. Member does not want to see the advancement of aviation safety in Canada and I think that is a real shame.


GOVERNMENT POSITION
Don Boudria: Mr. Speaker, the letter says: "As a board member you are expected to give your full and unqualified support to Mr. Thorneycroft". Would such a letter have been sent to a Supreme Court judge working in a similar manner? Is it not obvious that the Government is interfering with the process? Is it also not obvious that the real reason that letter was sent was to stop the dissenting report from coming out? That report of course totally contradicts the information which the Government has permitted to come out publicly thus far.
Oral Questions


Flora Isabel MacDonald: Mr. Speaker, obviously the Hon. Member cannot read or hear very well. I ask him to consult yesterday's Hansard where the Minister of State for Transport told him that the report would be made public. It is there. The Hon. Member should listen to what is being said occasionally, and not go off on wild goose chases which do nothing for his reputation or for the House.


CANADA POST CORPORATION
Rodney Edward Murphy: Mr. Speaker, my question is directed to the Minister responsible for Canada Post, the corporation which describes itself as service oriented and sensitive to its customers.
Some 378 families in Thompson, Manitoba, are being moved from one trailer court to a new one three or four blocks away because the old one is being closed. There has been no increase in staff, no increase in cost, but Canada Post refuses to provide those same people in the same trailers with postal services. Can the Minister explain why they are going to lose their door-to-door postal service?
Hon. Harvie Andre (Minister of Consumer and Corporate
Affairs): Mr. Speaker, in 1981 when the Canada Post Corporation Act was passed unanimously by this House with all-Party agreement it was on the basis of convincing arguments presented by the unions and representatives of the New Democratic Party that it was a mistake to have political interference in the day-to-day operations of the Post Office.
The Hon. Member now stands up and asks me about what is happening in some trailer court in Thompson, Manitoba, and expects me to respond to that. That is a ridiculous waste of the time of the House.


POSITION OF CORPORATION
Rodney Edward Murphy: Mr. Speaker, the Minister should know that Canada Post said the reason it cannot provide this service is because of the government directive to it.
Again I ask the Minister, why is the corporation being too iron-clad, too stubborn, and too insensitive to provide those people, who have been forced to move a few blocks, with daily delivery which they have had for the last 25 years?
Hon. Harvie Andre (Minister of Consumer and Corporate
Affairs): Mr. Speaker, if the Hon. Member does not want to write to Canada Post to ask why this is happening, perhaps he could telephone.

May 27, 1988
Oral Questions TRADE


CANADA-UNITED STATES FREE TRADE AGREEMENT-COMMERCIAL BLOOD BANKS
Sheila Maureen Copps: Mr. Speaker, my question is for the Minister for International Trade. Throughout the trade sell-out we have heard the Government insist time and again that it has absolutely nothing to do with the social fabric and social customs of Canada. We know, however, that in Canada, until this past year and until this Government arrived, we did not sell blood for profit. Yet in many States in the United States the selling of blood is a commercial enterprise.
If in fact this trade deal has nothing to do with the social fabric of this country, why is blood banking included under commercial operations?


John Carnell Crosbie: Mr. Speaker, I want to reassure the House that the U.S.-Canada Free Trade Agreement has nothing to do with blood. Whether people wish to sell their blood for profit or not is, I suppose, up to the individual. Some Members here don't even have any blood to sell.


MARKETING OF BLOOD-MINISTER'S POSITION
Sheila Maureen Copps: Mr. Speaker, my supplementary is directed to the same Minister. It is obvious that we are being sold out to the Americans, when the Minister for International Trade says there is no harm in selling your own blood. That is U.S. policy, it is not this country's policy. It is the policy of the Conservatives who last year in Montreal started the first private Canadian blood bank, where you can buy blood and pay $2,500 to get enough blood for a heart operation. Is that the universality of Canada's health policy?
1 would like to ask the Minister why, since he claims blood banks are not involved in the Canada-U.S. FTA, Annex 1408 includes blood banks under the commercial services group. And why is the Minister of National Health and Welfare holding a briefing session at the Chateau Laurier today on the subject of marketing blood under the FTA?


John Carnell Crosbie: Mr. Speaker, the Hon. Member is scraping the bottom of the barrel with this kind of nonsense. Let me assure the House that the Canadian Red Cross Society will continue in operation in Canada. There is nothing in the Free Trade Agreement to stop it. There will be free provision of blood for those who need it. The U.S.-Canada Free Trade Agreement has nothing to do with it. No one can force a person to sell or to give their blood. That is a voluntary action.


Sheila Maureen Copps: Why is it in the annex?


John Carnell Crosbie: Yesterday the killer bees were going to come to Canada; now the vampires and Dracula are coming to Canada. The Hon. Member should find a different vein to try to mine.


IMMIGRATION
Andrew Witer: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. The Minister will know that last summer the Government announced changes to the Immigration Act which would expand the family reunification category to include unmarried children over the age of 21, and give 15 bonus points for assisted relatives in the point assessment procedure.
To date these changes have not been implemented, causing considerable confusion, frustration, and anger. Can the Minister tell the House and Canadians why the announced changes have not been implemented and when the Government intends to make these anxiously awaited changes to the Immigration Act?


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, I am certainly glad the Hon. Member brought that up. Today at noon we will be tabling the new regulations regarding the family class and assisted relative class.
I would like to commend my colleague, the Member for Dollard, who first broached this issue in this Chamber about a year ago. We have now followed up on it after 20 years of Liberal neglect. I was interested to see that The Globe and Mail said this morning that they had wanted it for 10 years.
The amendments will make residents of Canada able to sponsor the admission of their never-married sons and daughters over 21 in the family class.


Mr. Speaker:: The Hon. Minister, I know, has a certain amount of enthusiasm for extending this answer. However, I really think it is getting into the realm of another procedure.


CANADA POST CORPORATION
Iain Francis Angus: Mr. Speaker, my question is for the Minister whom the Prime Minister made responsible for Canada Post. In his answer to my colleague earlier he talked about the misinformation which Rural Dignity was providing the people during its tour.
May 27, 1988

What does he think about Canada Post calling a meeting of the community of Vickers Heights in my riding to review their options with regard to replacing the postmistress when, in fact, it had no desire whatsoever to review the one option which the residents wanted, that is, the continuation of a staffed post office in their village?


Harvie Andre: Mr. Speaker, the policy in terms of changes in rural Canada is that the local Member of Parliament is to be given at least 90 days' notice and there is to be consultation with the community. This is frequently done by calling a meeting with the community and discussing the options.
The Hon. Member seems to be condemning Canada Post for calling a meeting and having these discussions. If the facts are as he said, the people there were able to communicate their options. That will be examined by Canada Post, and Canada Post will ultimately make the appropriate decision.


REQUEST THAT GOVERNMENT SEEK SERVICE AS PRIORITY
Iain Francis Angus: Mr. Speaker, the residents did let them know what they thought. They let them know by walking out when it was clear that Canada Post was not prepared to accept the one option which the residents desired, that is, the continuation of a staffed post office in their community.
When will the Minister and the Government take their responsibility, amend their instructions to Canada Post and tell them that they want service as the priority, not cut-backs in service to rural communities?


Harvie Andre: Mr. Speaker, the Post Office informed me, in terms of Vickers Heights, that in fact it intended to maintain a postal outlet that would be open more hours. The Hon. Member and some of his friends insisted that this be a union position, subject to union rules of so many hours a day. The Post Office said it would be open more hours for the public if it contracted it out through franchising to a private operation. There would be better service.
That offends the unions which pay for the Hon. Member's campaign expenses, but the public will get better service.


Iain Francis Angus: That is not true.


NATIONAL DEFENCE
André Ouellet: Mr. Speaker, I have a question for the Minister of Finance. Yesterday the Deputy Prime Minister, in answering a question, indicated that the Minister of National Defence "made very clear and precise
Oral Questions
what figures were allocated to the purchase of the nuclear submarines".
I have here a Canadian Press clipping which indicates that the Minister of Finance told a news conference in London while en route to a meeting in Paris of the OECD, the following: "Although the Government has some general parameters as to what they are going to cost, it would likely be two years before an exact figure is available". Is the Minister of Finance in a position to tell us whether these submarines will cost $8 billion, or $15 billion as the Canadian Centre for Arms Control and Disarmament has tagged it?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, that information was provided initially in the Defence White Paper which was released about a year ago. Further work is being done.
As I indicated in London, much of this work to make sure that we have the precise numbers on the cost of the submarines will be done once we have chosen the country of origin of the submarines. That decision is yet to be taken and that work will flow from that decision.


André Ouellet: I thank the Minister for his honesty in indicating clearly to us that we do not know yet how much it will cost.


ALTERNATIVE ACQUISITION PROPOSAL
André Ouellet: Since the evaluation is that the price of the 12 nuclear submarines could double the earlier price estimate indicated by the Minister of Defence, the Canadian Centre for Arms Control and Disarmament has suggested a much more intelligent alternative. It is a balanced mix of six extra naval frigates and six conventional submarines at a price tag that will be half of what the Canadian Government is ready to spend.
Surely the Minister of Finance should consider this a much more responsible fiscal decision. Why is he not insisting on his Government following this suggestion made by the Centre?


Michael Holcombe Wilson: Mr. Speaker, we are now getting into an area of policy that is more the purview of the Minister of National Defence than the Minister of Finance. Obviously there are different approaches and different philosophical attitudes as to how we should conduct our defence efforts. Our approach has been set out very clearly in the Defence White Paper.
The role of nuclear submarines has been clearly identified in the Defence White Paper. I think that probably answers the particular question posed by the Hon. Member.
As an aside, I should indicate that the exaggerated numbers the Hon. Member tried to give in reference to my first answer are not well founded.

May 27, 1988
Point of Order-Mr. Keeper


Mr. Speaker:: This will be the last question of Question Period. The Hon. Member for Ottawa Centre.


ENVIRONMENTAL AFFAIRS
Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, my question is for the Minister of the Environment, of which he has notice. Is the Minister aware that early next week the Ottawa-Carleton Regional Council will be considering the approval in principle of new collector lanes alongside the Queensway in downtown Ottawa as part of its regional official plan? Is the Minister aware that this project entails building a major new road bridge across the Rideau Canal and therefore must have federal government approval in order to proceed?
In view of the environmental impact on the canal and the capital area, what is the Government's position on this proposed encroachment on the NCC parkways and Rideau Canal? Will the Minister advise the region prior to its meeting next week that this project does not have federal approval? Will he recommend that it not be approved in principle to the regional official plan at this time?


Hon. Tom McMillan (Minister of the Environment):: Mr. Speaker, I am very familiar with the interest on the part of the regional municipality in the project which the Hon. Member has raised. It will be subject to a rigorous environmental assessment.
I think the Hon. Member knows that my Department administers the Rideau Canal not because we are in the business of transportation routes, utility corridors or any other utilitarian installations, but because of the heritage values at stake concerning the Canal.
If the Rideau Canal is to be encroached upon by municipal expansion or development, it does not make sense to have the Rideau Canal under the administration of the Department of the Environment. With that in mind, I shall be applying the same high standards of environmental scrutiny to this question that we try to apply in every other area of public policy in our domain.


MINISTER'S POSITION
Michael Morris Cassidy: Mr. Speaker, will the Minister communicate his concerns to the regional municipality before it considers adding these collector lanes to its regional official plan at its meeting earlier next week?


Thomas Michael McMillan: Yes, Mr. Speaker, I think I can. I do not want to prejudice the outcome of the issue because it must be subjected to a non partisan, neutral and objective environmental assessment process.
I can say, however, that the onus will be on the municipality to demonstrate to the Government that the project in question does not violate park principles. It is not the other way around. I shall be so communicating to the regional municipality.


POINT OF ORDER
Cyril Keeper: Mr. Speaker, could I have an assurance that the public opinion poll the Minister responsible for the Post Office quoted during Question Period will be tabled in its entirety and made available to the public?


Hon. Doug Lewis (Minister of State and Minister of State (Treasury Board)):: Mr. Speaker, I will check the "blues". I believe the Minister was referring to notes in his own handwriting, but I will check to see exactly what he said and, if necessary, will get back to the Hon. Member.


PRIVILEGE
Iain Francis Angus: Mr. Speaker, during the exchange in Question Period between myself and the Minister responsible for Canada Post, the Minister used words that would suggest that my motives for fighting on behalf of my constituents were based on financial support from a union. While he did not say "union", based on previous comments in the House the inference was the Rural Postmasters Union.
I would ask you to check the "blues", Mr. Speaker, to see exactly what was said and whether the Minister did impugn motives. If so, I would ask you to direct him accordingly.


Douglas Grinslade Lewis: Mr. Speaker, I know the Minister very well. I am sure he would never for a minute suggest that any New Democratic Party Member was supported by unions financially or otherwise. This would never enter his mind. However, we will check the "blues" and, if necessary, the Hon. Minister will reattend the House.


Rodney Edward Murphy: Mr. Speaker, 1 regret the attitude that has been taken by the Minister responding. First, we gave the Minister responsible for Canada Post notice that he would be referred to in a question of privilege and a point of order. He said that he could not stay.
He has an obligation to be in the House. He also has a practice in Question Period of being very insulting to Members
May 27, 1988

of the Opposition who are asking questions on behalf of their constituents. If he is going to take that approach in Question Period, he should have the decency to stay in the Chamber to respond to points of orders and questions of privilege.


Mr. Speaker:: It will be of no surprise to Members of the House or the public that Ministers often have to do other things than be in the House, just as do Hon. Members. Second, the matter has been raised and I have heard the interventions. I will look carefully at the "blues" and, if necessary, report back to the House with an appropriate comment.


POINT OF ORDER
Rodney Edward Murphy: Mr. Speaker, I was wondering whether the Speaker was satisfied with the withdrawal by the same Minister when he said that people were stating lies and the rest of it in the House of Commons. I thought it was a very mealy-mouthed withdrawal on the Minister's part.
Mr. Speaker I can tell the Hon. Member and other Hon. Members that I took it that the Hon. Minister was accepting completely my admonition and was withdrawing the comment. I think we all have heard, at times, withdrawals that may have been less than effusive admissions of guilt. However, I accepted it as a withdrawal and I hope Hon. Members will also accept it as a withdrawal, and a complete one.



ROUTINE PROCEEDINGS


Barbara Jean McDougall: Mr. Speaker, pursuant to Standing Order 67(2), I have the honour to table in both official languages the new regulations concerning family reunification.


André Ouellet: Mr. Speaker, I noticed that during Question Period, a government Member asked a question of the Minister in order to give her a chance to elaborate on the document she just tabled. There is a long established practice and, indeed, at the time of the study of the reform of the rules of the House, the McGrath Commission proposed a way to allow and facilitate Ministerial statements. I want to point out to the Government House Leader that in courtesy to all Members of the House of Commons, the Minister today should have availed herself of this opportunity to make a ministerial statement. I regret it very much. I hope in the
Tabling of Documents
future members of the Cabinet will know better the rules and use them to the interest of all Members of Parliament.


Mr. Speaker:: I thank the Hon. Member for Papineau (Mr. Ouellet) for his comments. I am sure Hon. Ministers will consider his comments in the helpful way in which they were meant.
I also remind Hon. Members that when the Hon. Minister for Employment and Immigration (Mrs. McDougall) was answering the question asked of her, the Chair did interrupt the Hon. Minister because the Chair is conscious of the very point the Hon. Member for Papineau raised. There are, of course, appropriate ways for Ministers to make statements, especially when they have information which they very much wish to extend not only to all Members of the House but, apparently, to the country.


Douglas Grinslade Lewis: Mr. Speaker, I would just like to inform my hon. colleague of two things, first, I am advised the Hon. Minister did give an advance copy of the regulations to the critics, as is the custom. I wish I had it on my desk. We in the Government have tried very hard to ensure that ministerial statements are made in the House. I think the average versus the last Government, of which my hon. colleague was a member, is about ten to one in our favour. I can provide him with those figures.


André Ouellet: That is not a fair comment.


Mr. Speaker:: The Chair is not going to comment on the number of statements made by one Government as opposed to another except, of course, to say that Ministers have, of course, been using extensively the vehicle of Ministers' Statements. The Chair can only say that ought to be encouraged.


Frederick James (Jim) Hawkes: Mr. Speaker, I would like to check the "blues", but in part of your response, I think you dealt with the Question Period itself. I know I have some responsibility for that in relation to our Members. There were words "newspaper stories" this morning, and "on the front pages of the newspapers", about the issue the Hon. Member suggests could have been a ministerial statement. When things break in the public press, they are very frequently the topic of Question Period regardless of what else might follow, including the tabling of regulations and ministerial statements. If there is something in the "blues" which indicates that because they are to be handled in a different way later that day, they are inappropriate for questions, I would like to reserve my right to argue, perhaps.


Mr. Gauthier:: Mr. Speaker, I cannot help but comment on the last statement made in the House. Indeed, if the Government leaks documents to the press and uses that to have questions asked in the House by its own Members and, therefore, short circuits the well established method of making statements, which is the result of reform, I remind the House, reform that was adopted unanimously by the House, then, of course, the Government cannot have it both ways. It cannot

May 27, 1988
Petitions
leak it to The Globe and Mail in the morning or the night before and then have justification for a question being asked on a document that it itself had leaked. Let us be honest. It cannot have it both ways.
[ Translation]


Marcel Prud'homme: Mr. Speaker, I would like to address the same subject. 1 was ready to give the Government the benefit of the doubt because, in any event, we are supposed to be honourable people in this House and we should take those who inform us at their word.
So I was prepared to take the Government word and give them the benefit of the doubt. But the previous speaker has just confirmed for us that they were very disappointed that we had no questions to ask about this document, which was definitely released to the press in time for the morning news in the hope that we would swallow the bait and ask questions about it. But that is contrary to the rules of the House. If we want the House to be orderly, we must proceed in an orderly manner.
Mr. Speaker, it seems very clear to us that the Hon. Minister, seeing that no question was coming from this side of the House, decided to ask one of his troops to put a question or a half-question.
Mr. Speaker, I think that you should once again tell the Cabinet and the House that such conduct should not be accepted here. Otherwise, order is impossible; it would be a circus! And if people want this to become a circus, I can tell you that I personally do not like taking part in such a free-for-all! And I think that if this were to become the general pattern, we would join in . . . But I warn you that not much would get done in this House.


Mr. Speaker:: Hon. Members I think have made their feelings quite clear. I want to respond to the Hon. Parliamentary Secretary. I do not think the Chair was suggesting that just because a question comes from a government Member to a Minister that that in itself is in any way improper, not at all. It may well be that the question is asked with respect to some information that has just very recently been made public. That in itself does not make it improper.
The Chair interrupted the Hon. Minister this morning not because the Hon. Minister was answering the question but because the Hon. Minister was extending that answer with extensive detail in a way which is more appropriate for a Minister to make under the proper rubric of Routine Proceedings for Ministers statements. That, of course, is what the reform exercise was all about.
I want to assure Members on both sides that the Chair, I think, can recognize legitimate questioning when it is there. The Chair can also recognize, and this will come as no surprise to Members on either side of this House who have on other
occasions been on a different side, when a question is asked to illicit a statement from a Minister that might very well be more properly put in a different way. So I do ask for the cooperation of all Hon. Members and I know we will receive it. Presenting Reports from Interparliamentary Delegations- The Hon. Parliamentary Secretary.


Frederick James (Jim) Hawkes: Tabling of documents.


Mr. Speaker:: I want to assure the Parliamentary Secretary that I was trying to get to him.

[ Translation]


PETITIONS
Frederick James (Jim) Hawkes: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to 18 petitions numbered as follows: 332-4326, 3324513, 332-4514, 332-4551, 332-4558, 332-4561, 332-4563, 332-4572, 332-4573, 332-4577 to 332-4583 inclusive, 3324588 and 332-4610.
[Editor's Note: See today's Votes and Proceedings.]


Mr. Speaker:: I hesitate to go on with Statements by Ministers.



COMMITTEES OF THE HOUSE


Marcel Prud'homme: Mr. Speaker, we shall try to end the week on a joyful, optimistic note.
And a chairman is always pleased to be able to table the budget voted by his committee and not rely on the clock, or deadline that implements the budget automatically if the estimates were not voted on in time. It is a very bad principle in the British system . . .
In the British parliamentary system it is very bad to say that if one does not have time to vote one's Estimates, they are automatically voted after a certain date. It is with great pride that I inform the House that the Standing Committee on Management and Members' Services, which I have the honour
May 27, 1988

to chair, saw fit, Mr. Speaker, to make the Elouse very happy and to get a nice smile from Your Honour by informing the House that we had the honour of voting your Estimates. You are all right, Mr. Speaker, until March 31, 1989.
I have the honour to table, in both official languages, the Estimates of the committee.


Mr. Speaker:: The Chair of course would want to express its appreciation to the Hon. Member for Saint Denis (Mr. Prud'homme) and to all members of the committee, and to again thank the committee for its warm and courteous reception just the other day.



ENERGY, MINES AND RESOURCES-NINTH REPORT OF STANDING COMMITTEE

Mrs. Barbara Sparrow (Calgary South):: Mr. Speaker, I have the honour to present the ninth report of the Standing Committee on Energy, Mines and Resources, in both official languages. The committee has reviewed the Estimates that are under its jurisdiction and has voted them in. It is a pleasure to present this report.
[Editor's Note: See today's Votes and Proceedings.]



REVISED EDITION OF STANDING ORDERS

Douglas Grinslade Lewis: Madam Speaker, I have a motion which has been discussed with the other Party House Leaders. I think Your Honour will find that there is consent to receive the motion and to put it immediately. I move:
That the Clerk of the House be authorized to re-order and renumber the Standing Orders, and after consultations with and concurrence of a staff member designated by the House Leader of each Party, to print a revised edition of the Standing Orders and to make such changes as may be required to the Order Paper and Notices.


André Ouellet: What is that?


Lorne Edmund Nystrom: The Hon. Member for Papineau said, "What is that?"

What has happened is that there has been a House Leaders' agreement to put the Standing Orders in a more clear fashion in a book. That was agreed to unanimously by the House Leaders, which is what I wanted to say publicly.


The Acting Speaker (Mrs. Champagne):: The House has heard the terms of the motion presented by the Minister of State (Mr. Lewis). Is there unanimous consent?


Some Hon. Members:: Agreed.
Order Paper Questions


[Stage Direction]
Motion agreed to.


Iain Francis Angus: Madam Speaker, I have a group of petitions to table this afternoon. They have been certified correct pursuant to Standing Order 106. They represent well over 50 per cent of the residents of the community of Vickers Heights, which is located within the City of Thunder Bay.
These residents signed the petition because of their concern over the future of their small post office. They point out that a meeting called by Canada Post to review the options with the residents of the area was a complete sham, and that Canada Post refused to review the option overwhelmingly supported by the residents, that is, to retain the post office.
They call upon Parliament to demand that Canada Post retain Vickers Heights Post Office as requested by the residents, and that it review all options in its consultation with residents and stop patronizing residents with the arrogant and hypocritical approach it takes at present.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Frederick James (Jim) Hawkes: Madam Speaker, the following questions will be answered today: Nos. 323 and 333.


Mr. Daubney: In (a) 1984 (6) 1985 (c) 1986 (d) 1987 did volunteer Canada Post employees respond to children's letters written to Santa Claus and, if so, what number of responses was sent out?
Hon. Harvie Andre (Minister of Consumer and Corporate
Affairs): 1. Yes.
2. Prior to 1982, letters from Ole' Saint Nick were ingeniously crafted by a wide cross-section of CPC volunteers from across the country. In 1982, Canada Post Corporation introduced the annual Santa Letter Writing Program which is actively supported by both current and retired employees of Canada Post, senior citizen groups and various community associations. Together this national team of volunteers answers thousands of letters from children in Canada and around the world.

May 27, 1988
Orders for Returns
The statistics below clearly indicate the program's growing popularity with children-and their parents: (a) 1984- 557,782; (b) 1985-597,000; (c) 1986-664,591; (d) 1987- 775,351.


Mr. Caccia: 1.	Does the Government test olive oil, chocolate and cocoa products for perchlorethylene content and, if so (a) with what frequency are such tests conducted (b) what are the dates of the three most recent tests (c) who conducts such tests?
2.	To the knowledge of the Government, is there a permissible level of perchlorethylene, in Canada and the United States, for olive oil, chocolate and cocoa products and, if so (a) were such levels ever exceeded and, if so (/) when (//) by whom (b) what action is taken when permissible levels are exceeded?


Hon. Jake Epp (Minister of National Health and Welfare):: 1. (a) (b) and (c) The Health Protection Branch is not testing olive oil, chocolate and cocoa products for perchlorethylene content. Analyses conducted in April, 1988, by the United States Food and Drug Administration, have all been negative. Staff of the Health Protection Branch are regularly in contact with the Food and Drug Administration officials and will be informed if any positive results are found.
2. (a) (i) (ii) and (b) There are no permissible levels for perchlorethylene in food in Canada or in the United States.


The Acting Speaker (Mrs. Champagne):: The questions as enumerated by the Parliamentary Secretary have been answered.


Frederick James (Jim) Hawkes: Madam Speaker, if Questions Nos. 273 and 308 could be made Orders for Returns, these returns would be tabled immediately.


The Acting Speaker (Mrs. Champagne):: Is it the pleasure of the House that Questions Nos. 273 and 308 be deemed to have been made Orders for Return?


Some Hon. Members:: Agreed.


Mr. Redway: Since September 4, 1984, did the Department of the Secretary of State make grants and/or loans to persons or corporations, non-governmental organizations and governments within Metropolitan Toronto and, if so, to which ones and, in each case, in what amount and for what purpose?
Return tabled.


Mr. Epp (Thunder Bay-Nipigon): For (a) 1980 (b) 1981 (c) 1982 (d) 1983 (e) 1984 (/) 1985 (g) 1986 (h) 1987, did the Government spend money on joint projects with provincial Governments for highway upgrading and construction and, if so, by Province, (i) on which dates (ft) in what amounts?
Return tabled.


Frederick James (Jim) Hawkes: I would ask that the remaining questions be allowed to stand.


The Acting Speaker (Mrs. Champagne):: Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, May 26, consideration of the motion of Mr. Mazankowski that Bill C-129, an Act to provide for the continuance of Air Canada under the Canada Business Corporations Act and for the issuance and sale of shares thereof to the public, be read the second time and referred to a legislative committee.
John Horton McDermid: Madam Speaker, I am pleased to join in this debate for a number of reasons. First, the constituency of Brampton-Georgetown is adjacent to Toronto International Airport. Therefore there are a great many employees from Air Canada who live in my constituency. Over the years these employees have made representations to me, as have various committees that have been formed by the staff and the unions, to discuss the issue of the privatization of Air Canada. Members of the union leadership have been into my office to discuss the privatization of Air Canada. They have expressed concern with respect to it. However, many of the workers who have come in to see me or who have met me on the street in my riding have informed me that in no uncertain terms they are very pleased with the actions of the Government in proceeding with the privatization of Air Canada under Bill C-129 which we are debating today.
I must say that I am very pleased at the action that the Government has taken as well. I think most Members in the House would agree that as Members of Parliament we do a fair amount of travelling and that we have the opportunity to travel on many airlines throughout the world. In my capacity as Parliamentary Secretary to the Minister of Energy, Mines and Resources and now in my capacity as Parliamentary Secretary to the Minister for International Trade I have had the pleasure of representing Canada around the world. I consider it a privilege to be able to travel on many airlines.


May 27, 1988

I am a great comparison shopper. I am pleased and proud to say that Air Canada competes with the finest airlines in the world. There is no question about it. The quality of service, the staff, the attitude and the leadership in aviation shown by Air Canada are all unquestioned. Thus I am standing with a great deal of confidence in knowing that the management of Air Canada is perfectly capable of competing in the world, in the private sector, in the air transportation business. I believe that management is extremely pleased with this decision as well.
At one time Air Canada served a public policy purpose in Canada. I believe that Canada is one of the toughest countries in the world to govern because of the vast distances between centres of population and because of its vast size. Thus transportation is very important. As the airline industry grew, various airlines in this country grew and matured. At the beginning we had to ensure that good, safe, and competent services were provided for all areas and regions of the country. In the beginning, and for a number of years, Air Canada was the tool that we used to achieve that.
Today the industry has matured tremendously. We as Canadians can be very proud of the various airlines that we have, and Air Canada is one of those. It is time that Air Canada competed on an equal basis with the other airlines in Canada that have developed and matured over the years. Because of the maturity of the organization, the public policy purpose for Air Canada no longer exists. Needless to say, I am very pleased to participate in this debate and support the Bill wholeheartedly.
There is not only great support from the staff of Air Canada, but generally I believe the public is supporting this move. Simply stated, the privatization program of the Government of Canada is if it does not serve a public policy purpose, then it should not be in government hands.
The success stories of those companies that have been privatized are nothing short of spectacular. De Havilland is one such example. For the period of time we debated in the House the privatization of de Havilland, we heard the Liberal Member who represents that area say how disastrous that it was going to be. He stood out in front of the plant and handed out pamphlets that stated that this was the demise of the company, it was going to be terrible, and what a terrible fate was ahead for the group of workers at de Havilland.
As it turned out, I believe there are 1,200 to 1,500 more employees at that plant. The plant has been modernized and streamlined. A few day ago I met with the president and he was excited and enthusiastic about what is going on. They are designing a much larger Dash-8, their sales are tremendous, and the prospects for the future are great. One can look at some 14 other privatizations that have taken place. They are all success stories. I have no doubt whatsoever that Air Canada will also be a success story.
Air Canada
We want to get this debate into committee in order that the committee can examine how the privatization will be carried out, hear representations from the public on their thoughts. Because this is such an important item and because the Government places such a priority on it, and because the Opposition is not very enthusiastic in its opposition, if the truth were known, I think that the Opposition would support this wholeheartedly, especially my friends in the New Democratic Party. If they talked to those ordinary Canadians whom they are always preaching about over there, if they talked to the people who handle the baggage, who take the reservations, the air crew, pilots, and so on, they would find out that the staff is very much in favour of this and looking forward to actively participating in the operation and the share ownership of that company. Because it is so wanted throughout the country, not only by staff but also by the general public, I move:
That the question be now put.


Some Hon. Members:: Agreed.


The Acting Speaker (Mrs. Champagne):: Mr. McDermid seconded by Mr. James moves that the question be now put. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mrs. Champagne):: On debate, the Hon. Member for Winnipeg North Centre (Mr. Keeper).


Cyril Keeper: Madam Speaker, my colleague wishes to know if I need a minute or two to finish my lunch. I do not feel the least bit embarrassed about that. I am willing to give up my lunch if we can put the brakes on the Government when it comes to the selling out of Air Canada.


Barbara Jane (Bobbie) Sparrow: It is not selling it out.


Cyril Keeper: I hear a little protest over there. I hope that means that the Government will pay close attention to what I have to say, because there are some very important issues that have to be faced in this privatization of Air Canada.
The Hon. Member who has just spoken stated that there was no longer a public policy purpose to having Air Canada owned by Canadians, owned by the public sector, and while it was useful and nice to have Air Canada in the public sector when it was being established and growing that now it is a mature airline, poof, the public policy purpose for having Air Canada has disappeared.
The fundamental question is whether there is a public purpose for having a publicly owned Air Canada or, as the Hon. Member has stated, whether the primary concern has to be with the fairness of the competition between Air Canada and the other airlines in the country. The Hon. Member emphasized the point that now that Air Canada is mature it is time to ensure that Air Canada is competing on a fair basis

May 27, 1988
Air Canada
with the other airlines. Therefore, the Hon. Member is putting his priority on concern about whether there is fair competition between Air Canada and other airlines, and has set aside the long established concern about why we have an Air Canada and what public purpose it serves. That is now a secondary consideration.
The public policy reasons for the creation of Air Canada still exist today. The fundamental reason why I am raising this question about whether there continues to be a public policy reason for having Air Canada is because we want to ask the question: "Why is the Government selling off Air Canada?" One of the crucial questions is whether the Government is correct when it states that there is no longer a public purpose for having Air Canada owned in the public sector as a public utility.
The original reason for the creation of Air Canada, which is still valid today, is that there was a need for transportation in this country. There was a need to tie and knit this country together. This fundamental purpose and reason applies not only to air transportation and therefore to the existence of Air Canada, but it also applies and has applied throughout Canadian history. It applied when the Trans-Canada Highway was built. When the time came to build the Trans-Canada Highway we did not ask if this could be done by the private sector, or if we build a highway from one coast to another would we be competing unfairly with the private sector railroad by building a highway on which trucks could run? We did not say that. We said that it is important to tie this country together. It is important to have a Canada. One of the ways we can build Canada is by having good transportation and communication systems.
The public purpose for having an Air Canada is to tie this country together, not only the big cities but also the small and remote communities. We want to tie those communities together through modern transportation means, air transport. This reasoning convinced Governments in the past, as it should convinced the Government today.
One of the ways we created Canada was by building a railroad to tie the nation together from coast to coast. Not only did the vast majority of Canadians accept the persuasiveness of the argument that there is a public purpose to having a railroad and a transportation system to knit the country together, but the Conservative Party of the day, the political ancestors of the dinosaurs that we have across the way now accepted that reasoning. In fact, it was Sir John A. Macdonald who articulated the dream and said that we want to give birth to a new country in the northern half of the North American continent. One of the crucial instruments for the building of the nation was a transportation system. In that day it was the railroads, but Sir John A. had the foresight and vision to see that there was a job of nation building to be done and that that job was a job for the public sector. That fundamental reason
still exists today. It applies not only to railroads and to highways but to airlines and air transportation.
This Government has embarked on the Americanization of Canada. It is trying to reduce the nation to a market-place, to a bazaar, to a shopping centre, to a pale reflection of the American dream. The Government has abandoned the Canadian dream started by the Conservative Party and by Sir John A. Macdonald. It is not enough to be simply concerned about whether there was fair competition between this airline company and that airline company. That is a legitimate concern. Nobody wants unfair competition, a concern which the Minister expressed. It is also necessary to be concerned about public purpose, about nation building. That is where our Party stands. Our Party is concerned about the building of Canada, about the holding together of the country, about people in small communities who are a part of this nation as well as those who live in Toronto, Montreal and Vancouver. We are concerned about nation building.
We say that Air Canada like the railroad and the Trans-Canada Highway has been a part of the building of this country. This successful public enterprise ought to continue to be a part of that. We should not put a price tag on everything. We should not say that you can only have service if you have enough dollars in your pocket, that your community will be a real part of this country as long as it can pay its way. We are all Canadians. It is reasonable and necessary that we have a national air transportation company that can use some of its profits from the populous areas of the country on the lucrative air transportation routes to subsidize transportation to some of the more remote parts of Canada. All Canadians should share the burdens and costs of providing communications.
The reason for establishing Air Canada was to knit the country together, to play a part in nation building, and that reason continues to exist today. To abandon Air Canada suddenly just because the Conservative Party has abandoned its own philosophical roots and has chosen to go down the route of American conservatism, down the road of worshipping the market-place above all else, is a mistake. The fundamental conclusion we come to is that there is a purpose in nation building for having Air Canada in the public sector. If there is a public purpose for having Air Canada so that air transportation can contribute to the strength of this nation, why is the Government seeking to sell Air Canada? Is it because there is a public demand for it? Have citizens from one coast to the other risen in unison to say "Sell Air Canada"?
The other day the Government managed to dig out of its files some place one public opinion poll which seemed to indicate that the majority of Canadians would favour the sale of Air Canada. Let me point out that I have read numerous public opinion polls reported in the daily press in Canada which indicate that a majority of Canadians favour Air Canada remaining in the public sector. I see no evidence of a public demand for the sale of Air Canada. There is a public purpose for Air Canada to stay in the public sector. There is no clear evidence that Canadians as a whole are beating on the
May 27, 1988

doors of the Canadian Government saying "Sell Air Canada". Probably a majority of the evidence shows that most Canadians would like Air Canada to stay the way it is as a public utility, as a successful enterprise, which can serve a public purpose rather than being transformed into a purely commercial enterprise whose only purpose can be to make a dollar.
There is nothing wrong with making a dollar, Madam Speaker, but we also have to serve the public purpose and build a nation. We already have airlines in Canada which are dedicated to making a buck and making a profit. We are content to allow that to happen. That is legitimate, but why must all airlines in Canada have as their primary purpose the making of a dollar as their top priority? Why can we not have at least one airline whose purpose it is to knit the country together and help build the nation? I ask again, why is this neo-Conservative Government, this conservative Party which has abandoned the Canadian notion of Conservatism to adopt an American notion of the market-place, selling off Air Canada? Why does the Government insist on selling Air Canada? Is it as a public enterprise unsuccessful? Is it as a public enterprise draining the public purse and not making a profit? The answer is absolutely not. Air Canada over the last couple of decades of operation has made a profit in all but two years. Over-all the profits, if I remember correctly, total something like $300 million.
Air Canada is a successful enterprise that serves the public purpose, helps to build our nation, and most people would like to see it remain as a public utility. It is a successfully run corporation. Why fix something if it is not broken? Why sell it off if it is functioning well as a public enterprise? I have no satisfactory answers to those questions. I would challenge Members opposite to rise to give some rational reasons for selling off Air Canada.
In addition, I want to say something about how the Government is selling off Air Canada. It is not only Members of the New Democratic Party, us of the social democratic persuasion, who are questioning the Government's action. Some business people are questioning it. Sir Colin Marshall has expressed skepticism about the approach the Government is taking to the sale of Air Canada.
I see in today's Globe and Mail that Sir Colin Marshall, the Chief Executive of British Airways, has said that he questions the way the Government is privatizing Air Canada. He is essentially saying that it ain't going to work. The Government is partially privatizing Air Canada and Sir Colin Marshall is saying that if the Government of the day is to be successful in its aim, an aim we do not share, then it has to go all the way.
Either this partial privatization effort will be a complete failure and will not raise the moneys the Government hopes it will raise or else the assurances the Government is giving Canadians that it intends to maintain control so that public policy objectives are pursued are false assurances.
Air Canada
Perhaps this is the first step of a two-step process, and the Government is sort of sneaking in full privatization under the blanket of partial privatization.
The Government's action has been criticized by a chief executive officer from the private sector in Britain who has been involved in a privatization scheme that worked, at least from that philosophical perspective. I wonder why the Government is seeking to sell off Air Canada. I have to conclude it is because the Conservative Party has adopted a new American philosophy of conservatism, a philosophy that puts the market-place above all other considerations, that puts making a buck above building a nation and that puts more emphasis on profit than on service.
I think the Government is doing this for ideological reasons rather than for practical, understandable reasons. As I said before, Air Canada works. It provides service and decent employment and it makes a profit. Why not leave it in the public sector?
I want to be a bit parochial for a moment. I would like to shift my concern specifically to Winnipeg and to my riding of Winnipeg North Centre. The people of Winnipeg are concerned about what will happen once Air Canada is privatized and starts to move away from the fleet it presently has to perhaps airbus. They are concerned about whether or not there will still be a place for Winnipeg in the aerospace industry.
Winnipegers have already had the experience of being robbed of our place in the aerospace industry. We are afraid that the pattern will repeat itself. We are afraid that once the airline is privatized, it will be possible and even likely that the Government will reduce the air maintenance work that takes place in Winnipeg. We would like to have some real assurances from the Government that Winnipeg will have a place in the aerospace industry.
I see that you are signalling that my time is almost up, Madam Speaker. Air Canada is making a profit and providing a service. It helps knit Canada together. It also reassures the people of Winnipeg that there will be a role for them in the aerospace industry as long as Air Canada remains in the public sector.
Why is the Government seeking to sell off Air Canada if it is not to reduce the workforce in places like Winnipeg, if it is not to find a way to reduce services to remote communities or if it is not simply to ride its own ideological hobby-horse? Air Canada has played a role in the building of the nation and it ought to remain in the public sector. Saying that Air Canada has lost its public purpose simply takes the narrow view of Air Canada, the view of a commercial enterprise, and forgets about its nation-building role.


John Horton McDermid: Madam Speaker, the Hon. Member spoke about Sir Colin Marshall's criticism of the sale of Air Canada. His criticism was that we should be selling all of Air Canada. He was not criticizing the actual privatization or the philosophy of privatization.

May 27, 1988
Air Canada
Is the Hon. Member saying that the Government should have privatized the whole thing? If he agrees with Sir Colin Marshall, that must be what he means. Is the Hon. Member aware of the Bill which allows for the partial sale of British Telecom and what a successful issue that was? Why is he criticizing this partial sale? He is in essence comparing apples and oranges.
I thought that Members of the NDP had got away from this, but obviously they have not. After listening to the Hon. Member, I realize that they still think that profit is a four letter word, a dirty word. I gather the Hon. Member is back attacking these terrible companies that earn a profit and saying what a terrible thing it is. That is still the philosophy of the NDP, the type of doctrinaire that NDP Members spout off as we heard the Hon. Member do today.


Cyril Keeper: Madam Speaker, I will deal with the second question first. One of the reasons for our belief that Air Canada ought to remain in the public sector is in fact that it is making a profit. We believe that profit is worth while-


John Horton McDermid: That isn't what you said before.


Cyril Keeper: Well, I see heads shaking. I acknowledged in my speech very clearly that it is important to have airlines that are capable of making a profit. I just said that I did not think that every airline in Canada should have that as its top priority. There ought to be an airline whose purpose it is to knit Canada together, to serve as a communication link and to help to build the nation. There is more to building a country than simply meeting cash register objectives.
Second, I was asked about my comments on Sir Colin Marshall. He is criticizing the Conservative Government's approach to privatization. He is saying, based on his experience with privatization in Britain, that going half way will not do the job. That comment by this gentleman who has some experience in these matters suggests to me that the Government is incompetent and is going to botch the job again. Canadians have seen it botch so many things.


John Horton McDermid: Like de Havilland, Telecom, Canadair, and Canadian Munitions?


Cyril Keeper: Either that, or its assurance to Canadians that it will maintain a hand in Air Canada for public policy purposes is misleading and false. The Government says it is going the partial privatization route and maintaining service to remote communities, but it cannot have it both ways. If it intends to privatize Air Canada, then it will deprive remote communities of service. If the Government really wants to provide assurances of service to those communities, then it ought to leave Air Canada where it is, in the public sector.


John Horton McDermid: Madam Speaker, I do not want to beat this to death, but I think the Hon. Member should be fair to Sir
Colin Marshall. He did not say it would not work. Here is the quote:
You have to be one or the other, and I am for airlines being totally free.
What he is saying to us is that we should privatize the whole thing. He was in Toronto at the time the statement was made, trying to sell shares in British Airways, for heaven's sake. The article says:
Riding a wave of record profit, Sir Colin Marshall, Chief Executive of
British Airways PLC, swept into Toronto as part of a North American blitz of
financial analysts to sell the company's shares.
I will quote further from the article in The Globe and Mail by Cecil Foster:
Sir Colin is the latest airline official to indicate an uneasiness with the
Canadian Government's decision to sell Air Canada gradually. Ottawa plans
to sell a 45 per cent stake by asking Air Canada to issue new shares.
That is what he said, so do not misrepresent the man. His only criticism is that we are doing it gradually. Yet the British have done it gradually, too, with the British Telecom privatization. That involved a partial share issue and it was very successful. So when the Hon. Member gets up, I wish he would be accurate.


Cyril Keeper: Madam Speaker, I guess more than one person can read an article. Sir Colin Marshall, this British entrepreneur with experience in the privatization of airlines, said:
You have to be one or the other-
In other words, you have to be a public airline or a private airline, and if you try to be both it is not going to work. What I am saying to the Government is that the plan it has announced is a mixed plan, and according to Sir Colin Marshall you cannot be both; you have to be one or the other. That means the Government has announced a plan that will not work. It will not raise the revenue it claims is needed and will not assure people that service will remain in their communities. The shares the Government will hold will not assure a public policy purpose.
If what the Minister is saying is that the plan is the total privatization of Air Canada, then he has to admit that any of the assurances he has given that service will be maintained in remote communities, or that there will be bilingual service, cannot be sustained.


John Horton McDermid: Name a remote community that Air Canada serves now.


John Henry Reimer: Madam Speaker, the Hon. Member for Winnipeg North Centre (Mr. Keeper) was berating the Government for saying that this action is a symbol or sign of the Government operating according to its ideological hobbyhorse of privatization.
There is no question that the Conservative Party and the Government clearly believe that wherever the national need or public interest does not require government intervention, it is far better that the private sector do it. If the private sector cannot meet that need or requirement, then of course the
May 27, 1988

Government has to do it. Elowever, in this case it is obvious that it can be done by the private sector, and perhaps better.
I suggest to the Hon. Member that surely what is sauce for the goose is sauce for the gander. If the Hon. Member wants to say that the Government is on its ideological hobby-horse of privatization, then is it not equally true that the Hon. Member is on his ideological hobby-horse of socialism, government control, and government ownership?


Cyril Keeper: Madam Speaker, I will be frank. I am on a hobby-horse. The hobby-horse is nation building.


Some Hon. Members:: Oh, oh!


Cyril Keeper: Air Canada has a purpose, that is, to knit Canada together. It is our transportation and communication network that helps keep this country one. That is a policy objective that was recognized by none other than Sir John A. Macdonald. Therefore, I ask the Hon. Member why his Party has abandoned the principles and vision which originally motivated it? Why has it abandoned the project of nation building? Why, all of a sudden, are they only concerned about whether or not someone makes a profit or whether or not a company can compete against another company?


The Acting Speaker (Mrs. Champagne):: Resuming debate.
[ Translation]


André Ouellet: Madam Speaker, I cannot say that I welcome this opportunity to take part in this debate, because when we consider why this Bill is before the House today, the only answer to that question lies in the ideology of the Conservative Party, of the hardline Tories and of this Government, who want to get rid of this country's Crown corporations at any price.
It is an obsession with this Government. Some of our Crown corporations which have outlived their usefulness can be sold, but when it comes to selling a Crown corporation which has its place in this country and which is absolutely necessary, given the peculiarities of our economy and geography, I think the Government's policy is regrettable.
As I see it, Air Canada is an indispensable adjunct to the economy of this vast country whose population is spread out from the Atlantic to the Pacific. Many outlying areas and small communities would be unable to get certain services or food supplies, and people would not be able to leave their communities without air transportation.
The Government of Canada created a Crown corporation to provide air transportation for all Canadians, wherever they happen to live, and I think the reason was valid at the time and is still valid today and will remain valid and essential for many years to come, because we still have a very low population density in this country.
Air Canada
However, there is another reason why we are considering this Bill today. I am referring to the fact that the Minister of Finance (Mr. Wilson) and his Treasury Board colleagues have refused to guarantee Air Canada the loans it needs and would normally contract in order to proceed with the renewal of its fleet. Previous Governments always helped Air Canada get the best possible terms and financing to achieve its economic goals. Now for the first time, Air Canada is faced with a Government that has put it on a starvation diet by refusing to support its plans for expansion and development. Obviously, the Government cannot let a corporation as popular and as useful as this one go down the drain. The only alternative was to let Air Canada be privatized, thus making it possible for the Corporation to obtain the hundreds of millions of dollars it needs to upgrade its fleet. I think this is very sad, because if we Canadians lose our collective ownership of this corporation, which is our pride and joy, it will be because of the lack of support and the irresponsibility shown by the Canadian Government.
On the fiftieth anniversary of Air Canada, the Liberal Party of Canada issued a press release to emphasize the major role played by the corporation in developing our country. I would like to take this opportunity to quote from that press release, which said: "In response to a persistent rumour that the Conservative Government is about to privatize Air Canada, Liberal Members want to recall the raison d'etre of our national carrier. From the date on which it was founded, Air Canada has provided passenger transportation services from one end of the country to the other, while reflecting the federal Government's commitment to the principles of bilingualism, employment equity and regional procurement. Once it is privatized, Air Canada will no longer fly to communities on less profitable routes. Thus, providing passenger air transportation services accessible to all, the reason why Trans-Canada Airlines was created in the first place, will no longer be feasible".
I personally wanted to stress that Air Canada has played and should continue to play a major role in connection with the deregulation of the air transportation industry.
Indeed, as the Conservative Government has just passed Bill C-18 that will completely deregulate air transport, we should ask whether it is wise and necessary to privatize Air Canada at this time. On behalf of our Liberal colleagues in this House, we rejected the partial privatization of the company in a press release on April 10, 1987. We said that such a policy would mean that the company would cease to be a Crown corporation under the Financial Administration Act. The power to issue directives, now held by the Governor in Council, would be lost. Now we see that this is exactly what the Government has done.
It carried out a partial privatization, trying to make the Canadian public believe that it would continue to control this Crown corporation which no longer is one; under Canadian corporation laws, it must now be a private company because the majority shareholder does not have the right to make

May 27, 1988
Air Canada
decisions that would be detrimental to the minority shareholders. The Canadian law protecting minority shareholders says this very clearly. So we will have an absolutely crazy situation where the Government will still own 55 per cent; it will be the largest shareholder, the majority shareholder, but it will have no say and will be powerless to act. The minority shareholders will control the company and most important, the Government will abdicate its power to issue directives to the company to maintain essential services in remote areas or to continue to serve some lines considered important for the national interest.
As the previous speaker was saying, we are wondering why the Government is so determined to undo something that was working so well. You do not take apart what is going well unless you are a Conservative Government. And this is not the first good company that the Government is destroying. We see what it is doing with Canadian National. We see what it has not been able to do despite all the promises to VIA Rail and we wonder what will happen with this hybrid decision that sooner or later may harm Air Canada's viability and efficiency. In reality, if no one buys these shares that will be put on the market, if this half-sale is not successful, Air Canada's whole future is threatened.
For Air Canada's fiftieth anniversary, we wanted to emphasize that it is one of the world's most profitable airlines, that it is very well managed and that it has won international awards. The most recent was the award of excellence for best passenger service given by Air Transport World.
In rejecting the argument that Air Canada must be privatized so that it can renew its fleet of aircraft, we asked the Government then to stop undermining the public's confidence in their national carrier.
We had suggested a much wiser and much more realistic alternative, and that was to change the Air Canada debt to equity and make sure it could secure loans at preferential rates to renew its fleet as was done in the past.
We had also suggested that the Conservative Government should be committed to maintain the unwritten rule whereby, as we did before, Air Canada would be given certain advantages with regard to international and transcontinental routes as compensation for maintaining service to nonprofitable Canadian communities.
Quite clearly the Government chose to ignore this suggestion made by the Official Opposition, by the Liberal Party of Canada. Today we are faced with a Bill which most unions representing Air Canada employees find unacceptable.
Perhaps I might just read this newspaper article, and I quote;
"Three Air Canada unions begin campaign to halt privatization". The article states that unions representing two-thirds of Air Canada's employees have launched a campaign to stop the
planned privatization of the Crown owned airline and to defeat the Conservative Government in the next federal election.
"You propose to sell out not only our members but all Canadians in disposing of our national asset", said representatives of the International Association of Machinists, the Canadian Union of Public Employees, and the Canadian Autoworkers Union in a letter which was recently sent to the Prime Minister (Mr. Mulroney).
"We will do our best to educate all Canadians in the true meaning of your duplicity so that you receive your just political reward in the next election", the three-page letter concluded.

I think the spokesmen for the employees are justified to use such harsh words about the Prime Minister (Mr. Mulroney). As everyone recalls, not long after the last elections the Prime Minister of Canada went to Montreal to see his close friend Louis Laberge to discuss various issues, particularly the future of Air Canada. At the end of their meeting, union boss Louis Laberge told newsmen in the presence of the Prime Minister who could have denied everything had it not been true: "The Prime Minister has just assured me that Air Canada will not be sold! Air Canada is not for sale! Canada needs a national airline", said the Prime Minister.
Well, like in the case of so many other unkept promises, we realize today that if the Prime Minister says something the contrary is bound to happen.
I see that the Hon. Member for Brampton-Georgetown (Mr. McDermid) is getting all worked up and taking upon himself to tell me that this quote of the Prime Minsiter is not complete.
The Prime Minister and the Deputy Prime Minister have invented remarks to justify the sale of Air Canada. Louis Laberge was not told half of the sentence when he met the press in Montreal following his meeting with the Prime Minister. He did not tell the people: "Half of Air Canada will be sold". He told them: "The Prime Minsiter has assured me that Air Canada is not for sale!". These are the facts and it is not the Hon. Member for Brampton-Georgetown who will convince me that Louis Laberge does not know what he is saying. The reality is that the Prime Minister had said that Air Canada would not be sold. In line with many other promises which the Prime Minister had made and not kept, Air Canada will be sold because of this bill, and the Tory Government will be held fully accountable for that.
Air Canada is a most successfully run corporation which has greatly contributed to the Canadian economy, which has enjoyed record economic growth, which has A-l employees, very competent officials who administer it in a remarkable fashion and which is second to none as a national airline. Air Canada is one of the best airlines in the world. Because the Tories do not want to finance the loan which this company needs to renew its fleet, they want to sell it off and make it
May 27, 1988

possible for foreigners, probably Americans, to take over through this minority participation full control of the company. The reality is that this airline of which we were all very proud will eventually become partly the property of foreigners and will probably fall within the next few years in the hands of the major conglomerates which will control the air transport industry in Canada.
Because the situation we are living now is a small scale replica of what is happening in the United States. Ever since the deregulation of the airline industry, we have witnessed an undue concentration of the airline industry in the United States at the expense of workers, at the expense of the services in less profitable areas and, especially to the benefit of a few tycoons who are about to take complete control over the air transport industry in the United States. I can foretell that the deregulation in Canada will bring about the same results.
This whole exercise means that within the next few years, because of the various schemes of this Tory Government, out of our two major national airlines, Air Canada and Canadian Pacific, in addition to five or six major regional carriers operating in the Maritimes, Quebec, Ontario, and Western Canada, only one or two will survive. All of them will end up in the same bag, to the great satisfaction of the Tories and their very affluent friends, who will completely dominate the air transport industry, not in the interest of Canadians or the travelling public, but in the interest of a few friends of the Tory Party.


The Acting Speaker (Mrs. Champagne):: Questions and comments. The Hon. Member for Levis (Mr. Fontaine) has the floor.


Mr. Fontaine:: Madam Speaker, when Canadians listen to the Hon. Member for Papineau (Mr. Ouellet), I suggest they remember this is the same Member whose team was involved in the Mirabel question, when any number of scandals came to light and thousands of farmers were expropriated, and now Canadians have to pay for these mistakes.
This is the same Member who poured billions of dollars of taxpayers' money into Canadair. The same Member was involved in the question about de Havilland, a company we decided to sell. These two companies are now making a profit and hiring more workers.
When the Hon. Member for Papineau said the Minister of Finance (Mr. Wilson) didn't want to advance funds to renew Air Canada's fleet, he was right. This Government will not advance any funds to renew Air Canada's fleet because it believes in private enterprise. This is not a socialist government that will soon be part of a coalition. This Government believes in private enterprise and wants to give Air Canada a chance to take advantage of the privatization process and the private sector a chance to purchase Air Canada shares.
The Hon. Member for Papineau doesn't want us to privatize Air Canada, but since he is so knowledgeable about the transportation industry, I would like to ask him today how
Air Canada
many airlines in the world are government-owned? I wish he would answer me here in the House. Out of 155 countries, how many have state-owned airlines? Let him explain to Canadians why we should be among the very few to have a national airline.
Finally, Madam Speaker, and I am about to conclude, it is a matter of philosophy. For decades, this Party decided to add to the Government's social and supportive role, letting it substitute for the private sector in 335 different corporations. As a result, Canadians today have a national debt of $262 billion. This means that 30 per cent of our taxes go to paying the interest on loans contracted by the Liberals who, in many cases, were supported by the socialists, because those were the kind of measures they liked.
I wish you would answer this question: How many airlines in the world operate today as Crown corporations?


André Ouellet: Madam Speaker, I would like to tell the Hon. Member for Levis (Mr. Fontaine), who has notes prepared for him from time to time so that he can say stupid things in this House, that the big national airlines in Europe are state-owned.


Gabriel Fontaine: Which ones?


André Ouellet: The French, the German.


Gabriel Fontaine: Which companies?


André Ouellet: Madam Speaker, I am telling him that Air France belongs to the French, Lufthansa belongs to the Germans. And if it is good for France and Germany, it is also very good for Canada.
Secondly, 1 would like to say this about Mirabel. When the Mirabel Airport development project was conceived, officials in the Department of Transport had planned to make this airport the port of entry for international trade to America. The airport of entry would become Mirabel. Today, if you have read a little about air transport, you will realize that Mirabel remains the only airport open 24 hours a day. It is the best port of entry to America for all international traffic from Europe.
The colleague of the Hon. Member for Levis, who is a Minister and represents the riding next to Mirabel, must be very nervous on hearing the Hon. Member for Levis call into question the reason for Mirabel's existence. This airport may be too big in the eyes of the Hon. Member for Levis, but I can say one thing: since the Conservatives took power, they have spent more time doing favours for their friends than building an expressway between Mirabel and Dorval or creating a rapid rail link between Mirabel and Dorval so that travelers arriving in Mirabel can catch a domestic flight in Dorval.
Despite the Conservatives' promises, this Mirabel/Dorval issue that they planned to settle has not yet been settled.

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Air Canada
Finally, I would like to say, because he asked me several questions...


Gabriel Fontaine: Only one is important.


André Ouellet: ... that the money Canadair cost the Government of Canada was well spent. Hundreds and thousands of jobs remained in Canada because the then Liberal Government had the courage to rescue this company which was on the verge of folding up, and to keep here in Canada the technology and know-how in the field of aeronautics and aviation. Had the Canadian Government failed to intervene at the time, Canadair would no longer exist and with it would have gone the highly paid jobs which keep Montreal among leaders in air transportation. I do not hesitate for a moment to defend the steps taken by the previous Government to save these jobs in Montreal and keep Canadair going. In conclusion I would say to the Hon. Member for Levis that at any time I am prepared to open a debate with him about the various airlines which operate worldwide. Give me more time and I will continue to tell him about the many countries of the world which have the decency to maintain their own national airlines, at a time when our own Government is about to sell off a chunk of Air Canada to foreigners and friends who can hardly wait to merge it with another company and make sure that this jewel in the sky will disappear for ever.


John Horton McDermid: Madam Speaker, I have two or three points I would like to make. First, I would like to thank the Right Hon. Leader of the Opposition (Mr. Turner) for appointing the Hon. Member co-campaign manager for the next federal campaign. It has brought him to life. We thought we would be writing an obituary on him. In the last three and a half years he has hardly been on his feet at all in the House. Obviously, this has given him a new shot of inspiration, and we are pleased to see him back again. It is certainly going to help us, I can tell him that.
I want to point out to the Hon. Member who is bragging about Lufthansa Airlines. Lufthansa happens to be partially privatized. It is not entirely state owned, just to let the Hon. Member know. The airlines that are totally state owned are Aeroflot which not only has an airline but builds planes. It is a totally integrated company. The New Democratic Party would love that. But its safety record is not one we would envy. The Hon. Member knows that, having been a former Minister of Transport. The Portuguese, Saudia Arabian, Air-India, El Al, Olympic, and Pakistan airlines are state owned.
The following are committed to privatization, and the Hon. Member will be interested in this: Aer Lingos, Air France, Air New Zealand with a socialist Government, Austrian Airlines, Iberia, Thai, Qantas, Australia, with a labour Government.
I would like to draw another point to the Hon. Member's attention. He says a Crown corporation is necessary in order to
ensure services in remote areas. Air Canada does not fly anywhere in the territories. In fact, Air Canada serves 28 domestic points. Canadian Airlines, that terrible private sector one-and I know the Liberals do not like this-serves 70 domestic points.
I want to ask the Hon. Member, when he stands here and gives a great "fear" speech about the airline going into foreign hands, Canadians not being good enough to run it, and it being taken over if the Americans want to take over our airlines, why have they not done it by now? It is because Canadians have faith in their own airline companies. Look at CP. CP was foreign owned and Canadians bought it back. Look at what Max Ward has done with his terrific airline, Wardair.
The Hon. Member has no faith in Canadians. Only the Government can do it. That is the Liberal line. That is what we heard in the whole of the Member's speech, that only the Government can do it. Canadians, independent and free of Government, cannot do it. I can tell the Hon. Member that Canadians have proved him wrong over the last three and a half years. The private sector has created 1.2 million new jobs.
When the private sector is freed up to do the job, it will do it, but not under the grip of the Grits. Once the Grits get a hold, they want to intervene and run everything. They want to control everything with their little red-rump sisters over there. That is what happens in this country. Well, Canadians do not want that. Canadians can see, when we let the private sector go, what it can do. It is doing a great job in this country, and it will continue to do so. They are not going to buy the Liberal bunk anymore that only big brother can run Canada.


The Acting Speaker (Mrs. Champagne):: The period for questions and comments is over, but I will give the Hon. Member a short time to reply.


André Ouellet: Thank you, Madam Speaker. I am not at all impressed by the rhetoric of the Hon. Member for Brampton-Georgetown (Mr. McDermid). He read a list of companies which could be privatized, including Air France, one of the most important in Europe. It is not because they could be privatized that they will. These companies are not privately owned, but state owned. It is not because Canada is about to make a mistake that these other countries will necessarily follow suit.
Also, I suggest to the Hon. Member that praising private companies operating in Canada is not at all inconsistent with our position in favour of Air Canada. Quite the contrary! Our Government had made it possible for private companies to take over a major share of the Canadian market, and the performance of Wardair, Canadian Pacific and other Canadian firms have all flourished under Liberal Governments. Since this Tory Government came into office, like by magic, all these companies have been purchased or merged in only one, and we have witnessed the disappearance of the regional carriers of which our various regions were very proud. The privatization
May 27, 1988

of Air Canada, therefore, is a step towards the take over and amalgamation in the more or less distant future in one huge air transport company, and I say this is both dangerous and bad.
To conclude, Madam Speaker, I will ask this to the Hon. Member who would like everybody to believe that he is pleased to hear us, the very same Member who has just moved that the question be put meaning that he would like this debate to be over as soon as possible: Is he not aware that by moving this motion, he will deny all Hon. Members the right to move amendments to this bill? Which means that on second reading, after the Hon. Member for Georgetown rises to speak, no other Hon. Member will be allowed to move an amendment to this Bill. That is outright hypocrisy on his part!


Iain Francis Angus: Madam Speaker, this is certainly turning into an interesting debate. It is a little lively today. My friend from Brampton-Georgetown was beginning to look the colour of what he was describing the New Democratic caucus as being, he was getting so excited about the whole procedure.
First, I would like to comment on the motion that is before us. It is: "That the question be now put". We are roughly into six or seven hours of debate on Bill C-129, and I am only guessing with respect to the time. This is a fairly major piece of legislation. It is part of a trilogy that the Conservative Government has entered into since it came into office in September, 1984, that is, privatization, deregulation, and the trade agreement with the United States.
When we talk about changing the structure, the ownership of an air transportation company that the people of Canada have owned for over 50 years through the House and the Cabinet that have reflected the political make-up of the country, it is a fundamental debate. It is not one about which games should be played. It is not one in which the Government should, as it tried to do the other day, force extended hours so that we would sit well into the evening to disrupt the normal pattern of committee work and responsibilities of Members when they are here in Ottawa.
Today, it chose to put in place a procedure which basically means-and this is for those people who are watching-that the Opposition cannot move any amendments. The next decision that will have to be made will be on "that the question be now put". Of course the Government with its majority, should it decide to vote in favour, would see that happen and then we would have the vote on second reading of Bill C-129.
I just want to point out that we are seeing a Government that is becoming very frustrated, very antsy. It has a number of pieces of legislation on the table.


Thomas Scott Fennell: We have lots of time.


John Horton McDermid: All the time in the world.
Air Canada


Iain Francis Angus: My colleague across the way says that we have "all the time in the world". Perhaps he would like to withdraw the motion that restricts us in terms of any amendments that we wish to make, not that we had planned that, Madam Speaker. We will get the legislation into committee-


John Horton McDermid: That is where the amendments should be made.


Iain Francis Angus: Of course the amendments that have been made did not deal with the specific wording of the Bill. The first amendment moved by one of my colleagues was to take the principle of the Bill and send it off to the Standing Committee on Transport, a committee of which I am a member, to study the whole concept of the privatization of Air Canada. The Government did not want that to happen, so it voted it down.
The second amendment was to delay further work on the Bill for six months, a period of time that is normally suggested by Members in this House. I am sure that government Members when they sat in opposition, did the very same thing. It gives the public time to absorb the ramifications of a Bill. It gives members of the public time to prepare briefs and to decide whether or not they agree with it so that when it enters the legislative committee they will be ready. Instead, we have a Government which once again has lost control of its own agenda and is trying to ram things through.
Let me turn to the substance of the Bill. At second reading we are here to talk about the principle of whether or not Air Canada should, initially, partially be sold to the public and then later, at the Government's whim, totally sold. I remind Members of the House that every Canadian man, woman, and child already owns a part of Air Canada, just like they own the CNR. In some provinces they own the telephone company or the hydroelectric company. In some communities such as mine the taxpayers own the telephone company and the hydroelectric distribution company.
Canada has had a history of this type of involvement in the running of our affairs and the provision of services, particularly in the field of transportation. When one looks back at the decisions made many decades ago about what this country was to look like, we see that at that time we had a Government which saw a danger in allowing an intrusion of rail lines from the south. It saw a future for our country disappearing from our grasp, so it arranged to have built a rail line to connect east to west.
Not too many decades ago a number of small railways were in financial difficulty. The Government pulled them together as the Canadian National Railway, totally owned by the taxpayers of Canada.
Over 50 years ago as air transportation developed and was seen as the tool of the future, the Government of Canada, with the support of the people of Canada, became involved in the airline business. It was not the private sector. It was not a

May 27, 1988
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forbear of Canadian Airlines International, or Max Ward, or the Deluce family from northern Ontario. It was the public sector that recognized the need and entered into the business of air travel.
Along the way the private sector finally realized, after Air Canada developed the markets, that perhaps there was a buck to be made and therefore it would get into that business. Also along the way the Government of the day decided that there needed to be rules and regulations that controlled the provision of services. In this public sector-private sector competition the Government of the day saw the danger that, while the public sector airline had a mandate to provide services, the private sector was more flexible and could target itself to the more lucrative routes, skim the cream off the top. We as a nation decided that tests had to be applied.
For example, the test of public convenience and necessity was the key one that stood the test of time for many years, until this Government came along and eliminated it. That test was designed to ensure that as well as servicing those lucrative routes-for example the Toronto to Ottawa to Montreal triangle many Members travel on a frequent basis, which is heavily utilized and very profitable-they would also be used to cross-subsidize the routes to the smaller communities.
The Hon. Member for Brampton-Georgetown (Mr. McDermid) refers to Canadian Airlines International serving somewhere in the neighbourhood of 70 domestic communities. Part of the reason it was doing so was that when the other companies-Pacific Western, Canadian Pacific, or some of the smaller feeder planes that are now partners-were applying to the regulatory agency for permission to travel some of the more profitable routes, they were told: "If we give you this licence here, you have to service these smaller communities". The network was expanded through a mix of public sector airlines, private sector airlines, and regulation to protect services.
Back to the trilogy. The first step in the plan of the Conservative Government for air transportation and for the future of Air Canada was deregulation, taking out that test of public convenience and necessity and turning it over to the marketplace. Therefore, the only test was to obtain a licence and insurance and have trained pilots and mechanics to do the work, and that is now the test, the test of the bottom line. Therefore, we were not surprised when the Prime Minister (Mr. Mulroney) reversed himself and finally indicated, through the Deputy Prime Minister (Mr. Mazankowski), that Air Canada was in fact for sale.
Let me mention some of the specifics of the legislation and the statements that have been made with regard to the decision by the Government to dispose of initially 45 per cent of the shares of Air Canada. The rationale that we have been given is that Air Canada needed money for new fleets and new airplanes. The Government was not going to give it to them, so the only route to go was through some type of public share offering.
The amount of money that Air Canada needs is in the vicinity of $300 million. That may seem like a very large amount of money. If it came out of my pocket, it would be-


John Horton McDermid: You do not have a pocket that big.


Iain Francis Angus: -or if it came out of the pocket of any of us in this room. When one realizes that the same Government is prepared to spend, at the very least that we know about, $8 billion for some big toys for little boys, the nuclear submarines-


John Horton McDermid: Don't let the Navy hear you call them little boys.


Iain Francis Angus: Actually, I was referring to the Minister. I was not referring to the Navy. I have great respect for it. It also knows that we do not need nuclear submarines.
We can set aside the issue of whether it should be nuclear submarines, conventional, or whatever. The question is that $8 billion is readily available for that project, and the Government cannot find $300 million to allow Air Canada to provide the fleet additions it needs. That makes one wonder.
The other aspect of this deal that bothers me is that, on the one hand the Government is saying that the initial share offering will be 45 per cent. Of that 45 per cent no more than 25 per cent can be held by non-Canadians. That is consistent with international agreements or treaties to which Canada is a signatory, and the same rule applies in the United States. Because this is an initial share offering, at some point in time the Government could dispose of the remaining 55 per cent. Therefore, 100 per cent of the shares of Air Canada could be owned by other than the Government of Canada, which means that up to one-quarter could be owned by non-Canadians.
Second, there is a restriction that no individual can own more than 10 per cent. That applies to the initial share offering, so we are talking about 4.5 per cent of that 45 per cent. When 100 per cent is sold then we are back up to 10 per cent. Conceivably and eventually those shares could be-and I am not saying that they will be-held by a maximum number of 10 individuals. It probably would not happen right away. However, over time those 10 individuals could also be principals in other airlines, and two or three of them could be non-Canadians. Therefore we have a very dangerous situation for this company that has been owned by all of us and managed very well.
Over the last 10 years Air Canada's pre-tax profit was $379.3 million. I would say that it is a very good record but we are going to get rid of it, sell it off. The final problem is that following the initial offering of 45 per cent the Government will give total control to those who hold 45 per cent. The Deputy Prime Minister indicated very clearly that the Chairman of Air Canada will be instructed by the Government to vote with the majority of the members on the board representing the 45 per cent. In other words, if there are 45 directors-for easy mathematics- and 23 voted to close or
May 27, 1988

stop serving Thunder Bay, the Government would have to vote with them even though it owned 55 per cent of the shares.
I realize that my time has run out. Let me conclude by saying that it is a bad deal, and there is no way that I can support it.


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


PRIVATE MEMBERS' BUSINESS-BILLS   EXPORT AND IMPORT PERMITS ACT MEASURE TO AMEND
Mr. Dan Heap (Spadina) moved: that Bill C-243, an Act to amend the Export and Import Permits Act (apparel industry), be read the second time and referred to a legislative committee.
He said: Madam Speaker, it gives me unusual pleasure to have an opportunity to speak in moving this Bill because it has been the product of a great deal of study and consideration by the men and women who are most concerned with the garment industry of Canada. I am referring to the companies, to the members of the Canadian Apparel Manufacturers Institute who support this Bill, and to the International Ladies' Garment Workers' Union which represents some tens of thousands of workers in Ontario, some tens of thousands of workers in Quebec, and some tens of thousands of workers in other parts of Canada. Obviously as unions and company employers there are things they sometimes find to disagree about, but on this proposal they agree because they want to defend the existence of the garment manufacturing or apparel manufacturing industry in Canada. It is a proposal which they have put to Parliament. They have sent copies of the proposal to all Members. I hope it will be considered worth while by all here today to vote at the end of this hour to have the Bill referred to committee for further study.
Both the manufacturers and the unions, while they are supporters of this Bill, have pointed out to me that there are some details which need amendment and that they very much wish to come to speak to the appropriate committee of Parliament about this Bill when it is referred.
The purpose of the Bill is, in effect, to regulate the imports of garments, of apparel, into Canada. That is reflected in the explanatory note which says:
Recognizing that measures to protect the apparel industry will benefit Canada, the purpose of this Bill is to impose quotas on imported apparel to encourage investment by Canadians and non-Canadians that would contribute to economic growth and employment opportunities in Canada.
Export and Import Permits Act
In other words, this is to strengthen investment and modernization in the apparel manufacturing industry of Canada. Unless we are going to change the climate in Canada for a much warmer one, I think we need to keep a clothing manufacturing industry here.
There are three main proposals as shown in Section 2 in the Bill. One is that new import permits, in excess of those already issued at a certain date to be determined in the law, would not be issued to enterprises whose sole business is importing. The new import permits would be issued to manufacturers and issued to them in proportion as they have increased their production in Canada. When I first heard this, I was puzzled. As it was explained to me, the manufacturers already find it appropriate. A shirt manufacturer may buy some shirts overseas so that he can offer to Eaton, The Bay, Sears, or whoever, a package line, a variety, more than he is able to concentrate on making in Canada. It is proposed, therefore, to establish this practice and to recognize and support it in law to give the benefit of importation to the manufacturers so long as they increase their manufacturing, their production, in Canada accordingly.
There is also a caveat in Section 3 in the Bill that this would not apply to importations from the United States or from the European Economic Community. The reason is very simple. In the past decade or so the garment industry in Canada has found it necessary to seek defence, as has the garment industry in the United States, as has the garment industry in western Europe, against the importation of garments from countries where the wages and working conditions are extremely poor. The concept of competition, even as reflected in the General Agreement on Tariffs and Trade does not allow unlimited injury to go without defence. In other words, when our industry is being injured as it is, the GATT agreements allow us to defend ourselves.
I have a letter from the Canadian Apparel Manufacturers Institute, dated April 20, written to me in support of this Bill. It points out that the industry employs some 113,000 people in such centres as Montreal or Winnipeg and that it is responsible for 18 per cent and 17 per cent respectively of all manufacturing in these cities. The Institute wrote:
However, we are an industry under considerable pressure from imports. Imports have captured 43 per cent of the Canadian market.
At the beginning of the 1980s imports captured only 31 per cent of the Canadian market but now they capture 43 per cent. That is what we have lost. The industry is asking that the haemorrhage be stopped. The letter continued:
At present, 90 per cent of imported clothing comes from low-cost sources and the Multi-Fibre Arrangement (under GATT). This international agreement allows the exporting countries to control Canadian quotas within their jurisdictions. The Canadian industry's share of our own market has been steadily eroded. Canadian shipments have been shrinking by an average 5 per cent and considerable employment has been lost over the last decade.
I repeat, we are speaking here of countries which pay extremely low wages, often less than one-tenth of others, and which operate under environmental and labour conditions that

May 27, 1988
Export and Import Permits Act
would not be tolerated anywhere in Canada, western Europe, or the United States. The letter continued:
Canadian manufacturers of apparel are increasingly importing some finished apparel. They use the imports to complement their production. They can rationalize and specialize, making what is best made in Canada and importing the rest to complete their product line; thus enhancing the marketability of the domestic product.
In the letter it is pointed out that this Bill:
-would effectively bring control of part of the quotas, on low-cost goods, back to Canada.
The Bill would also limit the increases in imports by retailers. For many years CAM I has promoted this type of mechanism under its quota control policies. We have done so because quota controlled in the hands of Canadian manufacturers can be used to increase Canadian production and employment while reducing costs to the consumer through the elimination of overseas quota charges.
There are many facets which would bear further study as to the application of the details. That is why I hope the Bill will be adopted in principle and go to committee.
I want to refer also to a couple of news stories in the same vein. On March 21 from the Kitchener-Waterloo Record:
Large or specialized shirt manufacturers in Kitchener-Waterloo should be able to withstand the loss of a promised duty remission program, but 35,000 jobs could be lost in other segments of the Canadian industry, says the President of the Arrow Co.
I am not debating today the question of the import duties. I am pointing out the danger that is recognized by one of our major shirt manufacturers.
There is another story dated April 2, 1987:
Women workers displaced by free trade will not be able to take advantage of the new job opportunities created by the pact, a panel discussion on free trade and women was told Thursday.
It is both ludicrous and callous to suggest women-particularly those in the textile and other manufacturing sectors-will be able to make the necessary adjustments, said economist Marjorie Cohen.
I have from the union their brief that was written a couple of years ago but is still up-to-date in which they point out that the General Agreement on Tariffs and Trade "permits importing countries to protect themselves from market disruptions and serious injury as a result of substantial imports. Article 19 of the GATT agreement permits global quotas where there is a serious injury to domestic production."
I want to take up another aspect of this matter which is relevant even though it is hidden. It is hidden in the sense that there is a general myth being put about Canada by certain interests to the effect that the garment industry is weak, inefficient, held up only by subsidies-that is to say, by protective tariffs-and therefore should be allowed to seek its own level, as it were, without any protection, even if that means that some or perhaps all of the garment manufacturing industry disappears from Canada.
I wish to object very strongly to the notion that the garment industry is peculiarly subsidized in Canada. I would point out
that the garment industry in fact, along with other light manufacturing industries no doubt, subsidizes the petroleum industry, the mining industry, and the finance industry.
My basis for saying that is that for the years 1976 to 1979- and I do not think it has altered in principle since-the garment industry was taxed at the rate of 34.4 per cent; petroleum and natural gas industry, only 21.8 per cent; the mining industry excluding mineral fuels, 16.4 per cent; and the finance industry, 18.7 per cent. In other words, the garment industry was paying at least half as much tax again as the wealthiest industries in Canada. The women working for $5, $8, or $10 an hour on Spadina Avenue were subsidizing the oil companies, the banks, and the mining companies through their taxes.
I can refer it also to the matter of income tax deferred. During those years the petroleum and natural gas industries deferred over $5 billion worth of taxes; the mining industry, $1.8 billion; the finance industry, $2.5 billion; and the garment industry deferred $17.4 million in the year 1979. In other words, the loans without interest, which is the most modest way of putting this tax deferral, ran in the billions to the petroleum, mining, and finance industries, whereas the garment industry got a measly $17 million in tax deferrals.
I have estimated that between $3 billion and $4 billion would have accrued to the Canadian Government's Treasury if those industries, petroleum, banks and mines, had been taxed effectively at the same rate as the garment manufacturing industry. Therefore, I am asking that the Government take seriously the need for a continuation of the garment industry in Canada and not accept this myth that it is somehow too weak to be worth defending.
In fact, what the garment industry leaders have said, both the employers and the unions, is that they are not asking for financial hand-outs. They are asking to have an assured share, not the whole Canadian market, of the Canadian market so that they will know that they have some hope of recovering their investment as they continue modernizing the industry.
The world market is undoubtedly changing, and there are many proposals being made in Canada to respond to those changes. A country like Thailand has just in the last couple of years entered into the world market for garment manufacturing, and some of its product in the last couple of years have come to Canada, only 2 or 3 per cent. They are not satisfied. They hope to boost that to 10 per cent. But it is one of the countries in which wages are a tenth or less of the wages in Canada, in which young women are brought from the countryside-they are a country of 50 million people, twice the size of Canada in population-and housed in dormitories, in not very free conditions. It is a country in which government and employers have an agreement, a de facto understanding with each other, for getting rid of unions by physically eliminating union leaders. It is a country in which there is some amount of the use of child labour, or what would in our country be classified by age as the labour of children.
May 27, 1988

It is not reasonable to allow those practices which we have outlawed in Canada, in Britain, in western Europe, generations ago, to undermine the employment opportunity or the working conditions and wages of the working men and women of Canada. Certainly it would be unreasonable to decide that Canada should return to child labour simply because a country like Thailand makes use of it.
Another country which has already made inroads into the Canadian market is Mexico and the Maquiladora strip. Two years ago this month, Adidas announced its closing of a factory of 200 employees in Toronto. When I phoned the manager, I asked the reason for it. He said: "Well, our sales are down". When I inquired more widely, I found that sales from that factory had been allowed to decline because they had opened a factory in Mexico where the wages are about one-tenth of what they are in Canada.
Again it is not reasonable, it is not patriotic, it is not socially responsible to allow workers of Canada to be thrown out of work because we are taking advantage of a situation in Mexico or Thailand or whatever in which the workers are economically pressured to work for wages like 50 cents an hour.
What I am asking for is consideration of this Bill by the committee for two purposes. One, immediately to control the extent of injury to the Canadian garment or apparel manufacturing industry. It would not take away the rights of the present importers. It would simply stop the increase of importation by people who are not also manufacturers of clothing in Canada. In other words, it would enable the clothing manufacturers who still survive in Canada to continue their production, to invest further in modernization which has certainly been continuing in the past few years on Spadina, and to maintain a garment manufacturing industry in Canada.
Second, this is a proposal that moves in the direction of an orderly sharing of the world market. Instead of simple dog-eat-dog, this is an attempt to suggest that as new technologies develop, as new producers come on the market, and as new markets come into sight, there should be the development of international arrangements for sharing that market. This is a specific proposal from the employers and the representatives of the workers in one of Canada's large industries, the second largest manufacturing industry in Canada, the largest employer of women in manufacturing. This is their request, that Parliament allow them to come to our committee and work with us on the details of this Bill. I would ask Hon. Members to vote in favour of it today.


John Horton McDermid: Madam Speaker, I have been sitting here for 20 minutes, and I am confused. I have listened to the Hon. Member from the New Democratic Party introduce his Bill which is before the House for second reading, Bill C-243, to amend the Export and Import Permits Act. He described its purpose as the encouragement of investment by Canadians and non-Canadians in domestic industries by setting limits on imported apparel. According to the Hon. Member, that
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measure would contribute to economic growth and increased employment in this country. Then, for 10 minutes, he knocked all these Third World countries, their employment record and methods of hiring and firing, their assassination of union leaders, and everything else.
This is where the confusion comes in. Everyone knows that the NDPers have to stick by their policy manual. They are committed to it. In their 1986 policy manual, Resolutions Reference, Resolution B.2.4 indicates that they would:
Take the following measures to facilitate importation of manufactures from
less developed countries:
(A)	Liberalize the generalized system of preferences;
(B)	Ease and eliminate the recent clothing import quotas;
(C)	Introduce no new import restrictions beyond the existing tariff levels."
That is Resolution B.2.4 in their 1986 policy manual, Resolutions Reference. They are also still committed to Resolution A. 1.11 which says the opposite. It says:
"The NDP will pursue-the immediate protection of jobs in the industry
through import restrictions."
You cannot have it both ways.


Claudy Mailly: They can. They always do.


John Horton McDermid: They try. They always try. The NDP do this all the time. When they are speaking to consumers or those with an interest in Third World countries, they say "Our policy as passed at the convention is to increase the flow of textiles and clothing from Third World countries to Canada. We have to help those Third World countries". Then, when they are speaking to manufacturers and workers, they say: "We will erect barriers to imports".


Lorne Edmund Nystrom: Point of order, Madam Speaker. I know the Parliamentary Secretary is a very able debator, and I wonder if he can tell the House from what he is quoting. There was no NDP convention in 1986. Is this one of the provincial sections of the Party? We would like to be enlightened on what section he is looking at.


The Acting Speaker (Mrs. Champagne):: That is not a point of order. It is a point that could be debated later on.


John Horton McDermid: Boy, they get nervous over there when you start quoting their policy to them. They get very nervous. I can understand why the Hon. Member is up on his feet interfering all the time.
As I was saying, when they speak to industry they say that they will erect barriers against imports from developing countries and that that is their policy. That is why I am confused.
The Hon. Member better talk to his colleagues who put these policies together at the NDP conventions which they have all the time, where they raise their little cards and

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support these things, because the policies are a direct contradiction of each other. Get your act together before you come into this House introducing a Bill to do something about textiles.
I believe the Government's continued commitment to maintaining a viable level of production in these vital industries has been made patently clear on a number of occasions. In the 1986 policy statement for the textile and clothing industries, a government policy statement I might add, the Government announced its plans for a broad trade regime with the primary objective of moderating the pace of clothing import growth to allow orderly adjustment in the Canadian industry.
A number of measures were set out in the statement to achieve this objective. Canada pursued international negotiations in 1986 for an extension to 1991 of the Multi-Fibre Arrangement, the international framework under the General Agreement on Tariffs and Trade which governs trade in the textile and clothing sectors. That is one thing the NDP always forgets. It always thinks Canada can go off and do its own little thing that we are a little island on to ourselves, and that we should never mind the global economy and what is going on around us. In addition, in 1986 and 1987, Canada renegotiated bilateral textile restraint arrangements with some 25 low-cost supplying countries. Those were tough negotiations, but we accomplished it.
To complement Canada's participation in this internationally accepted regime for textile and clothing trade, the Government has taken an innovative approach in introducing other programs to boost the prospects of domestic producers. These programs, while offering major benefits to Canadian clothing industries, will carry with them none of the potential for an international backlash, especially from low-cost countries, as would the Hon. Member's proposed import quotas at roll-back levels. It would cause a major furore throughout the trading world, and it would also conflict with the NDP's policy statement.
One of the programs I am referring to has most recently been the subject of a major announcement by the Minister of Finance (Mr. Wilson), the duty remission package for textile and clothing imports. The solutions offered by duty remission to the problems experienced in the clothing industry, and we do not minimize them, not for one minute, are particularly compelling. They have been under active consideration by this Government from the beginning.
We should remember the July 1984 campaign announcement of the Prime Minister (Mr. Mulroney) in Sherbrooke, Quebec. He outlined the Government's agenda for the textile and apparel industry which would provide both stability through fair trade measures and adjustment in those sectors by promoting and reinforcing their strengths. A key area targeted in the announcement was rationalization of Canadian production through the use of duty remission schemes so that Canadian producers could work with instead of against lowcost foreign producers. They would serve to combine Canadian expertise in fashion, marketing, and financial techniques with foreign input to offer a full range of textile and clothing products to both the domestic market and markets around the world.
The desirability of pursuing duty remission programs to increase competitiveness of Canadian manufacturers was reiterated in the Government's 1986 textile and clothing policy. Based on proposals put forward by the industry, a pilot project for duty remission on shirts was introduced at that time to enable domestic shirt producers to import, duty-free, those product lines which would complement their own output. Thus, they were able to focus more on rationalizing their operations to become more competitive. On March 22 of this year the Government announced an enhanced three part program of tariff relief measures to meet the express needs of the textile and clothing industry.
Let me conclude by saying this. The garment industry in Canada is very good. Our designers are world class. I am wearing a suit today, a Warren K. Cook fashion made in Toronto. I give them a plug. They are a Canadian company and do a great job. They can sell around the world. They make quality garments. Our designers are winning international awards. It is interesting to note that the Americans, in their criticism of the free trade agreement, said that their textile and garment industry will lose out to the Canadian industry. That is what they are saying in the U.S.
We in Canada are good. We are very good. Our garment makers are terrific. They are fabulous. They are superb. Our designers are great. We are going to do extremely well with all the programs we have in place for the garment and textile industry. We are going to be able to compete in the areas where we are good. That is what it is all about.
Unfortunately, I must tell my colleague, the Hon. Member for Spadina (Mr. Heap), that the Government must oppose his Private Member's Bill introduced today. However, we are greatly concerned about the future of clothing producers in Canada and have made what we believe is a very progressive move to develop a more streamlined and competitive approach, which will meet and even exceed the challenge of low-cost imports in a healthy and growing market.


Mr. David Berger (Laurier):: Mr. Speaker, I too would like to make a short intervention on Private Member's Bill C-243, introduced by the Hon. Member for Spadina (Mr. Heap). At the outset, I have trouble with his proposal. As I understand it, he seeks to tie imports of apparel or clothing to 1983 levels. This would apply to importers of clothing and, as I understand his proposal, imports would be frozen at 1983 levels. There would be no way for importers to increase the imports of clothing.
On the other hand, domestic manufacturers would be entitled to additional imports and these additional imports
May 27, 1988

would be tied to increases in domestic production. Therefore, those manufacturers that increase their production in Canada would be able to increase imports by an amount equal to their increased domestic production.
My general feeling is that this is too rigid. This is saying that only manufacturers can import, that those who are in the business of selling goods, those in the retail trade for the sake of argument, would not be able to import. I think this could lead to tremendous trafficking in quotas. That probably exists to a certain extent under today's system, but I think it would be seriously aggravated as a result of such a rigid provision.
The Hon. Member said that the Bill was also designed to move to an orderly sharing of the world market. I have trouble with that. I think it is well known that many Third World and developing countries have objected to attempts by industrialized countries to shut them out of their markets. The MultiFibre Arrangement is really an attempt by the industrialized countries to limit imports from developing countries.
It is somewhat of an anomaly in the sense that it is called a Multi-Fibre Arrangement because I understand it is imposed by industrialized countries against the will of developing countries which have no choice but to accept it. The Hon. Member talks about an orderly sharing of the world market, and I think there is danger in this proposal of discriminating against developing countries and inhibiting their ability to grow.
These are the kinds of concerns I have with this Bill. On the other hand, I recognize that the Member has raised some legitimate concerns. There are some clothing manufacturers in my constituency. I received a letter from one such manufacturer about a year ago, a manufacturer of sweaters and sporting or active wear. This manufacturer said that as an employer of 175 Quebecers he believes his company and others like his are being adversely affected by the lack of policies of the federal Government toward regulating the import of foreign made garments. He said that significant growth would not occur in his industry unless Canada reduced the indiscriminate quantities of imported goods into Canada.
I suppose that is a legitimate issue, to the extent that there are wide fluctuations and huge increases from year to year in any one category. However, my understanding of the present legislation is that this is not supposed to happen. Perhaps there is a need to enforce better existing legislation rather than pass new legislation.
I acknowledge that the Hon. Member for Spadina stated that another objective of this Bill would be the control of quotas here in Canada. That is a legitimate concern which I have heard expressed in the past. For some reason our present quotas are not controlled by Canadians. They are set by Canadians but, for some reason or another, we seem to have lost control over them. This matter certainly bears attention and study by this House.
Export and Import Permits Act
I thought that the comments of the Parliamentary Secretary on behalf of the Government were somewhat defensive. He ought to be defensive, given the recent decisions of the Government with respect to the duty remission scheme which was rolled back and is a much less substantial scheme than that which was envisioned by the industry and which the industry was led to believe by the Government would be the case. I see that the Member is shaking his head.


John Horton McDermid: It's what they requested.


David Berger: He says that that is what the industry requested, that they got what they requested.


John Horton McDermid: They didn't get what they requested.


David Berger: I have spoken to a number of manufacturers, and I can only go by what I am told by these people whom I regard to be knowledgeable. They live and work in the industry. They make their living by spending long hours every day at it. They tell me that they did not get what they expected, that they did not get what the Government promised over the course of the past two years. They say that the Government backed down on the promises it made to the industry because of the pressure applied on it by Washington.
Through its actions in the textile and clothing industry with respect to the duty remission scheme, the Government has indicated that our policies are not being made here in Canada by the Parliament of Canada according to the needs and best interests of Canadians but are being made in Washington according to the dictates of U.S. industry.
In conclusion, while I have great difficulty with some of the provisions of this Bill, I certainly believe that the subject matter is worthy of examination. If there were some method by which the subject matter of this Bill could be referred to a parliamentary committee, before which we could invite clothing manufacturers and clothing importers to tell us of their concerns first hand, that would be desirable. That is what I, on behalf of my Party, would support.


Iain Francis Angus: Madam Speaker, I want to clear up some confusion that I believe may have inadvertently been left by the Hon. Member for Brampton-Georgetown (Mr. McDermid). He referred to New Democratic Party documents dated 1986, I believe, and pointed to what he felt was a conflicting position within those documents. The reference he used suggests to me that he was really looking at the resolutions that were to be submitted to convention.


John Horton McDermid: No. It was as reaffirmation of a 1977 resolution.


Iain Francis Angus: Again, not having seen the document referred to by the Hon. Member-


John Horton McDermid: It is your policy book.

May 27, 1988
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Iain Francis Angus: Perhaps if the Hon. Member would let me finish explaining the process the NDP goes through. In advance of conventions, riding associations as well as some of the affiliated organizations will pass resolutions and send them to convention. At convention, every delegate will get a book of resolutions that have been proposed by the rank and file of the Party for consideration by convention.
We have a resolutions committee that will sift through the proposed resolutions, look at previous resolutions that had been adopted to determine if they are still relevant, and try to weed out any conflicts. We admit that from time to time there have been conflicts, in terms of the wording, which have only been discovered later on.
That committee reports to convention and indicates an order of priority of the resolutions for debate. That is debated as well, because sometimes people would like their particular issue moved up on the agenda.
Ultimately, some resolutions are debated at convention. We never have enough time to debate every resolution in the resolutions book. Hundreds of resolutions are submitted to our federal and provincial conventions.
The other point is that those resolutions which are not dealt with at convention are automatically referred to our federal council for consideration. For example, at our last convention in Montreal in 1987, a resolution that I had drafted and submitted from my riding association had not been dealt with by the floor. It was later referred to the federal council which, in turn, adopted it in a different form. I simply want people to understand the process.
We have provincial conventions that make decisions which are not necessarily binding on the federal Party or caucus until those policies have been adopted by the convention. Resolution No. 5 adopted by the federal council of NDP in 1983, reads:
The immediate protection of jobs in the industry through import restrictions
to ensure Canadian industry at least its present share of the domestic market
until the removal of such restrictions is warranted by:
(a)	improved productivity and competitiveness of the Canadian economy as a whole; and
(b)	proven adherence of competitor nations to recognized standards of human rights and economic justice as adopted by the I.L.O. in the form of Convention and Recommendations.
That is the operative resolution by which we are governed.
I support my colleague, the Hon. Member for Spadina (Mr. Heap), in his ongoing attempt to assist workers in the apparel industry. I know his interest in their ability to keep their jobs, as well as obtain decent pay, and to have some protection from the kind of competition we are seeing from other countries which are paying in a day what we do not consider legal pay for an hour's work.
The Hon. Member for Spadina has proposed in Bill C-243 that as a manufacturer expands his operation and requires additional materials from offshore he be allowed to do so in
proportion to the amount of sales and manufacturing. I think that makes a lot of sense.
The Liberal spokesperson suggested that there may be some things wrong with the Bill but the general concept of it was worth pursuing. He hoped that there would be a mechanism to allow the substance of this Bill to be sent to a committee for further consideration.
I believe the Parliamentary Secretary also indicated the importance of this industry and of trying to enhance it. We may disagree on the direction we should take, but perhaps there is a willingness to consider transferring the subject matter to a standing committee. Perhaps members on the Government side will want to consider that option.
In conclusion, I support Bill C-243. I wanted to clarify the process of how the NDP develops its resolutions, and I wanted to caution Members not to mix resolutions proposed with resolutions passed.


Barbara Jane (Bobbie) Sparrow: Madam Speaker, the speech by the Hon. Member who just spoke was interesting. I have taken the opportunity to check some of their resolutions, including Resolution B.3.1 of the New Democratic Party, Resolution B.2.2 from the 1977 convention, Resolution B.1.1. from the 1981 convention resolutions, and Resolution B.9.2. from its 1987 convention resolutions. According to those resolutions the NDP supported and is committed to eliminating trade barriers to manufactured imports from the Third World.
I find it most interesting that their latest 1987 convention states that they are committed to eliminating trade barriers to manufactured imports from the Third World.
I wish to take this opportunity to shed a little light on the current situation with regard to the performance of the domestic clothing industry in the face of import competition from low-cost countries. Perhaps an encouraging word on the moderation of the growth of these low-cost imports in recent years would cause the Hon. Member for Spadina (Mr. Heap) to reconsider the necessity of introducing import quotas that cut back levels, as he has sought to do through Bill C-243 to amend the Export and Import Permits Act.
The provisions contained in this Bill would limit the issuance of permits allowing clothing imports to enter Canada to a level imported in 1983, with only domestic producers being allowed to import above that year's level.
The reason behind the suggested amendment to the Export and Import Permits Act to put these quotas into effect is a recognition that measures to protect the apparel industry would benefit Canada by encouraging investment and thus contributing to economic growth and employment opportunities.
However, I wish to demonstrate that the special measures of protection this Government has had in place for several years
May 27, 1988

now are already proving effective in achieving a more stable market in which the domestic clothing industry can compete.
The priorities Canada has established for the textiles and clothing sectors were set out in the Government's textile policy announcement of July 30, 1986. They include a more moderate growth rate of clothing imports which between 1981 and 1985 had averaged 11 per cent each year in a market that grew by only 2 per cent annually. As a result of the growth of imports during those years, the market share held by Canadian clothing manufacturers fell from 69 per cent to 57 per cent. So we acted; the Government introduced its policy in July, 1986.
In addition, the Government adopted a stance of more rigorous application of Canada's rights under the international Multi-Fiber Arrangement and other international obligations, to ensure that the objective of reduced import growth was not derailed by surges in imports or by circumvention of controls through improper entry or misdeclaration of imports.
At the time that Canada announced its policy for the textiles and clothing sectors in July, 1986 it had 25 bilateral restraint arrangements in place, 22 of which were due to expire at the end of 1986. Consequently, negotiations were entered into with these sources to conclude arrangements for the 1987-1991 period. The negotiations were undertaken with a view to reducing the over-all import growth rate afforded in all the arrangements. However, it was recognized that the treatment given to less developed suppliers should be more favourable than that provided for in the agreements with major suppliers such as Korea, Hong Kong, and Taiwan, which together accounted for over 50 per cent of all imports from low-cost sources.
The negotiations were concluded in the spring of 1987, with new bilateral arrangements extending four years or five years in most cases. The over-all aggregate growth rate over the five years was frozen for the major suppliers. For the others, overall annual import growth is in the 5 per cent to 6 per cent range. Accordingly, given the prominence of the major suppliers, the aggregate growth rate for all agreements is more in line with the recent historical growth of the Canadian market.
The "Report on Textiles and Clothing-1987" published by the Textile and Clothing Board provides an account of the performance of the industries in 1986, as well as an analysis of Canada's bilateral textile restraint arrangements negotiated within the Multi-Fibre Arrangement framework. The board has concluded:
1986 turned out to be a strong year for the Canadian textile and clothing industries. All indicators of activity were up: output, employment, capacity utilization, investments and profits, and textile clothing retailers had a prosperous year, the chain stores in particular.
There was no indication of a slow down in the textile and clothing industries during the first months of 1987. All indicators were up with imports of clothing alone lagging at a growth rate of less than 2 per cent...
Export and Import Permits Act
In its appraisal of the Canadian bilateral restraint arrangements-the board concluded that, in general, more restrictive restraint arrangements have been negotiated with the 25 major exporting countries covering the period from January 1, 1987, to December 3, 1991. Such arrangements should serve to maintain a strong environment for the Canadian textile and clothing industries.
Although the new bilateral agreements have been in effect for only a little more than one year, they have already played a convincing role in moderating import growth. The reduction in maximum annual growth allowed under the 1987-1991 agreements is reflected in a much decelerated increase in actual 1987 imports compared with previous year over year growth. The level of clothing imports from all sources into Canada on a volume basis in 1987 was 277 million units, representing a rise of only 4 per cent over the 1986 level.
This trend has continued in the first three months of this year, with the January to March 1988 clothing import level showing an increase of only 4.6 per cent over the same period in 1987.
These percentages speak for themselves when it comes to assessing the stability of the trading environment within which the domestic clothing industry must compete. They also show that the current Government's policy objective of moderating import growth, as enunciated in the July 1986 policy statement, is being met. Therefore, I question the need for Draconian measures such as the import quotas proposed in Bill C-243.
While I do not pretend that clothing imports no longer present certain difficulties to Canadian producers, the introduction of excessive measures of protection seems unnecessary for a sector in which all indicators point to renewed vigour. I cannot support this proposal. I cannot say that it makes any sense.


Mr. Bruce Halliday (Oxford):: Madam Speaker, after listening to the two excellent presentations by my colleagues, the Hon. Member for Brampton-Georgetown (Mr. McDer-mid) and the Hon. Member for Calgary South (Mrs. Sparrow), I feel little more needs to be said to explain the serious deficiencies and inadequacies of the Bill proposed by the Hon. Member for Spadina (Mr. Heap).
What I think is noteworthy this afternoon is the fact that the New Democratic Party has once again shown its inconsistencies. With his usual sharpness, my colleague, the Parliamentary Secretary, identified the shortcomings in the Bill as compared with the New Democratic policies. I have noted that during the last 15 minutes or so members of the NDP in the House are having a little get-together to see what the problem is with respect to the Bill. There are obvious inconsistencies and they are shown up by those Members huddling together this afternoon to try to resolve it.
Having said that, let me say that I could talk at some length about why the Bill is not necessary because of the present policies in existence and the Acts we now have to regulate the industry. Let me just take advantage of the last minute by summarizing what is in existence now in Canada and why we

May 27, 1988
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do not need Bill C-243, which was proposed by the Hon. Member for Spadina.
At the present time almost all imports of apparel from low-cost sources are already subject to import controls and the Government is taking prompt action where new sources of disruptive imports emerge. The proposals in Bill C-243 are not in keeping with the current policy nor with the spirit of the provisions of the Export and Import Permits Act. The introduction of a fixed quota in the Act would introduce an unnecessary rigidity in the market-place, and there is no evidence that it would contribute to any more investment or permanent employment than is now the case.
Given the potential negative impact of a roll back of supply and the international repercussions which might ensue from Canada contravening its international agreements and obligations, the Bill is unwarranted and unnecessary.


The Acting Speaker (Mrs. Champagne):: The time provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 42(1), the order is dropped from the Order Paper.
[ Translation]
It being 3 o'clock, this House stands adjourn until Monday next at 11 a.m., pursuant to Standing Order 3(1).


[Stage Direction]
The House adjourned at 3 p.m.
[Stage Direction]

Monday, May 30, 1988
[Stage Direction]
Prayers