1988-06-03

Hon. Barbara McDougall (Minister of Employment and Immigration) moved: the second reading of, and concurrence in, amendments made by the Senate to Bill C-55, an Act to amend the Immigration Act, 1976 and to amend other Acts in consequence thereof.
She said: Mr. Speaker, in responding to the message of the Senate with respect to Bill C-55,1 want to stress the degree of scrutiny to which this Bill and Bill C-84 have been subjected. These two vital Bills, which I consider a complementary package, have been considered from every possible angle by parliamentarians, non-governmental organizations, legal experts, the media and many others. As a Government, we have encouraged the scrutiny and appreciate the efforts and sincere concerns of those who have contributed to the examination of these Bills. The process has been an example of how representatives of all Parties can contribute to the shaping of constructive and urgently needed reform. Make no mistake, Mr. Speaker, Bill C-55 is urgently needed.
I have been aware of those who have expressed concerns about certain aspects of Bill C-84, and I will address those concerns shortly in the Government's response to the Senate's message on that Bill. The time has now come for rapid passage of these measures. Can we continue to debate the same issues over and over again knowing that the situation will only get worse if no action is taken?

We believe the amendments I am tabling reflect Canada's concern for the protection of the genuine refugee, ensure more consultation with knowledgeable groups, and provide greater safeguards without in any way diluting the ability of this bill to help restore order and justice to our system.
A more efficient refugee determination system, with greater emphasis on fairness and due process, can only serve to help
those in genuine need of our protection and those who play by the rules.

It follows that these are the people who will suffer if we further delay the passage of legislation to restore integrity to our system. We want to be able to deal with those who really need our protection as quickly and humanely as possible. The Government believes that Bill C-55, in concert with the control initiatives of Bill C-84, can achieve the stable, fair and efficient system refugees and Canadians clearly deserve. We meet all our international obligations. Our system is linked to the recognition in Canadian law of the Geneva Convention definition of a refugee. Further, in Canada we offer a solid, practical role to the United Nations High Commissioner for Refugees in helping us resolve refugee issues.
I want to also say a word about the many thousands of Canadians who volunteer their efforts to help refugees and who are working for the highest ideals and in the best Canadian tradition.
[ Translation]
It was with the complementary nature of these Bills in mind, that many amendments were considered and approved by the Government for Bill C-55. It is our intention to soon introduce amendments to C-84.
The twin objectives of ensuring fairness in the system and curbing abuse were the raison d'etre of C-55 and 84 and they remain the bottom line of this important legislation.
I will be detailing the C-55 amendments in their entirety shortly, Mr. Speaker. But I would like to mention briefly some of the more crucial changes that are under consideration by the House.

To address concerns about the status of safe third countries we are recommending the establishment of a special consultative committee. This consultative body will include nongovernmental representatives with experience in refugee matters. It will advise and update the Minister concerning the establishment of the safe third country lists, and, on a regular basis, about any changes internationally that could affect safe return to a third country. We believe this is an important safeguard against possible error.
However, we will review and take into account the human rights record of countries under consideration for inclusion on

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the safe third country list. In addition, this provision will not be used to put people in orbit between countries, as we want assurances that the people we send to third countries will be accepted there or will have access to that country's refugee determination system.
Another area of concern was the review process as it applied to the exclusion of individuals from the determination process for security or other reasons. The Minister must now personally make the final decision on this exclusion of possible security risks.
As well, execution of the removal order has been extended from 24 to 72 hours in order to permit those being removed to retain and instruct counsel who may file for a leave application to seek judicial review. But filing an application for leave will not further stay the removal order.
We want to do everything we can to ensure fairness and equity in the legislation. We are bending over backwards to ensure no one who makes a refugee claim in Canada is ever removed to face death or torture. Where the refugee division rejects a refugee claim, the authority of the Minister and her delegates to act on humanitarian or compassionate grounds continue during the time during which any applications for leave to appeal a decision is being made. This authority will be exercised in every case.
The Government believes that the deterrent measures in Bill C-84 provide ample power to discourage the increasing abuse of our refugee determination system. These are necessary measures that will maintain the integrity of our immigration program. They will also send a message to the Canadian public and, beyond that, the Government is committed to restoring order.
[ Translation]
Mr. Speaker, the net result of these measures will be a refugee determination system better able to help those truly in need and to handle the unprecedented global pressures we are facing.
Our commitment to real refugees is strengthened by removing the opportunities for abuse by those who would exploit our system.

Over the past two years the Government has tried every administrative means at its disposal to maintain order within the existing legislative context. In May, 1986, we set a base system to fast track claims. This was followed by the control measures of February, 1987, to reduce the growth and abuse of claims, and by the imposition of visas on 10 countries, those which were the source of the most blatant abuse.
In the absence of the long-term solutions we are considering today, these measures were necessary. But it is only through the implementation of Bill C-84 and Bill C-55 that we will bring about meaningful change in our determination system such as we have seen in other areas of our immigration
program. This Government's commitment to genuine refugees is matched by an equal concern for the immigration program as a whole. We will not trade off refugee protection for a sound immigration process. Through extensive consultation we have revitalized our immigration program and given new direction to the crucial question of immigration levels, including refugee levels.
In 1984 landings were at historic lows. We set about to restore the program and the results have been impressive-an increase from fewer than 85,000 landings in 1984 to 150,000 in 1987.
Growth has been evident in all immigration categories. This holds true for the humanitarian stream that includes refugees, the economic stream, and the family-class stream which forms the foundation of our immigration policy. Just last week I announced new regulations expanding immigration opportunities for members of the family and assisted relative classes.
To complement these measures we have also begun to streamline immigration procedures, something long overdue. The more efficient processing that will result from these measures means better service not only for potential immigrants but for Canadians who want to bring close family members to Canada.

Mr. Speaker, many people both here and abroad are recognizing and benefiting from this new sense of direction and purpose. And I believe that all of us in this House, after months of debate, consideration and compromise, now have a responsibility to give refugee determination a similar sense of direction.
It is time we sent a message to Canadians, to immigrants, to refugees-and to those who would abuse our system-that fairness and efficiency will now define our determination process, from this day forth. This is the way to preserve our humanitarian traditions of helping those in need.

Certainly, this Bill before Parliament represents one of the most enlightened attempts anywhere in the world to create a fair and efficient refugee process that will protect the genuine refugee. Many countries are simply washing their hands of the responsibility to distinguish between the economic migrant and the legitimate refugee. In fact, some nations have moved to exclude all potential refugee claimants, false and genuine alike, before they even arrive. Border police are making executive decisions to deny entry of transportation vehicles.
The processes in these countries now have no place for review panels and lawyers. There are no representations from the United Nations High Commission for Refugees, and no safeguards to prevent genuine refugees from being shuttled from country to country. We will not have that in Canada. It is not and never should be the Canadian way, or this Government's way.
June 3, 1988

Bill C-55 can and will make the distinction between those in need and those abusing the system. Bill C-84 can back it up with deterrent measures that mean something and are fair. Can there be any doubt that our attempts to rebuild a credible refugee determination program rests with the passage of this Bill and Bill C-84, legislation that is founded in our Charter of Rights and which meets our Convention obligations? Until this legislation is in place very little can be done to reduce the vulnerability of the refugee claims process. By September there will be more than 60,000 claims in the backlog. As we have seen in the last week or so there is a very real possibility of ships arriving again this summer.
EJow long are we as representatives of the Canadian people going to live with such an outdated system? After much discussion we now have before us legislation that can restore confidence in our system at home and abroad. It is legislation that gives all of us the chance to set a new course for refugee determination in Canada. Clearly, the time to act is now, to act quickly and in a non-partisan way to pass these Bills into law. We owe it to Canadians and to refugees who need our protection.
We occupy a unique and privileged place in the world. Canadians have always been cognizant of the political stability and of the economic stability and development that we enjoy. We have met and will continue to meet our international obligations. We shall do our part in assisting the oppressed, the tortured, and the persecuted, of whom there are far too many on this planet. We shall not shirk from our responsibilities, and we shall offer protection to those who are the subject of inhumanity.
Therefore, I move:
That a message be sent to the Senate to acquaint Their Honours that this House agrees with amendments 6(b) and 12(c) made by the Senate to Bill C-55, an Act to amend the Immigration Act, 1976, and to amend other Acts in consequence thereof, but disagrees with amendments 1(a), 2, 5, 6(a), 7, 8, 9(a), (b), and (c), 10, and 12(a) and (b), because this House believes they contradict the principles of the Bill for the following reasons.
Amendment 1(a) would imply that the right to counsel of choice would no longer be subject to the requirement that the adjudicator assign counsel at the expense of the Minister where counsel of choice is not reasonably available; arguments over this erroneous implication could be used to delay the refugee determination process.
Amendment 2 would result in the recommencement of every hearing where the claimant indicates a fear of return only after substantive evidence has been heard, providing an opportunity for abuse by those who lack a credible basis for a claim or who would seek to delay or avoid removal by frustrating the "safe" third country mechanism.
Amendment 5 would introduce subjective elements which cannot be easily proven or rejected, thus opening a major loophole in the "safe" third country mechanism.
Amendment 6(a) arises out of Senate amendment 9(a), but is not consistent with the House amendment to Senate amendment 9(a), as set out below.
Amendment 7 would impair the effective elaboration of the "safe" third country list without improving the quality of the protection available to the claimant.
Immigration Act, 1976
Amendment 8 would extend the scope and nature of refugee division hearings, significantly increasing the workload of the division and thereby delaying decision-making for all claimants.
Amendments 9(b) and (c) arise out of Senate amendment 9(a), but are not consistent with House amendment to Senate amendment 9(a), as set out below.
Amendment 10 would change a fundamental principle that there be one high quality hearing on the merits of the claim by competent decision-makers, which hearing represents a proper balance between fairness and efficiency.
Amendment 12(a) would frustrate the selection of the best possible candidates, including present Members, for each division of the new Board.
Amendment 12(b) is consequential on amendment 12(a), which is not acceptable, and is therefore inappropriate.
And, that this House agrees with the principle set out in amendments 1(b), 3, 4, and 11, but would propose the following amendments:
Amendment 1(b) be amended to read as follows:
"Strike out line 25, on page 8, and substitute the following:
Ready and able to proceed within a reasonable period of time, unless the" Amendment 3 be amended to read as follows:
"Strike out lines 26 to 31 on page 14, and substitute the following: ant's habitual residence,
(/) that has been prescribed as a country that complies with Article 33 of the Convention either universally or with respect to persons of a specified class of persons of which the claimant is a member, and
(II) whose laws or practices provide that all claimants or claimants of a particular class of persons of which the claimant is a member would be allowed to return to that country, if removed from Canada, or would have the right to have the merits of their claims determined in that country;"
Amendment 4 be amended to read as follows:
"Strike out lines 3 to 15, and on page 15, and substitute the following:
19(1)0).
(II)	a person
(a)	described in paragraph 19(1 )(c), or
(b)	who has been convicted in Canada of an offence under any Act of Parliament for which a term of imprisonment of ten years or more may be imposed
who the Minister has certified constitutes a danger to the public in Canada, or
(III) a person described in paragraph (1)0), (/), or (g), or 27(1 )(c) or (2)(c) and the Minister is of the opinion that it would be contrary to the public interest to have the claim determined under this Act; or"
Amendment 9(a) be amended to read as follows:
"Add, immediately after line 13, on page 43, the following:
(1.1) Subsection (1) does not apply with respect to a decision of a visa officer on an application under section 9, 10, 25 or 79 or to any other matter arising thereunder with respect to an application to a visa officer".
Amendment 11 be amended to read as follows:
"Strike out lines 25 to 27, on page 55, and substitute the following:
tion, the country's policies and practices with respect to Convention refugee claims and the country's record with respect to human rights;"
Thank you, Mr. Speaker.


Mr. Sergio Marchi (York West):: Mr. Speaker, I am pleased to rise on behalf of the Liberal caucus to respond to the Minister's response to the recent Senate report on Bill C-55, a

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Bill that will reform and establish a new refugee determination system for our country.
If one was to quickly analyse the words spoken by the Minister of Employment and Immigration (Mrs. McDougall) and the documents accompanying her remarks that she will no doubt utilize at her press conference later, I think the Minister is involving herself in a bit of legislative magic. To a certain degree it is a game of smoke and mirrors, and an attempt to parade for the Canadian public, and obviously the media, a number of the more minor amendments that she had agreed with in the Senate in terms of tinkering with words here and there, clarifying a number of phrases, and attempting to pass these off as major amendments to the Bill. Through that, she is attempting to convince Canadians that, under her leadership, Bill C-55 is indeed a very different piece of legislation from that of her predecessors, and there were many.
I would submit, with all due respect for the Minister and the House, that essentially she is peddling the same old baggage that was brought and carried by her predecessors. Major principles in Bill C-55 were unanimously objected to by groups and witnesses across the country, by legal experts who told the Government time and again that these measures will encourage every lawyer worth his or her salt to challenge them in the courts under the provisions of the Charter as soon as they become law, and that this ran contrary to the report some years ago of the Standing Committee on Labour, Employment and Immigration that enjoyed support from all three political parties and the members thereof. Yet the Minister is attempting to say to those various parties and interest groups that we are looking at a different piece of legislation, a piece of legislation that has corrected its flaws, that has protected itself from possible charter challenges which, if they are successful, will paralyse this policy and this program, and then the haemorrhaging of public confidence will begin again. She is trying to pass this off as a very different Bill, but it is no different from what was introduced and debated at second reading, from what was debated in committee, from what was debated at third reading, and from what was studied by the committee in the other place.
There have been numerous objections to the way in which Bill C-55 establishes the refugee determination system in this country. The first problem dealt with the question of prescreening. The Government was to establish a new refugee board that would offer claimants an opportunity to give their side of the story and provide proof and credible evidence that would substantiate their refugee claim. That exists, and the refugee board will be in place to offer a legitimate opportunity to those claimants to come forward.
However, the Government has built a very high wall around that refugee board and called it the pre-screening stage. This stage will involve a refugee board member and an immigration adjudicator who will essentially try to stop and return as many individuals from where they came, without allowing them to
have access to the new refugee board, whose purpose was to listen and judge the cases it received.
The pre-screening stage is a significant barrier that will impede full accessibility to the new refugee board which the Government is promoting throughout the country. Those two officers will have no discretion to make decisions because that pre-screening stage will be rooted in the whole safe country concept.
Those two officers will essentially ask refugee claimants for only part of the story. They will only want to hear something of the refugee claim so that they can make a determination as to whether that claimant can legitimately proceed to the next step, the refugee board.
The Government has been complaining that it wants to minimize the bureaucracy, red tape and processing time in the system. However, it is actually adding to that bureaucracy when it has two pre-screening officers conduct a mini hearing of its own before a possible real hearing before the refugee board.
The more important dilemma for the refugee at that stage is that the claimant will be asked to only give part of the story. If you are a legitimate refugee who is escaping persecution, torture or some other form of intimidation, you will want to provide your whole story to the refugee board. Where do you stop when trying to convince the officers to allow you to go to the next stage and be accepted by the refugee board? The prescreening stage is a clear attempt to minimize the number of people who would be eligible to come before the new refugee board.
It would be like a hospital trying to maximize its efficiency by minimizing the number of patients coming into the hospital. It does not matter whether the patients are ill or in need of emergency health care, the hospital is trying to minimize the number of patients to maximize efficiency. Obviously that would be insane because hospitals exist to care for those who need health care, regardless of the number or the services offered by the hospital.
Similarly, if the Government is to establish a refugee board, let the refugee board take those claimants, adjudicate those hearings and render a decision. The Government is taking one step forward and three steps back. It is looking for acclaim, applause and accolades for introducing a new refugee board while Canadians may not be aware of this pre-screening stage that forms a huge barrier to the refugee board.
The second principle still contained in the legislation is the safe third country concept. Again, the Government is trying to wash its hands of the claims of these refugees, and wash its hands of the responsibility that this country has upheld for many years and for which it has earned us a proud record and tradition throughout the world as a leader in trying to galvanize an international solution to an international problem.
June 3, 1988

Canada won the Nansen Medal for a good reason. It is because of our long years of work and toil. Those reforms and those achievements were not made easily. They were the result of commitment, integrity, of compassion and long struggles to try to mould a progressive stance on an emotional issue that is causing increasing human misery throughout the globe.
Just as with the pre-screening stage, the Government's principle of a safe third country is another attempt to minimize the number of people coming into the system. According to this principle, those coming from a country that the Government deems to be safe will be returned there. Yet the Government has made very little effort to define what is a safe third country.
It would also have Cabinet make that decision. The Cabinet must make major decisions daily dealing with domestic policies and challenges. Now it will have to try to determine a list of safe third countries. How will the Cabinet establish that list? What will be the issues to determine what country is on the list and what country is left off?
We had an exceptional example of the fallacy of the safe third country concept being in the hands of Cabinet. The three member panel of the refugee advisory committee unanimously endorsed the fact that a refugee claimant, Santokh Singh, was a refugee. He had security clearance from both the RCMP and CSIS. It was made public a few weeks ago that the Secretary of State for External Affairs (Mr. Clark), out of the blue, wrote two confidential letters to the previous Minister of Employment and Immigration suggesting that this individual should not receive a refugee claim as recommended unanimously by the refugee advisory committee. The former Minister suddenly established a new committee and reversed the decision.
As of today we are still trying to find out the legitimate causes that would substantiate the intervention of the Secretary of State for External Affairs. That is a classic example of what happens when a Minister who is critically interested in the case can interfere in the procedures of what we are told is an impartial institution.
One would think that part of the reasons for the actions of the Secretary of State for External Affairs, as he said in the letters, was the fact that India was putting continued pressure on Canadian authorities to have this individual removed. Despite the fact the Indian Affairs Minister from India and the Indian High Commissioner for Canada then denied that they had put pressures or wanted this man returned or wanted him refused refugee status, there is obviously an appearance and a perception that political and diplomatic pressure was brought to bear on our External Affairs Minister to involve himself and intervene on the Government's behalf to the detriment of the individual claimant. That is a test case of how this Conservative Cabinet will probably react when devising the so-called safe country list.
Immigration Act, 1976
What will be the Government's priority? Will it be the individual merits of those coming from so-called countries which the Government wants to describe as safe? Will the Cabinet be concerned more with the political pressures that are brought to bear in the equation, the diplomatic relationships and pressures that we have with other countries? What about our trade with various countries and the political ramifications of putting countries that, while friendly and are allies to Canada, may be erring seriously in the refugee program?
The previous Ministers of Immigration never really answered these questions. They never really answered the question, when posed to them by myself or other groups in the House or in committee, that if the United States of America because of its political policies and stance in Central America discriminates against Central American refugees and deports them, would that mean a Central American refugee coming to our system and being asked by our Government where he came from-the answer being the United States-that the Canadian Government would decide the United States is not a safe country?
What political pressures would be brought to bear on the Conservative administration that boasts about its special relationships with Uncle Ronnie in the United States? What would be the consequences of leaving the United States of America off a so-called safe country list? I do not believe that this administration would leave the United States off a safe country list. Yet the question must be asked: "Is the United States a safe country vis-a-vis refugees coming from Central America?" If one were to pursue a truthful answer with both Canadians and Americans, Americans who testified at our committee, the answer would be a resounding "no".
Would this Government leave Great Britain off the safe country list? Probably not. Britain is a strong ally and friend. There are bonds of mutual respect and admiration with which I concur, yet when we break that relationship and just look at the refugee policy, Great Britain is indiscriminately deporting Tamil refugees. What happens when a refugee claimant who is a Tamil applies to our refugee board and is asked from which country did he come to which he answers Great Britain? Will Great Britain be left off a safe country list? The answer would be "of course not". What will constitute a safe country, Mr. Speaker?
The suggestion was made to consider what happens if the Government really wants to persist and hold dear to its safe country concept. This concept I think is flawed because the new Minister of Employment and Immigration should contemplate what happens if every other country defines and establishes a safe country list equally as flawed as this one. Every country will have a safe country list and every country will be safe and then every country will be sending refugees back and forth like a ball in a pinball machine. That is the domino effect of the policy. It encourages other countries to do likewise. Other countries up until now have been saying that Canada has shown leadership in this area. I know, as a

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Immigration Act, 1976
Member of Parliament and as a Canadian that Canada, cannot nor should it accept every refugee claim. That literally would be impossible.
I do not accept the premise that Canada should be playing the Pontius Pilate of the world in trying to cleanse its hands of its responsibilities, shoving the problem somewhere else, only to have other countries do the same thing. What happens then to refugees around the world? What happens to those individuals? What happens when those people become desperate? They do not try to get in through the front door, they try to break in through the back door, which is precisely an action we want to stop. In a very contradictory way, this type of legislation, because it is more restrictive and more inflexible, will push and motivate people to go through the back door. It will encourage profiteers of human misery to continue to market their business of illegal human smuggling from different parts of the globe.
An attempt was made in West Germany, with no response from this Government. The same situation occurred in Brazil, Lebanon and Portugal and again there was no response from the Government. Then we hear that the answer to the problem is a safe country concept. It is not because that argument is intellectually and factually dishonest. We in the Opposition said: "Look, the Government has an absolute majority. In the end if it really wants to push something against the better judgment of the House of Commons and Canadians, the Government will probably succeed". At least an attempt was made at the eleventh hour to ask why the Cabinet would not simply make an advisory list of safe countries it deems safe and allow the new refugee board and process to determine in the end which countries are safe for refugee claimants. That request was refused.
At the eleventh hour we also suggested passing the opportunity and authority to create a safe country list with the new refugee board. That request was refused. We also attempted to change wording and suggested that before allowing someone to go on a safe country concept list, to allow for an assurance and a guarantee that that person will be permitted not only to enter but to enter the process of refugee determination. You would not be sending a person into orbit. There would be a guarantee that that so-called safe country would accept an individual and allow him or her to have a refugee determination. But that request was refused.
That safe country provision is onerous for many individuals and groups. I believe it is onerous for those around the globe who have worked tirelessly for progressive refugee legislation. That principle is still in the Bill today despite the Minister trying to parade a Bill that is very different from the one crafted by her predecessors in Cabinet.
There is a third principle, and these are only principles that are basically the major areas of concern. There are other individual concerns, but I am trying to highlight in the time available I have before Question Period some of the more major ones. The third principle is the whole question of an
appeal. There again the Government refused the amendments of the other place, the Senate, to try to make the appeal system stronger and more foolproof. Why did the Senate attempt that?
On the advice of legal experts and organizations across the country, the Senate tried to help the Government recognize that when an individual goes before a refugee board, if he or she is a legitimate refugee, then we have to face the fact that the decision can dictate life or death. If you were a true refugee, Mr. Speaker, and you were fleeing from potential death, murder, torture, imprisonment or intimidation, you would want a full opportunity to defend yourself. If an error is made for some reason at some stage within the process, we need an appeal system as a safety valve that can recognize an error and rectify it so we do not have to pay for that mistake with a human life, that of a legitimate refugee who is sent back to his homeland to face that horrible music.
The current legislation suggests that an appeal be made to the Federal Court of Canada on leave. This means that the appeal is not automatic, it can only be appealed if the Federal Court agrees. Up until now, only 2 per cent of all cases that have been appealed to the Federal Court have been successful. Ninety-eight per cent of the cases are simply refused.
Moreover, the Federal Court is the wrong body to deal with refugee matters. Legal experts have told us that that is not the proper, knowledgeable body to judge such an appeal. As well, the Federal Court will only deal with points of law. It will not deal with points of fact or with evidence of the refugee claim. The Federal Court will only ask if the process was correct, fair and followed the proper course.
The Federal Court will not entertain points of fact, points of evidence or new evidence that the refugee or his or her lawyer would want to introduce in order to demonstrate an error. In effect, we have a very weak appeal system that will attempt to correct possible errors. This would not matter so much if the decisions involved did not have life or death consequences, but these kinds of decisions do.
Therefore, an attempt was made to convince the Government that the whole system, because it is predicated on human error, is only as strong as the appeal system. If the appeal system is terribly weak, which it is, and does not provide an opportunity to hear points of fact and new evidence and can only be used on leave, then it really casts a shadow over the integrity of the entire process.
That argument was made to the Government. It was not made in an attempt to delay the process. Who wants to delay the process? This Party does not want to delay the process. I am sure Members of the New Democratic Party do not, and no government Member wants the process to be delayed. Members from all sides would agree, I think, on the principle that when dealing with life or death decisions, we should ensure that we err on the side of caution rather than later on
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having to be sorry, having to say that if we had a stronger appeal system, such a thing might not have happened to such a person. Those things have already happened, and this has been documented, because of the failure of the Federal Court procedure's attempts to deal honestly and fairly with refugee claims.
The pre-screening provisions in Bill C-55 started a debate in Canada, and those provisions are still there. The safe third country concept which triggered a national debate is still there. The problems involved in a weak appeal system, which again triggered a national debate, are still there. Therefore, I must ask myself what this Minister has done to prove that this piece of legislation is now a compromise between the Senate and the House of Commons and that refugee groups will now be pleased with it. That is not true.
There have been some changes, I am not denying that, but I challenge the Minister to show that she has changed the clauses that were the major points of dispute. I challenge the Minister to find out if these minor changes meet with the major objections voiced by refugee groups. I challenge the Minister to return to the legal experts who came before the committee and to determine from them if they still feel that this piece of legislation violates our Constitution and our Charter of Rights and Freedoms. I challenge the Minister to produce the opinion of the Justice Department which shows that the Government believes it is on sure constitutional ground.
I do not believe that we will get any responses from those challenges. This piece of legislation does not live up to the press release that the Minister will no doubt release in about an hour's time. That is why I said at the very outset of my remarks today that the Minister is trying to encourage this Parliament to accept magic legislation, legislation that does not exist.
The major principles in this piece of legislation have been carried over from the legislation presented by the Minister's predecessor. That is sad, because I, along with other individuals and organizations, had greater expectations from this new Minister, a Minister who had shown in her previous portfolios that she was capable of handling the national interest in an adept way. This Minister comes from a riding in the City of Toronto which is very much concerned with matters of immigration and refugee policy. I had hoped that a new leaf would be turned by this new Minister.
This Minister has shied away from addressing the major objections of the refugee constituency and of the legal constituency. She has not asked herself how to overcome the inflexibility shown by her predecessors. She has not sought cooperation among all groups involved.
I see that you are telling me that my time is up, Mr. Speaker, and I look forward to continuing my remarks following Question Period.


Mr. Nystrom:: Mr. Speaker, I rise on a brief point of order. This morning, we have heard from the Minister and we have heard from the Liberal critic. I simply want to point out that the critic for the New Democratic Party, the Hon. Member for Spadina (Mr. Heap), will be the speaker for our Party, but he is not here this morning because he is attending the annual consultation meeting of the Canadian Council of Refugees in Montreal and is attending a workshop on refugee determination this morning.


Mr. Deputy Speaker:: We will proceed to Statements Pursuant to Standing Order 21.



STATEMENTS PURSUANT TO S. O. 21


Mr. Fernand Jourdenais (La Prairie):: Mr. Speaker, let me ask my colleagues in this House to join me in recognizing the outstanding contribution seniors have made to developing our country. Our parents and friends have built the Canada of today with the sweat of their brow, with their tears, their suffering and their hopes, despite hardship, discomfort and difficulties.
Let us pay them tribute and assure them of our unfailing support in their struggle for a decent, pleasant, rewarding retirement. Let us never give up fighting to preserve the dignity and respect due to older people.
Throughout the coming week, we are to highlight the contribution of senior citizens to Canada. So let us ask our fellow citizens to stop for a moment and reach out a hand to our elders. Thanks to all our senior citizens!



CANADA-UNITED STATES FREE TRADE AGREEMENT-TORONTO SUN REPORT

Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, more and more we find Canadians displeased with the Government's trade deal. There is a report in today's Toronto Sun about the unpopularity of the trade deal and the Minister trying to promote it. Here is what the article says:
Federal Trade Minister John Crosbie was confronted by hostile students at Jarvis Collegiate yesterday as he tried to promote the Canada-U.S. free trade agreement.
And later he told a businessmen's group the $10 million his Government is spending to promote free trade "is a mere nothing.''

June 3, 1988
The students openly challenged the deal and booed as Crosbie encouraged them to read a book promoting free trade.
When he asked for questions, two students stood and chanted "Free Canada, Trade Mulroney."
"Now, that's the kind of reasoned argument you're going to hear from the opponents of free trade," Crosbie shot back.
Students told Crosbie they don't believe statistics showing the deal will create jobs. They also called for an election on the pact.
Those are obviously very enlightened young people.



NATIONAL RESEARCH COUNCIL


Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, I am pleased to report that two National Research Council scientists will be honoured for their achievements in chemistry research at the Third Chemical Congress of North America, the largest scientific meeting ever held in Canada, June 5 to June 10, 1988, in Toronto. Dr. Peter Hackett will receive the Noranda Award, in recognition of his achievements in laser applications in chemistry. Dr. Jim McLaren will receive the WAE McBryde medal in recognition of his contributions to analytical chemistry.
The NRC develops new knowledge through its own research programs and also provides a wide range of services, facilities and technology transfer programs and collaborative research opportunities. I would like to congratulate Dr. Hackett and Dr. McLaren on their achievements and contributions to research and development, and I would like to commend the NRC on its fine work.



AIDS DISEASE-GOVERNMENT FUNDING

Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, one month ago the Prime Minister (Mr. Mulroney), in answer to my question about the delay in AIDS funding, said "We view this as a most important societal problem and one deserving of urgent action and the urgent devotion of national resources." Empty words from an uncaring Prime Minister because four weeks later, despite a desperate appeal from AIDS victims, the Cabinet has still not approved the requested funding.
What kind of a Government is it that cannot make a decision on urgently needed funding for a major epidemic? Not only are there limited operating funds for the federal centre for AIDS, but a promised conference has been refused, projects delayed, public information is inadequate, and funding for community groups is curtailed.
Why does the Cabinet refuse to make a decision on this important matter? Why did the Prime Minister once again break his commitment to Canadians?



PUBLIC SERVICE


Mr. David Daubney (Ottawa West):: Mr. Speaker, today marks an important day which I think many of Canada's public servants will welcome. The President of the Treasury Board (Miss Carney) announced the introduction of selffunded leave for employees of the Public Service. What that means is a new option for the hard-working government employees who serve us across the country. It introduces a new freedom and flexibility in the workplace.
Employees will be able to defer a portion of their regular salary to provide income during a period of what would ordinarily be leave of absence without pay. This initiative will assist the Government, as a responsible employer, in its efforts to encourage more productive, effective, and innovative management of the Public Service. Best of all, it will not cost the taxpayers one extra dime.



APARTHEID


Hon. Andre Ouellet (Papineau):: Mr. Speaker, I rise today to express deep dissatisfaction at the Conservative Government's failure to fulfil its commitment to impose stiff economic sanctions against the Government of South Africa.
We recently learned that CBC Enterprises is selling television programs to the South African homeland of Bophuthatswana, this in spite of the CBC's 1986 ban on program sales to South Africa, and despite repeated so-called strong statements by the Prime Minister (Mr. Mulroney) and the Secretary of State for External Affairs (Mr. Clark). This is a clear case of the right hand not knowing what the left hand is doing.
Ms. Joan Gordon, Director of the Parliamentary Service of the CBC, clearly stated the Government's confusion on the sanctions issue and I would like to quote her directly:
We are, and in fact have sold nature programs to BOP-TV. We know that
"homeland" is a synonym for government control by South Africa. What was
said in the newspaper reports-that's true. We are not aware that we have
been doing anything wrong."
Here we have a clear indication that an incompetent Government has no idea what its official agencies are doing. I call on the Government to clean up its act by ensuring that economic sanctions are applied throughout all areas of
June 3, 1988

Government, and to stop exporting products of CBC Enterprises to South Africa.



IMMIGRATION


Mrs. Pauline Browes (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, any attempt to use an amnesty to clear the backlog of refugee claims must be completely rejected. The solution to the thousands of backlog claims is not a free ride but a better refugee system. We want a system where bogus claims are immediately rejected and where legitimate refugees are given the help they need.
Over 70 per cent of refugee claims made in Canada are groundless. Yet under our current refugee determination system each claim can take years to process. We cannot allow illegitimate refugee claimants to stay in Canada simply because our system is too inefficient to process their claims.
Each claim must be examined on a case-by-case basis. Those that are not genuine refugees must be deported, and those that are must be helped. Fairness to the thousands of people who apply to come to Canada legally every year and to the thousands of refugees who need our help demands nothing less.



NATIONAL ACCESS AWARENESS WEEK


Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, National Access Awareness Week for the Disabled, which is being celebrated in Canada, points out the need for many services for the disabled to ensure that they can participate in society at the same level as the rest of us. Recently federal and provincial Ministers of Tourism formally recognized the need to provide these special services for handicapped travellers. However, words are not enough.
There is one organization which has been trying to provide travel assistance to the handicapped for some time. Freedom In Travelling, a very small organization based in Toronto, has been trying to provide these services on a national basis. With no funding from federal Ministers responsible for tourism or transportation, FIT has provided consulting services, education, and assistance to handicapped travellers. I urge the Government to put its money where its mouth is. FIT and other organizations like it deserve support to get the job done for disabled travellers. We do not need just fine words; we need fine action by the Government.



NATIONAL ENVIRONMENT WEEK


Mr. Barry Turner (Ottawa-Carleton):: Mr. Speaker, National Environment Week is now drawing to a close. Poll after poll has shown that Canadians are very aware of environmental degradation. During Environment Week they had a chance to do something about it. Tens of thousands of Canadians participated in thousands of activities from nature walks to clean car clinics, from bird counts to classroom discussions to streamside clean-ups. The focus has been on participation to ensure our common future.
The Minister of the Environment (Mr. McMillan) is to be commended for his announcement yesterday to ban all nonessential uses of chlorofluorocarbons and halons that destroy the earth's ozone layer. This goes far beyond the 50 per cent ban negotiated by 43 countries at last year's Montreal Conference on the Ozone Layer.
As Chief Seattle of the Dwamish Nation warned, "Whatever befalls the earth befalls the sons of the earth." Every action to protect our environment better is a protection of our own lives.

[DOT] (mo)



ABORIGINAL PEOPLES


Hon. William Rompkey (Grand Falls-White Bay- Labrador):: Mr. Speaker, we recently saw the sad spectacle of 200 RCMP officers descending on a Mohawk community near Montreal and, in a rather ham-handed way, trying to handle the situation in that community. Just about the same time the Government turned down a chance to negotiate land claims with the Inuit of Labrador.
If the Government refuses to consider seriously the rights of native people in this country it cannot be surprised when other means are taken. We have been warned by George Erasmus. What George Erasmus is saying differs very little from what Bishop Tutu is saying in South Africa.
Native people have legitimate rights and legitimate concerns. They have a right to negotiate their demands with the Government of Canada. If the Government of Canada does not respond to the reasonable demands of groups like the Labrador Inuit, let it be warned of the dire consequences to
come.

June 3, 1988



SOCIALISM


Mr. Gabriel Fontaine (Levis):: Mr. Speaker, some good news as we approach the year 2000: John Nesbitt, author of the bestseller Megatrends and a credible, recognized futurologist, predicts that by the end of the year 2000, socialism will be dead, throughout the world. He says that this has already begun in Russia and also in China. We know, Mr. Speaker, that the Conservatives in England buried the socialists long ago. We know that Manitobans told the socialists what they thought of their policies that defy the laws of nature.
Socialism, Mr. Speaker, is passe in Europe and in America; it has failed in Russia and China. There is no question of Canadians voting for an obsolete, moribund system in the next election, Mr. Speaker!



MOSCOW SUMMIT


Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, all Canadians, men and women, will want to congratulate President Reagan and General Secretary Gorbachev for this week's Summit in Moscow, not so much for specific successes as for the feeling that the two countries are learning to live together and beginning to reduce the arms race that threatens the whole world with nuclear destruction.

The fact that the Soviets are beginning to withdraw their miserable intervention in Afghanistan, and that the U.S. Congress has stopped Mr. Reagan from equally unjustifiable intervention in Nicaragua, are also positive signs for world peace.
Last night I had the pleasure to welcome the joint Soviet-Canadian team which pioneered a polar bridge between our two countries by skiing from the U.S.S.R. to Canada via the North Pole. I congratulate these athletes on their success, and I hope that the countries of East and West can develop more and more normal relationships of this kind based on cooperation and mutual benefit as an alternative to the destructive and costly confrontation which has proved such a threat to world peace over the past 40 years.



THE CONSTITUTION


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, it was with disappointment and dismay that the people of the Northwest and Yukon Territories learned yesterday that the Supreme Court had rejected their appeal against the infamous and discriminatory Meech Lake Constitutional Accord. Apparently the Supreme Court, in this instance, is not able to protect the minority against the tyranny of the majority.
This rejection, however, will not dissuade us from pursuing our objective of securing the same political rights as southern Canadians have. The fight will continue with renewed vigour. We refuse to be relegated to the status of second-class Canadians.



IMMIGRATION


Hon. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, I would like to bring to the attention of the House the very tragic and serious plight of the Jake and Maria Penner family of Randolph, Manitoba. Mr. Penner is a Canadian citizen but his wife and child are recent immigrants from Mexico who came to Canada and then discovered, tragically, that their young daughter is suffering from a very unique form of leukemia.
This personal tragedy is now compounded by decisions being taken by the Department of Immigration that would deport this family back to Mexico unless they are able to come up with a $25,000 cash bond by July 11. I know from my own experience as a former Minister of Immigration that it is possible to work out dispensations to override the rules in this case and provide a humanitarian response in such specific cases.
It would seem to me that in this particular instance the House of Commons, and in particular the Minister of Employment and Immigration, should apply the best of the compassionate and humane judgment of this country to allow the Penner family to stay in Canada and their daughter to have the treatment she needs so that personal tragedy is not compounded by the bureaucratic tragedy of sending the family back to Mexico.
June 3, 1988



BANKS AND BANKING


Mr. W. Paul McCrossan (York-Scarborough):: Mr. Speaker, constituent letters continue to arrive outlining incredibly insensitive actions by banks. In one case a bank savings account had only a few dollars in it. The bank commenced charging $1 a month because the balance was below $200. When the account ran out of money the bank unilaterally transferred $10 from the individual's chequing account to her savings account solely to pay the $1 monthly fee. Only after seven months did the customer find out about the $10 grab by the bank because the bank had not notified her of the fee or of the transfer. Abuses like this should be prohibited in the future.



ORAL QUESTION PERIOD


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, in the absence of the Minister of National Health and Welfare I would like to direct my question to the Minister for International Trade.
Will he and his Government endorse the Ontario legislation tabled yesterday which gives preference to the licensing of private Canadian non-profit health clinics in opposition to Articles 1402 and 1403 of the trade deal?


Hon. John C. Crosbie (Minister for International Trade):: Mr. Speaker, it is highly unusual for a federal Government to be asked either to give its blessing or not to give its blessing to any piece of provincial legislation. It is a most peculiar question.
In any event, as far as I can see the Bill in question, which deals with the licensing and funding of private health care facilities, is not affected by the U.S.-Canada Free Trade Agreement. The services chapter of that agreement does not apply to health care facilities. In any event, it does not apply to government health care facilities. The only application that there is to the health care field at all would be in regulating management services for private health care facilities.
In addition to that, of course, the FT A is not yet in effect. The Bill in question does not appear to be inconsistent with the FTA. This legislation is geared toward non-profit organizations which are not covered by the agreement.
I believe that the opposition Parties in Ontario, which have pointed out that this is not in any way in conflict with the FTA or any threat to it, are quite correct in their approach. I am not
Oral Questions
going to be asked to give approval to a piece of provincial legislation. That is the responsibility of the province.


ABORTION CLINICS
Sheila Maureen Copps: Mr. Speaker, the Minister should be aware that the Free Trade Agreement specifically includes a section on free trade and health management, to which he has referred this morning. Thus, the trade agreement is actually paving the way for the establishment in Canada of profit-making American clinics in everything from abortion to eye care.
Does the Minister really want the establishment of private profit-making abortion clinics to be allowed in this country under the trade agreement?


John Carnell Crosbie: Mr. Speaker, this Hon. Member has a habit of standing up in the House and making the silliest and most outrageous statements about what the U.S.-Canada Free Trade Agreement contains. The U.S.-Canada Free Trade Agreement does not apply to the health services of this country and it certainly does not apply to non-profit health care services. It applies only to and deals only with commercial activities. That is all the agreement deals with.
With respect to this proposed provincial legislation, it is not a piece of legislation which is in any way alarming. The Government of Ontario has the right to deal with health care activities within the Province of Ontario.
There is no point in the Hon. Member beating this dead carcass. There is no crisis because of this Bill and there is not going to be any crisis because of this Bill. The Bill, as far as I can see, is not inconsistent with the FTA and the FTA does not apply to non-profit government health services and does not direct that there be any other services. It does not direct anything about how we operate our health care system in this country. The whole health care system will continue under this agreement just as it is today.


PRIVATE HEALTH CLINICS
Sheila Maureen Copps: Mr. Speaker, we are not talking about government health services, we are talking about the establishment of private health clinics in this country which will no longer be able to be specifically run by Canadians. The free trade agreement opens the door to American commercial enterprise coming in in the area of health management, and it has been pointed out very clearly in this particular Act.
I ask the Minister again specifically whether he really thinks that free trade in areas like eye care clinics, abortion clinics and ophthalmology clinics, is really in the best interests of this country? Or does he not recognize that we have the potential in this deal to undo 30 years of work in making a universally

June 3, 1988
Oral Questions
accessible non-profit health care system in this country? That is what is at stake.


John Carnell Crosbie: Mr. Speaker, the Hon. Member is a veritable female Goeb-bels-


Some Hon. Members:: Oh, oh!


Margaret Anne Mitchell: Sexist!


Ms. Dewar:: Sexist!


John Carnell Crosbie: -who is continually going around this country making false statements, misrepresentations about the free trade agreement and the health care system.


Mr. Broadbent:: You just called her a Nazi, fellow!


John Carnell Crosbie: The free trade agreement has nothing at all to do with the health care system or any change in the health care system.


REQUEST THAT MINISTER WITHDRAW STATEMENT
Lloyd Axworthy: Mr. Speaker, I know there are times when the Minister for International Trade gets carried away with his own rhetoric, but before I put my substantive question I want to ask the Minister if he will withdraw that ugly and abusive statement he just made about the Member for Hamilton East.


John Carnell Crosbie: Mr. Speaker, I don't want to upset the Hon. Member. I will say that the Hon. Member for Hamilton East is not a female Goebbels, she is an Hon. Member who continually makes false and misleading statements about the free trade agreement and the national health care system.


Mr. Deputy Speaker:: I am sure the Minister does not mean that the Member for Hamilton East does that deliberately, otherwise the Minister knows full well he would have to withdraw. We would like to proceed with the Member for Winnipeg-Fort Garry.


Sheila Maureen Copps: Apologize!


HEALTH CARE INSTITUTIONS
Lloyd Axworthy: Mr. Speaker, we have at least seen the Minister recognize the error of his first statement. I think he should recognize the error of his second statement as well.


John Carnell Crosbie: Have you got a question?


Lloyd Axworthy: Yes, Mr. Speaker, I do have a question. I want to ask the Minister a very specific question because it concerns a great number of Canadians. In the trade agreement, in Sections 1403 to 1408, it clearly outlines that the agreement covers the management of health services in such things as rehabilitation hospitals, homes for the physically
handicapped, ambulance services, blood banks, laboratories and a whole series of others. There is a whole list of these under the Occupational Services Act. Yet the Minister keeps denying there is any involvement.
With respect to this part of the agreement that specifically mentions these various important institutions, which are private institutions and which are now covered by the agreement, is the Minister now forswearing or denying or retracting or retreating from the position of the Canadian Government when it signed this agreement? In other words, are we to understand that this part of the agreement no longer is valid? And does he intend to communicate that to the American Government?


John Carnell Crosbie: Mr. Speaker, let me repeat the situation. The U.S.-Canada Free Trade Agreement does not govern or relate to government health care services, nor does it relate to non-profit health care facilities. Its only connection to the health system at all would be in regulating management services for private health care service. If a Government or someone wants to offer the possibility of carrying on management services for private health care systems and they want to regulate that, then it should be done in a fair manner. But that is only with nonprofit management of a private health care facility.
The particular piece of legislation introduced by the Province of Ontario yesterday, as far as I can see, is not objectionable in any way with respect to the free trade agreement. Any attempt to allege that it is, is only an attempt to pretend that some province is defying the free trade agreement. The free trade agreement is not in effect yet but this particular legislation does not appear to be inconsistent with it in the least.


THE ECONOMY
John Edward Broadbent: Mr. Speaker, my question is directed to the Minister of State for Finance. Yesterday the Minister described the Government's interest rate policy as being a policy of moderation. Following that statement the chartered banks of Canada made a full half percentage increase in their prime rates. Newspapers from all over Canada that have arrived in Ottawa this morning, whether from Montreal, Toronto or Ottawa, all have, as part of their headline stories, "Highest Interest Rates in Two Years".
Does the Minister stand by the statement he made yesterday that the Government of Canada has a moderate interest rate policy?


Hon. Tom Hockin (Minister of State (Finance)):: Yes, Mr. Speaker, I certainly do stand by that statement. The Hon.
ft
*


June 3, 1988

Member's suggestions yesterday and, by implication, this morning, are to ask this Government to have a very relaxed monetary policy at a time when our economy is growing faster than it has ever grown before in recent memory. We have business investment up and consumer demand up. We have a very strong demand pull inflation.
The Hon. Member wants us to relax our monetary policy. It is a little like being in the woods in a log cabin and you have enough wood to get you through the year. The Hon. Member would pile all the wood on the fire in the first week and burn the cabin down. What we want to do is have a moderate monetary policy that takes us through the whole year and into further economic growth in the years ahead.


EFFECT ON PRAIRIE AND ATLANTIC REGIONS
John Edward Broadbent: Mr. Speaker, it just happens that every Premier in the country disagrees with the Minister. The Consumers Association disagrees. The Manufacturers Association disagrees. You name it, they are all on one side and the Minister is on the other.
Yesterday the Minister used another quaint metaphor of the pipe. He said, in justifying the high interest rate policy, that there is too much heat running through the pipe of the economy. I think Canadians in western Canada and in Atlantic Canada would like to be able to see where this pipe is in their part of the land. Could he tell the people on the Prairies, who have the worst drought in 40 years and who are going to have this policy inflicted on them, where they can find this overheated pipe on the Prairies, or in Atlantic Canada? Where is the economy overheating? And what is the Minister going to do for those regions that still have unacceptably high unemployment levels that he is whacking once again with his high interest rate policy?


Thomas Hockin: Mr. Speaker, I remind my hon. friend again that he quotes the provincial Premiers on this question but he does not quote them very often when it comes to Meech Lake and free trade.


John Edward Broadbent: What do you mean "Meech Lake"?


Thomas Hockin: Yes, but on free trade in particular you do not quote them. So your quotation of them is very selective.
The Hon. Member knows that we have all sorts of regional economic programs in place that are going to address specific regional needs. We have the Western Diversification Fund, the Atlantic Opportunities Agency, the Western Energy Accord, the Atlantic Energy Accord. We have one regional program after another, together with something further about which the Hon. Member needs to be reminded. We have very strong prices for commodities in the regions, be it raw fish, aluminum, copper, or pulp and paper. That, too, has to be moderated and that is in the interests of the regions about which the Hon. Member speaks.
Oral Questions


POSITION OF MINISTER AND OTHERS
John Edward Broadbent: Mr. Speaker, the Minister knows perfectly well the Government did not increase its budget for regional development. For instance, it has not earmarked enough funds for development in the West and the Atlantic provinces. My question is quite straightforward, and I agree with the points raised by the premiers about interest rates. That is why I am quoting the premiers. My question is, why are the premiers wrong, why are consumers wrong, why are agricultural producers wrong, and why would this Minister in this Tory Government be right, while the rest of the world, while the rest of Canada takes an entirely different view?


Thomas Hockin: Mr. Speaker, why would we need the kind of monetary policy the Leader of the New Democratic Party proposes? This policy completely ignores the threat of inflation. It is a policy for the short term, it is a dangerous policy and it is a policy the Government cannot support.


ABORIGINAL PEOPLES
Bill Rompkey: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development, or his Parliamentary Secretary. If they are not here to answer then perhaps the Minister for International Trade would like to answer.
My question concerns the fact that the Government of Canada has recently turned down a Memorandum of Understanding with the Government of Newfoundland that has been in place for a year that would see the start of land claims settlement for the Inuit of Labrador. This comes on the heels of an ugly incident we saw in Montreal in which 200 RCMP officers descended on a Mohawk reserve.
Is it the intention of the Government of Canada to allow the ticking time-bomb of native rights in Canada to deteriorate to ugly situations? Or is the Government prepared to sit down to negotiate with reasonable groups which have legitimate demands and legitimate rights? If that is the case, why will it not sit down to negotiate now the land claims with the Inuit of Labrador?


John Carnell Crosbie: Mr. Speaker, the hon. gentleman was a member of a Government that was in office for quite a long period of time while these same Labrador Inuit were there in Labrador formulating and putting forward their land claims. He might well like to

June 3, 1988
Oral Questions
explain to the Elouse why there was no progress whatsoever while he was there.
The Department of Indian Affairs and the Government are prepared to deal with the claims in Labrador, and to sit down, of course, with the people involved whenever it is reasonable and there are good prospects that some progress can be made in settling these particular claims. However, it has to be coordinated with the Province, as the hon. gentleman knows.
In addition, the Government of Canada is spending very considerable sums of money under agreements in all the territory that is lived in by these particular natives of Labrador. We are going to continue that.
There is a program under way this year to improve and expand the airport facilities along the coast, including, I think it is, Williams Harbour. I am sure the Hon. Member is pleased by that.


Bill Rompkey: Yes, except that there are no Inuit in Williams Harbour.
I want to say on behalf of my Party that we funded land claims research. There was a document entitled: "Our Footsteps are Everywhere" which was funded by the Government of Canada when this Party formed the Government. Our record on land claims is very clear.


Some Hon. Members:: Hear, hear!


REQUEST THAT GOVERNMENT NEGOTIATE SETTLEMENT
Bill Rompkey: Mr. Speaker, what I want to ask is this. Is the Government prepared to go beyond rhetoric? Rhetoric for native people is not enough any more. They want action. They are not prepared to wait forever.
Will the Minister of Indian Affairs go to Labrador, sit down with the Labrador Inuit, listen to what I consider to be reasonable demands, and try to negotiate a land claims settlement now? We do not want airports. We want land claims settled.


John Carnell Crosbie: Mr. Speaker, it is an interesting statement that the hon. gentleman does not want airports for his district-


Bill Rompkey: We have the airports.


John Carnell Crosbie: -or improvements to the airports in his district.
The hon. Gentleman says that rhetoric is of no use, of no concern, and of no value. If that is the case then why is the hon. gentleman getting up in the House with his kind of dramatic rhetoric?


Lloyd Axworthy: It's called Question Period.


John Carnell Crosbie: Does he think that this will achieve anything? I agree with him, specious rhetoric will get no one anywhere.


John Edward Broadbent: You are living proof.


THE ECONOMY
Lorne Edmund Nystrom: Mr. Speaker, I have a question for the Minister of State for Finance. I am sure the Minister is aware that in western Canada what we have now shaping up is the worst drought in 40 or 50 years, the worst natural disaster we have seen for a long, long time.
On one hand we have a drought which is an act of God. On the other hand we have increasing rates which are an act of Conservative callousness. I want to know how the Minister can justify higher interest rates for the farmers of western Canada when they are suffering from a drought like they are suffering from right now?


Thomas Hockin: Mr. Speaker, I am not entirely sure that there is a question in the middle of all that.
Let me say to the Hon. Member that NDP policy toward monetary affairs and inflation would lead to such a burst of inflation in the short term that that would be a disaster far worse than the one of which the Hon. Member speaks. What we are trying to do is to control the process and to moderate inflation.


GOVERNMENT POLICY
Lorne Edmund Nystrom: Mr. Speaker, the Minister said earlier today that the economy is growing at a faster rate than ever before. Yesterday in the House of Commons he said that we are protected by very high commodity prices.
I want to know how he can justify that when western farmers are suffering from low international commodity prices, where the economy is not going very well, where provincial deficits are escalating, and when the inflation rate is actually very low. How can he justify that to western farmers? Are we to expect a continuing policy of callous Conservative high interest rates?


Thomas Hockin: Mr. Speaker, week after week the Government is proposing programs to help the farmers of western Canada, such as programs with respect to stabilization, crop insurance, western grains, as well as the program announced last week. We are very proud of that.
June 3, 1988


TAX REFORM
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is for the Acting Minister of Finance. Now that the Canadian Bar Association and the Canadian Institute of Chartered Accountants have confirmed my criticism of April 20 that the draft legislation on tax reform-300 pages of arcane language, with new measures-is the most complex tax legislation ever devised, will the Minister withdraw it and produce a simplified version that Canadians, including tax professionals, can understand and comply with?


Thomas Hockin: Mr. Speaker, I am glad to have the opportunity to respond to that particular point. I have to tell you, Mr. Speaker, that this House understands that the simplest tax system in the world is a flat tax system which is also the least fair system. In fact, fairness does not always mean total simplicity. Fairness means that distinctions have to be made.
Let me just relate something further to the Hon. Member with regard to this matter. For example, we have fewer rates now in the income tax system. As a result of that people will be able intuitively and in an understandable way when they earn their wages to know what their tax level is. If there are 17 different wage rates and tax rates and so on, one never quite knows where one stands. Fewer tax rates are one of the most important elements of simplicity in tax reform. It is there and it is not acknowledged properly, I believe, in the report of the CICA and the Bar Association.
Also, I have to make this point. We have a number of complicated rules, which is true, for pension adjustments. However, if we take a crude approach to retirement savings and a crude approach to savings for pensions and make it simpler, we become unfair in the process. What we have to do in order to be fair is to reflect the different conditions of different people. That is what we have done through tax reform.


PENALTY FOR LATE PAYMENT OF TAX INSTALMENTS
Aideen Nicholson: Mr. Speaker, the Minister talks about fairness as being somehow opposed to simplicity. I should have thought that it was possible to do both.
Among the new proposals which were not disclosed in earlier tax reform hearings is one to impose an extra 50 per cent penalty on late instalments. As you know, Mr. Speaker, the people who pay their tax by instalments are mostly retired people or people who are out of the labour force.
Can the Minister explain, in view of his concern about fairness, why his Government decided on such harsh treatment for retired taxpayers or unemployed taxpayers?


Thomas Hockin: Mr. Speaker, I am not entirely sure I can let the Hon. Member's
Oral Questions
comment about fairness and simplicity being the same thing rest the way in which she put it. I ask her this. When savings are made for retirement, for example, and people are in different situations, would the Hon. Member give them all the same tax treatment, which would be simpler, but which would not be more fair?
The point I am trying to make to the Hon. Member is that if she wants to be fair we have to make some distinctions. That is what we have done through tax reform.


CANADA-UNITED STATES FREE TRADE AGREEMENT-ONTARIO INDEPENDENT HEALTH FACILITIES BILL
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I would like to go back to the Minister for International Trade on Ontario's Independent Health Facilities Bill. This Bill states in Clause 6(3) that in spite of any international treaty, licensing which takes place under this Bill for these private- not government-health facilities will give preference to nonprofit Canadian controlled facilities. It is a direct contradiction, not to the section of the accord that the Minister noted, but to chapter 16 on investment which clearly indicates that national treatment is to be applied to any new establishment of an enterprise in this country by Americans or Canadians.
In view of these facts, why does the Minister think that he is not on a direct collision course with the Province of Ontario over this Bill?


John Carnell Crosbie: Mr. Speaker, I believe that we are not on a direct collision course with the Province of Ontario with respect to this Bill, for the exact same reasons that Mr. Robert Rae, Leader of the New Democratic Opposition Party in the Ontario Legislature, believes that we are not on any collision course. The Ontario legislation does not conflict with the Canada-U.S. Free Trade Agreement. The Canada-U.S. Free Trade Agreement does not apply to the health services field. It does not apply to nonprofit organizations. It applies only to profit-making or commercial operations between the two countries.
As far as I can see, as far as we can see, and from what we know about it, this legislation does not trouble us. It is not in conflict with the Canada-U.S. Free Trade Agreement. It deals with the licensing and funding of private health care facilities, and gives a preference to proposals from Canadian non-profit organizations. If they wish to do that, they can do it. That is the position.
I agree with Robert Rae that there is no conflict. There is not any great conflict between this piece of Ontario legislation that has been introduced and the Canada-U.S. Free Trade

June 3, 1988
Oral Questions
Agreement which to date is not in effect, but we hope with the co-operation of Members opposite that it will be in effect by January 1, 1989.


NEW BUSINESS ENTERPRISES
Steven W. Langdon: Mr. Speaker, this Bill makes quite clear that it applies specifically to those parts of the health care services which are provided outside the public system of health care provision in the Province of Ontario. Therefore, what is in the section on investment obviously has to apply to it.
I ask the Minister the following question. Is he therefore saying to his friends in the United States that the section on national treatment in chapter 16 on investment, which states that each party must provide the same treatment to the establishment of new business enterprises located in each other's territory, is false, and that that statement is no longer something that Canada will live with?


John Carnell Crosbie: Mr. Speaker, this is the same question asked again. The hon. gentleman refers to my friends in the United States. I trust that the United States and Americans are friends of all Members of this House.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: I do not know of any Member of this House who considers himself to be an enemy of the United States of America. We live with Americans in peace and harmony, and we depend upon them for 77 per cent of our exports. That is why they are very important to us in commercial senses as well.
When the hon. gentleman attempts to intimate that somehow there is something wrong with me and my friends in the United States, I trust he will confirm that he has friends in the United States who have invested $8 billion in the town of Oshawa and created tremendous prosperity for the people of Oshawa, represented by the Leader of his Party.

[ Translation]


OPPOSITION TO FREE TRADE AGREEMENT-MINISTER'S POSITION
Gabriel Fontaine: Mr. Speaker, my question is directed to the Minister for International Trade.
On Wednesday, June 1, 1988, Thorne Ernst and Whinney Inc., a firm of chartered accountants, published a report that
revealed that 41 per cent of Canada's big companies not only intend but have decided to hire additional workers because of free trade.
My question is this: What does the Minister for International Trade intend to do to stop the false ravings of the socialist leader who is opposed to free trade?


John Carnell Crosbie: Mr. Speaker, the hon. gentleman asks a question with reference to a study done by the firm of Ernst and Whinney, a survey that confirms that Canadian business strongly supports the free trade arrangement, and is confident that it will increase production and employment in Canada. That backs tip studies done by the Conference Board, the C.D. Howe Institute, the Economic Council of Canada, and the Canada West Foundation.
The study did note that only 27 per cent of those surveyed had done studies of the impact of free trade on their firms. That is what makes it so important that we go forward with our campaign which includes the studies we are now doing on Canadian industries and the opportunities that await them in the United States, that we have the seminars and conferences across the country that we are planning, and that we have the advertising campaign that we are planning, in order that Canadian businessmen will know where the opportunities lie for them in this agreement.
I end, Mr. Speaker, by pointing out that the Association of Consulting Engineers of Canada fully supports our enabling legislation and calls on the Members of the House to give it swift passage both in the House of Commons and in the Senate.
Let's get with it!


PRESENCE IN GALLERY OF UNITED STATES SECRETARY OF COMMERCE
Mr. Deputy Speaker:: I wish to draw to the attention of Members the presence in the gallery of Mr. C. William Verity, the United States Secretary of Commerce.


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Let the record note that Mr. Broadbent clapped.


Some Hon. Members:: Oh, oh!
June 3, 1988


AIR SAFETY
Sergio Marchi: Mr. Speaker, in the absence of the Minister of Transport I direct my question to the Deputy Prime Minister. It concerns the security problems at our airports which continue to plague the Conservative administration.
Today The Globe and Mail revealed that more than 7,000 aircraft employees such as baggage handlers, those loading aircraft, checking attendants, and security guards, including 10 per cent of all employees at the Pearson International Airport in Toronto, are performing these very sensitive tasks without the mandatory security clearance from CSIS.
How can Transport Canada justify and permit such a significant portion of its airport personnel working in these sensitive areas without the necessary security clearance, which clearly jeopardizes the safety and confidence of the travelling public? Will the Government immediately move to rectify this very unacceptable and dangerous practice?


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I can tell the Hon. Member that there is a serious backlog in the security screening procedures. The Department of Transport and CSIS individuals are working very vigorously to overcome this problem.
I am advised that, while this backlog exists, there are no serious security problems as a result of it. I take the Hon. Member's representation, and I assure him that this matter is being addressed on a very urgent basis.


CSIS SECURITY POLICIES-GOVERNMENT POSITION
Sergio Marchi: Mr. Speaker, I thank the Deputy Prime Minister for the answer, but I beg to differ with the suggestion that there is no security threat to the travelling public. This latest compromise in security at airports is not an isolated incident. Temporary passes without the security clearances are as valuable as phoney dollars; there is no substitute for the real thing.
The Director-Generai of Security Screening at CSIS, Mr. Ian MacEwan, stated: "In the general security context if a person needs a security clearance for his job, he shouldn't be doing it without one".
In light of these serious comments by an official of CSIS, why is the Government permitting Transport Canada to violate the security policies established by CSIS and contravene its own transport policies by granting temporary passes to airport employees who have not been security cleared? In this review, will all resources be allocated to provide the required security at airports by its employees, and rid the backlog at CSIS by providing either the personnel or financial resources in order to be on the safe side rather than sorry?
Oral Questions
[DOT] (U50)


Donald Frank Mazankowski: Mr. Speaker, I believe the Hon. Member is aware that this Government has provided a beefed up security system at all airports in Canada and has provided considerable new resources in terms of person-years and funding. It is something in the order of $63 million.
I believe the CSIS individual was referring to the long delays in the security clearance process. I do not think it was his intention to alarm people unduly and that point was clearly made.
There is a serious problem and I can assure the Hon. Member that CSIS officials and the Department of Transport are working vigorously to clear up that backlog. Let me assure him and all Hon. Members that security has been, is, and will be one of our top priorities in terms of travel for Canadians and others who visit this country. That is our clear objective.


FOOD IRRADIATION REGULATIONS
Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, my question is directed to whomever in the Government is speaking about food irradiation today. The Director General of the Food Directorate of the Health Protection Branch has told the Canadian Institute of Food Sciences that regulations changing food irradiation from an additive under the Food and Drug Act to a process will be published soon.
The Minister of National Health and Welfare asked the Standing Committee on Consumer and Corporate Affairs to investigate that very question. Given that it unanimously agreed that the Minister should leave irradiation as an additive until further studies involving the public and the scientific community could be carried out, will the Government tell us why the Department is acting against the advice of that committee?


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: Mr. Speaker, when that committee reported, it asked for a response from the Government. The Government made that response. It is in the record and the Hon. Member can look it up.


MONITORING SYSTEM
Victor Fredrich (Vic) Althouse: Mr. Speaker, the official also indicated that record keeping would be used as a method for preventing the re-irradiation of foods. Since no test exists to identify irradiation, how will the Minister prevent a repeat of the British experience earlier this year where the monitoring became so farcical that the United Kingdom finally banned the irradiation of food altogether?

Oral Questions


Harvie Andre: Mr. Speaker, I cannot comment on what errors might have been made in other jurisdictions. Whatever lessons are available to Canadian officials will undoubtedly be taken into account.


DISARMAMENT
Dave Nickerson: Mr. Speaker, my question addresses itself to the Secretary of State for External Affairs. Although the Moscow Summit apparently failed to come up with a strategic arms reduction treaty, from the Canadian perspective was anything accomplished there that would contribute to achieving world peace?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, a great deal was accomplished at the Summit between President Reagan and Mr. Gorbachev. There has not been the conclusion of a START treaty yet. As the Hon. Member knows, that is the number one priority in the view of the Government of Canada.
However, significant progress was made on that question and on the signing of verification protocols that will allow the ratification of other important arms control agreements. We are continuing to make steady progress toward effective regimes of arms control. That has been highlighted and given real impetus by the meeting in Moscow between the President and Mr. Gorbachev.
[ Translation]


DISARMAMENT-CANADA'S ROLE
André Ouellet: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. The Minister is aware that the United Nations' third special session on disarmament has started in New York. Considering the progress, as the Minister just mentioned, that has been made in reducing intermediate range nuclear forces, could the Minister inform the House whether he expects any progress in other areas, in the short term, and could he also inform the House about the role Canada will play during this very important session?


Charles Joseph Clark: Mr. Speaker, I think we have now started making some real headway on arms control and the establishing of effective systems. The UN meeting is an important stage in this process. Ten days from now, I will have the privilege of speaking for Canada in New York. Canadian experts are now involved in developing procedures to implement certain agreements which have now become possible as a result of the Summit in Moscow, and Canada wants to continue to play a role in areas where we can make a constructive contribution.
June 3, 1988


SMOTHERING OF ARMS-GOVERNMENT POSITION
André Ouellet: The Minister knows perfectly well that eliminating intermediate range nuclear forces will be absolutely useless if new techniques are developed as a substitute for the missiles that are about to be dismantled. When the Minister makes a speech on June 13, will he, speaking on behalf of Canada at the UN special session, propose an arms suffocation strategy like the one suggested ten years ago by former Prime Minister Pierre Trudeau?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, what we would like to do, and considering the constructive differences in the present situation-there have been many changes in attitude among the superpowers and changes in the international situation with respect to arms control. That is something we must consider. We must maintain a constructive role in the present context. I am prepared to consider any suggestions the Hon. Member and any other Members of this House may wish to make, and I believe that our main concern is to continue to play a constructive role in the present situation.


CITIZENSHIP
Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, my question is directed to whomever in the Government is speaking on citizenship.
Given that the Government is surely aware of the delays, now running eight months and upwards, in getting citizenship approvals through the system, why is it allowing this situation to persist, whereby new Canadians are denied their voting rights and the emotional gratification of Canadian citizenship by virtue of the Government delays?


Barbara Jean McDougall: Mr. Speaker, the Government is not delaying this. As the Hon. Member knows, we have extended the celebrations about citizenship since we have been in office. We are as concerned about the delays as the Hon. Member.
I know how important it is for the people who have come through our immigration process to become citizens. At this moment we are considering some changes in our regulations regarding citizenship, but in the meantime we will deal with the delays as best we can. It is certainly not willful.


REMEDIAL ACTION
John Edmund Parry: Mr. Speaker, my supplementary question is directed to whomever speaks for the
June 3, 1988

Solicitor General. What action is being taken in that Department to remedy this unacceptable situation caused by the delays in security clearances?


Mr. Murray Cardiff (Parliamentary Secretary to Solicitor General of Canada):: Mr. Speaker, we have doubled the number of people responsible for clearing the backlog. Hopefully we will soon see an improvement in this area.


Mr. Deputy Speaker:: There will be two questions by the Member for Glengarry-Prescott-Russell and one question by the Member for St. John's East.


THE ECONOMY
Don Boudria: Mr. Speaker, my question is directed to the Minister of State for Finance. It concerns the increase in interest rates yesterday.
How can the Minister justify the increase in interest rates from 9.17 per cent to 9.49 per cent, which resulted this morning in banks increasing their five-year mortgage rate to 11.75 per cent? That creates a real interest rate of some 8 per cent. How can the Minister justify having real interest rates that are, in fact, higher now than they were in the depth of the economic recession?


Thomas Hockin: Mr. Speaker, I am astonished that the Hon. Member would take us back to that period. That was the period when interest rates were over 20 per cent. The Liberal Government had terrible problems conducting any monetary policy at all during that period.
This Government wants to control the very, very strong rate of growth in Canada so that it does not get out of hand in an inflationary sense, and that is what we are doing.


Don Boudria: Mr. Speaker, I am very glad the heat is running through the pipe of the Canadian economy, as the Minister said yesterday, in his part of the country. In the part of the country from where I come and from where many of my colleagues come, that is not the case yet.


DISADVANTAGED REGIONS-GOVERNMENT POSITION
Don Boudria: I would like to put the following question to the Minister of State (Finance). Since the Conservative Government came to power, various regional development programs such as IRDP, the Industrial Regional Development Program, have been abolished, while today, real interest rates are extremely high. How will this country's disadvantaged regions be able to work
Oral Questions
their way out of the problems they are facing today with this kind of policy?


Thomas Hockin: Mr. Speaker, let us think for a moment about Glengarry- Prescott-Russell and what kind of a monetary policy that region of Canada needs. It does not need a short-term, flash-in-the-pan monetary policy that keeps interest rates down and leads to an overheated economy which could lead to a situation of hyper inflation. That is not what that region needs.


Don Boudria: Twelve per cent unemployment is hardly overheated.


Thomas Hockin: What it needs with 12 per cent unemployment are good prospects for short-term, medium-term and long-term growth, and that is what this monetary policy is trying to do.


Mr. Deputy Speaker:: The last question is for the Hon. Member for St. John's East.


INDIAN AFFAIRS
Mr. Jack Harris (St. John's East):: Mr. Speaker, my question is for the Minister of Indian Affairs or whomever is speaking for him today in the House.
At a tribal meeting of the Conne River Micmacs held May 3 and 4 the then Chief accepted a motion of non-confidence and offered his support to a new Chief who was then elected. A week later the Department of Indian Affairs, contrary to notions of democracy and Indian self-government, reinstated the former Chief after he occupied the offices of the band. This interference has caused serious disruption of the democratic process which can only be resolved by the Department.
Can the Micmacs of Conne River be given a clear assurance from the Department of Indian Affairs that it will respect the decision of a tribal meeting to be held in Conne River tomorrow?


Mr. Blaine A. Thacker (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I would like to thank the Hon. Member for St. John's East for his valuable question on this difficult issue.
I have in hand a letter dated today to Chief Michael Joe stating that we understand a meeting is organized for tomorrow which is being held pursuant to the band's by-law 1-87. Proper notice has been given and a petition has been signed by at least 51 per cent of the electors. If that is correct, the Minister and the Department are prepared to accept the result of that meeting. It is requested that the letter be posted in public view for all interested parties at the meeting.

June 3, 1988
Point of Order-Mr. Crosbie POINT OF ORDER


WITHDRAWAL OF COMMENT DURING QUESTION PERIOD
John Carnell Crosbie: Mr. Speaker, just so there will be no misunderstanding, I want to make it clear that I withdraw the expression that the Hon. Member for Hamilton East (Ms. Copps) is a female Goebbels. That might well be unparliamentary. In any event, I will withdraw the comment whether it is unparliamentary or not.


Mr. Deputy Speaker:: I thank the Hon. Minister.



ROUTINE PROCEEDINGS


Hon. Doug Lewis (Minister of State and Minister of State (Treasury Board)):: Mr. Speaker, pursuant to Standing Order 106(8), I have the honour to table, in both official languages, the Government's response to 25 petitions, Nos. 332-4487 to 332-4509 inclusive, 332-4515 and 332-4520.
[Editor's Note: See today's Votes and Proceedings.}


Michael Morris Cassidy: Mr. Speaker, I have two sets of petitions, both of interest to a lot of Canadians.
The first is a petition signed by people concerned about schizophrenia, an illness which affects about 1 per cent of the population and costs Canadian society more than $3 billion annually. The petitioners desperately hope that a cure and method of prevention can be found as soon as possible through larger research efforts dedicated to schizophrenia.
They say that the research effort in Canada dedicated to schizophrenia is very small and not commensurate with the seriousness and cost of the illness in Canada and they petition Parliament to make sure that the research efforts on schizophrenia in the future will be commensurate with the seriousness of this illness in Canada.
This petition has been developed and signed by several hundred people who are related to the group of friends of schizophrenia. They are very concerned about that issue and hope that the petition will be taken very seriously.


Michael Morris Cassidy: Mr. Speaker, I have another petition which is acceptable to the House. This is a petition by residents of Canada of Vietnamese origin, including many leaders of the Vietnamese community in Canada.
They petition that whereas the Hanoi Government has continued to violate human rights in Vietnam by imprisoning religious leaders, artists, intellectuals, businessmen and former officials and members of the Armed Forces of the Republic of Vietnam without trials; and whereas the Hanoi Government in their words has brutally suppressed legitimate, political opposition in Vietnam by mercilessly executing those who fought for the return of fundamental freedoms in the country; whereas the Hanoi Government has blindly wasted Vietnam's resources in the military conquests of Laos and Kampuchea; and whereas these inhuman policies have continued to force thousands of people to flee Vietnam every year. They call on Parliament to use diplomatic means to demand that the Government in Hanoi abandon its inhuman policies and restore human rights in Vietnam. They call on Parliament to maintain Canada's generous policies on refugee resettlement and family reunification. They call on Parliament to intervene with the Government of Thailand to open its arms in welcoming unfortunate Vietnamese boat people on a humanitarian basis once they have landed on its shores.
This petition was given to me at a rally of several hundred representatives of the Vietnamese community from Toronto, Montreal and Ottawa on Parliament Hill a few days ago. It is humbly submitted on their behalf.


Dave Nickerson: Mr. Speaker, I have the pleasure of tabling a petition which was organized by Local 85 of the National Association of Broadcast Employees and Technicians of Yellowknife, Northwest Territories.
The petitioners point out that Bill C-23 was passed on December 19, 1986, substantially changing the rules related to tax treatment on housing and travel assistance benefits paid to employees in isolated posts, and whereas Yellowknife was designated as having a developed rental market and housing benefits to be valued at fair market value and that in order to establish a fair market value there must be a willing seller and a willing buyer operating in a position of equality, that apparently not being the case in Yellowknife where the vacancy rate for rental accommodation has been about zero for over a decade and that no viable developed rental market exists in Yellowknife and no fair market value can be achieved, the petitioners ask Parliament that Yellowknife be treated the same as the remainder of the Northwest Territories for the purposes of the tax treatment of housing benefits in prescribed areas.


Mr. Girve Fretz (Erie):: Mr. Speaker, I have a petition from a number of constituents in my riding. They state that nothing in the Supreme Court decision has established abortion as a right and whereas human life is a continuum from the moment of conception to the moment of death and there is no point in time between conception and the birth of the infant at which point we could say that this is not a human life. Therefore, the
June 3, 1988

petitioners call upon Parliament to pass into law legislation that will protect the life of the unborn child from conception and at all stages of development. The exception would be the extremely rare situation in which an abortion is performed in order to save the life of the mother. I present this petition on behalf of my constituents with my support.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, it is my privilege and responsibility to present a duly certified petition from a number of Canadian residents pointing out that the Conservative Government had no mandate to conclude a free trade agreement with the United States and that the Prime Minister (Mr. Mulroney) promised in the course of trade negotiations that Canadian sovereignty would not be compromised, but that the trade agreement negotiated by the Government threatens the very fabric of Canada's political and economic sovereignty by removing the power of the Canadian Government to control foreign ownership, to develop Canadian energy resources in the best interests of Canadians or to equalize opportunities between the regions.
The petition points out that the trade agreement denies Canada the policy freedom to determine its own economic future and it undermines our ability to build a society distinct from that of the United States. It denies Canadians the secure access to the United States that was the key objective of the negotiations and threatens the loss of hundreds of thousands of Canadian jobs. Therefore, the petitioners humbly pray and call upon Parliament to dissolve and to allow the people of Canada the opportunity to accept or reject the proposed trade agreement during a national general election.


Margaret Anne Mitchell: Mr. Speaker, I have the honour to present a petition from a number of constituents living in Richmond, Burnaby, Port Moody and Vancouver, British Columbia. They are joining many others who have signed petitions asking that the Criminal Code be changed to prohibit the carrying of knives by citizens in public places because there has been a very high incidence of crimes including murder, robbery and sexual assault committed with knives, and this is on the increase in all major cities across Canada.


Douglas Grinslade Lewis: Mr. Speaker, if questions Nos. 278 and 324 could be made Orders for Returns, these returns would be tabled immediately.
Air Canada


Mr. Deputy Speaker:: Is it the pleasure of the House that questions Nos. 278 and 324 be deemed to have been made Orders for Returns?


Some Hon. Members:: Agreed.


Mr. Nystrom: 1.	For each of the reports of the Task Force on Program Review (Nielsen Report), which recommendations (a) have been rejected (b) have been accepted (c) remain under review and, in each case, for what reason?
2.	With respect to the recommendations which remain under review, on what date is a decision anticipated?
Return tabled.


Ms. McDonald (Broadview-Greenwood): In 1987 and 1988 to date, to the knowledge of the Government, were any measurements taken of levels of dioxin in waters or in flora and fauna in the vicinity of pulp and paper mills and, if so, in each case, what were the results?
Return tabled.


Douglas Grinslade Lewis: Mr. Speaker, I would ask that the remaining questions be allowed to stand.


Mr. Deputy Speaker:: Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, June 1, 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; and the motion of Mr. McDermid:
That this question be now put.
James Douglas Manly: Mr. Speaker, I welcome the opportunity to make a few remarks on Bill C-129, the semi-privatization of Air Canada Bill.
The Bill provides that up to 45 per cent of Air Canada's shares are to be sold on the market with the Government retaining 55 per cent, with the understanding that the Government's 55 per cent will be voted in accordance with the decisions made by the 45 per cent that are held privately. There are supposed to be guarantees in the Bill that will

June 3, 1988
Air Canada
protect jobs and pension benefits of employees. There are supposed to be guarantees that the major Air Canada centres of Montreal, Mississauga and Winnipeg will be maintained and that no individual can own more than 10 per cent of the shares and that no more than 5 per cent of the shares can be foreign owned.
Looking at this legislation, I find that there are three issues I want to discuss. The first is the question of the betrayal of trust. Second is the ideology of privatization that this sale represents. The third is the specifics of the Air Canada sell-off itself.
First, let me deal with the betrayal of trust. On January 15, 1985, The Globe and Mail reported that the Prime Minister (Mr. Mulroney) said that the CBC is not for sale and Air Canada is not for sale. The Prime Minister went on to say that there may be some persuasive arguments in the case of Air Canada, that he would take a look at it, but that Canada needs a national airline.
There was a very clear commitment made by the Prime Minister, followed by a minor qualification. Now we see that the qualification is taking precedence over the commitment. The people of Canada were led to believe one thing. They were led by the Prime Minister to believe that Air Canada is not for sale. Now Air Canada is being sold. This reinforces the perception the people of Canada have had for the last three years at least that the Prime Minister is a man who cannot be trusted and that he leads a Government that cannot be trusted. Why the back-benchers on the other side are content to put up with this betrayal of the Canadian trust is something that I cannot understand.
The betrayal of trust in the sell-off of Air Canada is not an isolated incident. If it were, perhaps the people of Canada could forgive it, but it is part of a pattern. The one consistent thing we have seen from the Prime Minister is this pattern of betrayal of trust.
During the election campaign of 1984, we heard about fairness in taxation. We have seen that fairness in taxation means that people who earn over $100,000 per year have some savings in taxes whereas ordinary Canadians are paying more taxes. During the 1984 election campaign and since, we heard promises about a child care package. We have yet to see the details of this package, but what we do know indicates that there will be no more spaces for child care in Canada than there would be through normal growth as indicated over the past 10 years. There is another betrayal of the promise to Canadian parents that there would be an adequate, comprehensive child care program.
There has been a betrayal of promises to the Indian people. I think specifically of the promises that were made by the former Minister of Indian Affairs, the former Hon. Member for Rosedale who has since resigned. I suppose he had a bellyful of this Government and its broken promises. He made a commitment, not only a personal commitment but as a Minister of the Government, that Indian bands would not
suffer as a result of Bill C-31. He promised that there would be adequate housing and that there would be adequate financing.
The Indian Affairs Committee is holding hearings on Bill C-31 to see how the reintegration of people who lost their status through unfair legislation is proceeding. The committee has found that in fact, Indian bands are suffering and that individuals who are being reinstated are suffering. The Government has not lived up to that commitment that was made on its behalf by the former Minister of Indian Affairs.
The latest example is that the Minister of Communications (Miss MacDonald) promised that there would be legislation dealing with film distribution in Canada. It was supposed to be released on June 1. However, the Prime Minister, probably with Jack Valenti breathing over his shoulder, interfered so that the press conference was cancelled. The Minister even thought of resigning on a question of principle. It would have really been something for this Government if a member of the Cabinet had actually resigned on a question of principle. However, the Minister thought better of it and she is now doing the Prime Minister's bidding. The changes the Prime Minister's Office wanted in that legislation are being implemented. I do not know what those changes were, but I am pretty sure that they will not result in better legislation that will provide a better deal for the Canadian film industry. That is one thing I am pretty confident of.
These failures of the Government to fulfil commitments are bad enough, but they pale in comparison to the direct breaches of promises made by the Government. For example, during the 1984 election campaign, the Prime Minister made a great event out of Liberal patronage. Certainly the people of Canada were sick and fed up to the teeth with the long record of Liberal patronage. The Prime Minister promised that there would be a different approach to Government. We have not seen a different approach. We have seen that instead of Liberal pork-barrel patronage, there is Conservative pork-barrel patronage. It is just as bad and it is very difficult to tell the difference.
We heard many times from the Prime Minister that our social security programs were a sacred trust. That phrase has almost become a euphemism for breach of trust. The people of Canada have become so used to hearing him talk about a sacred trust that they know it means just one more area where he is going to break his word. Even the Prime Minister has got the message and he is not using that phrase anymore. It is kind of like the way people used to talk about a financial crisis. Then they had such serious crises that they did not talk about crisis anymore, they began to talk about depression. The idea of a depression did not sound quite so bad as a crisis. Then we had the Great Depression of the 1930s and we tried not to talk about depressions anymore.
June 3, 1988

The Prime Minister talked about social security programs that were not going to be touched, then we saw him attempt to deindex Old Age Security. We had senior citizens at the front door of Parliament calling the Prime Minister to account and accusing him of things I would not dare accuse him of in this House because it would require unparliamentary language. We saw the Government force through deindexation of family allowances at a time when we have unprecedented poverty among our children.
Air Canada is just one more example of this breach of trust. In 1983, when the Prime Minister was running for the leadership of the Conservative Party, he very clearly indicated that Canadians rejected free trade in 1911 and they would reject it again in 1983. He said free trade was not what he wanted. He did not mention it in the 1984 election, so presumably he was opposed to free trade. Then, suddenly in 1985, he begins negotiations with the U.S. and we have a whole process-


Mrs. Mailly:: Point of order, Mr. Speaker. I am just wondering what Bill the Hon. Member is debating. I thought it was Air Canada. He seems to be talking about everything but the Bill.


The Acting Speaker (Mr. Ellis):: We always look for relevance but in a case like this the Hon. Member has only about seven or eight minutes left and I think we can put up with whatever comes for that period of time.


James Douglas Manly: This is directly relevant to the issue because we were talking about the record of breach of trust of the Government. Air Canada is only one more example, and the people of Canada do not see it as an isolated example. He broke his word on free trade. He broke his word on film distribution. He broke his word on fairness in taxes. He broke his word on child care. On one thing after another the Prime Minister and the Government have broken their word. This is a Prime Minister that cannot be trusted by the Canadian people. He leads a Government that cannot be trusted. That is the point I have been trying to make and I am glad the Hon. Member finally understands it.


The Acting Speaker (Mr. Ellis):: The Hon. Member could try the patience of the Speaker by continuing in that vein for the rest of his time.


James Douglas Manly: Mr. Speaker, I do not wish to try your patience. I think I have made the point.
I want to go on and ask why the Government is pushing through this privatization program, not only of Air Canada but of other Crown corporations as well. The fact is we are not dealing here with any pragmatic approach. We are not dealing with the fact that some Crown corporations may have outlived their usefulness or perhaps the time has come for the federal Government to get rid of its responsibility. For example, the Northern Canada Power Commission was one Crown corporation where it made sense for the federal Government to divest
Air Canada
itself of its responsibility. Yet here we are dealing not with any pragmatic decision but rather something based strictly on ideology, a wholesale selling off of resources built up by the Canadian people over a number of years. It is the mentality of the bargain basement and used car lot. Everything must go.
I come from British Columbia where we have a soul mate of the Prime Minister for a Premier, Bill Vander Zalm. He wants to privatize everything. He wants to privatize maintenance of highways. He wants to privatize our hospitals. Our Prime Minister is also the soul mate of Margaret Thatcher of Great Britain. This is the approach of even Augusto Pinochet of Chile. He wants to privatize and sell off the national airline of Chile. That is what we are doing here in Canada.
Last July the Fraser Institute, the right wing think tank from British Columbia, if you can use the word "think" for people who simply rearrange their right wing prejudices, held a conference on privatization and outlined a strategy for privatization. They said when selling Crown corporations, sell significant amounts of stock to non-traditional investors. Among other advantages, this makes privatization politically popular. It also makes renationalization by future Governments more difficult. Of course, that is what happened in British Columbia with the sale of BCRIC. Those resources are gone forever, as the Hon. Member for Surrey-White Rock- North Delta (Mr. Friesen) knows. I do not know how many BCRIC shares he has-


Mr. Friesen:: Five.


James Douglas Manly: -but he knows how much they have sunk in value. He has five, I gave my five away.


Benno Friesen: You gave away 75 cents.


James Douglas Manly: That is right. The second strategy advocated by the Fraser Institute was to undervalue shares so that share prices immediately rise and investors make a quick profit. By allowing large numbers of people a small share in the profits they will overlook any negative social effects. Third, sell profitable enterprises first. This builds the image of success. Fourth, identify who is likely to be opposed to the privatization and buy them off. Bypass the union leadership by making an attractive share offering directly to the workers. That is very much what is happening here with Air Canada.
They also recommend identifying all possible political objections and disarming them. Build in a regulatory framework if necessary. Legislate restrictions. Allow for successor status to unions. Specify levels of service, and so on. Whether these will actually work or not is secondary to the political advantage their existence gives to the privatizing Government. Certainly we have that tactic being used in this sale.
They recommend using retail merchandising techniques to sell ideas and stocks. The Government is great at hiring people to go out and advertise whatever it is doing to make it palpable to the Canadian people. They say no lay-offs and do not talk about lay-offs. Privatize first, then after that the usual

June 3, 1988
Air Canada
performance procedures may take place. Finally, orchestrate the media.
Those are some of the strategies that the Fraser Institute identified for Governments that want to be involved in privatizing. Certainly we have seen that with Air Canada. It was founded 51 years ago, in 1937. Over the last 10 years its pre-tax profits exceeded losses by $379.3 million. Air Canada has been a money maker, but of course if there is one thing that the Tory back-benchers and many of the Tory Cabinet hate worse than a Crown corporation that loses money, it is a Crown corporation that makes money. When Air Canada is making money they want to sell it, they want to put it into the private sector so that private individuals can make that money rather than having it coming into the public Treasury.
A recent poll indicated that 53 per cent of the Canadian people oppose the sale of Air Canada. It had a very good image. This poll done by Angus-Reid showed that federal Progressive Conservative supporters are almost evenly divided on the Air Canada issue. Forty-seven per cent oppose selling it and 44 per cent are in favour. Even those people who traditionally vote Conservative, but are not necessarily as hide-bound as are some of the Conservative Members, on balance recognize that selling Air Canada does not make a lot of sense.
This is only a partial sale. Forty-five per cent is being sold with 55 per cent being left with the Government. The Government's shares will vote with the majority. In other words, the 55 per cent share which the Government is retaining in our name will not be voted in accordance with our interests. What we have here is neither fish, fowl, nor good red herring. It is a lame duck corporation and will be flying with one wing. It will be 45 per cent private and 55 per cent public, but the 55 per cent public will be non-voting shares.
We have to ask how that can possibly serve the public interest. If the 45 per cent wish to shut down unprofitable routes, the 55 per cent of government shares will simply go along with it. The public is, in effect, left holding a 55 per cent bag and has no say in it.
A year ago the Minister for International Trade (Mr. Crosbie), who is sometimes able to speak the truth when other members of the Government are not, said that it would be better to sell all of it or none of it. Of course, we are selling a little bit of it. We are selling 45 per cent of it.
The Government pretends to have it both ways. It says it wants to protect the public interest. It says that it is protecting the interests of places like Winnipeg, that servicing will continue to take place there. It says that it will protect employee benefits and pensions. On the other hand, it says that it is getting out of the business and the business will be open to private direction. This is privatization on a wing and a prayer.
What possible reasons are there for privatizing? One of them, of course, is the need for equity. Everyone recognizes
that Air Canada needs new equipment and needs equity. Certainly privatizing is not the only way in which that could be done. Another possible reason is to reduce the deficit. This will not result in a significant reduction in the deficit. We are getting rid of a corporation which has in fact brought money into the Treasury.
In conclusion, it is important that all Members of this House recognize the importance of Air Canada as a Crown corporation over the last 50 years. It served the public purpose. It has been one of the building blocks of Canadian Confederation. Canada is a huge country, it stretches thousands of miles from the Atlantic to the Pacific and needs something like Air Canada to tie it together. It has served that purpose in the past and we need to have that purpose served in the future. This is not an easy country to hold together. We are talking about a new constitution for Canada. I submit that infrastructure such as Air Canada is as important in holding Canada together as is the Constitution. Yet the Government is getting rid of it.
Air Canada has set service, safety, and employment standards for the airline industry. It is responsible, not only for a financial bottom line but to serve social purpose. On that basis I do not think the Conservative arguments for selling Air Canada are reasonable, I do not think they are convincing. On the contrary, I think there are very convincing reasons for keeping Air Canada as a Crown corporation. We will continue to oppose this sell-off and sell-out.


Benno Friesen: Mr. Speaker, I was not at all surprised at the remarks of the Member. We have heard these kinds of remarks before. They follow a general theme. They usually degenerate into attacking characters and personalities and impugning motives. That should not surprise us because, as I said, it has been a general theme. What does surprise me is that the Member is also the minister of a church. This calls to mind, in the same context, the words of John Milton who said: "The hungry sheep look up and are not fed". Mr. Speaker, pity the flock.


James Douglas Manly: Mr. Speaker, I see that the Hon. Member made his comment and then did not have the jam to stay and hear a reply. If he is going to make that kind of a slurring comment, I wish he would stay to hear the reply.
Why did he not refute some of the things I said? I pointed out that the Prime Minister and the Government have breached their trust with the Canadian people. I cited specific examples. If the Member believes that it is undignified for a clergyman to say that what the Government has done is a breach of trust, I wonder what kind of truth he speaks from his pulpit.


Lorne Edmund Nystrom: Mr. Speaker, that was a very interesting exchange. It provokes me to wonder what is going in the minds of the Conservative Party with regard to this Bill. As a senior Member, Mr. Speaker, I am sure you recall that the Conservative Party has had a history of, from time to time, being fairly interventionist in the economy. I remember Sir John A.
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Macdonald's national plan, his national dream. The Conservative Party, of course, started the CNR, the CBC, and the Canadian Wheat Board. It was fairly interventionist.
As the Member for Cowichan-Malahat-The Islands (Mr. Manly) pointed out, the most recent Angus-Reid poll indicated that even among Conservatives, 47 per cent oppose the privatization of Air Canada and 44 per cent are in favour of it.
I really wonder why the Conservative Party had made this fundamental change in ideology with regard to public ownership. Why this move to embrace Thatcherism, this move to embrace Reaganism?
I see the Chairman of the Transport Committee sitting across the way. He is a great red Tory from Nova Scotia. I imagine that great red Tory from Nova Scotia must be seething with anger as he sits in his seat. He was sitting there with head bowed a few minutes ago. I thought he was sleeping, but he was upset. He must be extremely upset to see the direction which the boy from Baie Comeau is taking the Conservative Party in fundamentally changing this country and trying to make it reflect Thatcher's Britain or Reagan's United States. I am sure that such a dignified senior Tory such as the Chairman of the Transport Committee must be extremely angry to see what is happening to his country because of the "boy from Baie Comeau".
Could the Member for Cowichan-Malahat-The Islands comment upon why, in his opinion, the Conservative Party is straying from its roots and heritage in terms of free trade, privatization, and regulation? Why this breach from the leadership of that Party over the years from Sir John A. Macdonald, Stanfield, Diefenbaker, and Joe Clark who believed in a certain amount of public participation? Why are they changing this country in terms of privatization, with the prime example, of course, being this Air Canada Bill? It is a fundamental change. Why this Reaganism? Why this Thatcherism?
I wonder if the Member for Cowichan-Malahat-The Islands (Mr. Manly) has been able to psychoanalyse the mind of the Prime Minister (Mr. Mulroney) and can tell us what is happening. If that does not work, maybe the Chairman of the Transport Committee could. He has great experience. He is an old fashioned red Tory who was a great admirer of John Diefenbaker and all those other red Tories. Perhaps he could get up in the House and tell us how disgusted he is about this particular move. Or has the Member who now chairs the Transport Committee been muzzled by the Prime Minister's office? Is he one of those puppets that has been muzzled and is afraid to get up and speak his mind? I suspect that might be the case.


The Acting Speaker (Mr. Ellis):: Unfortunately, the Hon. Member for Cowichan-Malahat-The Islands (Mr. Manly) has no time left because the Member for Yorkton-Melville (Mr. Nystrom) used it all up. Debate.
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Lloyd Axworthy: Mr. Speaker, I have a particular interest in this Bill, partly because of the importance of Air Canada to my community of Winnipeg, but also because my own experience when I was Minister of Transport brought me into a close examination of some of these issues and questions. In fact, there was a suggestion, when the announcement was first made by the Deputy Prime Minister (Mr. Mazankowski), that the Conservative Government was basing its policies on my initial objectives and goals. As I pointed out at the time, I only wish it had. I think we would have had a much better Bill and a much better presentation of the role of Air Canada if it had continued to follow the pattern and development of airline policy that we started back in 1983-84.
I would like to spend the time I have this afternoon by outlining the steps that were taken and why I think this is not the right Bill. It does not suit the purpose of proper airline development in Canada. In the summer of 1983 when I took over the Transport portfolio, virtually all major Canadian airlines were in deep financial trouble. Two of the private firms were close to bankruptcy. Air Canada had very large losses and was losing a substantial number of customers on its existing airlines. It required an immediate response.
We immediately established a series of working groups to examine what changes could be made in airline policy that would restore to the airline industry the predominant role it has always played. We kept in mind that the airline industry has a special role in Canada because of our geography, our climate and because of our dependence on trade and commerce. The exchange of people and goods by air has always been one of the important factors in allowing us to build and grow and developmemt.
That was recognized by previous Governments back in the 1930s and 1940s when they had to establish a public airline because private airlines were not prepared to undertake that task. By the time we reached the 1980s, conditions had changed radically and altered the role of the public airline. After a very exhaustive and internal examination by a number of Departments, and an examination of the American experience with deregulation, it was my judgment that one way we could stimulate further development in airline activity would be to loosen the rules. So we announced in the spring of 1984 a new airline policy that substantially changed the rules applied by the Canadian Transport Commission. We gave the airlines far greater freedom to set prices, to choose routes and to engage in a number of other initiatives that would allow them to attract customers. The frequent flyer program was a direct result of those changes in rules and regulations in the spring of 1984.
At the same time it was clear to me that if we were going to move to loosen or liberalize the airline regulatory system, we also had to look at the role of the public airline in that context. If we were to follow the American pattern of full and total deregulation, it would obviously put Air Canada into a very awkward position, together with the private airlines. It is very

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difficult in a totally deregulated environment to have a public airline and private airlines competing. However, it was not my feeling that we should necessarily move toward the full deregulation because in examining the American experience, it was clear there was a number of serious problems related to that American experience. One problem was the whole question of labour relations. One of the by-products of deregulation was a severe and abusive treatment of workers. People were laid off. They lost their jobs and their livelihood without any due compensation or retraining or any opportunity to ensure that their workers' rights would be honoured or protected.
Second, there were some real concerns about safety. There is no question that by having full and open entry we were going to give an invitation to a number of airlines to come into the business without due regard for the proper accountability or safety that was required. Third, and this is a little known fact, under deregulation, the Americans had a very expensive program by which they promoted the development of smaller airlines connecting regional points. They would be prepared to subsidize in a substantial manner airlines that would provide connections to smaller regional areas in Alaska or parts of their continental expanse. That was seen by the Americans as a corollary of any deregulation atmosphere. It was a pure deregulation, in other words. There were also, I think, very severe question marks about the concentration of the airline industry.
At the same time as announcing the airline policy in April of 1984, we put forward a clear term of reference to the Transport Committee of the House of Commons to examine those kinds of questions. First, should we proceed with further liberalizing of the airline regulations? And what should be the role of Air Canada in that particular environment? Specifically that term of reference included an examination of safety, labour relations, merger and anti-competition policy, supply of services to out of place regions. We said that before any further changes would be instituted, the House of Commons Transport Committee, in keeping with the spirit of having a Commons committee engaged in policy making, should undertake a series of extensive hearings across Canada and undertake the proper research and examination and come forward with its recommendations.
Unfortunately, the election in 1984 brought that term of reference to an end. The then Minister of Transport, the present Deputy Prime Minister, cancelled that term of reference. Therefore, there has never been an opportunity in this country for Canadians to express themselves in an open and public way on these very large and serious questions related to airline deregulation and to the role of Air Canada. For the life of me, I do not understand why the new Government, when it came into power in 1984, refused to continue with what should have been an open and serious examination and inquiry into those very important questions. Instead, it retreated back into the bureaucracy, I suppose, and came up
with plans for deregulation and the role of Air Canada without any form of public reference or public examination.
Therefore, those questions went unexamined and to this day are still unexamined. They have not been looked at, nor have Canadians had an opportunity to make themselves heard.
In addition, it was also my feeling that the Government of Canada, as the sole shareholder of Air Canada, had the responsibility to begin examining airline policy and Air Canada not simply in purely transportation terms, but also in large economic development terms. As a renewed and intense competition internationally, we were looking at the development of new technologies, particularly in the aerospace industry. We were certainly looking at increasing the concentration of technology in the central part of Canada, not broadly shared by other parts of Canada. One of the reference I began to examine as Minister of Transport was the question of whether the public role of Air Canada should also include its responsibility to carry with it economic development benefits. That substantially broadened the kind of framework of analysis and accounting that should be applied to that very important Crown agency.
I do not know what happened to that examination. The people of Canada spoke their wisdom in September of 1984 and I was no longer a Transport Minister, so I do not know what happened to that particular internal study we had begun to determine how Air Canada itself could become a major instrument of public policy in terms of economic development.
I would suggest that the concerns we had in 1983-84 about that role were certainly exacerbated and enhanced as we saw what began to happen. The CF-18 decision was a clear example of how the aerospace industry, which could provide a major sharing of technological benefits across Canada, was in fact denied. Instead, the legitimate case for Winnipeg, proven beyond a doubt in terms of economic and financial criteria, was rejected. It was decided for political reasons to place it in the City of Montreal.
Similarly, the situation with Airbus is another question mark. As Air Canada now decides to replace its 727 fleet with a brand new generation of aircraft, the key questions are: "Where will the subcontracting for that Airbus be made and where will the maintenance be carried out?" Those public decisions have a great deal to do with regional development in Canada. If we simply allow the market forces to play, then what we will see happening, once more, is a concentration of that technology, of that new sort of advanced frontier level work concentrated in a very small region of Canada.
The history of Canada has been that we have not relied upon market forces to build it, but that our forefathers, and Sir John A. Macdonald at the time of Confederation, said that if it were simply up to the market, there would not be a Canada. He said that there would be a north-south economic integration with the United States. In order to have an east-west economic
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union there had to be a form of public intervention. In Sir John A's day it was the railroad that did it. In our generation it may be the computer, or information systems, or the aerospace industry that does it. Nevertheless there has to be a public decision to ensure that those economic benefits are broadly and widely shared so that all of Canada becomes part of that system of new economic activity.
We come to the point as to whether those kinds of considerations were in fact brought to bear in both the deregulation initiative and the Air Canada Bill. The answer is clearly no. Nowhere in any of the speeches by the Ministers introducing these measures was there any consideration of those factors or criteria-none whatsoever. It is simply an attempt, as they say, to find ways of refinancing Air Canada, and then letting the competitive market-place take its course.
The reason I oppose the Bill is for that reason primarily. I still believe that there is a public purpose for Air Canada. There is still a very important set of public policies that can be carried out by a national airline.
This legislation, as hybrid as it may be, and as much as it attempts to say that we are going to protect the maintenance base in Winnipeg, does not say that that maintenance base will continue to provide work on the frontier of the aerospace industry. It is just as easy for that maintenance base to do maintenance work on junk aircraft, DC-3s or older jet aircraft, which will put it in the back lot of technological development.
The only way that a fair share of technology can be assured is through public policy. But if the primary carrier in the airline industry of that public policy is being taken away, then no longer can any type of judgment or guidance as to how it should be carried out be given. Similarly, it is very clear from the way that this has been handled that the Government has given no account to those concerns that were raised and should have been examined by the Transport Committee in 1984. There are still very serious safety questions related to the deregulation of our airlines.
One of the important roles that Air Canada has always played has been in providing leadership in establishing proper safety standards, ensuring that it would give the standard by which others would follow. Similarly, with respect to the question of employee-labour relations, we have been able, through public policy, to establish guidelines and standards for labour relations in the federal sector, which I think have had an important influence on all other sectors. We will lose that capacity.
Even matters such as our language policy, for which we used Air Canada as a carrier of national identity and expression, will no longer have the same ability to influence those decisions. The moment that there is one private share sold under the laws of Canada, Air Canada can no longer be used as an instrument of public policy. It can no longer be our instrument. Rules can be set that Air Canada must abide, like all other private businesses in the federal jurisdiction, but it cannot be
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used to demonstrate, to show example, to give a standard. That capacity is lost.
Let me deal with a further question which I think is important. We debate day after day, as you well know, Mr. Speaker, the question of trade in this House. The position of my Party has been that we should be aiming to establish Canada as an international trader and not to confine ourselves to a continental market-place. One of the crucial elements in that strategy is our capacity to establish lines of commerce, exchange and communication with countries around the world.
If we look at the airline industry, we see that it is one of the most important avenues for establishing those commercial connections. One of the reasons why we have such faltering sales in Latin America, for example, is that we have two flights a week to Rio from Canada and that is it. If one wants to travel to the Argentine or to Central America, it is a 15 hour flight from Canada, as opposed to direct flights to those areas which would open up new sales opportunities, as well as new commercial and tourist opportunities. To make that happen, a flag carrier is needed. What is needed is a public airline to establish that type of initiative. That should be a judgment of public policy. We will be dealing with an airline totally dictated by its market-place criteria, its bottom line. It will say: "Look, we can make an awful lot more money by putting our 747s on the London-Toronto run. We do not have time to open up a new line into Rio or Buenos Aires or into Malaysia". Some lines are being opened into Malaysia through negotiation. I think that that could be dictated because it is a Crown corporation and therefore has certain leverage.
What I am saying is that these Bills have been introduced in a total vacuum, in the absence of an airline policy for Canada that would demonstrate what we see as the future role and opportunity for airline travel, both domestically and internationally. There is no sense of what kind of needs we will have, or what our priorities should be, or whether we need a public airline to service those.
If we had done that examination, if we had said that there is the future of our airline industry for Canada in the next 50 years, and then done a proper examination as to what would best service that, what mixture of public or private initiatives, then we could legitimately say whether this Bill serves the purpose or not. It was done without any of that kind of judgment or analysis. So literally, to use an airline analogy, we are flying blind.
We do not know whether we need a public airline or not at this stage because the Government has never bothered to find out from Canadians. It is asking Parliament to pass an important piece of legislation that will take Air Canada out of the public sphere and turn it to the private sphere without knowing whether that is the best judgment in terms of future development for Canada or, in terms of increasing its commitment in high technology, or of ensuring that there is a fair sharing in the regions of Canada, and that we have the ability to protect ourselves abroad.

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It is legislation that has no roots. It has no context. It has no framework. It is born out of a very basic and very short-term judgment that we do not have $300 million to give Air Canada to buy new airplanes so we will sell it now and get the money so that we can balance our books for the next Budget. That is not the way decisions of this importance should be taken. That is the reason why my Party and I are opposing this particular Bill.


Lorne Edmund Nystrom: Mr. Speaker, I want to ask the Hon. Member for Winnipeg-Fort Garry (Mr. Axworthy) a few questions. I have a great deal of respect for the Hon. Member. He is a fellow westerner. He has a great deal of experience in politics. He was a former Minister. We have worked together on projects in the past. I want to ask him whether or not he has really changed his mind in terms of privatizing Air Canada.
I happened by fluke to come across a Canadian Press article from May 17, 1984.1 am sure the Conservatives will be happy to know that the headline in the article stated: "Air Canada may be flying into the private sector". The article contained a lengthy interview with a number of people, including the Minister of Transport at the time who is now the Hon. Member for Winnipeg-Fort Garry. The lead sentence was: "Has Lloyd Axworthy hung a 'for sale' sign on Air Canada?" The article goes on to state: "Mr. Axworthy's plan to relax regulation of the airline industry has rekindled enthusiasm for putting Air Canada into private hands. Mr. Axworthy will not say whether or not he favours changing ownership of the airline, which has assets of some $2.2 billion". In the article, Mr. Jeanniot, who at that time was the Executive VicePresident of Air Canada, stated: "Mr. Axworthy would not oppose the principle of privatization".
I do not wish to read the whole article since it is fairly lengthy, but certainly in May, 1984, the Canadian Press was convinced that the then Minister of Transport was in favour of the principle of the privatization of Air Canada. It states in the article somewhere that the Minister is willing to have a study done and keep an open mind and see whether or not Air Canada should be sold to the private sector.
I am very happy, of course, that the Hon. Member for Winnipeg-Fort Garry is not in favour of privatization of Air Canada. Can he elaborate to the House if indeed he has changed his mind, and why he has done so?


Lloyd Axworthy: It is unfortunate that the Hon. Member did not listen to my speech. I went through step by step what we did. I pointed out to him that, when we relaxed the rules setting a new airline policy in 1984, it clearly put Air Canada into a new position. I put a reference to the Transport Committee of the House of Commons asking it to examine the role of Air Canada in light of those questions on safety, competition and concentration, labour relations, and regional development. As I pointed out at the time, unfortunately the new Government when it came in in 1984, cancelled that reference.
What I was saying, and I think that I was being open and honest, was that the previous system, which, through unnecessary rules had restricted and limited the routing and pricing for airline policy, had to be relaxed. In light of the U.S. experience with deregulation it was incumbent upon us to determine exactly how we should proceed in Canada. All I did was to make an honest effort to allow Canadians to be heard on a very crucial issue.
Furthermore, I established very clear criteria as to what should be the determination. I was not responding blindly, as some of his colleagues do, against it or for it; I was saying that there are new circumstances that should be examined, Canadians should be heard, we should conduct inquiries, and if it meets some type of criteria then we would act. As I pointed out in my speech, and it is unfortunate that the Member did not listen more carefully, the Government refused to do that. None of the criteria that I have established in terms of a sharing of technology, a sharing of benefits, and a consideration about safety, have been answered. The Government has made no attempt to deal with those issues. There is no airline policy for Canada. Therefore, to privatize Air Canada without having a proper airline policy is a fool's game.


Mrs. Finestone:: As my hon. colleague travels back and forth to Winnipeg has he noticed any significant change in the service offered, the length of line-ups, the time it takes to check through the baggage, or the time it takes to check through and board the aircraft? Does the Hon. Member think that privatization will add the security that is needed? Is there a withdrawal of the number of staff and people available to service the clientele?
When one listens to some of the airline employees, and I wonder if the Hon. Member has had the same feedback, there have been unconscionable cuts and not necessarily lay-offs, but the gaps have not been filled. As the Hon. Member laid out the parameters of the criteria that should have been examined by a committee of the House, which included not only the regulations but the sharing of benefits, labour relations, competition, and safety, what has the Hon. Member noticed when he has been travelling?


Lloyd Axworthy: I must confess that this morning I did a quick calculation and discovered that in the last two months I have travelled back and forth to Winnipeg 16 times. With that type of frequency, my only way of coping was to shift my mind into neutral and not even recognize what was going on. That was the only way to deal with that particular vagary. It allows me to lighten up totally and once again become the refreshing and provocative Member of Parliament when I hit the ground in Winnipeg running.
Those types of questions were exactly what I had hoped we would have had a chance to examine. I find it unsettling and disturbing that those are questions that we could have found answers to. We did have the experience of other forms of deregulation or privatizing in other parts of the world that we

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could have carefully examined. There was no attempt to do that.
This particular legislation is dictated far more by the Minister of Finance (Mr. Wilson) and his imperatives than by the attempt of the Minister of Transport (Mr. Bouchard) to come up with the best mixture of airline policy and the best mixture of airline services for this country. We are doing it for the wrong reasons.


The Acting Speaker (Mr. Towers):: Unless I see someone else, the Hon. Member for Yorkton-Melville (Mr. Nystrom) can have the floor for the second time.


Lorne Edmund Nystrom: When the Hon. Member for Cowichan- Malahat-The Islands (Mr. Manly) rose, I stated that I thought the Conservative Party had made a very abrupt change from a historical position on public ownership in our country. It was the Party across the way that brought in things like the Wheat Board, the Canadian Broadcasting Corporation, the CNR, and other agencies of that type. Now it seems to be following the policy of Ronald Reagan and Margaret Thatcher when it comes to planning our economy and our society. I suggest that some long-time members of the Conservative Party, for example, the Chairman of the Transport Committee, are probably extremely upset with this abrupt change in direction in a vision for our country.
Can the Hon. Member for Winnipeg-Fort Garry shed some light on why the Conservative Party has made this very abrupt change? There must be some reason for it, other than blind devotion to the ideology of Margaret Thatcher and Ronald Reagan, which is importing an ideology from another country. Can the Hon. Member shed some light as to why the Conservative Party is doing this and changing the country that we have all fought so hard to build?


Lloyd Axworthy: For the life of me, I have never been able to figure out why anyone is a Conservative anyway, so to try to figure out why someone thinks like one is certainly beyond my capacity. I think that would require a whole assembly of Freudian psychologists to work that particular problem out.
I should point out to the Hon. Member that it is important to remember that in the United States the deregulation policy was initiated by President Jimmy Carter. In fact, it was Senator Ted Kennedy, who was known as one of the strong left-wing Liberals in the United States' political spectrum, who initiated that through his studies in the United States Senate.
To return to my point, I do not think that we should be debating on ideological terms. The real success in Canada has been to determine how we use public Crown corporations in a pragmatic, utilitarian way. Our judgment has been: "If you need a Crown corporation, then do it." If there is a public role, a public service, and a public reason for doing it, then have a Crown corporation. If those reasons come to an end, then get rid of it. The problem is that this Bill is not using that judgment. There is no basis for making that judgment in anything the Minister of Transport or his colleagues have
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stated. I think it was dictated frankly and purely out of the fact that the Government does not want to spend $300 million to refinance an Air Canada fleet. That is the reason the Prime Minister (Mr. Mulroney) changed his mind. I think that the Minister of Finance simply said: "We can't afford $300 million, so sell the airline". It is as simple as that.
That is not a reason to sell one of the most valuable and important public assets in this country. Perhaps in a few years we will need a public Air Canada.


The Acting Speaker (Mr. Towers):: On debate, the Hon. Minister of State for Treasury Board (Mr. Lewis).


Douglas Grinslade Lewis: Mr. Speaker, I wanted to point out to my colleague, who just suggested that we do not have the $300 million to buy new airplanes, that the reason for that is that the Liberals left us with such a vast deficit to deal with. Had we had a better Treasury, and had we not had a $38 billion deficit, we certainly would not be in the position of needing the money.
Under those circumstances, I move:
That the House continue to sit beyond the ordinary hour of daily adjournment-


Lorne Edmund Nystrom: Point of order-


Douglas Grinslade Lewis: -for the purpose of consideration of 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.


The Acting Speaker (Mr. Ellis):: Of course, the Minister had to complete the motion once he had started. I can now hear the Member for Yorkton-Melville (Mr. Nystrom) on a point of order.


Lorne Edmund Nystrom: Mr. Speaker, I was going to rise on a point of order and call for a quorum because I do not think the Conservative Party is taking this debate seriously.


The Acting Speaker (Mr. Ellis):: The House has heard the terms of the motion moved by the Deputy Government House Leader. Is it the pleasure of the House to adopt the motion?


Some Hon. Members:: Agreed.


Some Hon. Members:: No.


The Acting Speaker (Mr. Ellis):: According to the provisions of Standing Order 9(4)(b), if 15 Members rise in their places to object, the motion is defeated. Shall the motion carry?
And more than 15 Members having risen:


The Acting Speaker (Mr. Ellis):: There being more than 15 Members rising in objection to the motion, according to the

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provisions of Standing Order 9(4)(b), the motion is deemed to be withdrawn.


Douglas Grinslade Lewis: Mr. Speaker, I rise on a point of order. I just want to point out that government Members were prepared to stay a little later today to finish this important business, and to advise the House that the business on Monday will be Bill C-129.


The Acting Speaker (Mr. Ellis):: The Minister will know that that is hardly a point of order.


Sheila Finestone: Mr. Speaker, I rise on a point of order. I want to point out that if the Minister and the Conservative Government would get their act together he would not have to make a point of order that is not a point of order.


The Acting Speaker (Mr. Ellis):: That is also not a point of order. Debate.


Michael Morris Cassidy: Mr. Speaker, before the Conservatives flee from the House, I want to remind them of the promise that was made by the Leader of the Conservative Party on January 15, 1985. He gave assurances that the federal Government had no plans to sell either the CBC or Air Canada.
Now that the Government has flip-flopped on this one, I presume the next thing we will see is its decision to put CBC on the block as well. It is shameful that a government that was elected on a platform that Canadians needed a government that people could trust and that it was a Party bent on kicking out the Liberal Government to bring in something more positive has turned around and given the country exactly the opposite.
When the Prime Minister (Mr. Mulroney) says that something is a sacred trust, we know that means the opposite. When the Prime Minister says that Air Canada is not for sale, we know now that it is not true. Whatever he says today is liable to be turned around tomorrow.
One of the basic issues in the forthcoming election campaign will be exactly that question: Can you trust the man who has been Prime Minister for the last four years? Is he to be trusted if he says in the next election that he will do something for battered wives or child benefits? You cannot trust him on Air Canada.
One of the first things his Government did after it took power in 1984 was to deindex the income tax system. Then it tried to deindex the old age pensions after the Prime Minister said that pensions and help for pensioners was a sacred trust. This gang cannot shoot straight and this gang cannot be trusted.
I am raising this because I think the Government itself has to realize just how profound is the deception, disaffection and disillusionment among Canadians since the Conservatives came to power in 1984.
There has been some improvement in terms of economic performance of our country. That has happened because of international factors and because of a spillover of economic growth from the United States. That probably would have happened under any Party in power. However, it has not affected how people perceive the Conservatives. There is some justice to their perception because people understand that whether or not there are more jobs or some improvement in certain areas of the economy, a lot more than that is needed. We need integrity in this country, we need honesty, and we have not been getting that. Instead, there has been a succession of scandals, an unprecedented succession of Ministers having to leave office under a cloud or facing various charges in the court and so on.
The public has had to shell out for expensive inquiries around members of the Cabinet. It is no wonder this has come right back into the hands of the man who leads the country, the Prime Minister.
When the Government announced in April that it intended to privatize Air Canada, it is no wonder that people responded by saying it was a betrayal. That is exactly what it is.

Mr. Speaker, personally, I have considerable doubts about the integrity and honesty of this Government, and I remember a meeting the Prime Minister (Mr. Mulroney) had with Mr. Laberge of the QFL, the first in a series of consultations with leaders of the labour movement in Canada, on January 15, 1985. When the Prime Minister met reporters upon leaving the meeting, he said: "Some people want to buy the CBC. The CBC is not for sale! Air Canada is not for sale!" Mr. Speaker, how can we trust a Prime Minister who makes statements that are completely turned around in a matter of days or months?

Recently there was another example of that exact question about the credibility of the Government and the kind of tawdry, sleazy government it is intent on giving to Canada. That example was the announcement made a few days ago that the Government intends to spend some $30 million of taxpayer's money on an advertising PR campaign for the free trade agreement. Some of that money has already been spent.
The Minister responsible for the trade agreement has hired the campaign manager who ran his leadership campaign in 1984 to direct this particular effort. The Minister is now jetting across Canada, going to barbecues and attending meetings, to say that free trade is good.
Until now, the campaigns have not affected the public's perception much, and people continue to say that they have grave misgivings about the trade agreement. They have even greater misgivings about that kind of misuse of public funds. They ask how the Conservatives can cough up a billion dollars to bail out some western banks, including some $300 million to foreign banks who had short-term deposits in western banks. These are not ranchers or farmers, these are not senior citizens
June 3, 1988

eking out their living in retirement on the basis of money they deposited with the Canadian Commercial Bank or Northland Bank. These are big money machines in the United States and abroad that happened to put money in short-term deposits in these two banks in Canada, knowing the risk. They were compensated.
If Air Canada needs $300 million for equipment, why could that money not have been put aside? Instead, the Government could have put $700 million into Northland and CCB and kept the remaining money to ensure that Air Canada would not be sold by a Government that claims it is starved for money.
The same Government that says it must sell Air Canada is capable of turning around and saying the defence of the Arctic in this country requires Canada to have a dozen nuclear-powered submarines at a cost it says is $8 billion but which every expert says will approach $16 billion.
I think you should ask the average Canadian, Mr. Speaker, whether on balance people would prefer that we have an extra submarine or that we put half or one-third of the money the sub would cost into keeping Air Canada as a national instrument and as a company that continues to be owned by all Canadians.
One thing that puzzles me about this-


Mr. Scowen:: It doesn't take much to puzzle you.


Michael Morris Cassidy: -is how the devil can you sell to Canadians something that Canadians already own? I really wonder about that. We are not talking about broadening the ownership of Air Canada, we are talking about narrowing it.
After privatization takes place, if it does take place, then we will see a few thousand Canadians, some Americans or other foreigners who will control Air Canada whether or not their shareholding is 45 per cent or 100 per cent. There, too, we have an example of deception of the Government and dishonesty of the Prime Minister (Mr. Mulroney) and the Minister responsible, the Deputy Prime Minister (Mr. Mazankowski) and others for this particular move. That dishonesty lies in the fact that the Government is trying to maintain that the majority stake in Air Canada is kept in the hands of the Minister of Transport (Mr. Bouchard). But the Minister of Transport and the Minister responsible for this deal, the Deputy Prime Minister, have specifically announced that 55 per cent ownership will be a passive ownership and will not be voted. In other words, it will follow decisions made by the directors who were selected by the private sector shareholders. That it seems to me does not leave us in a very good position at all. It means that Air Canada's control will have effectively been sold, whether or not the majority of the shares remain in the hands of the Minister of Transport.
May I say, as the spokesperson for finance for my Party- and I want to be quite specific-that if we arrive in government in a few months' time, and there is very much a prospect
Air Canada
of that happening, and we find that 55 per cent of the shares in Air Canada continue to be in the hands of the Minister of Transport, we will not feel bound by promises made by the Government now that that will be a passive holding which will go exactly the way the private shareholders want it to go. That is an unconscionable commitment, a commitment which no government should make. If the people of Canada own the majority of Air Canada, then they should have the right to direct Air Canada just as it is done in the private sector.
Suggestions from the private sector that because Air Canada is publicly owned it somehow acts unfairly are just plain bunkum. The Chairman of Air Canada, who favours privatization, regrettably, has strongly reacted to any suggestion that Air Canada is operating under unfair business practices. Mr. Taylor responded to a critique by CP Air saying, "It is not our size that bothers the President of CP Air, it is our skill". He added, "Our shareholding community is 25 million Canadian citizens, and a great many of them feel a direct interest in our company". I think that is important. I will come to this question in just a second about what I believe is genuinely public enterprise culture which has served this country extremely well. It would be tragic to back away from it in the case of Air Canada. When Canadians see the Maple Leaf in the circle which is the Air Canada logo, they know it is theirs.
I can remember the day 10 or 15 years ago when perhaps Air Canada had too great a market share, too much control over the markets and it was criticized. The service was not as good as it might have been. Let me point out how the service in Air Canada has improved. This airline has won efficiency, tourists, courtesy, service and safety awards consistently over the years. Its operating statistics have put it in the upper rank of airlines in North America. Air Canada is a good airline.
I want to say to Mr. Taylor and Mr. Jeanniot and all the men and women who are employees of Air Canada that as one Canadian I am proud of Air Canada. I do not think we should try to punish them by selling it off and saying we are ashamed of the contribution it has made to this country over the course of the last few years.
I would say as well that if the Government had evidence that Air Canada was overstaffed and had evidence that it was being run inefficiently, the Government has had three and a half years to use its control of Air Canada to change it. The Government could and have replaced the Chairman or President of Air Canada and brought in new management and told them to do a decent job.
At British Air about one-third of the workforce was cut before Margaret Thatcher sold the company into the private sector. There were some real staff problems, but those problems do not exist with Air Canada or, if they do, I certainly have not heard them discussed by the Government as part of its justification for the sale.
What does the Government try to maintain? It maintains that Air Canada will become an unprofitable airline unless it is

June 3, 1988
Air Canada
privatized. Over the last 10 years Air Canada has made profits of over $300 million. It has had profits in 10 of the last 12 years. There is absolutely no evidence that that will change. In fact, last year Air Canada's profits would have been upwards of $100 million if it had not been for a labour dispute toward the end of the year.
The Government says that unless Air Canada is privatized it will not able to replace its fleet of aircraft over the next few years because it will not be able to raise the capital to finance the move. I am not exactly sure what analogy to give to this, but let us consider the example of parents providing room and board for their son or daughter so that he or she can go to university and then turning around and saying to that son or daughter, "You have to pay for the room and board", to which the son or daughter replies, "Then I can't go to university". Parents will then blame their child for dropping out of university because he or she refuses to pay the room and board because it was not being provided by the parent in a parental role.
If I can come back to the corporate matter we, the people of Canada, own Air Canada. We own the equity of Air Canada. Air Canada has not had any equity from its owners over the last 10 years despite enormous changes in aviation internationally and nationally over the course of that period of time. Air Canada has done an outstanding job of maintaining competitiveness, of changing the way it operates, of providing competitive fares so people can fly across this country from time to time and return for $300 or $400, bringing air travel within the reach of many people who could not afford fares the way they were eight or ten years ago.
The reason that Air Canada cannot reasonably get those new aircraft is the Government refuses. The Government says it will not give it any equity, but then says Air Canada cannot compete to get new aircraft because it has no equity. Of course it has no equity because the Government will not give Air Canada any equity.
We know there was a shoot-out on this issue between the then Minister of Transport, who is now the Minister for International Trade (Mr. Crosbie), and the Minister of Finance (Mr. Wilson). Air Canada came along and said it needed $300 million in equity. The Government said no, and the Minister responsible, the Deputy Prime Minister, then went ahead with privatization. The Government created a crisis where no crisis needed to exist.
The Government, which cannot find $300 million equity, has not explored other means such as lease-backs, nor has there been any published statement about the kinds of concessional terms available from aircraft manufacturers to assist with the financing of the new fleet that Air Canada needs over the course of the next 15 years. The airline needs to spend a couple of billion dollars. It is a lot of money and some of the money has to be in the form of equity. As a New Democrat I understand and accept that. If my Party were in power, the Minister of Finance of my Party would ensure that
the equity which Air Canada needs, if that is the solution, can and would be found within the budget of the people of Canada in order to allow Air Canada to remain as a national and publicly owned airline.
Let us come back to the question that if the Government can spend $16 billion or $18 billion on a number of submarines, what is wrong with keeping Air Canada in public hands? If the Government can spend close to $1 billion on a low-level air defence system which, believe it or not, will protect two military airports in West Germany as part of our NATO commitment, then why can it not come up with $300 million for Air Canada?
I do not believe that the entire $300 million is needed today. I have had a look at Air Canada's balance sheet. It needs some infusion of equity, but if it were assured that it could have $100 million as of July 1 and a further injection of capital in, let's say, April of next year, and the rest in March or April of 1990, that would do the job. That would ensure that Air Canada could go forward confidently and order the new aircraft it needs. That would avoid the loss of control of this airline as a consequence of the Government's short-sighted policies.
Then they say that the federal Government has overextended itself in support of Air Canada. I am not sure what they are talking about. There have not been public funds going into Air Canada. This has not been like de Havilland or Canadair. Then they say that Air Canada will become leaner, meaner and more efficient if it goes into private hands. That case has not been proved. The Chairman of Air Canada himself says that it is an efficient airline.
The Chairman and the President of Air Canada say that Canadian consumers would immediately see the benefits of a privatized Air Canada in lower fares and aggressive fights for passengers. If I were the Minister of Transport, I would call those folk in and say: "What the devil are you doing? You say you can cut fares if we follow your campaign to become privatized". That is blackmail on the part of Mr. Jeanniot and Mr. Taylor. It is nothing less.
As the Chairman and the President of Air Canada responsible for a Crown corporation, they have been acting quite improperly and inappropriately in the launching of the privatization campaign that they have launched consistently over the last several years. I believe that if the Government had any gumption at all, it would tell the Chairman and the President: "You are our airline right now. We speak for the people of Canada. You quit that campaign for privatization. That is a decision that we as a Government will take. Don't try to force our hands".
I would like to conclude with some notes that go back to that great Canadian, Sir John A. Macdonald. As my friend, Herschel Hardin, in his excellent book A Nation Unaware: The Canadian Economic Culture, pointed out several years
June 3, 1988

ago, this country has had and has now a public enterprise culture. We have good and efficient railways because we have Canadian National and Canadian Pacific. Canadian National was the result of lousy investments in the private sector initially, but it has given Canada very efficient rail service. There is the CBC and private television broadcasting in healthy competition. The public sector helps to set the standards and to ensure service to all Canadians across this broad and diverse country. I know that in the event that the broadcasting sector really falls down on the job, the CBC will be there to do it.
We have Petro-Canada and private oil companies. We have private and public companies in other sectors as well. While it may seem that there is reasonable competition between Canadian Airlines International, Wardair and Air Canada right now, we do not have the assurance that that will continue. It could simply collapse the way the U.S. airline industry almost collapsed after deregulation under Reagan just a few years ago. We could have chaos and we would have no national instrument.
Just because the Government feels that the instrument of national policy in air transportation may not be needed today-and I do not agree with the Government-that is no reason to abandon it and do away with a national instrument for public policy in the passenger and freight aviation sectors should it be needed in the year 1995 or the year 2005. For all of those reasons, I believe that this country can afford to keep Air Canada in public hands. It should be able to afford to keep Air Canada as an instrument of public policy and it should be proud of the job Air Canada has done over the last half century.


James Douglas Manly: Mr. Speaker, as the finance critic for the New Democratic Party, I am sure my hon. colleague is aware of the very heavy tax burdens that have been placed on the Canadian people over the last four years by the Conservative Government. There is a lot of concern on the part of the Government about the deficit.
Does my colleague see the sale of Air Canada as being one possible way of reducing the deficit? If so, how significant an impact would it have on reducing the deficit? Would that in any way result in lower taxes for the hard-pressed Canadian taxpayers?


Michael Morris Cassidy: Mr. Speaker, the effect on the deficit of this particular measure would be minuscule. It would be infinitesimal. It would be absolutely microscopic. It would be insignificant. It would be invisible. It could not be seen in any meaningful way. I do hope I make myself clear.
Let us look at the figures. The national debt of Canada currently runs somewhere over $250 billion, and that is uncomfortably high. Our annual deficit is running at something like $28 billion or $29 billion a year. I am not sure how the Government would deal with the money received from the sale of shares in Air Canada. Does it really want to sell the
Air Canada
jewels and use that money to pay for the groceries? That is essentially what would happen if all of that $300 million were to be put against the deficit. If it were put against the deficit, it would represent 1 per cent of one year's deficit. That would be the total reduction.
If the Government really wants to reduce the deficit, let it cut back on spending programs for nuclear submarines. I think Canadians would be an awful lot happier about owning an airline which encourages international co-operation than they would about having a dozen nuclear subs which would be increasing confrontation between the western powers and the powers in the Soviet bloc.
If the Government were to invest that money, it would return about $30 million a year. That would be meaningful in the sense that it would reduce the annual deficit of Canada, at its current rate, by about one-tenth of 1 per cent on a continuing basis. That is a very small sum indeed.
Finally, I have been reading in some commentaries in the financial press the suggestion that the benefit of the sale of the shares will provide the $300 million in equity that Air Canada needs. If I understand that correctly, that means that the Treasury will not get a dime in order to reduce the deficit. Air Canada is not costing us any money right now. There is no annual pay-out to Air Canada the way there is to VIA Rail. This move would simply provide Air Canada with $300 million in equity, and there has been no rationale or serious attempt to look for various other ways to find that money. The only argument then is that if we were to proceed and to provide that equity, there would be some charge which would either have to be met by lower expenses elsewhere, such as on nuclear subs, or else by an increase in the deficit. However, it is not worth half a bag of chicken feed relative to the over-all size of the deficit of the Government of Canada.


Douglas Grinslade Lewis: Mr. Speaker, a question or comment. I wish to advise that since an agreement could not be reached under the provisions of Standing Order 115 and Standing Order 116 with respect to an allocation of time for the second reading of 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-


Michael Morris Cassidy: Mr. Speaker, a point of order.


Douglas Grinslade Lewis: -I therefore, under the provisions of Standing Order 117-


Michael Morris Cassidy: Mr. Speaker, a point of order!


Douglas Grinslade Lewis: -give notice of my intention to move a time allocation motion at the next sitting of the House for the purpose of allocating a specified number of days or hours for the consideration and disposal of the second reading stage of the said Bill.

June 3, 1988
Air Canada


Michael Morris Cassidy: Mr. Speaker, on a point of order, the Hon, Member for Hamilton Mountain (Ms. Dewar) was on her feet to ask a question. It is my distinct understanding that the Chair is certainly free to recognize a Member from any Party on a question or comment until the period for questions or comments has expired. At that time, the Chair is certainly free to recognize the government House Leader or any other Hon. Member to speak. I am not sure where we were in the normal rotation, but where we were not was in a situation in which, purporting to rise under questions and comments, the government House Leader could proceed to move a motion for time allocation.
My point is this. That motion would have been all right at the end of the time for questions and comments or when questions and comments had come to a close. I believe the procedure followed by the Minister just a few minutes ago, where he got up purporting to do one thing and then did another, is misleading, deceitful, wrong, and should not be permitted.


Mr. Deputy Speaker:: There is no need to hear the Minister. The correct procedure was followed.


Michael Morris Cassidy: On a further point of order, Mr. Speaker. My colleague from Yorkton-Melville was able to hear the Minister while I was trying to attract your attention on a point of order. As he pointed out to me, the Minister sought to introduce a motion for time allocation. He was not calling for a further extension of hours on this Bill. Since he had just gotten up and called for an extension of hours the last time he got on his feet, I had no choice but to try to attract your attention on the point of order. However, I believe the point of order is still valid, and that is, when we are on questions and comments it is surely inappropriate and out of order for a government spokesperson to rise in order to move a procedural motion.


Douglas Grinslade Lewis: Lome, take over, that guy is hopeless.


Michael Morris Cassidy: That should take place in the gap between one speaker and another.


Douglas Grinslade Lewis: Save him, Lome.


Michael Morris Cassidy: That would be at the end of the period for questions and comments. That is the point I draw to your attention, Mr. Speaker.


Mr. Deputy Speaker:: I realize full well what the Hon. Member is saying. On certain types of motions the Hon. Member would of course be correct. However, the notice that was given can be given at any time.
We are now back to questions and comments on the speech by the Hon. Member for Ottawa Centre (Mr. Cassidy).


Marion Dewar: Mr. Speaker, I appreciate the extensive rationale that my colleague gave for opposing the sale of Air Canada. However, he did not address the kind of policy introduced by the previous Government concerning deregulation, and I think it is important that we look at that.
My question is whether the fact that we are getting deregulation is part and parcel of what the Government is concerned about when it talks about selling off Air Canada, the felling that maybe consumers will not benefit from lower air fares. Or has the experience in the U.S. been that consumers really have not benefited that much from deregulation? Is my colleague aware of the situation in the industry in the U.S. as far as consumers are concerned, and would this inhibit our ability to stabilize the industry here when we lose such an important tool as a national airline?


Michael Morris Cassidy: Mr. Speaker, I think the best way to describe the situation in the U.S. is that it is a bit like the curate's egg, it is good in parts. However, it is certainly bad in parts as well. At times it is downright chaotic.
Every sector has cause to complain about air travel in the U.S. There are certain people and groups who benefit. For example, if you live in New York and have a girlfriend in Los Angeles, it is cheaper than ever before to go and visit her once a month or vice versa.


Ms. Jewett:: What about a boyfriend?


Michael Morris Cassidy: Or a boyfriend. If you live close to a major airport and wish to go someplace else, then it has perhaps been a benefit. On the other hand, should you have family living in some smaller community, then just watch out.
I talked with someone in my constituency office about this the other day. She had a telephone call telling her about the death of her mother in California. In order to go there for her mother's funeral, which she was in the end unable to attend, she would have had to go through four changes of planes. Because the fares were not melded in many cases, they went up and up and up if you were trying to get to the smaller communities. The names of the airlines seem to change every six months. For example, I do not know who Piedmont is but it seems to be very big in the eastern United States right now. I wonder what happened to Eastern Airlines. They seem to have disappeared.


Benno Friesen: They are still there.


Michael Morris Cassidy: Are they? Maybe.
My final point is that for people in business or politics, those who need a premium quality service to get to places quickly and are very busy on behalf of their corporation or the people they represent, the situation is one of chronic delays, sitting stacked up in the airways over O'Hare Airport, Kennedy Airport or La Guardia. It means constant and chronic delays, fatigue, frustration and that kind of thing.
June 3, 1988

The point I want to make about Canada is this. For people along the main trunk from Vancouver through possibly Halifax, there are some benefits in deregulation. It is possible to go to the U.K. for less than $500. It is possible to get the occasional fare from Ottawa to Vancouver for $300 return. However, this is not a country consisting of a 3,000 mile long line of people. We have people living in Yellowknife and Whitehorse who are still subject to monopoly conditions. Before they can benefit from the fares coming in under deregulation they have to pay $500 to get to southern Canada. As a result, they are severely inhibited. They cannot get joint fares any more because of the way the system works.
One of the benefits of having a national airline is that it is more appropriate and possible to have a national policy so that all Canadians, not just those living in our eight or 10 biggest cities, have the benefit of cheaper fares and greater availability of flights.
Mir. Deputy Speaker: Resuming debate.


Aideen Nicholson: Mr. Speaker, this Bill was introduced in haste and unexpectedly by the Deputy Prime Minister (Mr. Mazankowski) after his predecessor Minister responsible for privatization took a long time to consider it without the Bill being presented to the House. Let us look at some statements by the Government. Some time ago the Prime Minister (Mr. Mulroney) said Air Canada is not for sale. He said Canada needs a national airline. He said there is a possibility that shares in Air Canada will be sold to the public but the Government would certainly retain a majority interest. So spoke the Prime Minister. However, the Deputy Prime Minister said that the legislation will permit the transfer of all Air Canada shares to the public. This is essentially the first phase. What are we to believe?
The industry is distinctly cool to the sale, presumably because they, like Members of this House, are not quite sure what to believe either. Critics think that because of its heavy demands for capital it is unlikely that Air Canada will pay shareholders any dividends for a long time. Critics are unclear and uneasy about the precise division of powers as between the Government and the private shareholders. Again, the legislation is unclear.
On April 12, 1988, the Deputy Prime Minister stated that after completion of the initial offering the Government would hold no less than 55 per cent of the shares but would vote in accordance with the majority of the 45 per cent of private shareholders. That means that in theory several shareholders holding a majority of the 45 per cent, acting in concert, could exert considerable control over the company, and if the Government stays with that position it would be powerless.
The record following deregulation of airlines in the United States and Britain has not been encouraging. We have heard of extraordinary inconvenience to travellers in the name of economy. Flights are cancelled, flights are late, flights are
Air Canada
crowded, and the less profitable, more remote areas are getting very poor service.
The three unions concerned with Air Canada have opposed privatization largely on the grounds of their concerns with safety. In one of their briefs they stated:
A publicly owned Air Canada provides accountability and a "policy
window" to ensure safety and service in an increasingly concentrated,
deregulated industry.
Canada is a very large nation. One of our important planks of nation-building has been communications and transportation. The railways opened up this country and established the east-west links in a way which had not been done before and set the development of the country. Air Canada has contributed to that in particular by providing some levels of service to the more outlying areas.
There is within Air Canada now a form of cross-subsidization under which the major routes help to subsidize the less travelled routes. Obviously when the airline is privatized that will not happen if it is run purely on a profit motive. In the smaller Canadian market where expenses as a result of weather conditions make competition with U.S. airlines more difficult I think we can expect that service to small, remote northern areas will disappear or be greatly reduced. Once Air Canada is privatized there is no guarantee at all that jobs and services will be maintained.
Air Canada is now involved in numerous feeder lines. It owns 100 per cent of Air B.C., 75 per cent of Air Ontario, 75 per cent of Austin Airways, and 49 per cent of Air Nova. If the experience with the privatization of Air Canada is the same as in the United States and Great Britain, if the profit motive takes precedence over public policy goals of providing service to all Canadians, we will see less and less service to the less populated areas while the airlines provide more service in the more profitable, densely populated areas.
Privatization also raises questions about what is going to happen to the estimated $200 million surplus in Air Canada's employee pension fund. I have not heard the Government address this question. Air Canada has proved to be profitable. One must also ask why the Government wants to sell a winner which the people of Canada own and have paid for.
The reason the airline itself is asking for privatization is essentially that it needs capitalization. Do we have to privatize in order to ensure that the airline has funds to replace its aging aircraft? The proposal put forward by my colleague, our critic for transport, the Hon. Member for Papineau (Mr. Ouellet), was that Air Canada be assisted to secure loans at preferential rates to renew its fleet as was done in the past. In 1977, when Air Canada had need for recapitalization, the Liberal Government moved to assist in that way. Indeed, Air Canada has gone on to be a very profitable and very successful airline.
We must ask again whether the Government is moving to privatize because this will really enhance the efficiency of Air Canada and its ability to recapitalize, or is this yet again a

June 3, 1988
Organized Crime
matter of blind ideology to privatize for the sake of privatization without looking at the alternatives or at whether it is even feasible? As I said at the outset, the markets are being decidedly cool at the thought of this offering.
To return to the solutions of the previous Liberal Government, in 1977 this House passed the Air Canada Act under which the corporation now operates. That Act was in response to the Estey Commission of Inquiry which had made certain recommendations. That commission proposed that Air Canada be given the legal and corporate structure, the flexibility, and the financing to operate on a commercial basis on the same footing as its competitors in Canada and abroad. Air Canada was refinanced in 1977 with a debt equity ratio equivalent to that of other major North American airlines.
There is no question that Air Canada requires financing to modernize its fleet, but is privatization the best way to ensure that financing? From the cool reaction of the markets it does not appear likely. Neither is there any evidence that the Government has carefully studied the solutions of the past to see whether they might again be used.
Air Canada does need billions of dollars to finance new aircraft. In the short term it probably has a need for some $300 million to start purchasing. However, the situation is urgent now only because the Government, which has been in power for four years, has done nothing. It has considered, but has failed to act to assist Air Canada. This is yet another example of the Government ruminating for almost four years and then acting in haste to produce the ill-considered motion before us which will not assist Air Canada.
We have clearly seen that the response in the markets is that this Bill is the worst of both worlds. It is not an attractive investment opportunity. In any case, it is very difficult to get people to invest in airlines at the moment, largely because of the chaos in the United States as a result of deregulation there.
Therefore, this Bill is ill-considered and is not going to achieve the Government's goal of recapitalizing Air Canada. There are better ways of assisting Air Canada to buy the necessary new equipment and continue to be profitable as it has been in the past.


The Acting Speaker (Mr. Danis):: 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-MOTIONS   ORGANIZED CRIME

[Stage Direction]
ADVISABILITY OF ESTABLISHING PARLIAMENTARY TASK FORCE Miss Aideen Nicholson (Trinity) moved:
That a Special joint Committee be appointed to act as a Parliamentary Task Force to investigate and report upon the extent to which organized crime is connected to the legislative, judicial and administrative institutions of Canadian society;
That the committee be composed of not more than 15 Members to be named at a later date;
That the committee shall have all of the powers given to Standing Committees by Standing Order 96(1);
That the committee have the power to retain the services of professional, technical and clerical staff as may be deemed necessary;
That the committee have the power to adjourn or travel from place to place inside Canada and that, when deemed necessary, the required staff accompany the committee; and
That a message be sent to the Senate praying their Honours to unite with this House for this purpose.
She said: Mr. Speaker, last year I proposed a motion which suggested that a royal commission be appointed to examine various aspects of organized crime. The motion was voted on but defeated. Some of those who spoke on the motion suggested that a royal commission would be too expensive. Some of the government Members had speeches that were extraordinarily similar. One might even suspect they had all been written by the same hand. The speeches indicated that the Department of Justice had absolutely everything in hand and there was essentially very little problem.
So I have come back today with a new motion to take care of the criticism of costs. I have scaled this down so that instead of a royal commission, I am proposing a joint committee of the Senate and the House of Commons.
May I also point out that some of the Members who spoke on my previous motion estimated the cost of organized crime in our society in Canada as being up to $10 billion a year. One would think that to counter that, the costs of a commission might be a very good investment.
The second round of criticism was that the new legislation being brought in by the Government would deal much more effectively with organized crime. Not all the legislation talked about is here yet. Nevertheless, since I have faith, I am concentrating this motion on the extent to which organized crime is connected to the legislative, judicial and administrative institutions of Canadian society.
The definition in Canada of organized crime, I believe, is two or more persons consorting together on a continuing basis to participate in illegal activities either directly or indirectly for gain. Organized crime, as we know, has no ethnicity. Organized crime can involve people of many ethnic origins. What I want to talk about today is the invasion by organized crime of legitimate business, the attempts to infiltrate members of organized crime into situations where they can have control, be it unions, the judiciary, the police and, of course, political office.
I would suggest that an examination of these matters can only be helpful if properly done, with careful rules of evidence, of course. No one would want to see a McCarthy-type
June 3, 1988
[Stage Direction]
inquisition. What is necessary is to turn the bright light of publicity on those who would exploit our fellow Canadians.
Something about which we must all surely be aware is that many of the activities of organized crime in Canada hurt the poor and defenceless in particular. Organized crime is being addressed by a Bill still before the House, that is, Bill C-61, an Act to amend the Criminal Code, the Food and Drugs Act and the Narcotic Control Act. This Bill, among other things, addresses the seizures of criminals' profits as well as money laundering. But we have yet to see this Bill available for third reading debate.
Canada still lags behind both the United States and Italy where organized crime has been examined and legislation enacted. The present Secretary of State for External Affairs (Mr. Clark), when he was in opposition, called for a royal commission into organized crime. So did the late Right Hon. Diefenbaker when he was in opposition. But there has never been a national commission into organized crime in Canadian history. We have had two provincial inquiries, one in Montreal and one in Ontario, the Waisberg Commission, which reported, I believe, in 1973. Both of these commissions were very effective in bringing to public attention abuses in the construction trade and other legitimate trades and unions which had been infiltrated by members of organized crime. It is this white light of publicity that will be one of the greatest deterrents to organized crime. When citizens are informed, they can protect themselves and, indeed, more public support and public pressure is needed.
Criminals fear the exposure of their crimes and the resulting efforts by society to limit profitability. The history of what has happened when organized crime has gotten into legitimate business is full of dangerous and unpleasant situations. When organized crime is involved in contract bidding in the construction industry, inferior materials can be used and lives can be lost. The corruption of public officials is necessary for this to happen and the corruption of public officials and business is very difficult to uncover. Last October, in the course of debate, the Hon. Member for St. Catharines (Mr. Reid), described how business people, well known in the community, may be drawn innocently into the circle of organized crime by the prospects of large profits, not always knowing that the links to criminal organizations exist. Poor people find themselves drawn into organized crime. They borrow, they gamble, they then find they are being pressured to do unacceptable things. In Canada and in other countries, organized criminals are protected by using legal businesses to mask their activities.
To look outside of Canada at things that have happened elsewhere in the world, I will point out that in the fall of 1986, most Members here, I think, were reading about the situation of the European Economic Community where millions of dollars a year were being drained from the Community by the very ingenious use by organized crime of the common agricultural policy in Europe. Criminals are ingenious, and if they have officials in place who can give them information about how certain systems work, they are able to exploit the system.
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Something else was happening at the same time as the European Economic Community was able to pinpoint the involvement by organized crime in this exploitation and abuse of a particular compensation measure under the common agriculture policy. In Britain people were becoming concerned about the organized structure of the United States illicit drug industry moving into Britain.
To go back a little further, in 1982, an Italian banker was found hanging from a bridge in Blackfriars, London. It was never determined whether this was suicide or murder. But you will remember, Mr. Speaker, this banker was the head of the Vatican Bank. In fact, the Italian Justice Ministry later issued arrest warrants for senior personnel of that bank. This was again proven to be a situation in which the tentacles of organized crime had extended even into the Vatican's own bank.
Members of this House who have read the book Mob Rule by James Dubro will be aware of incidents that have happened in Canada in which criminals have talked about laundering their money through apparently legitimate businesses. They have also talked about their practices in corrupt registration of deeds. Much of this depends on having an official in place who is controlled by these individuals. Without someone in a key position some of these schemes would fail.
Members of this House have been lobbied on behalf of organized crime, but innocently. One particular Member of the House whose integrity is absolutely beyond question was asked by local business people who were well respected and by a priest to write to the Solicitor General asking for special treatment for a prisoner on the grounds of the prisoner's youth and inexperience. That prisoner was a key figure in organized crime who is well known now to have ordered murders from his cell and who was himself subsequently killed by a rival gang. One could go on.
We are all aware that from time to time criminals will allege that they had a judge or a policeman in their pocket. In many cases this allegation is totally without foundation. It is merely a matter of boasting and trying to appear more powerful to the people they are trying to impress. However, it may not always be boasting. While the question exists it should be examined.
I repeat what I said at the outset. I certainly would not want to see, and I know that no Member of the House would want to see, a special committee of the Senate and of the House of Commons used in any way as a fishing expedition or used in any way to endanger people's reputations without full proof. But the mere fact that such a committee was known to be sitting, was known to be willing to receive witnesses, would itself cast a very bright light of publicity on the activities of organized crime and would act as a deterrent.
We have certainly seen that whenever politicians have shown the courage to tackle organized crime they have been able to win. We need only look to that extraordinarily brave
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Organized Crime
Italian mayor in Palermo who in spite of threats to him and his family went ahead in standing up to organized crime. The implications have been tremendous, both in the United and in Italy.
We also have to remember, as my colleague from Winnipeg pointed out in a previous debate on this subject, now that it is less profitable and less safe for organized criminals to ply their trade in the United States and in Italy they will be looking for other places to move to and other sources of influence. Canada must be prepared for this. I suggest that the establishment of a special joint committee of the House of Commons and the Senate to examine this whole subject could only be a useful and constructive one.
Pauline Browes: Mr. Speaker, I appreciate this opportunity to address the House on the motion of the Hon. Member for Trinity (Miss Nicholson) for a parliamentary inquiry into organized crime. Much of the organized criminal activity in Canada involves the supplying of illegal goods and services, gambling, loan sharking, drugs, prostitution, pornography, and other forms of vice are included. Press reports indicate that organized crime is also involved in legitimate business with the purpose to monopolize services and manipulate prices. Within these structures activity is not dependent upon any one individual, and the criminal activity will continue to flourish even if one or more of the principals is removed.
We also know that persons involved in organized crime represent a wide variety of backgrounds and origins. They are groups of criminals, some working within structures as complex as those of some large corporations and subject to internal laws which are rigidly enforced. Their actions are well thought out conspiracy aimed at gaining control over fields of activity in order to amass profits.
All Canadians are concerned that organized criminals be thwarted, exposed, punished, and incapacitated to show that their business will not be tolerated in Canada. But I ask, Mr. Speaker, is the way the Hon. Member for Trinity suggests the best way to deal with organized crime in Canada?
Some Canadians, perhaps influenced by media, may have vastly inflated views of the extent of organized crime in Canada. While I do not want to minimize the threat posed by organized crime in Canada, particularly with respect to drug trafficking, the combined law enforcement efforts of the various orders of government in Canada are increasingly effective in controlling organized crime.
A major problem with inquiries of the nature proposed here is that they attract a great deal of public attention. There are public hearings, daily reports in the media, and discussions of the latest revelations on national news and interview programs which could sensationalize the issue and undermine the work of law enforcement authorities.
A parliamentary committee collects information. It is not a court of law where the rules of evidence are strictly applied.
When there is a breach of criminal conduct only a trial, where a defence can be made public, satisfies the Canadian sense of justice.
Therefore, because the rules of evidence are less rigorous in parliamentary inquiries than those applicable to Canadian courts, inquiries have to be handled very carefully. Moreover, evidence educed before such an inquiry could not be used in court proceedings and thus is of little value from a law enforcement perspective.
Moreover, it is likely that a parliamentary inquiry would unnecessarily alarm Canadians by creating the impression that organized crime has not been adequately addressed by Canadian police and the courts. In addition, I am concerned that an inquiry would tend to deflect both attention and resources away from ongoing intelligence and enforcement efforts, and possibly retard the investigation and prosecution of major cases.
I believe that the arrangements we already have in this country are our strength in combating organized crime. We have a federal police force, the RCMP, dealing with the problem. We have all levels of government and their enforcement agencies co-operating to provide an effective shield against organized crime. We have national intelligence systems, national police training programs, joint force operations, and a host of other mechanisms. Major institutions, such as the Canadian banking community, are examining ways and means of minimizing the extent to which they can be used to launder money.
Those efforts are not widely appreciated and reported on in the media. In Canada, we tend to proceed more quietly and with less fanfare than in the United States.
In my view the approach of Canadian law enforcement authorities to organized crime is effective. It focuses efforts and resources and reflects excellent co-operation between all jurisdictions in the prevention, detection, investigation, and prosecution of organized crime figures. Enforcement policy and activities operate to preserve the confidence of Canadians in the integrity of our social, political and economic institutions as the major influences constraining the corruption that organized crime attempts to promote.
Key to this is the integrity of Canada's police, courts, and other law enforcement institutions as our front line defence against organized crime. Fortunately, these institutions have been and remain free of corruption, and we must sustain policy and programs to ensure that it will never become a country in which the underworld can take root.
The Government recognizes the Hon. Member's legitimate concerns respecting organized crime. A parliamentary inquiry would add little to the mechanisms already in place to deal with organized crime. Rather, this House should support and encourage the federal and provincial Governments in their law
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enforcement activities, including the expeditious handling of the proceeds of crime and mutual legal assistance legislation which are designed to make the law more effective in dealing with organized crime.
While I am confident that the motion put forward by the Hon. Member for Trinity reflects serious concern over the extent of organized crime in Canadian society and in advancing measures to facilitate enforcement efforts, the Hon. Member can be assured that members of the Canadian police community and other dedicated criminal justice professionals are dealing competently in their response to the problem. They have the confidence of this Government and merit the support of all Members of the House, and Canadians generally.
I believe that it would not be in the best interest of Canadians and our efforts against organized crime to establish a parliamentary inquiry.


Jack Harris: Mr. Speaker, I am pleased to participate in the debate before the House on the motion of the Hon. Member for Trinity (Miss Nicholson). In looking carefully at the motion I see are not talking about an over-all investigation into organized crime in this country. Canada is a very different country from that south of the border in the United States of America. Many of our images of organized crime come from the United States and perhaps from things that we as children may have seen on television, for those of us who had television when we were children, or read about from south of the border.
Television programs, movies, and books all give us a picture of organized crime, violence and essentially corruption that may result, in addition to the terror, murder, and death that is caused by the activities of people engaged in organized crime. That is one image that we have of organized crime, as I say, mostly coming from south of the border, but more and more we also hear of the activities of organized crime in Canada.
When one looks closely at the motion proposed by the Hon. Member for Trinity, an over-all investigation into organized crime and the extent of organized crime is not what is being suggested, but rather an inquiry into the extent to which organized crime is connected to the legislative, judicial, and administrative institutions of Canadian society. That is a very directed question and I would submit a very timely one, given the nature of this Parliament and the type of changes that are taking place in the way legislative decisions are made in this country.
As a result of the recent reforms to the House of Commons, as a further result of the greater efforts at lobbying individual Members and Governments that have taken place only in the last several years, we are seeing effective means whereby individuals, corporations, or groups with large sums of money, however they may get it, can use that money to influence the decision-making of this Parliament, of the Cabinet, and of the Government.
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If that can be done at this level of Canadian society, at what we regard as the highest level of democratic decision-making in the country, at the level of the federal Parliament, and if those lobbying efforts can be made which are financed by funds collected in various ways or coming from corporate coffers, then we must be careful to ensure that any activity of that nature, that any influencing attempted on the legislative, judicial, and administrative bodies, and on the institutions of Canadian society which guarantee us the democracy, is tightly controlled, regulated, and insulated from the activities of those who would seek to corrupt governmental, institutional, and administrative decision-making in this country.
As we know, so many of the decisions that are most important in this country are not made in this legislature or by the Cabinet, because it is impossible for these decisions to be made. There are numerous administrative tribunals and boards. The CRTC makes numerous decisions which affect the corporate viability and profitability of Canadian corporations whether they be privately or publicly owned, or owned by a consortium. The operation of those companies and institutions are affected by many administrative decisions made outside this House.
If we look only at the House of Commons, we increasingly see an incredible effort to influence the decisions of Members of the House. We saw it most recently with the tobacco Bills, C-51 and C-204. There was extensive lobbying of individual Members, and I believe that will increase, perhaps to the extent that it is carried on in the United States where thousands of lobbyists in Washington attempt to influence the decision-makers in the Senate and House of Representatives.
I believe a study of the effect of organized crime on institutions is not a narrow point but a focused point. This is a timely motion moved by the Hon. Member for Trinity. There will be an increased focus of attention on how Members of Parliament and members of the Cabinet are making decisions that affect what happens in Canada.
There has been a rise in the number of corporations that are involved in the decisions that are made behind closed doors on the Hill. Many of these corporations include many former powerful federal and provincial politicians.
We know that organized crime is active in this country but we cannot limit an inquiry of this nature into the kind of godfather, Mafia-type activity with which we associate organized crime.
The definition of organized crime urged upon us by the Member for Trinity involved two or more people working together to effect an illegal purpose. That is somewhat the definition of conspiracy. Any conspiracy where two or more people get together for an illegal purpose is an organized criminal activity.

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Organized Crime
We must also consider organized crime in relation to corporate activity, whether it is in the area of environmental pollution or the breaking of environmental laws in an organized way by corporate decision-making or by criminal neglect on the part of corporate boards or management. That too is an organized crime and we must be vigilant about that type of activity as well.
When organizations that violate environmental laws, health and safety laws, or laws protecting workers, band together to try to influence the Members of the House, committees of the House or influence the Government to relax enforcement procedures, that too is evidence of organized crime influencing the legislative and administrative institutions of Canadian society.
The Hon. Member who spoke before me was concerned about the danger that this motion may scare people. Other Members may debate organized crime in this country and the extent to which it should be addressed. I think we should focus on what the motion says, which is to consider to what extent organized criminal activity is connected to the legislative, judicial and administrative institutions of Canadian society.
This would be a timely inquiry and one that should consider the activities of lobbyists and lobbying groups. I think this question ought to be studied and a joint committee of this Parliament and the other place would be the appropriate body to study it. I support the motion.


John Barry Turner: Mr. Speaker, no one can dispute that there is organized crime in Canada. However, the motion before us today would seem to suggest that Canada does not have enough legal mechanisms to counter organized crime and those who live by it.
The mechanisms we have may not be perfect, but they are continually being improved to ensure that Canadians can live in a safe country.

Mr. Speaker, perhaps I may describe, for the benefit of the Hon. Member for Trinity, a few of the mechanisms that already exist for investigating and fighting organized crime. The police, Crown counsel and the regulatory authorities have used these mechanisms successfully to render harmless those criminals who would otherwise profit from society's illicit lusts and cravings.

First, let us take the Criminal Code. It contains, in section 31(2), a provision which enables the court to declare "forfeit" the possession of property obtained by crime. Similarly, the Narcotic Control Act allows for the seizure of anything relating to an offence under the Act. Clever use of the provisions of these two Acts has led to the ill-gotten gains of the organized criminal drug trafficker being seized by the courts.
The Member for Trinity (Miss Nicholson) spoke also of the ingenuity of the criminal. I dare say that we have a tremendous amount of ingenuity in our police forces and our research institutions. As they develop more effective techniques of criminal analysis, that ingenuity is on the leading edge of keeping up with and in fact ahead of the criminal element that exists in our country.
Another section of the Criminal Code allows for the same punishment to be given for a conspiracy to commit an offence as for the offence itself. This is a particularly valuable weapon against organized crime because it allows police to be proactive in their investigations. By the means of legal wiretaps, they can follow the planning of a crime and then step in and arrest the offenders before the crime itself has been actually committed. This can stop illicit drugs hitting the street, release the loan shark victim from the threat of violence, and prevent the bookie from laying off his bets with another organized criminal in the United States. In addition, the whole organized criminal gang can be prosecuted at the same time as coconspirators.

In the past ten years, this tactic has been used successfully against organized criminals. Thanks to the help of judges who are more inclined to impose severe penalties on drug traffickers and want to acquire a better understanding of the mechanisms of organized crime, there have been some real mopping-up operations recently.

I used the words peines plus severes. I call upon the Justices of our country to vigorously enforce severe penalties which I believe are the deterrent element.
In one Canadian jurisdiction, 400 organized criminals of one sort or another were put behind bars, rendered inactive, or induced to flee this country to escape prosecution. All this within five years of the decision being taken to declare legal war on organized crime.
The criminal courts are not the only battle front on which the war is being waged. Neither are all the soldiers, police and prosecutors. As vendors of illegal goods and services, organized criminals frequently cross swords with the regulatory agencies in our country, both federal and provincial. Customs and income tax officers, stock exchange and liquor licensing officials are just as involved in suppressing organized criminal activity as are police officers and Crown attorneys.
There is a program you may know of, Sir, called Crime Stoppers which evolved from the U.S. It is now very successfully established in the National Capital Region in cooperation with the public, police forces, the judiciary and the legal community. I want to mention Richard Raymond, from Raymond Steel, Bruce Hillary, Sketchley Cleaners; Sgt. Harrison of the Ottawa Police Force, Gary Grant from Sheffield Graphics and Doris Johnson from Crime Stoppers,
June 3, 1988

all of whom have played a major, private role in making this program in Ottawa a most successful one in attacking the criminal element in the National Capital Region. In fact, it is the most successful one of its kind in North America. All of the individuals and officials I have mentioned are fundamental to the task of tracing the financial exploits, the business deals, the empire building, the cheating and the lying and the scams of the organized criminal. These almost invisible officials and individuals patiently weed out the liquor licence application of known criminals who are seeking it for a bar where the real business is to sell and push drugs. They develop evidence to collect the thousands of dollars of tax on undeclared illicit income. They bring about the dispension of trading in phoney stock and seize consignments of heroine or other contraband coming into the country's ports of entry.
All this activity incapacitates the organized criminal without fanfare, without drama and usually without the public ever knowing about it. These are the concerned officials and citizens of our country. Regulatory agencies and administrative tribunals do not always make front page news. You know as well as I, Mr. Speaker, that the RCMP always get their man or woman. What they need are more resources to allow them to do that. They do not want to see more public funds spent on expensive task forces to tell them what they should be doing. They know what they should be doing. They need more help and more money.
In the area of legislation, the Hon. Member for Trinity made reference to the fact that the Minister of Justice (Mr. Hnatyshyn) has introduced Bill C-61, which I understand is coming back to the House shortly from committee. It focuses on the proceeds of crime legislation. It will enable the courts in certain circumstances to strip criminals of assets obtained through criminal means. The proposed legislation will allow the courts to order that the proceeds of designated drug offences and 23 Criminal Code offences be forfeited to the federal or provincial Governments. I urge my colleagues on all sides of the House to make the public aware of these efforts and to pass this legislation before a recess for the summer.
It is essential and it is long overdue. It will give the courts an opportunity to enforce more vigorously what we have to do to seize those assets acquired through criminal activity.
The Minister of Justice has also introduced Bill C-58 which will enable the implementation of the mutual legal assistance treaties discussed previously. The battle is far from won. We all know that. A concerted and continuous effort has to be made, but we are on the right track and this Government is proud of what it has tried to accomplish in this area. I am a little apprehensive that the proposed parliamentary task force might retard ongoing federal, national and international initiatives aimed at organized crime control. The key to this is to get Bill C-61 passed to give the courts and the judges more power to seize assets acquired through criminal activities. Let us throw the book at them so that your children, Sir, my children and our children's children will not have their lives affected by disgusting criminal activity that infiltrates our
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schools, even the primary schools where kids acquire drug habits.
Let us not set up a task force. Let us give the authorities more power, money and resources to go after the criminal element in our country.


Mr. Gilbert Chartrand (Verdun-Saint-Paul):: Mr. Speaker, today I would like to give my assessment of the problem of organized crime. First of all, I would like to say that the Hon. Member for Trinity (Miss Nicholson) is right to be concerned about organized crime in Canada. My only criticism is the solution she suggests. In fact, an inquiry of this type would be more appropriate in the United States, where fragmented attempts to enforce legislation, lack of co-ordination, states' rights and many other elements make it very difficult to discover the extent of the problem posed by organized crime.
In Canada, we are lucky to have a very co-operative system under which policing, prosecution and enforcement bodies exchange information and co-operate in their operations. Thanks to this network we have a very clear understanding of the problem we are dealing with.
The many information sources at our disposal include the annual report prepared by Criminal Intelligence Service Canada, published by the committee on organized crime of the Canadian Association of Chiefs of Police; the annual RCMP report on drugs, Customs Canada's drugs seizure report; and the excellent reports prepared by the various services in Quebec and British Columbia dealing with organized crime. According to these sources, organized crime is not beaten but at least there is little chance it will expand.
In recent years, motorcycle gangs have been a major problem. They have become involved in all forms of organized crime, including drug trafficking, prostitution and contract killings.
The major gangs are very business-like. They increase their numbers by taking over smaller ones. Many bikers have shed the image of the sloppily-dressed trouble-maker and become clever, extremely image-conscious businessmen. The big crime organizations are also present in Canada. The most important members work in central and western Canada, but they often have contacts in many other countries. These groups are involved in what are often referred to as consensual crimes, in other words, customers agree to purchase the illicit goods or services they are offered. These crimes include drug trafficking, prostitution, gambling and loan sharking.
Although the Atlantic provinces appear to be relatively untouched by the more insidious forms of organized crime, there is nevertheless a thriving business in cigarette and alcohol smuggling. The region is also used as a dropping-off point for large cargoes of soft drugs, most of which come from the Caribbean. Youth gangs are also involved in organized

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crime activities and concentrate on gambling, drug trafficking and extortion. Occasionally, intense rivalry among gangs lead to multiple killings.
In a way, these gangs are similar to the motorcycle gangs. Since 1920, sociologists have held the view that youth gangs are often the first step towards much greater involvement in organized crime.
It is essential that measures be taken to prevent new generations of criminals, but I don't think an inquiry on organized crime is the answer. The emphasis must be on education and jobs.
By reducing the unemployment rate and by stressing the needs of Canada's youth, this Government has done a great deal to create a socio-economic climate that is not favourable for the development of organized crime.
Organized crime is a problem in most countries throughout the world. Even East Block countries will admit it exists there as well. There is an international network that focusses on dealing with these problems on a worldwide basis.
Thanks to this mechanism we are familiar with the problems of other countries, and it is reassuring to find that, compared to most countries, Canada has not been overrun by organized crime. Our parliamentary system, and our custom of appointing judges, Crown counsels, police officers and administrators according to merit, have given us a tradition of loyal public servants. It is one of our best defences against organized crime. We have a judicial system that we can trust and of which we can be proud. However, we must be prepared to provide the material assistance that goes along with that trust and that pride. We cannot ask our police officers, our Crown counsels and our judges to keep fighting organized crime without giving them the necessary tools, and today, these include the authority to participate with other countries in a form of judicial cooperation, and also the authority to declare forfeit the financial proceeds of organized crime. The House can give them those tools by adopting Bills C-68 and C-61. We should focus our efforts on supporting our judicial system, instead of ignoring its needs and creating a parliamentary task force.


Benno Friesen: Mr. Speaker, we are indebted to the Hon. Member for Trinity (Miss Nicholson) for bringing forward a very interesting motion which has to do with the calling of a special joint committee of the House of Commons and the Senate to inquire into the nature and the extent of organized crime in Canada.
I recall the opening remarks of the Hon. Member for Trinity. She pointed out that when she put forward a similar motion last year, the speeches of government Members who responded had a certain ring of similarity. She responded with some measure of disdain for that, and I do not blame her. I feel the same way about that as she does. Nevertheless, if we
wanted to go back into the annals of Hansard, I suspect that we would find that about five or six years ago, she may have been guilty of the same offence. However, we do not take offence for that. I might just say that that is one of the illnesses that exists in this Chamber that we wish we would be cured of.
While the motion is an interesting one, I doubt that it is a very workable one. I say that not because we do not share the same goals. What she is talking about has an awesome ring of urgency to it. We know that organized crime does infiltrate into many segments of our society, and it causes fear and dread in many households, and it feeds on fear and recrimination if the detailed terms of any contract are not fulfilled. We know that it is an awesome problem in Canada. However, it is the kind of problem that I do not know whether we can solve or even approach through a special joint committee of the House of Commons and the Senate.
I might use as an analogy an experience I had when I was living in the United States. I attended a university in the midwestern United States and was graduated there. Upon graduation, I decided that because I could not afford to move home, I would take employment in the United States as a teacher. That was in the late 1950s when that country was still suffering from the backlash of McCarthyism.
Because of the McCarthyism earlier in the fifties, many of the states had enacted legislation which required that people who worked in any way within the public sector, people like teachers, would have to take an oath upholding the Constitution of the United States. That was an admirable goal and I do not blame those states for wanting to ensure that those who worked for the Government in any way and particularly those who were entrusted with the education of their children would also be those who respected democracy and would not endorse the violent overthrow of their Government.
The problem with the proposal, however, was that those people who respected democracy, wanted to enhance freedom, and respected the family and the rights of the children were shut out from the teaching profession, for example, if they were not American citizens. They could not help the United States by enhancing democracy and a sense of freedom within the country. However, native-born Americans, who were full citizens but may have been communists or communist sympathizers and who may have endorsed the violent overthrow of the Government, would have no compunction about taking an oath like that since their sense of morality has nothing to do with absolutes, absolute honesty or absolute truth. They would not mind taking an oath of fidelity to the Constitution of the United States and then doing everything in their power to overthrow the Government of the United States. That would not bother people like that a bit.
There we had the anomaly of people who wanted to preserve and enhance democracy in the United States being shut out if they were not citizens, and those who would have gladly created problems in the United States being willing to take an
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oath which they did not intend to uphold. The problem is that the proposal of the Eton. Member for Trinity, while it may not be exactly parallel to that, has a similar ring to it.
If we were to conduct public hearings across Canada of the nature the Hon. Member is proposing, those people who have been affected by organized crime would be the least likely to come forward to give testimony in a public hearing because of the nature of the problem. What person who has been caught in the grip of extortionate financiers, threatened for not keeping up extortionate payments, what person who has had his life or possessions threatened or has been told that his legs will be broken if he does not pay that 30 per cent on his loan, will come forward in a public hearing to give evidence of how organized crime is treating him in Canada? Will people like that come forward?
The nature of the problem militates against the success of the proposal. If we recall the Congressional hearings in the United States, the only people who came forward were those who were totally disguised and had been given immunity. They were people who had earlier been convicted of a crime or who were part of the family of crime in the United States and were
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given immunity from further prosecution or were promised protection. They were people who were plea-bargaining. They appeared because their sentences were minimized or done away with. Those Congressional hearings were at least moderately successful.
However, the proposal of the Hon. Member, while it is a goal that the Government shares and I certainly endorse, will probably not be workable. While I commend her for the goal and the ambition she is showing in trying to deal with organized crime, I think the proposal itself would not be a workable one.


Mr. Deputy Speaker:: 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.
It being three o'clock, this House stands adjourned until Monday next at eleven o'clock pursuant to Standing Order 3(1). '


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The House adjourned at 3 p.m.
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Monday, June 6, 1988
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Prayers