1988-05-20

Hon. Tom Hockin (Minister of State (Finance)) moved: that Bill C-126, an Act to amend the Bretton Woods and Related Agreements Act, be read the second time and referred to a legislative committee.


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


Mr. Gauthier:: Point of order.


Mr. Friesen:: Come on, Jean!


Jean-Robert Gauthier: I am sorry my friend objects to my getting up on a point of order, which is quite a reasonable one.


Mr. Speaker:: I can assure the Hon. Member that the Chair will decide whether an Hon. Member is given the floor. The Hon. Member has the floor.


Jean-Robert Gauthier: I appreciate your kindness, Mr. Speaker. I cannot say as much for the government side. I notice today that we have not received copies of our Hansard. I wonder if you could inform the House if Hansard will be available to us before Question Period? Or is there a delay here which should be explained to Members as to why we do not have our Hansard in our books this morning?


Mr. Speaker:: I am very grateful for the point raised by my colleague the Hon. Member for Ottawa-Vanier concerning Hansard. I am informed that it should be available soon.


Jean-Robert Gauthier: Soon?


Mr. Speaker:: Soon.


Miss Nicholson (Trinity):: Debate.


Jean-Robert Gauthier: Debate.


Thomas Hockin: Mr. Speaker, I have the honour of moving second reading of Bill C-126. The purpose of this Bill is to amend the Bretton Woods and Related Agreements Act. The proposed Act will provide the parliamentary authority for Canada's contribution to the International Monetary Fund's Enhanced Structural Adjustment Facility. It will authorize the Minister of Finance to lend and grant funds to the enhanced structural facility trust on behalf of the Government of Canada. I am very pleased that this morning I will be able to explain this Bill to Members of the House.

The creation of this facility is an important measure taken by the IMF to deal with the debt problems of the world's least developed countries. This mechanism will add significantly to the structural adjustment facility set up in 1986 to help low-income countries balance their payments on very favorable terms.
After the enhanced structural adjustment facility was implemented, the size of the balance of payments problems of the least developed countries led to requests for additional help. It became obvious that international organizations would have to take further special measures to deal with the problems of the poorest debtor countries, especially those of the Sahel. Their extremely slow economic development and the weak growth of their export markets seriously undermined their recovery efforts. Their debt burden had become a major obstacle to their economic development.
Faced with this bleak economic outlook, some developing countries hesitated to pursue or begin sustained adjustment initiatives under the International Monetary Fund. It became obvious that these countries would need increased financial aid on favorable terms to effectively implement through reforms. Although the resources of the structural adjustment facility were limited, they were an appropriate form of assistance because the more favorable terms and extended repayment schedules offered by the structural adjustment facility, as compared to a simple loan, are necessary to help these fragile economies adjust. Increasing the resources of the structural adjustment facility was therefore suggested.

The initiative for an Enhanced Structural Adjustment Facility received the endorsement of the group of seven

May 20, 1988
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industrialized countries at the Venice Summit in June, 1987. At that time, the Prime Minister (Mr. Mulroney) expressed Canada's support for such a facility. The result of the international consensus to provide more aid to the poorest debtor countries has been a tripling of the IMF structural adjustment facility. This facility is being enhanced and increased to an important degree.
The Enhanced Structural Adjustment Facility is expected to add over $10 billion in equivalent Canadian funds to the resources available through the IMF structural adjustment facility. The loans will carry a subsidized interest rate of one-half per cent per annum and will be repaid over 10 years. The loans are conditional upon countries having an IMF-supported structural reform program in place. The programs will be formulated within a policy framework worked out jointly by the borrowing country, the IMF, and the World Bank. Potentially some 60 very poor countries could benefit from the use of the Enhanced Structural Adjustment Facility resources.
The Enhanced Structural Adjustment Facility contributions are made to two accounts. The contributions to the loan account will earn interest. Contributions to the subsidy account will be in the form of grants and allow the IMF to lend loan account funds at one-half per cent interest per year. The Enhanced Structural Adjustment Facility has received the enthusiastic support of the international community. Some 25 countries have made pledges to this facility.
In Canada's case, the Bill before us will give the Minister of Finance (Mr. Wilson), the authority to lend up to $550 million Canadian to the loan account. These moneys will be lent in three equal instalments over three years beginning in 1988. This contribution will pay Canada a rate of interest based on long-term rates for domestic financial instruments of five major world currencies.
The legislation will further allow for the Minister of Finance to grant up to $250 million Canadian over the 12-year life of the trust, in order that our loan contribution can be loaned out to low-income countries at one-half per cent interest per year. Canada's contribution will be financed through the Consolidated Revenue Fund. The subsidy portion will be counted as part of Canada's official development assistance. The legislation allows changes to both the subsidy and loan contributions, through Order-in-Council, to reflect future international discussions.
As a Government we support the structural adjustment facility because we believe that countries that are undertaking necessary adjustments in their economic policies deserve the encouragement of the international community. This is particularly true when required policy reforms may be politically unpopular in the short term. Furthermore, the Enhanced Structural Adjustment Facility will be complementary to our bilateral aid efforts. The economic stabilization of the least developed economies, quite frankly, is a necessary prerequisite to their more effective use of bilateral aid.
For all those reasons, this Bill deserves our strong support.


Aideen Nicholson: Mr. Speaker, I am pleased to take part in the debate on Bill C-126, an Act to amend the Bretton Woods and Related Agreements Act.
As has been said, this legislation gives authority to the Minister of Finance (Mr. Wilson) to contribute to the International Monetary Fund in support of the new IMF balance of payments assistance program, the Enhanced Structural Adjustment Facility or ESAF.
ESAF is a trust fund established by the International Monetary Fund to make resources available to some of the poorest highly indebted countries. When I talk of some of the poorest countries, Mr. Speaker, I am talking about countries where the average per capita income is $300 a year.
The resources that are being planned for now will support policy programs that help their balance of payments, because these poorest countries are among the most heavily indebted, and enable them to start planning for economic growth.
ESAF was initiated at the June, 1987, Venice Summit of industrialized countries. At the summit it was agreed that the magnitude of the debt problem, and the protracted nature of the balance of payments problem of the poorest countries called for additional resources.
ESAF will operate on the basis of two accounts. The loan account will pay contributors, that is, the industrialized countries, a market rate of interest. The grant account, or the subsidy account, will be composed of grants which allow loans to be made to the borrowing countries at .5 per cent interest per annum for 10 years with 5 years' grace. As has been said, ESAF will support the adjustment efforts of about 60 low-income countries, many of which are in sub-Saharan Africa.
Canada will support this initiative by providing loans at concessional interest rates to these poor or debt-ridden countries, conditional on the countries putting in place the structural adjustment and growth programs which will help them achieve economic self-sufficiency. Perhaps I could say here that some of the commercial lending in the 1970s was not sufficiently buttressed by performance requirements or by assistance to these countries, to improve their lot.
The ESAF, in contrast, is planned as an initiative to encourage policy reform in developing countries. It will allow the very poor, debt-ridden countries, to maintain needed imports while servicing their foreign debt obligations and undertaking policy reforms. Of course, it offers an opportunity for further co-operation between the IMF, the World Bank and the developing countries.
The following are the amounts that are being contributed by some other countries in special drawing rights converted into Canadian dollars: Japan, approximately $3.7 billion to the loan account and approximately $510 million to the subsidy account; West Germany, approximately $1,190 million to the loan account and approximately $221 million to the subsidy
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account; France, $1,360 million to the loan account and $1,190 million to the subsidy account.
As I said earlier, a poor country to be assisted under this program is defined as a country where the average annual per capita income is $300. Many of these countries are indeed in dire straits because simply meeting the interest rate on their foreign debts takes up almost all of their GDP, leaving them unable to undertake planning to get out of their basic predicament and to improve the economy of their country.
Prior to 1982, low-income countries experienced external pressures similar to those experienced by middle-income countries. Two of these were the commodity booms of the 1970s and the two oil shocks that led to huge increases in the price of oil. The cruel world-wide recession of 1981 and 1982, of course, exacerbated the problems.
Low-income countries which import their energy were faced with high energy import costs after 1973. New sources of funds were acquired to sustain the growth that had been stimulated by the expanded commodity exports of 1971. The traditional source of funds, official development assistance, was not meeting the needs of low-income countries. These countries began to look to commercial banks seeking to recycle OPEC surpluses. The result was, in the years between 1972 and 1982, a striking shift toward capital market and nonconcessional debt occurring in low-income countries. The commercial banks have to bear some responsibility for this. They looked at short-term credit worthiness. They did not look at the fact that these countries had serious problems that needed to be addressed which went far beyond their need for immediate loans.
According to a World Bank study, borrowings from the private financial markets increased ten-fold from 1972 to 1979. As interest rates began to rise rapidly, debt servicing became an enormous problem for the poorest countries, compounded by the fact that new commercial financing abruptly declined. Making matters worse, of course, were the underlying inefficient domestic policies in place in low-income countries. For some of these countries weapons imports add a costly drain, absorbing capital that could have been spent on programs to develop economic growth.
The scenario for some of these countries is bleak. On a per capita basis the debt for the low-income countries is higher than that of middle-income Latin American countries. Their debt has grown faster and is a heavier burden. Most of these countries lack the most basic infrastructure and personnel to put in place needed reforms.
Many of these countries over-borrowed but did not make the necessary domestic structural domestic adjustments. In terms of the international financial system, the smaller debtor countries do not pose a threat. But in human terms the poverty, the starvation, are a constant source of distress. Hence this particular measure is welcome, provided that it is carefully monitored.
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Canada must ensure that the financial assistance is given in a context that involves the recipient country in defining its needs, in planning, and some appropriate expectations for change must be set.
When I spoke in the House on March 12, 1985, also on an amendment to the Bretton Woods Act, I pointed out that while financial assistance is desperately needed by the poor countries of the world, financial assistance without performance requirements and monitoring will lead to inefficient investment.
The commercial lenders simply evaluated the credit worthiness of the borrowers for short-term loans but failed to monitor how the funds were used, or the long-term policies and prospects of the borrowing countries. Bilateral country-to-country assistance is very often given without insisting on the restructuring that would lead that country out of the need for assistance to the same extent. This is understandable because sovereign nations do not easily accept attempts by other countries to influence or dictate their policies. However, an international organization such as the IMF is in a position to discuss with recipient countries their plans, to help them set appropriate targets. This is a most important part of the aid and a very necessary condition of what we are agreeing to this morning.
The multilateral financial institutions have a better opportunity to design and evaluate adjustment programs in cooperation with the recipient country and in ways that are acceptable to all concerned.
In April, 1984, I heard the Vice-President of the World Bank speaking in Lisbon on the issue of conditional aid to developing countries. He talked about conditionality implying hard choices and disagreements. He also pointed out that major reforms can only take place if they are implemented gradually over a number of years and financed in parallel with closely monitored implementation. One can hardly emphasize too much the need for co-operation and full partnership with the recipient country. This is the key.
Imposing harsh conditions without consultation, understanding and agreement of the assisted country is fruitless. It only makes for resentment and lack of co-operation. The role that the IMF must play is that of the consultant who studies and evaluates the needs of the country, makes recommendations on policy and helps the recipient country meet those recommendations.
Canada must ensure that this happens. Canada is particularly well suited to do so. Our officials have a reputation for being able to be helpful without taking over. It is important that this continue.
Efficient and thoughtful long-term planning and implementation will benefit both the assisted and assisting countries. As

May 20, 1988
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developing countries are able to improve their economies, they will depend less on assistance from countries like Canada.
My Party is basically in agreement with the principle of this Bill. Indeed, no one who has travelled in some of the very poor countries can fail to be moved by the dreadful conditions-the starvation, the lack of opportunity for people to achieve their potential, to achieve basic education. We clearly have a duty to help and the average Canadian is glad to do so and have tax dollars invested in this. However, Canadians want to know that the Government is fully committed to ensuring that the $800 million being committed today to assist the poorest countries is wisely and constructively used.
In fact, no new money has actually been committed. The $250 million grant will come from the current development aid envelope. The remainder is loans at market rates.
I should also point out that discussion of Third World loans is on the agenda of the summit meeting in June in Toronto and this could be an opportunity for Canada to propose new initiatives and also to work toward better international understanding and more effective use of the moneys being committed at this time.


Mr. Jim Manly (Cowichan-Malahat-The Islands):: Mr. Speaker, I appreciate the opportunity to speak to Bill C-126 dealing with an amendment to the Bretton Woods Act and other agreements. While this very short Bill appears to be very straightforward, since it deals with the debt load of the poorest countries in the world we believe it needs more than simply a cursory debate. We do not want to hold the Bill up unduly, but we do want to focus attention on the debt problem. We hope to be able to hear witnesses and make amendments in committee.
The Bill provides both for the loan and the granting of funds to the International Monetary Fund in order to fund: "Any trust or body established by the Fund". A sum of $550 million is the total mentioned for the loan, and $250 million for the grant. However, in both cases the amount can be increased by the Governor in Council. In other words, the Government is asking for a blank cheque.
The immediate purpose for these funds is to meet Canada's commitment to the IMF's Enhanced Structural Adjustment Facility.
When the Bill states: "Any trust or body established by the IMF", it is more open-ended than necessary for the purposes of Canada's commitment. I think it is more open-ended than this House of Commons should allow and I hope it can be strengthened in committee.
The Enhanced Structural Adjustment Facility originated last June at the Venice Summit as an attempt by the industrialized world to come to grips with the debt problem, particularly the debt problem of the poorest countries in the world and the balance of payment problems of the poorest countries, most of which are in Africa.
The IMF has now taken this under its wing and hopes to provide some $6 billion special drawing rights, which would be the equivalent of just over $10 billion Canadian.
The Government hand-out on the Bill states that these resources will support policy reforms designed to restore balance of payments sustainability and enable these countries to maintain satisfactory economic growth. Taken in isolation, the terms of the proposed loans to the poor countries are extremely generous, almost unbelievable. Certainly 0.5 per cent interest per annum for 10 years, with five years' grace, is extremely generous.
However, the great portion of the contribution from Canada and other countries will be used to subsidize this negligible rate of interest so that the original lenders will get a normal rate of interest on the loan portion. That is, the grant portion will be used to subsidize the interest portion so that there will be a market rate of interest paid.
We support this concessional flow of funds, but we do question the so-called policy reforms which the IMF will impose on the recipient countries. That is the burden of a good deal of our debate this morning. It should be noted that a good part of the funds will be used to service debts owed to the same countries that are lending the money, or to multinational agencies like the IMF itself. In other words, ESAF will be used not to meet the developmental needs of the poorest countries but to help keep them from defaulting to First World creditors.
The World Bank has estimated that the total debt of developing countries is something like $1.19 trillion U.S. This could be a considerable under-estimate since the World Bank tends to take very conservative estimates of such things as debt. This has climbed from a $1 trillion debt just two or three years ago.
Much of the attention about this debt and most of the anxiety has focused on big debtors such as Brazil or Mexico, both of which owe over $100 billion in U.S. funds.
Indeed, the six largest problem debtors account for 32 per cent of the $1.19 trillion. Their inability to service these debts creates major problems not only for themselves but for the entire world economy.
This problem is outside the range of ESAF, but it should not be outside the range of our concerns in the House. I know it will not be outside the concerns of the economic summit in Toronto next month.
It is outside the range of concern of ESAF because these are far from the poorest countries. ESAF is designed to help countries like the sub-Saharan countries of Africa, which account for 5.2 per cent of this total debt. In contrast to countries owing large debts to private banks, most of the subSaharan and African countries' debt is official. Only 13.5 per cent is owed to banks or to private creditors. Sixty-two per cent of that debt is owed to OECD bilateral countries or to multilateral creditors, and smaller amounts are owed to OPEC
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and Soviet bloc countries. While these countries may have lower debts in terms of the absolute numbers, these debts are horrendous in terms of their relation to the Gross National Product per capita or expressed in terms of the ratio of debt exports.
I would like to quote from Roy Culpeper's study for the North-South Institute called The Debt Matrix in which he looks at some selected low income sub-Saharan debtors. Benin had in 1985 a GNP per capita of $260 U.S. and a total external debt of $890 million U.S. The ratio of debt to export of goods and services in 1986 was 321.6 per cent. Gambia had a GNP per capita of $230 U.S. It owes $270 million U.S. and has a debt export ratio of 290.5 per cent. Liberia had a GNP per capita of $470 U.S. It owes $1,303 billion and has a ratio of debt to export of goods and services of 280.8 per cent. Madagascar has a GNP per capita of $240 U.S. It owes $2,899 billion U.S. and has a debt export ratio of 708.4 per cent. Mauritania had a GNP per capita of $420 U.S. and owes $1,761 billion. It has a debt capita ratio of 387.1 per cent. Senegal has a per capita of $370 U.S. GNP. It owes $2,989 billion and has a debt export ratio of 302.2 per cent. Sudan has a GNP per capita of $300 U.S. and owes $8,272 billion. It has an astounding debt export ratio of $1,145.7. Tanzania, with a per capita GNP of $290, owes $3,955 billion. It has a debt export ratio of $864.4.
Zaire, with a very low GNP per capita of only $170 U.S., owes $5,430 billion. It has a debt export ratio of 266.8 per cent. Zambia has a GNP per capita of $390 U.S. and owes $5,300 billion. It has a debt export ratio of 326.1 per cent.
When we look at these figures and do not just think of them as dry statistics but look at the reality that here we have countries with Gross National Products per capita of $200, $300 and $400 each, with these astounding debts we can well ask how can they ever service them, let alone pay them off. Culpeper points out that for developing countries in total the debt export ratio deteriorated from 169 per cent in 1982 to 227 per cent in 1986. Zambia provides a tragic example of what this means for an individual developing country.
Let me refer to Roger Young's study called Zambia Adjusting to Poverty. He points out that the outstanding short and long-term debt now stands at four times the estimated dollar value of the Gross Domestic Product as at the end of 1986. The schedule debt servicing ratio in 1987 stands at nearly 100 per cent of estimated exports, and if arrears are included at 150 per cent of exports, interest payments alone in 1986 were estimated at $336 million U.S. or 35 per cent of exports.
At present Zambia is in arrears both to the IMF and the World Bank and is ineligible to resource the general funds of the IMF. As a result of this horrendous situation, the real Gross Domestic Product per person has fallen 19 per cent since 1981 or 3 per cent per year in each of the past six years. This
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has meant a very drastic deterioration in the country's social infrastructure in health, education and housing as these have become more expensive and more inaccessible. In order to get help from the IMF, countries have to adjust their economies to meet IMF conditions. These conditions are imposed upon Third World countries from a western monetarist point of view and they usually have the following components.
They usually involve devaluation of local currency so that the local currency will not buy as much as it previously did, and cut-backs in government services. This means cut-backs in health services and education, lay-offs of government employees, which increases the unemployment in countries that are already suffering from up to 40 per cent unemployment, and it means raising the price of food, hitting particularly hard at the poor. The elimination of subsidies for state-run enterprises means opening the local economy to outside investment and control. Nevertheless, in the last few years, faced with these very difficult situations, at least 28 African countries have introduced measures along these lines.
As I pointed out, these measures hit particularly hard at the poor and cause a great deal of social unrest. Zambia is a case in point. In order to receive international help, it raised the price of maize meal by 125 per cent. When the price of the staple food is raised it causes great hardship for the poor. Riots resulted and 17 people were killed. President Kenneth Kaunda was forced to rescind the price increase and broke off the IMF program. As I pointed out earlier, Zambia is not now eligible for regular IMF funding.
It is interesting to note that when the Senate of Canada was studying the international financial institutions and the debt problem of developing countries, Mr. Cedric Ritchie, Chairman of the Bank of Nova Scotia, told the committee that continual application of austerity measures "have exacted a social and political cost that in some countries at least appear to be unsustainable. Mr. William Mulholland, Chairman of the Bank of Montreal, put it even more directly, "If we think we can convince debtor countries that it is in their interest to eat less in order to make low repayments, we better think again". These are chairmen of large Canadian banks, banks which themselves are heavily involved in the whole debt problem, but they recognize that simply tightening the screws on poor people will not work.
An international labour organization report points out that these measures do not work in many poor countries which lack a strong industrial base where unemployment and malnutrition are already very high. The programs may have reduced the balance of payments deficit, but they have not led to economic recovery. That is why Africa is in such a difficult situation today.
Western liberal democracies have often been very critical of the poor human rights record of many African countries. We have good reason to be concerned about the human rights

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records of those countries, but we need also recognize that we share a good deal of the blame. If the IMF, controlled by the West, imposes such onerous conditions on African countries that they lead to higher food costs, more hungry children, less schooling, poor health facilities and higher unemployment, do we wonder if this will cause social unrest that will lead to riots and do we wonder if in response, Governments take stern measures to put these riots down?
The point is that IMF programs, far from leading to recovery for African and other poor nations, often seem to pave the road to increased poverty, social chaos and the breakdown of democracy. It is important not to exaggerate at this point. African nations themselves admit that many of their problems are the result of mistakes they made in the past. Some of their reforms are necessary, and these reforms form the basis for their program of recovery that was adopted by African nations at the special session of the United Nations in 1987.
Having admitted this, we need to realize the truth of what Julius Nyerere, the President of Tanzania, said in 1984 about the IMF and the World Bank. He said:
These institutions, originally meant as institutions of co-operation among
the developed countries, are now being used as instruments of control over the
developing countries. They have become instruments for a new kind of empire.
They are being used as instruments of power to dominate the Third World.
The rigid IMF policy has meant that in 1987, debtor countries paid $5.9 billion more back to the IMF than they received from it. We are talking about poor countries here. We are talking about the plight of poverty in these countries. We are talking about the IMF providing some help to them, yet in 1987, according to a Globe and Mail article of February 2 of this year, they paid back to the IMF $5.9 billion more than they received. This $5.9 billion U.S. is coming from poverty-stricken African countries.
Admittedly, in recent months, the International Monetary Fund has begun to show some sensitivity to the impact of its policies on poor people. Michael Camdessus, the new head of the IMF, wants to ease the monitoring provisions for loans and he supports contingency financing for countries with reform packages that face unexpected shocks such as a collapse in commodity prices or a rapid rise in interest rates.
As one Third World person put it, these measures are welcome, but he asked if they are enough and if they are coming in time to prevent a complete collapse in many of these countries.
Combined with the debt problem, we need to recognize that African countries face a decline in the level of official development assistance from many countries. Canada plays a very ambiguous role here. When the Right Hon. Secretary of State for External Affairs (Mr. Clark) appeared before the United Nations in 1984, he promised that Canada would reach its goal of 0.7 per cent of GNP by 1990. With the cut-backs the Government has introduced, that was reduced to 0.7 per cent by 1995. In another Budget, it was said that we would reach
that figure sometime in the 21st century, and in the meantime, we would try to reach the goal of 0.6 per cent by the year 1995-96.
The Special Joint Committee on Canada's External Relations that was chaired by the Hon. Minister responsible for this Bill two years ago recommended that we go back to the original commitment of reaching 0.7 per cent of GNP by 1990. The Government rejected that. Then, when the Standing Committee on External Affairs and International Trade studied the whole question of the amount of our development assistance last year, the committee, with a Conservative majority, recommended that we should move at least more quickly to the 0.6 per cent goal. The committee report read:
With such a floor securely in place, we believe Canada should make steady progress towards higher aid targets. We doubt that the current plan to hold the ratio steady at 0.5 per cent until 1990 and then increase it sharply to 0.6 per cent in the following five years is realistic, particularly considering that we are now at a level slightly below 0.5 per cent. We are concerned that Canada may find itself once more in the position of abandoning its commitments.
In the Committee's view, a plan is needed that would take us to the 0.6 per cent level in 1995-96 by steady, achievable annual increments. Accordingly, the Committee recommends that progress towards achieving the 0.6 per cent target in 1995-96 should begin in the 1988-1989 fiscal year, rather than the current plan of fiscal year 1990-91, and proceed by steady annual increases. We estimate that would bring the ODA/GNP ratio to 0.53 per cent in fiscal year 1990-91.
Unfortunately, the Government chose to ignore that advice as well.
Canada's record is not bad when compared with that of countries like the United Kingdom or the United States, but it is not good when compared with some of the Nordic countries or when compared with the record of the need for development assistance.
The real villain is the fall in commodity prices. Unfortunately, the International Monetary Fund is much more ready to move to prop up the monetary system than it is to put in place some system of price stabilization that would result in commodity prices not being subject to the wild fluctuations that they are so that development countries would not be constantly the victim of international markets.
Roy Culpeper, in his book Forced Adjustment, again a North-South study, pointed out that sub-Saharan Africa went from being the export growth leader of the world from 1965 to 1980 to being the world lagger, with exports shrinking at an annual rate of 5 per cent during 1980-85. He points out that in 1986, the terms of trade of developing countries fell by some 16.8 per cent, equivalent to a loss in exports of about $100 billion. However, because of the growth in the volume of exports, developing countries' export purchasing power fell only by about 10 per cent.
According to World Bank estimates, real prices of a basket of 33 non-fuel commodities plummeted from their 1980 levels some 32 per cent by 1986. Oil prices also fell sharply, particularly during the 1986-
May 20, 1988


Mr. Deputy Speaker:: Order, please. I regret to interrupt the Hon. Member, but we must proceed at this time to Statements Pursuant to Standing Order 21. The Hon. Member will of course complete his speech after Question Period.



STATEMENTS PURSUANT TO S.O. 21


Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, I want to urge students who are looking for a summer job to register as soon as possible with the Canada Employment Centre for Students in Drummond.
And I invite the people of Drummond, whether they are manufacturers, merchants, farmers or private citizens, to help make the Employment Centre for Students a success by hiring quality manpower. High school, CEGEP and university students are counting on the community to help them find jobs.
So far, 211 applications have been approved in my riding under the Challenge 88 Program. These projects will create 322 jobs, thanks to federal wage subsidies totalling $414,507. The program demonstrates how keen this Government is to help young people make the transition from school to the labour market.
I am very proud that I can help create jobs for the students in Drummond through this program set up by the Conservative Government.
I wish all young people in my riding the best of luck with their job search, and I urge them once again to register without delay with the Drummond Canada Employment Centre.



CANADIAN NATIONAL RAILWAYS


Mr. Gilles Grondin (Saint-Maurice):: Mr. Speaker,
yesterday I received a request from about 100 CN employees to intervene in a situation which they reject as unacceptable, and it was in connection with rumours that the Switching and Control Centre will move from Montreal to Toronto. In fact, these people are employed as telegraph operators and in addition to the threat of cutbacks at CN, they will also have to cope with this possibility, which may deprive them of a chance



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to switch to other jobs such as train dispatcher or director of train operations in Montreal.
The move to Toronto will leave these employees no alternative except unemployment, since their jobs will then be filled by other employees located in Toronto.
I don't think we are giving them a fair break. Some of their positions are being cut, and at the same time they may be deprived of a chance to get another job with CN. If Montreal is not going to get the space agency, Mr. Speaker, couldn't we at least keep the railways?


Mr. Bill Tupper (Nepean-Carleton):: Mr. Speaker, I am pleased with the Government's decision to make the West Memorial Building at 344 Wellington Street in Ottawa the new home of the National Archives and to consolidate the housing of its collections in a special facility to be built in the future.
The National Archives contain 250,000 Yousuf Karsh's negatives, Marshall McLuhan's complete works and papers, and a set of Frances Ann Hopkins' paintings of the fur trade. It also houses over 60 million manuscripts, the personal papers of past Prime Ministers of Canada, and over one million maps and architectural drawings. There are also 70,000 hours of sound recordings in the Archives' collections.
The proposed environmentally controlled storage facility will better enable archivists to preserve existing collections and make room for the Archives to collect more of Canada's precious national heritage.
The Minister of Communications (Miss MacDonald) based her decision on the report of the Standing Committee on Communications and Culture. This is a good example of how this Government responds to committee recommendations.
This Government cares about our national heritage.



NATIONAL CAPITAL OF MOOSE AND MEMBERS

Mr. Ian Waddell (Vancouver-Kingsway):: Mr. Speaker, this has been a tough week in Parliament for Members on all sides. We have had abortion, free trade, and the Meech Lake constitutional resolution, all of which are big, tough issues. However, let us not lose sight of the sweeter side of life. Remember, this is the week when a moose fell into the

May 20, 1988
swimming pool of a suburban Ottawa home. What could be more Canadian? Could that happen in any other capital city of the world?
Tonight is the opening of the magnificent new National Gallery here in Ottawa. That gives us a chance to reflect on the vital role our museums and art galleries play in lifting our spirits, educating our young people, and reflecting our past and present in all their diversity. Therefore, I propose a toast with my glass of water to Ottawa, to Canada, to the new National Gallery, and to us at the end of a tough week!


Some Hon. Members:: Hear, hear!



NATIONAL FITNESS WEEK


Mrs. Monique B. Tardif (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, it is with a great deal of pleasure that I bring to the attention of all Members of this House a very important event on the nation's annual calendar, Canada's Fitweek. This year's event starts today, Sneaker Day, and will run until May 29.

During the next ten days, Mr. Speaker, one out of three Canadians will take part in Canada's Fitweek, the biggest celebration of physical activity in the world.
Thousands of organizers and volunteers have planned nearly 14,000 events that will take place in schools and communities across this country.

This phenomenal program is co-ordinated jointly by the Government of Canada through the efforts of Fitness Canada, along with the 12 provincial and territorial Governments and 20 national fitness and recreation agencies.

Finally, under the slogan " Celebrate Good Times", the whole country will be moving, from May 20 to 29, and I invite all of you to join in.

So let us see those sneakers!



ENVIRONMENTAL AFFAIRS


Mrs. Therese Killens (Saint-Michel-Ahuntsic):: Mr. Speaker, did you know that acid rain is eating away at our houses? Acid rain is not only corroding our monuments and
destroying our lakes and forests, it is also gradually destroying the houses people live in.
In Canada acid rain damage is heaviest in Ontario and Quebec. Martin Weaver, an Ottawa conservation consultant, said recently that masonry in Montreal is crumbling, metalwork is corroding, and paint is fading and peeling at up to twice the expected rate. He added that construction materials once thought to last almost forever, like granite, concrete, and marble, are being reduced to spongy masses that can be cut like cheese with a blunt knife. This is really bad news. The situation is alarming now and getting worse every day.
Some questions beg to be asked. What can be done to stop the effect of acid rain on houses? What is the Government doing about it? Why is it so weak vis-a-vis our neighbour to the south? Our growing aging population have only limited funds for the upkeep of their homes. Who will help them with their repair bills? The problem is urgent and will not go away. The solution rests squarely on the shoulders of the Prime Minister (Mr. Mulroney).



ABBOTSFORD INTERNATIONAL AIRSHOW


Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, my riding of Fraser Valley East, in beautiful British Columbia, has been proud to be the home of the Abbotsford Airshow for the last 27 years. The Airshow will expand in 1989 to include an aerospace trade show, thanks to a $3.4 million contribution cost-shared equally by our federal Government and the Province of British Columbia. This will make the Abbotsford Airshow and the new trade show comparable with the famous Paris and Farnborough Airshows in Europe.
The funding, welcomed by all involved in the Airshow, comes from the Western Diversification Fund and the B.C. Ministry of Economic Development.
Airshow Canada, as the trade show will be called, will be devoted to aircraft, space aviation components, and the latest powered flight technology. It will also be a forum for international decision-makers and aviation business leaders and in no way will diminish the thrills and chills of the Airshow.
Congratulations, Abbotsford International Airshow, for a job well done! Fraser Valley East and the rest of Canada look forward to an even more successful and interesting airshow and trade show in the future. Come see us the second week in August. It's well worth the trip.
May 20, 1988



LABOUR CONDITIONS


Mr. Dan Heap (Spadina):: Mr. Speaker, the Canadian Government legislates semi-slave labour for some women. Because women's work in Canada gets less than two-thirds of men's pay and housework less still, immigrant domestics are imported to work at about $10,000 per year.
There are no real limits on their hours so we cannot say how much they get per hour. They must usually live in and are subject to traditional abuse by either man or woman in the house. They are compelled by our federal law to stay in that occupation for two or three years in what one immigration official called a "halfway house".
Why do they come here? They are hoping to be landed. What are their chances? In order to stay more than two or three years they must leave domestic work and upgrade themselves by study for work that would be accepted as another category of immigration. Often they cannot get the time to study. Many are forced to return home to be replaced by others on the same treadmill.
The Minister of Employment and Immigration (Mrs. McDougall), who is also the Minister responsible for women, ought to revise the regulations so as to free these semi-slave labouring women.



FOOD EXPORTS FROM ALBERTA

Mr. Jim Edwards (Edmonton South):: Mr. Speaker, Alberta food processors look increasingly to export markets for their products. The drive to export fine processed food products is southward and westward. The markets in the United States are opening to Alberta food. The Pacific Rim nations such as Japan, Taiwan, Korea and Singapore are developing a taste for Alberta beef, for Alberta smoked trout, for Alberta foodstuffs of quality and nourishment.
The free trade agreement, and Canada's commitment to GATT, combined with Alberta hustle, all work together to provide food exports to make millions of mouths water.
Food processing is the second largest Alberta industry. In our drive to diversity, let's make it number one.



ENVIRONMENTAL AFFAIRS


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, yesterday at the examination of the current estimates of Environment Canada, I learned with shock and dismay that Environment Canada has not conducted any study on the environmental implications of the Canada-U.S. trade deal. This is astonishing considering the fact that in January, 1986, the Canadian Environmental Advisory Council, at the request of the Minister, strongly recommended that it will be necessary to examine the environmental implications just as systematically as the economic ones. This has not been done.
By contrast, most other federal Departments have studied the deal's impact on their areas of responsibility and have even publicly reported on potential impacts. The deal contains provisions such as Schedule 7 on pesticides and their regulation which will undoubtedly have an impact on the environment.
The Minister of the Environment (Mr. McMillan) has been remiss in his duty and responsibility. He should have studied the trade deal from the environmental point of view so as to determine its long-term consequences for our natural resources.



BANKS AND BANKING


Mr. W. Paul McCrossan (York-Scarborough):: Mr. Speaker, the bank service charge hearings are over but the letters continue to arrive. Customers are now being levied service charges even when the banks make an error. In one case a cheque was written for $6 and was returned as NSF. The writer of the cheque was charged $12.50 for writing the NSF cheque. The recipient of the cheque was charged $4 for depositing the NSF cheque.
Upon investigation, it turned out that there were sufficient funds to cover the cheque in the first place, so the first bank cheerfully refunded the $12.50 service charge. However, the depositor's bank refused to reverse its $4 service charge since, according to it, a charge is levied on all returned cheques.
Banks should be prohibited from levying service charges on people who are victims of NSF cheques, but even more fundamentally, banks should be prohibited from levying service charges which result from bank errors in the first place.

May 20, 1988



S. O. 21 FORESTRY LEGENDARY STAND OF SITKA SPRUCE-CALL FOR PRESERVATION

James Douglas Manly: Mr. Speaker, on Tuesday, Queen Beatrix of The Netherlands concluded her Canadian tour by watching loggers fall a 900-year old Douglas Fir near Duncan on Vancouver Island. Over six feet through and nearly 200 feet high, this giant took only seven minutes to fall. Nine hundred years to grow, seven minutes to fall!
Pretty soon we will not have any of these giants left to show visiting Royalty or anyone else. For this reason I commend McMillan-Bloedel for placing a one-month moratorium on the building of a road into the Carmanah Creek area where we have a legendary stand of spruce only now becoming known. Thought to be the largest Sitka Spruce in Canada, perhaps in the world, these trees should be protected from the power saw.
During the one-month moratorium, I urge federal and provincial Governments to work together with McMillan-Bloedel and the people of British Columbia and Canada to ensure this priceless treasure is preserved. Perhaps the grandchildren of Queen Beatrix, as well as our own grandchildren, might want to come and see them still standing.



IMPORTANCE TO ECONOMY

Mr. Jim Caldwell (Essex-Kent):: Mr. Speaker, Canada is a trading nation, and has been since the fur traders sold their wares to the Hudson Bay Company. Today, however, we no longer depend totally on our natural resources for trade. In fact, for the first time in our history, our economy has boomed during a period of low resource prices.
Canadian companies earn more export dollars from the sales of insurance policies than they do from softwood lumber or crude oil. We export more office equipment than meat. Canadian exports of wheat are now worth only half as much as our exports of trucks. More than two-thirds of our exports are manufactured goods.
Trade is Canada's future. It is the Canadian way, yesterday, today, and tomorrow, and into the 21st century. Those who oppose free trade oppose the future prosperity of Canada. Are you listening, Mr. Peterson?



THE NATIONAL GALLERY OF CANADA


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, Wednesday was International Museums Day and this year Canada marks that celebration with the opening of the doors of our world-class new National Gallery. One hundred and eight years after its establishment, the National Gallery finally has a home worthy of its collection. Congratulations to Canadian architect Moshe Safdie for his creative design and use of daylight, making it not only a refreshing place to view art but an architectural masterpiece in its own right.
Never before was so much of the gallery's collection of 40,000 works of art on display. In the Canadian historical section, more space means that the number of pieces on display has been doubled from 375 to almost 800.
Amidst these celebrations we salute the Liberal Party, whose foresight started the ball rolling for this Canadian cultural landmark.
Canadian museums play a unique role in furthering public education as well as in the preservation and display of the collection of our heritage. We are all looking forward to full discussion with all museums on the new federal museum policy.



PUBLIC WORKS


Mr. Dave Nickerson (Western Arctic):: Mr. Speaker, a standard clause in lease agreements entered into by the Government of Canada as lessee, states that the rent will be paid on the last day of each and every month during the term thereof. However, it is not uncommon for rent cheques to be a week or more late in coming to my constituency. An explanation often given is that: "We are not just set up to make timely payments in the North".
The lessor is obliged to keep to the terms of the agreement and so should the lessee. Perhaps Public Works Canada could work a little harder to ensure timely payment of rent cheques in northern areas.



MISSING CHILDREN


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, this Sunday is National Missing Childrens' Day. Last year, with much fanfare, the Government brought in the Family Orders and Agreements Enforcement Assistance Act which was
May 20, 1988

supposed to help families locate missing children. However, in my own community I have now received a very solid example of how it is not working.
I refer specifically to the abduction of Ryan Kevin Johnston, aged three and a half years. He was abducted by his father on January 28, 1988. Mr. Johnston abducted the child and has essentially disappeared from the face of the earth. The access that has been sought to federal and provincial records has been very slow in coming.
It took four months to find out from the federal data bank that no new address has been posted. In fact the legislation prohibits access to information under the Income Tax Act. It is funny that the Income Tax Act will allow us to get an address of a tax evader but it will not allow us to get an address of a person who abducts a child. Nothing could be more heinous than the abduction of a child and I think we should change the Income Tax Act to ensure that people who steal children are dealt with under the Criminal Code.



AEROSPACE


Mr. Jean-Claude Malepart (Montreal-Sainte-Marie):: Mr. Speaker, on April 21, the federal Government in the person of the Minister of Regional Industrial Expansion (Mr. de Cotret), announced the Conservative Government's decision to participate in the U.S. space station. At the time, the Minister guaranteed that 35 per cent of the contracts would be for Quebec and 35 per cent for Ontario. Unfortunately, this morning we heard that so far, Ontario has obtained 77.8 per cent and Quebec a meagre 17.9 per cent.
Mr. Speaker, at this rate, pretty soon all the contracts will have been awarded, and by the time the Government announces the space agency will be located in Montreal, it will be an empty shell. There will be nothing left to give, since Ontario will have the lion's share!



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, yesterday the Minister for International Trade mocked the Hon. Member for Egmont when that Hon. Member attempted to find out from the Minister why Prince Edward Island lobster fishermen and potato farmers were the
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last minute victims of the Prime Minister's trade deal with the United States. I want to say to him that this Government seems to revel in picking on the little guy.
Why, in this instance, is the Government allowing Canada's smallest province to become a victim of the continuing changes of attitude of the Americans on this trade deal? The Prime Minister is so concerned about the deal that he really doesn't care what happens to anything else.
What is the Minister for International Trade actually prepared to do in response to American action on lobsters and potatoes which, as he knows, undermines the economy of Prince Edward Island and, indeed, of the Atlantic provinces? Aside from the bombast, what is he actually prepared to do?


Hon. John C. Crosbie (Minister for International Trade):: Mr. Speaker, it ill behooves the Right Hon. Leader of the Opposition to talk about bombast when he has threatened to tear up an agreement entered into by the U.S. and Canada. He is the world's leading expert on bombast.
With respect to the question about P.E.I., first, on the issue of potatoes, we continually hear the Opposition crying wolf. What happened with respect to potatoes? The U.S. Senate Finance Committee has proposed that their legislation provide the President with authority to negotiate bilateral quantitative limitations on potato trade with Canada. All it is is that they want to give the President authority to negotiate.
The President can negotiate, but it takes two sides to enter into an agreement. There is nothing objectionable in that, surely. It is a recommendation to the administration that they negotiate. So much for the potato threat. We are not going to agree to anything that will limit the export of potatoes from Canada to the United States.
With respect to lobsters, the United States, I might tell the Hon. Leader of the Opposition, and pass the message on to Premier Ghiz, introduced new federal legislation on lobster carapace size in 1987. Under the regulations the minimum size would increase to three and seven thirty-second inches this year, and so on.
An industry-government meeting was held in Charlottetown on this subject on May 15 with respect to the impact of these regulations on the Canadian lobster fishery. Governments were represented, as were industry and the fishermen. All provincial government representatives, with the exception of the Quebec representative, supported a carapace size increase. The situation is a little bit different than the public impression given. In addition, this is a regulation already made by the U.S. federal authorities.
With respect to the Canada-U.S. Free Trade Agreement and the language suggested to be added by the committee members several days ago, we are protesting that. We do not think that it has any place in this legislation. We are delivering

May 20, 1988
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a note of protest. We will act vigorously in the interest of Canada.
Let us note that a meeting was held on May 15. The government representatives there supported an increase in the minimum size.
I might further point out that the P.E.I. industry is largely a canner fishery which is not affected by the U.S. regulations.


Some Hon. Members:: Time!


John Carnell Crosbie: These are the facts. If the hon. gentleman wants to talk about bombast, he better examine his own bombastic statements.


Some Hon. Members:: Hear, hear!


DIPLOMATIC PROTEST NOTES
John Napier Turner: Mr. Speaker, I want to encourage the Minister to go on as he has. He has become the best salesman that we have on this side of the House to sink this deal.


Some Hon. Members:: Hear, hear!


John Napier Turner: What the Minister is really saying is: "No problem with potatoes. No problem with lobsters. But we sent a note of diplomatic protest because it goes against the spirit of the deal". Of course it goes against the spirit of the deal.
There are really two issues at stake here. One is the Prime Minister's willingness to sell out everything and anything to keep this deal intact. The other is a question of the Government's honesty in treating this deal in the House of Commons.
Why did the Minister for International Trade yesterday in answer to the Hon. Member for Egmont say that there was no problem with respect to lobsters or potatoes when he had already sent a diplomatic note to the United States, as he revealed outside the House? Why did he not come clean with the House of Commons at that time and say: "Yes, there is a problem. Yes, it is contrary to the trade deal. Yes, I have sent a note of diplomatic protest to the United States"? Why did he not treat this issue fair and square yesterday in the House of Commons?


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, I have just explained the position with reference to the situation. I have outlined the facts. The Hon. Leader of the Opposition never deals in facts.
He says: "What's the problem?" The problem is U.S. protectionism. We recognize the problem. Under the direction of the Prime Minister we have taken action to do something
about that. We have negotiated an agreement that will be of considerable help to Canada next year if it is implemented.
What is the solution of the Leader of the Opposition? He gets up and crabs and complains in this House, with all his Members, every day about what the Americans are doing, but he is doing nothing about it. He is going to tear up the protection that we have negotiated that will go into effect next year.


Some Hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, the great protection he has negotiated does not protect our lobster fishermen, and it does not protect the potato farmers of Atlantic Canada. That is where he is.


Some Hon. Members:: Hear, hear!


ALLEGED CONCESSIONS MADE TO AMERICANS-GOVERNMENT POSITION
John Napier Turner: Mr. Speaker, why are lobster fishermen in the Gaspe, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland the victims of the trade agreement signed by the Prime Minister? Hasn't this Government made enough concessions to the United States? And why are potato producers being victimized by the trade agreement with the United States?
The Prime Minister has stated on many occasions that he would not tolerate any amendments or concessions regarding his agreement with the United States. What about these concessions on potatoes and lobster?


John Carnell Crosbie: Mr. Speaker, there are no concessions made to the United States at all. I just explained that the situation on potatoes is that they want to give to the President authority to negotiate, as though he needed the authority to negotiate. That is all that they are doing. There is no danger to potatoes at all.
The danger to potatoes is if the hon. gentleman were successful and got elected, which of course is not going to happen, and tears up up the agreement. Then the spuds would really be in danger. We would then have an hon. gentleman in power who said that he wished to export water, not for money but in return for access to their markets. He would exchange water and potatoes and fish for access to the Americans.


John Napier Turner: Read the whole quote.


John Carnell Crosbie: That is the statement of the Leader of the Opposition. We are protecting Canadians. He would sell them out just as he said he would in 1968.

May 20, 1988


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Deputy Prime Minister in the absence of the Minister of Agriculture. The drought situation in the southern prairies grows worse every day. Last weekend I had an opportunity to visit the Milk River Ridge area of southern Alberta where we saw topsoil blowing away, sloughs were dry, and dug-outs with no water in them. Still, the federal Government is not prepared to make any commitment to the farmers in that area.
I wonder if the Minister is willing to give a commitment today to provide at least the same amount of money, $28.5 million, that the provinces of Alberta and Saskatchewan have already committed so that they can provide emergency water systems, dug-outs, wells, and transportation systems for livestock herds.


Hon. Don Mazankowski (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, of course the Government shares the Hon. Member's concern in this very serious matter. I think that he would acknowledge at the same time that there has never been a Government in the history of the country that has done as much for agriculture, and has responded to the needs of agriculture in the way in which this Government has under the leadership of the Prime Minister of Canada. The programs have been effective. We have responded generously.
I can tell the Hon. Member that the Prime Minister has instructed the Minister of Agriculture to meet with his provincial counterparts at the earliest possible date. As he knows, there has been an ongoing working group of federal and provincial officials working on this particular issue.
He should also know that there are indeed ongoing government programs to deal with this very serious problem.
He should also recognize that there is a long-term commitment, as was enunciated in the announcement in December, to the effect that we want to work very closely with the provinces in establishing a long-term soil and water conservation program that will meet all the needs of agriculture throughout Canada.


HAY AND FEED SUPPLIES-REQUEST FOR EMERGENCY ASSISTANCE
Maurice Brydon Foster: Mr. Speaker, the Deputy Prime Minister knows that hay and feed supplies are desperately low in many of the drought areas, and that farmers are actually starting to disperse their herds, which not only cuts off their livelihoods for the next three or four years but also drives down cattle prices.
Is the Deputy Prime Minister willing to give a commitment to the farmers of western Canada today that the Government will provide emergency assistance for moving feed into those
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drought areas? After all, this is a national emergency that requires specific action for these livestock producers now, not vague generalities about what the Government has done in the past or may do at some time in the future.


Donald Frank Mazankowski: Mr. Speaker, I find it rather strange for the Hon. Member to suggest that we deal in vague generalities when well in excess of $3 billion has been committed to western Canada this year, an increase of well over 400 per cent since the Hon. Member's Party was in office.
The fact of the matter is that there have been ongoing meetings at the officials' level. The Prime Minister has instructed the Minister of Agriculture to meet with his provincial counterparts. This is a co-ordinated effort. The provinces recognize that they have a responsibility. The federal Government has always recognized its responsibility in this regard.
I can tell the Hon. Member that this Government, under the leadership of the Prime Minister, has responded to the needs of agriculture before, and will do so again.


CANADA-UNITED STATES FREE TRADE AGREEMENT-PLYWOOD EXPORTS
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is directed to the Minister for International Trade. Earlier today in Question Period we heard questions raised about how the Government has not stood up for the interests of our lobster producers and potato producers.
My question relates to another aspect of the deal. In the U.S. Senate and House of Representatives the U.S. has proposed changes in the accord, and apparently the Government of Canada has objected.
Is the Minister aware that the wording used on the proposed change in the plywood section at the House committee level, a copy of which I have obtained today, is virtually the same as the wording used in the U.S. Senate Finance Committee, which shows that they are deadly serious about this change in the United States? By the way, it is being described in the United States as a major victory for U.S. plywood producers, allowing them greater access to the Canadian market.
Is the Minister aware that the wording is now identical at both the House and Senate levels, and that they intend to proceed with it? If the Minister is aware, has he made it clear that this further change in the deal is unacceptable to the Government of Canada, and it will not be proceeding with this deal if these changes in the wording are proceeded with in the United States?

May 20, 1988
Oral Questions


John Carnell Crosbie: Speaker, when we encounter a problem we do not throw up our hands and withdraw altogether and leave chaos in its place, as apparently the Leader of the New Democratic Party suggests. What a course of conduct that is. When one encounters a difficulty, Mr. Speaker, one continues on to overcome the difficulty.
What is happening in the United States is that the Senate Finance Committee has dealt with the markup of the proposed administration Bill as has the House Ways and Means Committee. They have to get together, have a conference, and decide what it is Congress will recommend.


John Edward Broadbent: It is the same wording.


John Carnell Crosbie: We do not know what the final version of this Bill will be.
With respect to the plywood situation we have pointed out to the United States that, unless it institutes the tariff cuts to which we have agreed, on January 1, it will be in violation of the Canada-U.S. FTA. If the Canada-U.S. FTA is adopted by this country, as we intend to do, and as we feel reasonably certain the United States will do, it would be in violation.
Therefore, we would have several options. One is to go to dispute settlement, because the Americans would be violating the FTA. Another option is to take our own action with respect to repositing or replying to that action by the United States, if it goes forward with it.
It has not acted yet, and we are not going to panic. We have to ask the hon. gentleman opposite what is his answer to U.S. protectionism? What are the NDP going to do? What would the hon. gentleman do if the United States gives notice that it wants to cancel the Auto Pact? What would the hon. gentleman do then? Superman Broadbent, what would his solution be?


John Edward Broadbent: Mr. Speaker, I can tell the Minister that one thing we would not do is when the Americans say "jump", unlike the Conservatives we would not say "how high?" That is the difference.


Some Hon. Members:: Hear, hear!


WORDING OF CONGRESSIONAL COMMITTEES' RECOMMENDATIONS
John Edward Broadbent: Mr. Speaker, since the Minister obviously does not know, I would like to tell him that the wording of the change in this proposal as it affects Canadian exports of plywood, is identical in the House committee to the wording in the Senate.


John Carnell Crosbie: So what?


John Edward Broadbent: The Minister says, "So, what?" We want action before the deal is completed, not protesting after; that is so what.


Mr. Speaker:: The Hon. Minister.


John Carnell Crosbie: Mr. Speaker, the Hon. Leader of the NDP wants action. He has been wanting action now for how many years? Is it 10, 12, or 20 years? For how many years have members of the New Democratic Party been wanting action? They have been wanting it all their lives, and they are getting action. We have already delivered a diplomatic note to the United States objecting to what it is proposing, and what might be in the legislation. It is not there yet. We will continue objecting. If the United States does not rectify it, we will take a counter action, because we have the backbone to do it, and we are going to do it.
The hon. gentleman asks how high they jump. I ask the hon. gentleman is it a bird, is it a plane? No, it is Ed Broadbent hurtling over Oshawa on his way down to the United States to force the Senate and the House of Representatives to do his will.


John Edward Broadbent: Mr. Speaker, all I can say is that the Government has certainly taken action and that is why it remains distinctly lodged in third place in popularity among Canadians today. That is the type of action it has taken.


Mr. McDermid:: You are beginning to believe those polls now, are you?


An Hon. Member:: Getting a little arrogant, Ed.


John Edward Broadbent: Who is arrogant? Listen to your answers.


Mr. Speaker:: Perhaps the Hon. Leader of the New Democratic Party can put his question.


GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, instead of waiting until after the act is done, would the Minister, in his straightforward, non-bellicose language, inform the United States that we will not be introducing this Bill in the Parliament of Canada next week if it contains a change that the Minister himself has said goes against the agreement? Just for once will the Government stand up for Canadian interests before something is done against us, instead of after? That is the question.


John Carnell Crosbie: Mr. Speaker, what we have done, of course, is make it plain to the Americans that any change such as has been suggested would be strongly resisted by us. I have mentioned two ways in which we can respond to that.
Let me read what the offending provisions suggest: "The implementing Bill encourages the President to develop with Canada common performance standards for the use of softwood plywood and other structural panels in construction applications in the United States and Canada. The President shall report to the Congress on the incorporation of common
May 20, 1988

performance standards-and may implement the tariff reductions pursuant to Article-when he determines that the necessary standards have been met."
It is not such a bellicose pronouncement as the Leader of the New Democratic Party makes out, but nevertheless we are opposing this. We do not control the Congress. The American administration does not control the Congress. The Leader of the New Democratic Party has the least influence of any man in Canada on the U.S. Congress, believe me, and second to him the Leader of the Opposition, because they have lost any respect for them down there. They are going to tear up agreements before they are even ratified.


John Edward Broadbent: No, we respect them. It is you we do not respect. They stand up for their interests.


Mr. Speaker:: The Hon. Member for Ottawa-Vanier.

[ Translation]


OFFICIAL LANGUAGES
Jean-Robert Gauthier: Mr. Speaker, my question is directed to the Prime Minister. Yesterday I mentioned the amendments prepared by the Deputy Prime Minister for the dinosaurs on his back-bench committee that will gut the Official Languages Bill, especially where it concerns anglophone and francophone language minorities.
The amendment to Section 38 drops completely the concept of official language communities, which goes against the intent of Meech Lake.
I would like to ask the Prime Minister whether he would give his word, or make a solemn commitment to this House, that his Government will not tolerate any amendments that in any way diminish the role or importance of official language communities, in this country and in the Official Languages Bill.


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, the Hon. Member referred to amendments that were prepared by the Deputy Prime Minister. That is false! I think the Hon. Member will want to withdraw what he said, because we are not talking about amendments prepared by the Deputy Prime Minister.
The Minister of Justice mentioned yesterday that amendments would be tabled next Wednesday, if I am not mistaken, including a number of amendments from the Liberal Party and perhaps from the New Democratic Party, I am not sure. I assume that all these amendments, considering the support of all three political Parties for the Official Languages Bill, will tend to improve, and make more direct and more accessible,
Oral Questions
the provisions for implementing the legislation and in no way affect its basic principles, since the basic principles of the Official Languages Act enjoy the full support of all political Parties in Parliament.
It should come as no surprise to have amendments by the Liberals, the NDP and the Conservatives on a Bill as important as this one. I assume the amendments will tend to improve the Bill and make it more acceptable to a larger number of Canadians, because basically, its purpose is to make bilingualism acceptable from Vancouver to St. John's, despite certain problems and some resistance.
This requires understanding and generosity on the part of all involved, and a total absence of partisanship on a question of such vital importance.


CONCEPT OF MINORITY LANGUAGE COMMUNITIES
Jean-Robert Gauthier: Mr. Speaker, I have in hand a set of amendments which I take it come from the meetings of Tory back-benchers-


John Horton McDermid: What do you mean you take it? If you have an accusation, make it.


John Carnell Crosbie: Is anyone's name on it?


Jean-Robert Gauthier: -in which we find the same proposal for Clause 38, the same proposal which would gut the concept that is essential to this Bill, dealing with minority language communities.
Will the Prime Minister give his word that he will not allow any back-bench committee, or other amendments to be put to this Bill that would, in effect, scuttle the spirit of the Bill and destroy the Bill by eliminating the concept of language communities in this country? Will he give me an undertaking that he will not allow language communities to be excluded from this Bill?


Martin Brian Mulroney: Mr. Speaker, I point out to my hon. friend that in his choice of language he said that he has in his possession a set of amendments that "I take it comes from back-benchers". I do not know where he gets the amendments. I suppose any Member is entitled to present amendments.
Quite frankly, one of the moments of great dismay to me personally, and I assume to other Members of the House, was when an important instrument like the Meech Lake Accord was subjected to eight or nine amendments by the Liberal Senate which would have the effect of vitiating much of the impact of the Meech Lake Accord. I did not hear any objection from the Liberals in regard to the-


Jean-Robert Gauthier: Answer the question.

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Martin Brian Mulroney: Let me tell my hon. friend that the amendments to the Meech Lake Accord brought forward by the Liberal Senate would gut the Meech Lake Accord. I did not hear any objection from the Member for Ottawa-Vanier who should have been on his feet protesting that, and should have been denouncing those Senators.


CANADA-UNITED STATES FREE TRADE AGREEMENT-PLYWOOD EXPORTS-PROTEST NOTE
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I want to return to the Minister for International Trade who is spinning a cobweb of contradictions which will get him in real trouble.
He suggested to my Leader that with regard to these actions on plywood in the United States there is nothing we need to worry about seriously. He said this despite the fact that U.S. commentators have called it a major victory for the U.S. plywood industry and despite the fact that his own Government has sent a protest note with respect to the issue.
If there is no problem, why has this note been sent? Second, will the Minister table the note in the House of Commons so that we can judge just exactly how tough the Minister is in standing up for this country?


John Carnell Crosbie: Mr. Speaker, it would certainly be a job to be as tough as the Hon. Member opposite-


John Edward Broadbent: Yes.


John Carnell Crosbie: Nevertheless, we must aspire to have a high peak of toughness.
No one has suggested that we have nothing to worry about. I suggest that this country has much to worry about in its trade with the outside world and its trade with the United States. Since we have much to worry about, the Prime Minister and the Government entered into this U.S.-Canada Free Trade Agreement. It is because we are worried about U.S. protectionism, which is evidenced by their action on plywood, their action on lobsters, and evidenced by their attempts on potatoes. We can use a hundred different examples.
We are worried and doing something about it. However, the two Parties opposite try to stop us and tear us down at every step of the way.
I read what they are suggesting in the United States. We have sent a note of protest. I, myself, spoke to Clayton Yeutter today


Some Hon. Members:: Hear, hear!


John Carnell Crosbie: -and expressed the same position verbally.
We only get derision, of course. If I call the U.S. trade representative, I get derision from Members opposite. What do you want? Do you want me to go down with a machine gun? Is it the Rambo policy that the NDP suggest?


Some Hon. Members:: Sit down.


Mr. Speaker:: The Hon. Member for Essex-Windsor.


REQUEST THAT MINISTER TABLE PROTEST NOTE
Steven W. Langdon: Mr. Speaker, I am pleased that the Minister has had a conversation with Mr. Yeutter. He still has not answered the question about whether he will give the House of Commons a chance to see the note of protest which he sent on this and the other issues.

Could the Minister not table here in Parliament a note of protest on this serious problem?


John Carnell Crosbie: Mr. Speaker, that is incredible!

I said that this is incredible, Mr. Speaker. Every time the hon. gentleman opposite asks a question, he proves how right we are to be on the course of the Canada-U.S. Free Trade Agreement in order to get more secure access to the U.S. market. The plywood example more than proves the point.
If the Americans do not heed our protest, we have several options. We will exercise those options under the FTA.


FISHERIES
Mr. George Baker (Gander-Twillingate):: Mr. Speaker, Captain Willougby Bolt, the Canadian fisherman arrested by the French Navy, is to appear in court at the beginning of next week charged with violating French fishing regulations that he knew nothing about. Apparently the Government of Canada knew nothing about them either because the Secretary of State for External Affairs stated in the House last week, as reported at page 15339 of Hansard:
There was an agreement providing for at least three months' notice of any
change in practice. We did not receive such notice from the French ...
Was the Government not aware that the Canadian Ambassador in Paris received letters dating back to November 8, 1986, about these changes in regulations? They were gazetted on March 19, 1987, together with the letters from and to the Canadian Ambassador in Paris. What happened? Why did he not inform the Cabinet of which he is now a part, or at least the fishermen?
May 20, 1988



Was Mr. Bouchard so busy with his own policies that he forgot about Canadian fishermen?


An Hon. Member:: Right on!


John Carnell Crosbie: Mr. Speaker, I believe a calm recital of the facts is the best approach in this case. The Secretary of State for External Affairs was exactly right when he said that we did not receive such notice. The facts are that on November 8, 1986, the French Government delivered a note to Ambassador Bouchard, soon to be Member Bouchard, in Paris. That note was transmitted to Ottawa.
Under Article 6 of the Treaty of 1972, drafted and implemented by our Liberal predecessors, three months' prior notice must be given of any action to be taken by the French with respect to licensing or whatever. On March 20, 1987, there was a gazetting. On March 24 and 25 our representatives met with the French representatives. It was agreed by the French that they would give a period of grace during which Canadian boats would not be required to be licensed. These are the facts, Mr. Speaker.


Mr. Speaker:: All of this is important. Perhaps the Hon. Member could put a direct question which will enable the Minister to reply more directly.


RIGHTS OF CANADIAN FISHERMEN
George Baker: Mr. Speaker, the reasoning in his response is just as fractured as his French when he dares to use it.
Doesn't the Minister realize that while these diplomatic games are being played the fishermen are being forgotten, that Captain Willie Bolt has to go out 60 miles before he is allowed to fish after having this line across Fortune Bay and, if he goes beyond that, he is arrested by the French. Doesn't the Minister realize that those fishermen if they fish in waters they have traditionally fished in, so-called Canadian waters, they are arrested by the Government? If they fish in waters where they traditionally fished, so-called French waters, they are arrested by the Government of France? Where does he expect them to fish? Meech Lake?


Some Hon. Members:: Oh, oh!
[ Translation]


John Carnell Crosbie: Mr. Speaker, my French is not perfect.

That is why I don't attempt it more often.


Some Hon. Members:: Oh, oh!
Oral Questions


John Carnell Crosbie: In other words, the French Government said that before there was any change the French would give us notice. They gave us no notice of any change in their regulations or that they would be applied to Newfoundland inshore fishermen.
With respect to the rest of the hon. gentleman's question on Meech Lake, the Hon. Member fishes in troubled waters there because the Leader of the Opposition cannot get the Senate to concur with him on Meech Lake. The Liberal Leader of the Opposition in Newfoundland is sabotaging Meech Lake. I would not want to fish in Meech Lake if I was the Leader of the Opposition-


Mr. Speaker:: The Hon. Member for Humboldt-Lake Centre.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Mr. Speaker, my question is for the Prime Minister or the Deputy Prime Minister. The Minister of Agriculture's position on western drought aid has been very clear to date both before the Agriculture Committee and in this House during our May 9 opposition day on drought. The Minister said in effect "crop insurance is in place. Use it. The Prairie Farm Rehabilitation Agency exists. Use it".
In light of the urgent call for assistance from the four western Premiers has the Government changed its mind on drought aid? Will there be another federal-provincial program this year?


Martin Brian Mulroney: Not at all, Mr. Speaker. The Government has been very responsive to the problems of agriculture generally in Canada, and western agriculture in particular this last while. As the Deputy Prime Minister pointed out, there has been a substantial increase in aid to western agriculture. We view this very seriously.
I have instructed the Minister of Agriculture to meet on an urgent basis with his provincial colleagues. When there is damage being done like this to the farming industry in western Canada, it is a national problem. We have to be involved in the solution and I know that my hon. friend would want the Parliament of Canada to be involved in that.


PROPOSED EMERGENCY ASSISTANCE PROGRAM
Victor Fredrich (Vic) Althouse: I thank the Prime Minister for his answer, Mr. Speaker. During the 1985 drought, the Parliamentary Secretary to the Prime Minister, the Hon. Member for Assiniboia, chaired the drought committee and was apparently responsible for developing a

May 20, 1988
Oral Questions
permanent emergency assistance program to respond to future droughts. Where is that program today? Why don't the four western Premiers seem to know about it?


Martin Brian Mulroney: I thank my hon. friend for pointing out the exceptional work and very successful initiatives of the Hon. Member for Assiniboia who provided great leadership on the question of the drought the last time around and was saluted for such by, I think, Members on all sides of the House.
The western Premiers signalled yesterday that we have a new dimension to the problem. All I can do is tell my hon. friend that we will be assisting the western Premiers in dealing with this very debilitating situation that is causing such damage to the western farmers. I see the Hon. Leader of the NDP smiling. That is all the New Democrats do-smile. We help farmers in trouble.


CORPORATE AFFAIRS
Aideen Nicholson: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. It concerns the unusual intrusion of his officials into the work of the Finance Committee.
Would the Minister tell the House why the Government is trying to frustrate the achievement of a solution to the problem of charges by financial institutions?


Hon. Harvie Andre (Minister of Consumer and Corporate Affairs):: We are not, Mr. Speaker. When Mr. McIntosh of the Banker's Association appeared before the committee he indicated that the Competition Act prevented the banks from getting together to provide certain advantages to consumers. I wrote to him on April 29 saying that that is not true. The Competition Act is there designed to help consumers, and it was not acceptable to me for him to claim that it was the Competition Act that prevented banks taking action to help consumers.
I went on to tell him how he could get advice from the Department if he had any doubts about it. I was trying to make sure that the bankers did not try to hide behind the Competition Act when it came to giving consumers some relief from these service charges.


VOLUNTARY COMPLIANCE-MINISTER'S POSITION
Aideen Nicholson: Mr. Speaker, this is interesting because it is a different perspective from the one given to members of the committee as a result of telephone calls from his officials.
Will the Minister confirm that he is prepared to see voluntary compliance in preference to a legislated solution, or is he moving toward legislation?


Harvie Andre: Mr. Speaker, I would like to see compliance. I think there is the ability for the banks to comply. They can get legal opinion for that from my Department.
If, in fact, there is some unseen quirk that would prevent this, I would certainly be more than willing to come forward with quick amendments to the Competition Act, or to recommend to my colleague in terms of the Bank Act to have any legislative obstacles removed to allow the banks to comply. If they do not comply voluntarily, I am certainly not averse to a legislative solution, but I would prefer compliance on their part. I wish they would stop trying to hide behind the law, and get on with compliance.


FUNDING OF HEALTH CARE SYSTEM IN ONTARIO
Mr. Ernie Epp (Thunder Bay-Nipigon):: Mr. Speaker, my question is for the Minister of National Health and Welfare who has undoubtedly noted media reports about Ontario hospitals which are unable to balance their budgets, and about patients dying because they were not able to have the surgery needed in time to save their lives.
Does the Minister still think, as he said in New York not very long ago, that there is enough money in the Canadian health care system to maintain the good health of Ontario residents?


Hon. Jake Epp (Minister of National Health and Welfare):: Mr. Speaker, the issue which the Hon. Member raises is one that is a concern I think to all Canadians who want to preserve the health care system, and it is a good health care system.
I point out to him that the delivery of health care is a provincial responsibility. I further point out to him that from 1982 to 1987 through the transfer payments for health and post-secondary education, the entire established programs financing portfolio, that the federal Government transferred to the provinces in the order of $65 billion. For 1987 to 1992 with a formula for protection against inflation we project that figure of $65 billion to increase to $90 billion.
I think additionally what the Hon. Member should keep in mind is that in a number of cases provinces have not transferred the same percentage of increase they receive from the federal Government in the transfers to their institutions. If that had been done, then possibly we would not be in the dilemma we are in today.
May 20, 1988


ESTABLISHED PROGRAMS FINANCING
Abram Ernest Epp: Mr. Speaker, the Minister knows perfectly well that in his own province the limits on federal support for the system are forcing closure of beds and the same kinds of consequences are occurring in Ontario. Does the Minister have any plans at all to reconsider the policy, which the Liberal Government began more than 10 years ago, of restraining transfers under the Established Programs Financing? This Government has made the situation worse. We will be seeing more people dying across Canada because the Government is not financing health care adequately.


John Horton McDermid: What nonsense.


Abram Ernest Epp: They are dying.


Arthur Jacob (Jake) Epp: Mr. Speaker, that is simply not the case. Back in the 1970s, 7.4 per cent of the GNP was expended on health care. Today that figure is 8.6 per cent at a period of time when we have seen the GNP and economic growth increase in this country over the last four years. The first point is wrong.
Second, we have the S65 billion over the last five years, and the projected $90 billion projected for the next five years together with the increases which that involves.
The third point I would make is that this would not happen if there had not been the kind of mismanagement in Manitoba that existed with the NDP Government. It was that Government that closed the hospital beds and that is why it was rejected in the last election.


AGRICULTURE
Ross Belsher: Mr. Speaker, having grown up on the Prairies and in southern Saskatchewan, I know the real dangers of a drought. This year it will become necessary for many cow-calf operators to sell down their herds. Normally, when sales are made, taxes must be paid in the year the sales are made and then replacements are paid for with tax dollars.
My question is for the Minister of State for Finance. Can there be a program initiated that would cause the deferral of the taxes over a two to three-year period to compensate for this very real dilemma the cow-calf operators will find themselves in this year?


Thomas Hockin: Mr. Speaker, I thank the Hon. Member for Fraser Valley East for his very important question, and I join with him in the great
Oral Questions
concern he raises for his constituents, the farmers and the ranchers in his constituency. He is very alert to their needs.
I must tell the Hon. Member that the Government has not dealt with these particular problems through a diddle of the tax system. This Government has approached the matter through direct assistance. Since 1984 there has been $140 million in drought assistance for livestock and $150 million in drought assistance for crops. The direct assistance approach has been this Government's approach.
As the Prime Minister and the Deputy Prime Minister mentioned today, the Government is watching this and monitoring it carefully, and it will act firmly and decisively.


MISSING CHILDREN
Sheila Maureen Copps: Mr. Speaker, in the absence of the Minister of Justice and of the Minister of National Revenue, my question is for the Prime Minister. The Prime Minister will know that on Sunday of this weekend we will be commemorating National Missing Children's Day. He will also be aware of the fact, I think, that the current federal record data bases which are made available for parents seeking children who have been abducted do not include access to information under the Income Tax Act.
I have in my hand a copy of a Canada-wide warrant which was issued under Section 250.1 of the Criminal Code, for one Kevin Lee Johnston, who abducted his son Ryan last January. Mrs. Johnston came to me because she wanted access to all and any information to find out where her son is, yet she has been denied access to information under the Income Tax Act.
Can the Prime Minister move immediately to amend the Income Tax Act to make available information about the whereabouts of child abductors who are facing charges under the Criminal Code?


Martin Brian Mulroney: Mr. Speaker, I am unaware of the specifics of this case, but I thank my hon. friend from Hamilton East for raising what is clearly a very important question. The problem of missing children is a great tragedy and one that I think all Members of the House and all agencies of government should respond to as quickly and as effectively as we can.
We have made some important advances in the last couple of years in this area, but we can do a lot more. I will inquire immediately as to the possibility of acting promptly in regard to the suggestion of my hon. friend and any other suggestions she may have in this regard.

May 20, 1988
Point of Order-Mr. Langdon INCOME TAX ACT PROVISIONS


Sheila Maureen Copps: Mr. Speaker, I thank the Prime Minister. I hope he will give personal attention to this matter.
He should be aware that this morning a representative of the Minister of National Revenue told me personally that if any person tried to get information under the Income Tax Act about the whereabouts of missing children, he or she would be fought all the way to the Supreme Court because the Minister of National Revenue does not intend to release this information.
Again, is the Prime Minister aware of the fact that under the Income Tax Act, those who happen to be evading income taxes can be required to provide information? The whereabouts of a person who evades income tax is public information which can be received by the courts, whereas the whereabouts of a child abductor is private information. Does the Prime Minister not agree with me that the whereabouts of children are more important than the whereabouts of missing income tax money?


Arthur Jacob (Jake) Epp: Mr. Speaker, I thank the Hon. Member for her question following up further to what the Prime Minister said. The Hon. Member will be aware that when changes were made for computer access, the Income Tax Act and Revenue Canada operations were examined. I appreciate the comments made today indicating that that will be revisited.
I should say to the Hon. Member and all Canadians, because we all share the concern in this area, that we are now using the computerization of the Employment and Immigration Department and we are also using the computerization of the Department of National Health and Welfare. I have been told, and I believe it to be correct, that there are possibly more names of Canadians on National Health and Welfare computers than even on Revenue Canada computers. That notwithstanding, we will examine if there is another way to access Revenue Canada information.
Excuse me, Mr. Speaker. I am taking a little bit of time. For example, changes in contributions to the Canada Pension Plan also come through National Health and Welfare. I will check again to see how fast that program is working.
May I say as well, if I might, Mr. Speaker, that corporations are also demonstrating some civic responsibility. One example is Child Find. As well, a rental car company, Budget Rent a Car, has a program of showing missing children brochures on vans, and some children have been found through that program.
Last, the Hon. Member for Surrey-White Rock-North Delta, back in the mid-1970s, came forward with a Private Member's Bill on parental abduction. I think that-thank you for the time, Mr. Speaker.


Mr. Speaker:: I must advise that this brings Question Period to a close. I wish to share with Hon. Members a few words.
I know that all of the matters raised today were important, both in the questions and in the responses, but I want to indicate to Hon. Members that, at least in the view of the Chair, we should be seeing more Members rise and more questions and more answers than we were able to see today. I would ask all Hon. Members to co-operate when we return after the long weekend because I will need that co-operation in order to do what we are supposed to do in Question Period, and that is get a maximum number of questions and answers. I thank all Hon. Members.


POINT OF ORDER
Steven W. Langdon: Mr. Speaker, during Question Period today, a reference was made by the Minister for International Trade (Mr. Crosbie) to certain notes which have been sent to the United States with reference to sections of the Finance Committee's suggested changes to the legislation dealing with the trade agreement, and I would draw your attention, Mr. Speaker, to Beauchesne's 1978 edition, Citation 327, which deals with documents cited and the requirements of Ministers of the Crown with respect to this. Paragraph (2) reads:
It has been admitted that a document which has been cited ought to be laid
upon the Table of the House, if it can be done without injury to the public
interest.
In view of this rule which binds us in the House of Commons, I would ask you, Mr. Speaker, if it would be possible for you to ascertain from the Minister for International Trade if there is in fact any potential or actual injury to the public interest which might exist if these protest notes to the United States were laid upon the Table. If there is no such injury to our national interest, I would ask that these documents be in fact laid upon the Table further to that rule.


Mr. Speaker:: Perhaps I can help other Hon. Members who might wish to contribute to this question by pointing out that we had this matter before us only a little while ago, and a question of whether or not a Minister is quoting from a document becomes of some considerable concern to the Chair.
If the Member is quoting from a document, the rule is clearly as the Hon. Member for Essex-Windsor (Mr. Langdon) states it to be. If it is something less than a quote, it puts the Chair in some difficulty, and I ask Hon. Members to address that point.


Hon. Herb Gray (Windsor West):: Mr. Speaker, the precedents on this matter speak not only of quotations but also
May 20, 1988

of citing documents. I respectfully submit there must be some distinction between the meaning of the word "quote" and the meaning of the word "cite". Otherwise, the precedents in question would not have covered both those words in setting out a basis for requiring Ministers to table documents they refer to in debate or in answering questions. Therefore, I know you will want to review the "blues" to see exactly in what way and in what context the Minister referred to the notes in question.
I submit that the precedents are clear. It is not necessary for the Minister to quote at length or in any substantial fashion from the documents in question. It is sufficient that he cite them, and I repeat that there must be some difference in meaning between the words "quote" and "cite", otherwise the precedents would not have made reference to both those words in setting out conditions for the requirement that documents referred to by Ministers in this House have to be tabled once they are referred to.
I also want to point out that the Minister, at no time in the answers he gave, made any suggestion or gave any hint that there be anything contrary to national security or the public interest in making their contents public. On the contrary, he took great delight in referring to those notes and their existence as supporting the position of the Government that it was in fact doing what it should in defence of the best interests of this country.
I ask you to take into account the context in which the Minister made reference to the notes. I would think that he would be delighted, if not to table the notes forthwith in the House, to release them publicly as soon as possible today. I certainly think it would be consistent with the Minister's responsibility to this House to disclose those notes first by tabling them here, and he has time to do that up until three o'clock. However, if there is some problem in getting the text of the notes in both official languages before three o'clock in such a way that they can be made public, then he need not, and in fact should not, wait until next Tuesday. He should make them public as a press release as soon as possible later today.
To conclude, I say the precedents are clear. The context in which the Minister made reference to the notes is also clear. He has a definite obligation to table the notes in question in their complete form forthwith. Anything else would be not only contrary to the precedents in question, it would be a failure to show the respect which any Member, especially a Minister, owes to this House.


Mr. Speaker:: I want to thank the Hon. Member for his intervention. He points out an important addition to the argument and also a distinction. I have taken the point that he raises and I will keep it in mind.


Hon. Doug Lewis (Minister of State and Minister of State (Treasury Board)):: Mr. Speaker, I have a couple of things if I may. First, I think it is quite clear that Beauchesne's deals
Point of Order-Mr. Langdon
with this in more than one section than that which my hon. friend from Essex-Windsor (Mr. Langdon) quoted. He started with Citation 327(2). I would like to quote Citation 327(1) which states:
A Minister of the Crown is not at liberty to read or quote from a dispatch or other state paper not before the House, unless he be prepared to lay it upon the Table.
I think when you review the "blues" you will find that the Minister referred to his notes, not the note sent to the U.S. Government or the trade ambassador.


Herbert Eser (Herb) Gray: So he has to table his notes.


Douglas Grinslade Lewis: They were his handwritten notes. Second, and this is the neat part, my hon. friend was kind enough to read to the House Citation 327(2), which says:
It has been admitted that a document which has been cited ought to be laid upon the Table of the House, if it can be done without injury to the public interest.
My friend did not give you the last sentence and I would like to read it for you:
The same rule, however, cannot be held to apply to private letters or memoranda.
Even if the Hon. Minister were quoting from it, I submit that it would be in the context of a private letter.


Herbert Eser (Herb) Gray: Mr. Speaker, I want to get some clarification of what the Minister has been saying. Is he attempting to tell the House and you, Sir, that a diplomatic note exchanged between Canada and the U.S. is the same thing as a private letter? With all due respect to the Hon. Minister, I say that argument is, if I may use the words, patently absurd. A note is not a private letter, it is a formal document exchanged between two countries, and the only grounds for not tabling it in this House is if the public interest would somehow be harmed by it.
There is no suggestion by the Minister for International Trade that what he told the press outside the House yesterday and what he referred to in his questions today was just some private little billet-doux, some personal love note exchanged between the Minister and his U.S. counterpart. Rather, it was a formal diplomatic note, a state paper, which clearly, under the circumstances in which it was referred to, should be tabled in this House.


Steven W. Langdon: Mr. Speaker, in an attempt to set out what seems to be indicated in this section in full-


Douglas Grinslade Lewis: Bring back Nelson Riis.


Steven W. Langdon: No such luck.


Douglas Grinslade Lewis: Stick to the issues.


Steven W. Langdon: The key distinctions are between state papers or dispatches from which a Minister reads or quotes on the one

May 20, 1988
Petitions
hand, or public documents which are referred to on the other-


Douglas Grinslade Lewis: That is not the word.


Steven W. Langdon: Or, third, documents which have been cited.


Douglas Grinslade Lewis: Cited.


Steven W. Langdon: As I took the answer of the Minister today, he certainly cited this document and provided a description of it in doing so. He indicated that it had a certain sense of emphasis or toughness, a certain power which was conveyed, et cetera. I think that is a citation and I think that unless there is, as the section suggests, some injury to the public interest which could be created by requiring that this be laid upon the Table, I frankly see little option for the Minister but to follow the rules. I very much hope that those distinctions and the argument would lead you to rule in that direction.


Mr. Rod Murphy (Churchill):: Mr. Speaker, just a short intervention. I am very concerned about the Minister's last reference to private letters. If that argument were to be accepted by the Chair, then virtually everything sent out by a cabinet Minister could be deemed to be a private letter. Obviously we would then be in a situation where no documents, whether quoted or cited by a Minister in this House, would ever be tabled. I think that argument indicates a disregard for the precedents.
We are not asking for the Minister's private letters to his wife or his sons. We are talking about a document sent by the Government to another Government, on behalf of Canada, presumably. Obviously, there was a citation or reference to that letter and I believe it should be tabled.
If I may, Mr. Speaker, I just want to point out to the Minister that it is obvious that his letter to his own profession in which he said he does not practice law in Ontario is very honest.


Mr. Speaker:: I have listened carefully to the interventions of all Hon. Members. I would remind Hon. Members that the Chair dealt with a similar situation raised by the Hon. Member for Regina West (Mr. Benjamin) several weeks ago. I will, of course, review that ruling and I will take very great care to reread Hansard and will report to the House accordingly. I thank Hon. Members for their interventions.



ROUTINE PROCEEDINGS


Mr. Bill  Doram@Peterborough: Mr. Speaker, I have two petitions I have made available to your office for clarification. I would like to present them at this time. The first petition is from a number of members of the Calgary Pentecostal Church in the constituency of Peterborough. These 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, with the exception of the extremely rare situation in which an abortion is performed in order to save the life of the mother.


Mr. Bill Domm (Peterborough):: The other petition I would like to introduce to the House this afternoon is from employees of Canada Post at the main post office in Peterborough. It was received in my constituency office on March 17. The petition calls upon Parliament to ensure that Canada Post provides a clean and healthful workplace for its employees in the Peterborough post office in the Province of Ontario.


Hon. William Rompkey (Grand Falls-White Bay- Labrador):: Mr. Speaker, I also have a petition from my constituents in the community of Shoe Cove in Newfoundland. In fact, this petition was originally sent to the Speaker himself.
The petition requests that the Parliament of Canada legislate to ensure that the fundamental right to life of everyone is protected from conception through to natural death. The petitioners call upon Parliament to enjoin the Government so to legislate.


Bill Rompkey: Mr. Speaker, I also have a petition from residents in the community of Conche in Newfoundland who call upon Parliament to ensure that the Government acts upon their very reasonable request for a change in the unemployment insurance regulations. The petitioners ask the Government to allow fish plant workers to use their best rather than their most recent 10 to 20 weeks when applying for unemployment insurance benefits, as most fish plant workers are struggling to survive and raise their families on very low incomes.


Mr. Louis Plamondon (Richelieu):: Mr. Speaker, I have the honour to table a petition concerning the destitute on behalf of students at Ecole Lemire and Ecole Moreau in Pierreville and

May 20, 1988

Saint-Franfois-du-Lac, so that 1987, the year of the homeless, will result in increased assistance for them in 1988.


Mr. John Parry (Kenora-Rainy River):: Mr. Speaker, pursuant to Standing Order 106,1 have the privilege to present a petition today signed by residents principally of the community of Dryden, Ontario, some 80 in number. These Canadian citizens call upon Parliament to provide a remedy to the inequities created by the application of the northern residents' tax allowance by the designation of all Tier III communities as eligible for that allowance.


Daniel James Macdonnell Heap: Mr. Speaker, it is my pleasure and duty to present a petition from a number of residents of the City of Toronto who are concerned about our immigration policy. The petitioners point out that the Minister promised more than half a year ago to admit unmarried daughters and sons of all ages as members of the family class of immigrants and to provide 15 points instead of 10 points in the case of married children and brothers and sisters coming in as assisted relatives.
Furthermore, in 1986, the then Minister of Justice promised to remove the unfair distinction between Canadian citizens and permanent residents who have been here for three years or more with respect to the right to sponsor parents of any age. The petitioners point out that none of these promises have yet been fulfilled. Therefore, the undersigned ask that Parliament ensure that the Government fulfil its promises now.


Daniel James Macdonnell Heap: Mr. Speaker, I have another petition from residents of the City of Toronto who point out that the trade deal negotiated between the Prime Minister (Mr. Mulroney) of Canada and the President of the United States, for which the Prime Minister of Canada, they say, had no mandate, would reduce Canada's ability to plan the economic, social and cultural programs Canada needs. It would also integrate Canada further into the North American defence industrial base. Therefore, the petitioners request Parliament to ensure that a national debate takes place on the Mulroney-Reagan trade deal and that this debate result in a national general election before such an agreement is finalized.


QUESTIONS ON THE ORDER PAPER
Douglas Grinslade Lewis: Mr. Speaker, I ask that all questions be allowed to stand.


Mr. Deputy Speaker:: Is it agreed?
Bretton Woods and Related Agreements Act


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Hockin that Bill C-126, an Act to amend the Bretton Woods and Related Agreements Act, be read the second time and referred to a legislative committee.
James Douglas Manly: Mr. Speaker, when I was interrupted by Question Period, I had been pointing out that in addition to the debt problem faced by the poorest countries in the world, there is a decline in official development assistance, and then I went on to talk about the most serious problem, and that is, the decline in commodity prices. I was reading from Roy Culpeper's study "Forced Adjustment: The Export Collapse in Sub-Saharan Africa" in which he states:
No commodity category was exempt: food, non-food, agricultural and mineral commodities alike plunged to their lowest level, in real terms, since the Great Depression half a century ago.
Other World Bank estimates provide forecasts of commodity prices over the next 15 years, under various assumptions about global supply and demand conditions and the economic environment. These projections indicate that the price deterioration which has occurred during 1980-86 is expected to continue in 1987 before commodity prices rise again.
However, prices are not expected to rise much in coming years, with the result that by the year 2000, they will still be lower in real terms than the depressed levels of 1985. By the turn of the century, real commodity prices, according to this scenario, will only be one-half their 1950 levels!
This is the problem facing African nations and other poor nations around the world which depend for their export earnings on commodity prices. They have declined drastically. They will continue to decline in real prices.
In fact, it has been estimated that in 1986 there was a net outflow of funds from Africa amounting to some $16 billion American. That is made up by the fact that funds coming into Africa were some $16 billion of development assistance from all countries. There was private lending amounting to only some $2 billion. This amounts to a total of $18 billion going into Africa. Going out of Africa there was a drop in commodity prices of $19 billion. Debt servicing amounted to some $15 billion. This amounts to a total of $34 billion.
This is why our Ambassador to the United Nations, Stephen Lewis, a person who has spent a great deal of time in the last three or four years visiting Africa studying the situation there and working with the United Nations trying to get a program of action that will actually meet the problems of Africa has

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said time and time again that the West is betraying the African continent.
Perhaps we could look at the words of a distinguished African President, President Kaunda, who is the head of the Organization of African Unity. On October 6 he spoke before the United Nations General Assembly. He said that:
-almost one and a half years after the adoption of the Program, and despite some limited initiatives here and there, the international community's over-all response has fallen far short of the requirements of the Program. The international community has not lived up to its side of the recovery pact.. .
Africa has been losing on all counts ... No measures are in sight to stabilize export earnings from commodities, which are of major interest to Africa; nor have effective mechanisms been put in place to deal with the unmanageable debt and debt-servicing burdens in any meaningful way. Worse still, the anticipated increase in the resource flows to Africa has not materialized. Not only have they not matched the resource outflows from Africa, they have actually stagnated.
He concluded by stating that:
-unless effective solutions are found for the debt and commodity problems and unless resource flows at levels adequate to compensate for the outward transfer of resources away from Africa are ensured, prospects for bringing about recovery and development in Africa will become forever elusive and the continent will forever be a victim of the vagaries and misery of perpetual crisis.
This is the problem about which we are concerned. The fund that we are talking about contributing to will establish approximately $6 billion in special drawing rights, a little over $10 billion Canadian, or a little over $8 billion American. Yet that is going to be spent over a number of years to help with the debt problem. We are talking about a situation in Africa alone where there is a net shortfall of $16 billion per year. Thus the enhanced structural adjustment facility, ESAF, is not going to meet the total needs of the African continent. We should not be under any illusion that it will do that. It is a small step. It is a step that is primarily designed to ensure that the poorest countries do not default to their creditors in the West or to the IMF itself.
In our Party we are concerned that Canada should be doing more for Africa. We are concerned that when Canada meets with the other leaders of the industrialized West at the G-7 meeting in Toronto next month we should be pushing for more human adjustment policies on the part of the IMF. We should be pushing for a greater role by the World Bank and its concessionary flows to the poorest countries. We should be putting some pressure on the United States because, inadequate as ESAF is, the United States has said it will not be contributing anything to it.
Here we are talking about a trade arrangement with the United States. We want to get in under its protectionist umbrella, so-called. We are not going to quite make it. We will be standing with quite a bit of our shoulders and our head outside the umbrella with it dripping down on us. However, we want to get in under the American umbrella. Yet the United States is pleading poor. It says it cannot make any contributions to this enhanced structural adjustment facility that is supposed to be helping the poorest nations in the world. It says that it is too poor itself.
This raises questions as to why we are getting involved in a trade arrangement with another nation that is not able to carry its weight in international terms. It is able to throw its weight around on the International Monetary Fund but it is not able to carry its weight in terms of helping the poor nations.
We would like to see Canada take a more straightforward position on this matter and work with other nations to ensure that multilateral agencies such as the IMF and the World Bank have better structural policies that take account of the impact of those policies upon the poorest of the poor. We want to see Canada take a better position in terms of itself increasing the amount of official development assistance that goes to the poorest of the poor.
I remind the House and I remind the Canadian people of the commitment that was made by the Secretary of State for External Affairs when he appeared before the United Nations shortly after the Conservative Government was elected. He said that Canada would reach its commitment to guarantee 0.7 per cent of its Gross National Product to official development assistance by 1990. That is a commitment that Canada made. The Secretary of State for External Affairs made that commitment in our name to the poor peoples of the world. It is a commitment that the Government has welched on. I regret that as a Canadian who would like to see us living up to our commitments. We should be taking action.
We must place back on the agenda the need for a new international economic order. We have to be working for some system that will stabilize world commodity prices. It is in our interests as well as in the interests of the poorest nations in the world that their economies should not be allowed to collapse because of the way in which commodity prices have collapsed.
Thus we have this agenda. It is a big agenda. We support the small step that the establishment of the enhanced structural adjustment facility makes. But we want to emphasize that there are other items that need to be addressed also if we are going to take at all a comprehensive approach to Africa and not be simply a drop in the bucket.
Finally, I want to reiterate that we want to see this Bill tightened up in terms of not giving a blank cheque to the Government so that it can simply increase the money, at any time it wants and so that it can give money to any fund that it wants without coming back to Parliament. We believe it is extremely important that Parliament should continue to have control over the purse, that when we are talking about such matters as contributions to the International Monetary Fund the Government should be accountable to the House of Commons for the way in which the IMF operates. If we are giving money to it, if we are providing Canadian taxpayers' money then we should insist that the Government be accountable for the way in which the IMF spends that money.


Daniel James Macdonnell Heap: Mr. Speaker, I am very pleased to have a chance to speak on Bill C-126 because it raises a very serious problem. That is to say, on the one hand it undertakes
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to give aid to the needy. It asks those countries that have money to provide money to lend to those that lack it. On the other hand, our experience over several years now with this kind of lending process is not encouraging because it seems that the results that we were going to get are just not there.
Furthermore, I believe that this Bill takes a direction which is unwise and unfortunate in that it removes from the House almost all effective responsibility and oversight for future contributions to the International Monetary Fund. Bill C-126, an Act to amend the Bretton Woods and Related Agreements Act, has two short clauses. The first states, in part:
"5.1(1) The Minister of Finance may lend to the International Monetary Fund, at such rate of interest and on such other terms and conditions as the Governor in Council may approve, such sum or sums of money as may be required for funding any trust or body established by the Fund ...
In other words, it will not only go to specified purposes now existing in the fund, but if new purposes and new programs are created, they need not be discussed, and probably will not be discussed in the House of Commons, because the Minister now has the power to direct it anywhere he or the IMF please.
The Minister can direct it "as may be required for funding any trust or body established by the Fund to assist in fulfilling the purposes of the fund ..." Those are very broadly stated purposes, which the fund does not necessarily carry out, such as maintaining the income level of the people in the country to which it lends.
That clause further states, "not exceeding in the whole five hundred and fifty million dollars, or such greater amount as may be fixed by the Governor in Council". If the Governor in Council decides to put in a further $1 billion or $10 billion, he or she does not need to return to Parliament to ask for the money. We have now said it may be any amount that the Governor in Council thinks would be reasonable.
The second clause states that, "the Minister of Finance may grant..." The first clause states "lend" and the second clause states:
... grant to the International Monetary Fund, on such terms and conditions as the Governor in Council may approve, such sum or sums of money as may be required for funding any trust or body established by the Fund to assist in fulfilling the purposes of the Fund, not exceeding in the whole two hundred and fifty million dollars, or such greater amount as may be fixed by the Governor in Council.
In other words, this Bill gives the Cabinet a blank cheque in its lending or granting to the International Monetary Fund. It is a blank cheque not only in the limits to which it can grant or lend, but also in the purposes and the bodies to which it can grant or lend. If the International Monetary Fund had a really good record of helping the people it is supposed to help, that would be more acceptable. But it does not.
I wish to move from the dry figures and dry legal words to what I saw a couple of years ago when I was on parliamentary business in Guatemala. I wish to speak about the man with the hoe. There is a famous portrait that was produced in Europe of
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a man with a hoe. This is a different man with a different hoe. In the famous European picture the man with the hoe has a hoe similar to that which we would use in our gardens. The hoe being used by the man in Guatemala was at least twice or perhaps four times as large, a really heavy tool. As we drove past this person in the countryside, I was told by the officials that that was the only technological improvement brought to the indigenous peoples of Central America by five centuries of European conquest and occupation.
This man with the hoe was brother or cousin to the others whom I saw there. They were lifting their hoes to dig at a hillside which was at least 45 degrees steep, and sometimes 60 degrees steep. That was the only land that they could work, the only land that they were allowed to have. On the road I saw one of his brothers or cousins carrying a load of firewood, logs that had been split and sawed. It was a huge load about the size that he was himself. He was carrying this load of firewood from where it could be cut to where he would need it for his family. Behind him was a woman carrying on her head a large bundle of sticks, also for firewood.
It was explained to me by our CIDA officials that the gathering of Firewood for cooking and the gathering of water for cooking on those mountainous hills occupy several hours a day of a peasant's time. No wonder these people are poor. For a few days or weeks in a year they may go down to the coastlands for a day labour at low rates for the cotton harvest, the sugar harvest, or similar work. But all in all, 80 per cent of their children are suffering malnutrition. I believe it is obvious that that is not a condition that has gone on for many centuries. The fact that 80 per cent of the children of a country are suffering malnutrition is a modern invention.
The man with the hoe is contributing a small amount, but he is contributing to the wealth of Canada, the United States, and the other banker countries. It was pointed out by my colleague that the people of the Third World, of which this country is a part, last year contributed almost $6 billion in outflow, that is, $6 billion more went out than came in. That is $6 billion from the poorest to the richest. That is why I think of the man with the hoe when I look at this Bill.
There is another reason why I think of the man with the hoe. When I grew up in Winnipeg during the Depression I heard that there were two kinds of farmers: there were those farmers who farm the land, and there were those who farm the farmers. That farming of the farmers has not stopped in Canada, but it has been powerfully extended to Guatemala and dozens of other countries of the former colonies of Europe that we now call the Third World. They are exporting food from Guatemala because there is plenty of rich land. Guatemala is not the Sahara Desert, or even the Sahel. Guatemala has some of the richest farm land one could find, with an excellent climate and fertile soil on the flat bottom land.
Generations ago the landowners and the military drove the indigenous people, who are the great majority in the country,

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off the good land into the hills. They did not kill all of them because they were needed for cheap labour. As I said, come harvest time for a few days or weeks they are needed to work for a pittance down near the coast. There they are on the hills, unable to feed their children properly, but supposed to survive as a pool of surplus labour, the reserve army of the unemployed.
Whether it is through the IMF, the IAB, or any of the other multiple lending sources, those organizations lend money to countries such as Guatemala, El Salvador, or to many other countries in the same condition. These loans are mainly contributed by the countries of Europe and America, and mainly used to police countries of the Third World to ensure that they will structure their economy in such a way as to enable them to repay not only the IMF, but also their loans from the private banks.
It happens that in Central America three-quarters of the $17 billion debt, which has been created mainly in the last eight years, because it was $7 billion in 1980, is owed to Governments, that is, bilateral debts, or to multilateral institutions such as the IMF. This does not include the $600 million that is provided annually by the United States for the military. It is clear why the military are needed. They are needed in order to stop the rebellion of people who do not like supporting the IMF and the other creditors in the style to which we have become accustomed. In fact, of the 25 million people in Central America, every man, woman, and child is charged by us with owing us $700. People who do not see $100 in a year are supposed to owe us $700. People in lands where we have taken out gold, silver, timber, cotton, sugar, bananas, coffee and all kinds of mineral and agricultural wealth, are now considered by our laws to be debtors to us. Every man, woman and child, including those suffering malnutrition, on average in Central America, is charged with owing us $700. It is bizarre. It is obscene.
The only way that they can pay it, of course, by our standards, is by producing their cheap labour to keep the price of our coffee, our sugar, our cotton, our bananas, carnations and other beautiful flowers and so on, low enough so that we will be able to afford them easily and never come within sight of the kind of malnutrition that their children suffer.
The role of the IMF is illustrated in this Bill but not in full detail. The information from the departmental staff indicates that loans will be made at 0.5 per cent to certain countries under conditions that they tighten the screws still further on their population in order to repay. But the grant will be used to make up the difference between that one-half per cent and whatever is the rate, perhaps 8 per cent, 10 per cent or 12 per cent, at which the IMF will receive the money from the creditor countries. In other words, the borrowers-the people in countries like Africa and Central America, Latin America-are not really benefiting by this so-called easy or cheap interest rate. It is the Fund itself which benefits and, along
with that, about 13.5 per cent of the repayments go to the private banks. The private banks in our country benefit by the kind of money that is being put in as proposed in this Bill today.
The responsibility for repaying the loan is attributed to countries like Guatemala, El Salvador, Brazil, Peru and so on, but the benefit of it does not come to them. On paper there is a benefit. Instead of being in debt for 50 years, they will be allowed to pay it more slowly and be in debt for 100 years to come. In other words, they will be locked into what is called debt peonage.
The basis of this debt peonage is the declining prices of agricultural and other raw products, but primarily agricultural products.
At a conference yesterday dealing with Central America, we were told by an official of CIDA that there is no use trying to stop the decline of agricultural prices. That is a very convenient statement of fact. Is it not nice for us coffee drinkers that it is impossible to stop the lowering of the price of coffee to the men and women who actually produce it? I suppose, according to our officials, it is supposed to be some inevitable law of God that agricultural prices must decline and there is nothing we can do about it, so we say. Certainly there is nothing we can do about it by the rules we have created.
I think the principal thought for the IMF under these circumstances was actually enunciated a century ago by Lewis Carroll in Alice in Wonderland and the verses about the walrus and the carpenter.
After they invited the oysters for a walk and were eating them, the oysters complained. The verse is:
"I weep for you", the walrus said; I deeply sympathize, with sobs and tears he sorted out those of the largest size, holding his pocket handkerchief before his streaming eyes.
The carpenter was complaining that the walrus only held the handkerchief in front of his eyes so that the carpenter could not see how many oysters he was eating.
Lewis Carroll thought he was joking, but apparently the IMF has taken him seriously. What we heard yesterday at the round table conference on Central America, for example, concerns this same point, the prices of agricultural products.
Mr. Gabriel Siris, Director of the country program of the Economic Committee for the Latin American countries of the United Nations, told us in part that;
Another determinant of today's economic crisis is the downturn in exports of traditional goods, which in the past had been the principal engine of growth for these economies.
He is referring to Central America.
He went on to say:
Basic agriculture commodities, such as coffee, cotton, and bananas constitute a major source of savings for investment in other sectors, principally industry.
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He went on to detail the sharp drop in world prices of their chief export commodities. For the seven years from 1980 to 1987, coffee dropped 41 per cent; cotton dropped 31 per cent; bananas dropped 7 per cent; sugar dropped 83 per cent; and beef dropped 12 per cent. With such a sharp drop, he said that it is no accident that every country in the region has slid into economic depression during this decade, regardless of its degree of civil strife or the prevailing political structure. He went on to say:
Preliminary estimates indicate that the losses resulting from decreases in the
volume of traditional export goods average more than half a billion dollars a
year; the losses attributable to drops in prices are even greater.
Therefore, more than half a billion dollars is taken out of those countries by the devices that our countries use to force agricultural prices down.
I do not see any sign that the IMF will change its policy. We read in the newspapers that it will not. An article yesterday in the Ottawa Citizen quotes Mr. Camdessus as saying: "I see no readiness by Governments of the major creditor countries to entertain such an approach."
He was referring to debt relief. He refers also to the desperate condition not just of Central America but to the whole of Latin America.
The same principle applies in Latin America as in Central America, as in Africa. The IMF is not helping those countries to recover. It is driving them deeper into the hole. Unless Canada can persuade the IMF, along with other countries, to alter its policy then the money we put in there does not help them but hurts them. It only benefits the banks in our countries.


James Douglas Manly: My colleague said that it almost comes down to the man with the hoe. I agree with him, except that to a large extent in the world today it comes down to the woman with the hoe or even the child with the hoe.
The reality is that entire families are forced into wage slavery, producing these commodities where the bottom has dropped out of prices.
I am reminded of the old story of the company store. The harder you work, the more you owe. You owe your soul to the company store. We have had ample illustration of that in some of the single industry towns in Canada, Mr. Speaker, where people were literally locked into a kind of wage slavery. The company store would extend credit to them. When it looked as though people might be going under, the company store would extend a little more credit to them, always keeping them on the hook. In a sense that is what the IMF has done.
The Member spoke about this vicious spiral that we have. It is a downward spiral. It is not just a vicious cycle. It is a vicious downward spiral with a drop in commodity prices. That in turn leads the poor people of the poor countries to produce more to try to make up the short-fall for the drop in prices.
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When they produce more there is a glut in the market, causing a further decline in commodity prices. This vicious downward spiral has a direct impact upon the poor.
How can this vicious cycle be broken? What steps should Canada be taking? What steps should the IMF be taking? What steps would the Members, like the Prime Minister (Mr. Mulroney) to take next month when he meets with the other so-called world leaders in Toronto?


Daniel James Macdonnell Heap: I thank my hon. colleague for his question, Mr. Speaker. I recognize that he has a strong background on this subject through his work in connection with official development aid through CIDA.
The question that he poses is one which I think should be addressed by a committee when this Bill, after second reading, is referred to committee. I would hope this very question would receive very close attention in the committee. Although I may not be a member of it, I would be interested if possible in attending and assisting in the work of that committee.
As to what could be done, I believe the answer has to be that the kind of conditionality traditionally imposed by the International Monetary Fund must be changed. Instead of conditions forcing countries to export more and therefore often to import more machinery, fuel, herbicides, fertilizer and so on, the conditions to be required by the IMF should rather concern the well-being of the people of a particular country, not the well-being of the IMF. Is the IMF following policies which enable people to eat better, to have schools for their children and to have decent houses? That is not expected all in one year, but is the IMF moving in that direction? If not, the IMF should seek ways in which it can move in that direction and not look at the balance of exports and the ability to repay debts.
A proposal was put forward by a number of people at a conference held in Oxford last month at which a Member from each Party in Canada attended. The debt repayments from Central America mostly owed to governments and multilateral groups should be retained in Central America in the Central American Bank and recycled for the development of Central America, particularly for projects that would encourage two or more countries to co-operate together.
A suggestion was made that a railroad could be built running the length of Central America, a revolutionary proposal, Mr. Speaker. There are railroads but there is no Central American railroad, only feeder lines running down to the sea. A railroad might help to bring those people together and avoid future wars. Projects like that could be considered by our committee for suggestion to the International Monetary Fund, and I hope they would be, Mr. Speaker.


Benno Friesen: Mr. Speaker, the Hon. Member is suggesting that the countries in Central America should export less. It would seem to me that the logical result, since there would be fewer exports, would be that more and more of their products

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would remain within a given country. Is the Member suggesting that each of the economies in Central America should then become internalized and that there be as little as possible trade with the outside world? In conjunction with that, how long can an economy last in any part of the world if it cuts down on trade and tries to improve its future only by trading within?


Daniel James Macdonnell Heap: I thank the Member for his question, Mr. Speaker, because it is very pertinent. Mr. Siri pointed out yesterday that one of the most painful casualties of the economic recession has been the Central American Common Market. It is not only a question of whether countries will sell carnations to Canada, but they used to trade among themselves and there were complimentary activities in different countries.
Trade between the countries, which in the past constituted the driving force behind the industrial sector, has plummeted to the levels of the early 1960s, less than one-third of the values recorded during the peak period of 1979-80. It is not a question of whether they will trade, but what kind of trade. When good land is used to grow carnations for our entertainment and pleasure while children lack beans and rice so they can grow to adulthood, that is wrong. There is no justification for any kind of talk about trade which suggests that carnations for us are more important than beans or rice for children. People were producing beans and rice before we came to help them with the IMF. I think they feel that with friends like the IMF they do not need enemies.


Abram Ernest Epp: Mr. Speaker, I have been appreciating the debate by the Hon. Member for Spadina (Mr. Heap). He has explored particularly the Latin American dimensions of the debt peonage in which people and many countries find themselves these days. It is a problem, and we are using the word frequently. It seems so far from us and it rarely receives much attention in the House of Commons. Today the Government has a Minister presenting the Bill and is expecting that it will go to a vote quite rapidly. I know the Member has had profound concern about these matters himself and has been involved with others in trying to arouse the concern of Canadians for much stronger action than this Bill proposes.
Could he tell us in the minute or two that he has something of his conclusions from that experience about the concern of Canadians for their brothers and sisters in other parts of the world and how that can be aroused. The Government in arousing Canadian support and support in the other industrial countries is going for much stronger action than the International Monetary Fund, a much better directed action with much larger resources than the International Monetary Fund appears ready to bring to bear.


Daniel James Macdonnell Heap: Mr. Speaker, I thank the Hon. Member for his question. I want to answer on two points very briefly. There is a great deal of volunteer work being done by Canadians in Central America. Some of it is funded or assisted by CIDA. Some of it depends entirely on the churches or on other nonpublicly funded non-governmental organizations. This shows that Canadians are very interested in what can be done in a practical way.
Second, some of our CIDA projects I believe are very good. I had an opportunity last year to visit a bee farm while in Nicaragua with the International Parliamentary Union. I saw a relatively modern type of bee farm, that is to say there were boxes such as we have here instead of hollow logs which were there before. African bees have to be watched more carefully, but they produce more, and together with that, a new kind of fruit, which probably grew there wild, is on the market and which is doubling in output since the beehives were brought in there.
The person who took me there is an apiarist from Alberta, one of the many people who had gone from Alberta to help the people in that region. He is an apiarist who was sent by CIDA to help farmers like that develop their land. He does not have a huge plantation of thousands of acres, he has about 40 acres, perhaps, and he feels he is doing very well with the technology that was shown to him by the Canadian apiarist. I think there are projects like that which could be multiplied many times over.


Mr. Mike Cassidy (Ottawa Centre):: Mr. Speaker, when this Bill came before us, I looked at it and it looked entirely innocuous. Had it been brought forward quickly, there might have been no debate on it at all. That is really too bad, and it says something about deficiencies in our process.
This Bill, which is an Act to amend the Bretton Woods and Related Agreements Act, is in fact of major importance. It provides the House an opportunity to discuss the debt crisis in the Third World, and of course, that is one of those issues which is important and in fact absolutely crucial to the future of our world but which this particular Parliament seldom if ever discusses.
When members of the public complain that we are a bit trivial and are worried only about what Minister is taking loans from whom or how many pairs of shoes so and so happens to keep in his closet or something like that, and why do we not talk about the important things, I would reply that today we have such an opportunity and I would hope that Members of the Progressive Conservative and Liberal Parties in the House of Commons would take the opportunity to discuss this very serious question.
Let us make no mistake. We are talking about some 120 less developed countries. Their debt now amounts to about one and one-quarter trillion dollars. A lot of that debt was run up during the 1970s during the oil crisis when there was a great deal of recycling of oil revenues which went through the banks of the developed, industrialized world and were then put into the less developed countries.

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Unfortunately, for political or other reasons many of those loans have not proven to be particularly good. In particular, the ability of those countries to support that debt, to use it for development and to pay it off has been tragically undermined because of the change in relative commodity prices over the course of the last eight or ten years and because of the recession in the industrial world at the beginning of the 1980s. As well, it is because, dare I say it, of the fact that the major markets for goods, services and commodities that could be sold by the developing world, the markets in the industrial countries, have not been particularly receptive to the kind of growth those countries would have needed in order to maintain the debt that was almost forced upon them back in the late 1970s at the time of the oil crisis.
As my colleague from Cowichan-Malahat-The Islands has already indicated, the New Democratic Party is glad that this issue is being debated in the House of Commons through Bill C-126, and we are taking this debate very seriously. At the same time, we are uneasy about this Bill. It indicates the kind of priority the Government has given to the Bill. When the Government of Canada proposes to play its part in a $10 billion facility to help the poorest of the less developed countries, it does so in the form of a two page Bill which gives almost no clue in the explanatory notes as to what it is all about. I do not think that this subject deserves such paltry treatment as that.
This Bill provides for Canada to advance about $550 million Canadian, equivalent to about 300 million special drawing right units or SDR units of the IMF, to the International Monetary Fund for its Enhanced Structural Adjustment Facility, plus an additional $250 million in grants to the same facility.
This Enhanced Structural Adjustment Facility was agreed to at the Venice Summit meeting of the seven economic powers in June of 1987 and calls for a total enhancement of about $10 billion Canadian or 6 billion SDRs to provide funding to deal with the structural development programs of the poorest developing countries. There was already a facility in place that was begun in 1986. This is also known as a structural adjustment facility, and it had a value of 2.7 billion SDRs.
The idea is that the money in the fund will be lent at very low interest rates of one-half of 1 per cent by the IMF to the poorest countries in order to allow them to service debts and to maintain necessary imports. The difference between that and market interest rates will be made up by grants from the participating countries such as Canada.
As far as Canada is concerned, to some extent, we are committing foreign aid funds into the 1990s. The $250 million in grants for this facility will be used up in a few years, and we will be looking at a continuing commitment for this interest rate subsidy of perhaps $50 million a year as long as this Enhanced Structural Adjustment Facility stays in place.
As my colleague has already pointed out, this particular provision is a double-edged sword for the very poor countries.
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Advances from the International Monetary Fund will be accompanied by policy advice from the IMF relative to economic growth, deficits, export-oriented policies and privatization policies pursued by the developing countries in question. This means that this facility is a means for the western industrial nations to impose their agendas on developing countries. I will return to that in a few moments, because it seems to me that that is very important and could be and is very dangerous.
Let us look at the price the developed countries are paying in order to impose their agendas on large numbers of developing countries. It is not that great when one considers that the current total of Third World debt is about a trillion and a quarter dollars or $1,250 billion or thereabouts, and $10 billion in this enhanced structural adjustment facility is therefore less than 1 per cent of the outstanding amount of the debt. However, many of the less developed countries are so poor, so desperate, that they have no choice but to accept the money from the International Monetary Fund and the advice that goes with it. It seems to me that that is a matter about which we should express some very real concern.
My friend and colleague, a former NDP Member from Saskatoon, Father Bob Ogle, went with a Parliamentary Committee to Brazil a few years ago, and I met him when he came back. I asked him what he found, and he told me that he had been able, through his networks, because he served as a missionary in northern Brazil, to see people and to go places to which the committee would not have been taken by the Brazilian Government or even by our own diplomats because they do not know the areas that well.
He remarked that when he went to towns where he had worked 10 or 15 years earlier as a missionary, he went to the markets and saw what the people there were carrying home from the markets. I recall the conversation I had with him very vividly. He said: "If you are living at that level of development, then everything you can spend on food, you spend, so that when you go to the market and take your week's food home, you are taking everything you can afford. You have paid whatever else you have to pay in terms of rent or any taxes or other things you have to pay", and he said what people were taking home to their families in the early 1980s was only just over half of what they had been taking home 10 or 15 years earlier.
To me and to Father Ogle, that was a vivid example of just what is happening in that part of Brazil, a country which has substantial industrial development in the southern industrial area between Sao Paulo and Rio de Janeiro.
At a recent convention my Party took on this question of the agenda the IMF has been imposing upon the Third World. My Party does not always refer to its convention resolutions in the House of Commons, but this time I think it is particularly apt and deserves quoting. Policy (b)3(2) says in part that the IMF,

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in pursuit of monetarist objectives, has imposed conditions upon Third World countries which have led to drastic devaluations of currencies, reduction of already low wage levels, elimination of food subsidies, and cut-backs in social services. Enforcement of these unpopular policies has required repressive internal security measures which are directly counter to development. At that point we, assembled in our convention, called upon the Government of Canada to respond positively to Third World proposals for immediate debt relief such as the repayment at a rate equal to a ceiling of 10 per cent of export earnings proposed by the President of Peru, Alan Garcia Perez.
That was the proposal, but the situation we have now is such that it is estimated in the last five or six years there has been some $125 billion more sucked out of poor, less-developed countries in debt servicing and debt repayment than went into those countries. Those countries have perforce followed the script written by the IMF and the industrial countries in a way which I do not believe would be tolerable in this country.
Recently the Canada-Mexico parliamentary group met here. We talked at length about Third World debt. The people we talked to were representatives of the Popular Revolution Party, the governing Party for the last 50 or 60 years in Mexico, a country with an unusual form of democracy. The message they brought to us was that there have to be answers. The problems of debt servicing are killing Mexico, a country which is rather more advanced with a higher per capita income and higher standard of industrial development than many of the other less-developed countries.
During the period of office of the current President of Mexico, real wages for Mexican workers have tumbled by 30 per cent, 40 per cent or 50 per cent. The level of underemployment and unemployment is tragic. Even in the industrialized areas immediately adjacent to the U.S. border, workers are paid the equivalent of about 40 cents or 50 cents an hour Canadian. That is a good wage compared to the standard in the rest of Mexico.
When I got home last night I noticed an article in The Ottawa Citizen from The New York Times Service which talked about concern throughout Latin America, which was reflected when I met with the Mexican parliamentarians just a few weeks ago. A number of people, including economists from different Latin American countries, point out that over the past five years alone Latin America has financed $145 billion in debt repayment. What they are saying is that the IMF prescriptions have now been tested in 28 of the 32 Latin American and Caribbean nations, the policy of what is called investment through growth. That policy has produced adjustments but it has not produced growth. It has not produced an ability to solve the problems of those particular people. In fact, it has produced exactly the contrary.
I will give another example which would perhaps indicate the depth of the problem. The other day I was speaking to someone from Jamaica. There, because of import duties and
conditions of life and that kind of thing, an ordinary man's shirt can cost $50 or $60. A Datsun automobile which might sell second-hand for $3,000 or $4,000 in this country costs $30,000 or $40,000. Of course, incomes are far lower there than here. That gives you an idea of the disparities that exist there.
The IMF, according to the Latin Americans, has four commandments: Get your prices right; balance your budget; open up the economy; and privatize. All at the same time. I would like to ask my colleague from Thunder Bay-Nipigon, or my colleague from Cowichan-Malahat-The Islands, or my colleague from Spadina, all NDP Members, where they have heard that particular prescription before. I know where we have heard it. We have heard it from Washington and Ronald Reagan. We have heard it from the United Kingdom and Margaret Thatcher. We have heard it from the Fraser Institute. We have heard it from all the gurus of the right in the U.S. and the U.K.
Mir. Friesen: You forgot Helmut Kohl.


Michael Morris Cassidy: It has created massive unemployment in the northern part of the U.K. It has made the U.S. the biggest debtor nation in the world. These nostrums of the right have not even worked in the developed world but they have been applied with a vengeance against countries too economically weak to fight back.
One of the reasons I raise this issue is the fact that our record on assistance to the Third World was relatively good. It is a heck of a lot better than that of the U.S. where development assistance is only one-half the portion of GNP that it is here. It is a hell of a lot better than in the U.K. when you note that Canadian development aid in sheer dollars is now greater than what Margaret Thatcher and her Conservative Government is prepared to devote around the world. That is shameful for a country which has had a great international mission as the U.K. has had for many years.
Canada provided leadership last year at both the Commonwealth Conference and the conference la francophonie in Quebec when we effectively wrote down or wrote off hundreds of millions of dollars of government-to-government loans extended by Canada to countries in la francophonie and the poorest countries of the Commonwealth. We have shown some leadership, but we are not doing it here because there is no indication from the Department of Finance that the Government has said boo about the agenda to be imposed in this enhanced structurally adjustment facility. In other words, even if the Government, for political and other reasons, has now backed off its determination to eliminate the deficit at all costs, even if it is having second thoughts about its agenda for privatization when it finds Canadians do not want Petro-Canada privatized, even if it has been backing off some of the extreme right wing policies it hoped to bring in when it took office three and a half years ago for its first and last four years, it is supporting the Ronald Reagans and Margaret Thatchers when they say to the IMF: Let us make those poor
May 20, 1988

countries shape up regardless of the impact on people in the developing world.
I would have liked to see Canada really taking the lead. I note that the presidents of Canada's banks, who are not noted for being particularly socially enlightened, are now beginning to speak in a very strong way about Third World debt. Just the other day the chairman of the Royal Bank of Canada, in a speech in Los Angeles, urged that the Group of Seven meeting, the economic summit taking place in Toronto about a month from now, should give priority to the trillion dollar debt crisis of the Third World. We know the Prime Minister (Mr. Mulroney) has certain privileges in terms of setting the agenda for that particular conference.
Mr. Speaker, I would like to express the strong desire that our Prime Minister put the debt crisis of under-developed countries on the agenda of the meeting of the G-7 to be held in Toronto in a few weeks.
I note that Mr. Ritchie, the President of the Bank of Nova Scotia, also made the same request, that the Third World debt crisis be on the agenda of the Economic Summit.

I do not know how to say it strongly enough, but the figures and facts all point in the same way. We need a more human and humane policy by the International Monetary Fund. We need a recognition that one cannot get blood from a stone. The IMF's policies now are effectively implicating this country in ways which we could never tolerate here. We are saying to these countries that regardless of the starvation, the child prostitution, the family breakup and regardless of the other impact of policies the IMF is imposing, they are going to have to do it in order to get funds without which their country cannot survive. Literally, some of these countries are going to go bankrupt.
We need to have a more human and humane policy by the IMF and in the committee when this matter goes to the Standing Committee on Finance. My Party and I will be looking for commitments from the Government, far stronger commitments than we heard before. We will be looking to the Minister of Finance (Mr. Wilson) and his colleagues to press in the IMF, the World Bank, the United Nations, the G-7, the OECD, every form available, so that Canada will become a leader in the industrial word for humane policies that will stop this savage, repressive, industrial country, right wing agenda which the Thatchers and Reagans are imposing on the IMF, and which Canada is joining in having the IMF impose on 120 countries where the bulk of the world population lives, and where there is suffering to the level of starvation because of the economic policies of the developed world.


James Douglas Manly: Mr. Speaker, Harry Golden, the American journalist, once said: "We are on a single ball of twine and if
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you follow it, everything kind of crosses and recrosses". I want to ask my hon. colleague about an issue about which he is very concerned, that is, the Canada-U.S. Trade Deal as it relates to this issue, and I will explain how it relates.
Part of the conditionality, the very strict severe conditions that are laid upon Third World countries, comes from the fact that the IMF has a limited pool of funds in its resources. The World Bank has very limited resources it makes available. When these institutions were set up under the Bretton Woods Agreement at the end of the Second World War, the United States was the major contributor and, therefore, the United States, of course, had the largest vote, because the votes are weighted in accordance with the contribution.
I was very disturbed to read in the Senate report on world debt published just last April that the United States is opposing any increase in the capitalization of these international financial institutions. It wants to keep the capitalization the same because it does not want to put in any more money itself. However, at the same time, it does not want to lose its veto over the way in which these funds are being used. In other words, the United States is not prepared to carry its weight with these international financial institutions, but it wants to throw its weight around.
How does my hon. colleague react to this in light of the fact that Canada will be going into a trade arrangement with the United States? What does that say about any kind of equality with the United States in being able to secure some kind of just arrangements when Canada faces difficulties?


Michael Morris Cassidy: Mr. Speaker, I think that good fences make good neighbours. I think if a country becomes too dependent on another country, it leads to very unfortunate things in terms of its foreign policy. Anyone who has been to the United Nations has seen the way certain Central American countries and Israel, I regret to say, vote faithfully with the United States, no matter what it wants them to do. They vote like lap dogs. I do not want to see Canada come to that point in the IMF or anywhere else.
You may recall, Mr. Speaker, a couple of years ago that U.S. Treasury Secretary James Baker proposed there be some additional resources channelled toward debtor nations. However, the managing director of the International Monetary Fund himself confesses, saying: "Look. This is the only way we can go. We have no other solution because the industrial countries are defining the policies that control the institution". As my friend, the Hon. Member for Cowichan-Malahat- The Islands (Mr. Manly), points out, the United States is playing a beggar my neighbour policy within the IMF. It will not allow the quotas to be increased because it does not want to put more money in itself. It is 20th in terms of the proportion of the GNP given to development aid of the major countries which are aid donors around the world. The U.S. donates only half as much a proportion of their GNP as does Canada, and a lot of that American aid is, I am afraid, motivated by ideology rather than perhaps directly by need.

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If the IMF is now getting the message that there is no point in even trying to implement the Baker plan, that the Baker plan is dead, then where the devil are we? Do we have a sense of crisis here or not? Do we have a sense of the importance or, in this spaceship earth, are we of the view that we in North America can fly on our own in one direction while the rest of the world is allowed to starve? 1 hope my friend from Ottawa Carleton will talk about this as a man who has in fact worked in the Third World, to say whether he agrees with imposing Margaret Thatcher's policies on countries like Kenya.


Benno Friesen: Mr. Speaker, the Hon. Member for Ottawa Centre (Mr. Cassidy), as well as the Hon. Member for Spadina (Mr. Heap) spent considerable time dealing with the poverty in Central America which is undoubtedly a crisis issue about which all of us are concerned. However, a year or two ago, General Umberto Ortega, who is Daniel Ortego's brother and the Minister of Defence, deposited in his bank account in Switzerland, account No. 58946 in Banque Nationale de Paris, $1.5 million in one fell swoop. How much was already in there we do not know and how much the other commandantes have in these Swiss bank accounts we do not know. Let us say they have none. Let us say it is just the $1.5 million. Does the Member not agree that given the impoverishment in Nicaragua itself, and all of us have seen it, it would have gone a considerable distance to alleviating the poverty and helping the reconstruction in Nicaragua if he had forgotten about the Swiss bank account and put that money into the economy of Nicaragua?


Michael Morris Cassidy: Mr. Speaker, I am not familiar with the allegations made by my hon. friend. He is a parliamentarian of long standing in this House. During the period prior to the Sandanistas taking over and the revolution in Nicaragua, some eight or nine years ago, I would wager that my hon. friend, despite his activity in parliamentary reform and that kind of thing, never once in this House of Commons raised a complaint about the way in which the Somoza regime had drained Nicaragua dry, how it had sucked the wealth out of Nicaragua, how it had taken the livelihood from men, women and children in that country over a period not just of years but of decades.


Mr. Dick:: Two wrongs do not make a right.


Michael Morris Cassidy: The Associate Minister of National Defence (Mr. Dick) seems to think that General Somoza was okay, according to what he is saying.


Paul Wyatt Dick: That is not what I said. I said two wrongs do not make a right.


Michael Morris Cassidy: The American Government and the Canadian Government were complicit in that kind of thing going on. I have yet to hear, in my four years in the House of Commons, my friend, the Hon. Member for Surrey-White Rock- North Delta (Mr. Friesen) say once what I am about to say right now, that I think it is criminal that the United States
should have cut off trade with Nicaragua, which had a thriving and effective trade in cattle and other agriculture products with the United States. It was helping to keep Nicaraguans alive and give them a standard of living.
The United States complained about the fact that Nicaragua was trading too much with the Soviet Union, but, of course, it was similar to the Cuban boycott 25 years ago. The United States left Nicaragua with absolutely no choice because it cut off its trade with United States. Even today with the peace process which is working in Nicaragua that has not changed. I call on my hon. friend to do what he can, as I can do what I can, in order to try to loosen up that situation and allow Nicaraguans access to their natural markets in all of North America, including the United States, so that all Nicaraguans can have a reasonable standard of living in peace and justice.


Daniel James Macdonnell Heap: Mr. Speaker, the Hon. Member for Ottawa Centre (Mr. Cassidy) has mentioned the trillion dollar debt of these 120 Third World countries. I would like to ask him to comment on what was said by an economist at the conference on Central America yesterday. He said the only way they can pay that debt back is with a trade surplus. If those 120 countries among them have a trade surplus with other countries it means other countries have, according to this economist, a trade deficit. What he asks is which of the lending countries is willing to accept a trade deficit in order to enable those countries to have the trade surplus to repay the trillion dollars. I would ask my hon. friend if he can illuminate that problem.


Michael Morris Cassidy: Mr. Speaker, I can illuminate the problem. I am not sure that the developed world has really faced that particular problem.
I note that the United States sent 40 per cent of its exports to developing countries in 1981 but that it has lost more than half of these markets. One of the reasons is because the developing countries cannot afford to buy any more. That of course in turn helps to explain a great deal of the American trade deficit which is causing such problems. We are all in this boat together.
I wish to make one other point, too, which is addressed to the Hon. Member for Lanark-Renfrew-Carleton, the Associate Minister of National Defence the Hon. Member for Surrey-White Rock-North Delta and other Members of the Conservative Party. I do not know now why certain among them seem to line up uncritically with every tinpot right wing dicatator who is sapping his less developed country. One does not have to support that kind of thing in order to be a Conservative. A Conservative is quite able it seems to me to advocate Conservative policies without advocating the kind of repression of human rights which exist in those countries
May 20, 1988

which are often supported by the United States and, unfortunately, which are also often supported by policies which are being advocated by the International Monetary Fund.
I would like to see members of the Conservative Party join with us in expressing concern about the debt crisis rather than lining up on the other side.


Paul Wyatt Dick: You're an asshole, Mike. You don't know what you're talking about.


Michael Morris Cassidy: Mr. Speaker, I rise on a point of order. I believe the Associate Minister of National Defence should withdraw that word which I am sure is unparliamentary.


Paul Wyatt Dick: Whatever is the truth I would like to withdraw the word, Mr. Speaker.


Abram Ernest Epp: Mr. Speaker, I appreciate the opportunity to join in this very important debate on Bill C-126. As my colleagues have already pointed out, this debate gives us a very important opportunity to consider the profound problems which have arisen in the developing countries in these last years, problems which began to develop in the 1970s and have during this decade reached tragic dimensions for country after country.
We here in Canada, whether Members of Parliament or so many of our citizens are often insulated from the situation that exists. However, I recognize in my own constituency of Thunder Bay-Nipigon some of the smaller communities, particularly those which are Indian reserves, about which the Canadian Government has done so little, that the Canadian people have failed so badly to recognize the challenges of development. There certainly are areas in Canada of misery. However, what has happened in one country after another of the so-called Third World during these last years is a tragic situation which the proposal of the Government has put before us will do little to resolve. In fact, one might say it will do nothing to resolve it. It may go some little way toward helping. But there is not here in these proposals any kind of a resolution.
After all, the Bill proposes to authorize contributions by Canada to an enhanced structural adjustment facility which will be operated within the International Monetary Fund-World Bank arrangements which date back to the Bretton Woods Conference of 1944. This facility, this pooling of a certain amount of western, industrial financial resources, to make available in the way of concessionary financing at very low interest rates to countries is on the right track. When it is such a limited facility, when it adds to the 2.7 billion in the way of special drawing right units that was put into an earlier facility in 1986, another 6 billion of these SDR units, an addition of some $10 billion, we have only very limited action when we recognize that the debt of the developing countries in fact exceeds $1 trillion U.S. My colleague, the Hon. Member for Ottawa Centre (Mr. Cassidy), has pointed out that it is $1.25 trillion of debt.
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We in the Democratic caucus are profoundly concerned about the inadequacy of the arrangement. We are perhaps even more profoundly concerned about the failure of the G-7, the leaders of the industrial countries, including of course the Canadian Prime Minister (Mr. Mulroney), who in June of 1987 at the summit in Venice agreed to deal with the situation that faces us.
1 am particularly concerned about the situation because of what has happened in sub-Saharan Africa and perhaps across the whole continent of Africa. We have among us of course people with various interests. My friend, the Hon. Member for Spadina (Mr. Heap), has a profound concern about the Central American and Latin American situation. I had the enormous privilege as an undergraduate student 25 years ago last summer of spending the summer of 1962 in West Africa as an Operations Crossroads Africa participant in a student group of largely American students, with one Mexican student. I was the Canadian in the group as it happened.
The dozen of us spent a month in a work camp in northern Ghana. We spent additional time visiting other parts of Ghana. We also spent a few days in Nigeria as well. I will never forget those experiences, which were among the most formative of my life, in sharpening my perception of the lives and the history of various peoples. It was an enormously exciting time to be in West Africa. Those were the days of independence. The Black Star stood proudly on the tower in Accra and President Kwame Nkrumah anticipated independence in country after country in black Africa. There was such enormous hope about what independence would enable the African peoples to achieve. There was even then some recognition of the economic ties that these countries were still living within. Economic neo-colonialism was certainly one of the concerns expressed in those days. However, there was all the excitement about development in Africa 25 years ago.
We would gather at public events, hold hands in a circle and sing John Donne's No Man is an Island. There in the reminder of the unity that a Canadian later on put in the language of the global village was something of the personal experience sharing with Africans in their hopes. John Donne reminds us: "-and therefore never send to know for whom the bell tolls; it tolls for thee". I ask this afternoon in debating this particular proposal whether among us there is much recognition of the fact that the poverty, the distress, the disease, the degradation, the death of thousands, of hundreds of thousands-millions in the cumulative sense-of people around the globe in these various countries, recognition among us that the bell is tolling and that it has its terrible overtones and consequences for us if we fail to recognize that reality.
These countries which looked forward to a great future of development have ended up falling into what can simply be described as debt slavery. The Hon. Member for Spadina spoke of debt peonage which puts it into the language of Central America. Here are whole countries ground down into

May 20, 1988
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slavery under the demands of the western nations, the commercial banks, and that financial structure created at the end of the Second World War in order to bring prosperity to the world. That debt poverty and slavery that grips and grinds down so many of the people of this earth is the final commentary on the failure of the arrangements made in the mid-1940s.
The leaders of the industrial countries are maintaining the demands of the International Monetary Fund that the obligations incurred in the 1970s and the 1980s are met. There has been some forgiveness. The current Government deserves some credit for the forgiveness to the seven poorest African countries. In a large measure there is still the requirement that the payments be made. The payments can only be made if the countries have a balance in their trade in order that they can earn the foreign exchange required to make the payments. Consequently, exports have to be pushed and imports have to be cut back, and there should be a balance available in such circumstances. To some extent a government could decide to follow that course. In the Nkrumah days that Government did limit imports in order to ensure that foreign exchange was available for development purposes. That is not happening these days. That money leaves Africa, or the countries of Latin America, or the Asian countries, in order to meet obligations incurred in the 1970s.
Without spending any amount of time on how that happened, in facing up to the responsibility we have here, we ought to recognize that when the price of petroleum was driven up by OPEC in the early 1970s and the whole western financial system got busy with what it could do with all this money, which could not be digested or absorbed by the OPEC countries, it ended up as deposits in the western banks. Deposits are liabilities. What is wanted are assets, and assets are loans. Banks internationally, as they did in Canada in those years, were pushing loans to build up their assets in a wild rush to destruction. Now the leaders of the industrialized countries, the International Monetary Fund directors, and the World Bank are involved in trying to head off that destruction that follows from that type of activity.
Given our complicity, that of the leaders of the industrialized countries, and the leaders of financial institutions, and what happened in the 1970s and 1980s, surely in the circumstances of loans that were made that could not be repaid in any sensible manner, and loans that were not oriented to development which would not achieve the type of profits required to pay off the debt incurred, it is necessary to take up the need for action.
I will not take the time to indicate in detail how tragic the situation has become in Africa. When we recognize that the debt service has now reached the level of 50 per cent of Gross National Product, one recognizes the type of shackles on African countries. When one contemplates the fact that the level of per capita income fell between 1980 and 1986 by 10.8 per cent, this is the very opposite of development.
For many years, one of the most impressive countries in western Africa was the Ivory Coast. It has been quite impressive in using western financial resource connections with France, particularly to develop itself. From statistics of per capita income, in the 1980s the per capita income in that country has fallen by no less than 23 per cent. That is the personal experience of individuals in those countries in the debt slavery imposed upon them.
Does Canada have a responsibility? Surely the answer can only be yes. Does Canada have the possibility of doing something about it? I would suggest if we return to the origins of Bretton Woods, some Members may wish to look at A.F.W. Plumptre's account of the organization of the Bretton Woods system. At the time Canada played its part between the Americans and the British. John Maynard Keynes was the British negotiator who was pressing for international arrangements that would make it possible for Britain to continue after the war and to continue after the U.S. lend-lease credits were cut off so abruptly when the war ended in Europe. He hoped for the type of assistance for reconstruction that was required, and he did not get it. Canada did all that it could to assist in that. In fact, in terms of lending to Britain in 1946 and 1947, Canada did more than the U.S. by a large measure, in fact to such an extent that Canada ended up in financial difficulties in 1947, which were only resolved by a combination of Canada's getting a share in the Marshall Plan expenditures by the U.S. and developments in the petroleum industry.
The fact is that in 1947 the United States recognized responsibilities for Europe that it had not seen when it was negotiating the International Monetary Fund arrangements in 1944 and 1945. The U.S. recognized the necessity of the Marshall Plan arrangements for European reconstruction. That recognition seems to point the way to what is required now. Canadian recognition of what is needed, and Canadian pressure on the United States to change its policies to recognize, as my colleagues have been pointing out, that orientation to the market, privatization, the imposition of these economic policies that I have been denouncing on one country after another lead not to development, but a grinding down into abject poverty for those countries.
There are proposals on the table that have been put forward as against the proposals of Mr. Baker from the U.S. Secretary of the Treasury which are very limited and piecemeal. What is required is to start with the most fundamental truth for the industrialized countries. If these countries of the Third World around the globe are forced to put all their resources and all their foreign exchange earnings into keeping the western banking structure going, we will end up in depression. As the Hon. Member for Ottawa Centre (Mr. Cassidy) pointed out, the U.S. decline as an exporter through this decade has been based on the fact that if a country cannot export what will happen to its industry?
The first principle and understanding is to recognize that somehow or another we need to take the weight of the western financial system off those countries for our own survival and in
May 20, 1988

order to ensure that we are able to export, and do not see all the earnings of those countries ending up simply propping up the world banking structure.
I will end my comments at this point for lack of time. It is that type of wisdom that we have not seen from the Government which is so desperately needed for our sake and for the sake of the people of the entire earth.


Mr. Deputy Speaker:: It being two o'clock, the House will now proceed to the consideration of private members' business.



PRIVATE MEMBERS' BUSINESS-MOTIONS

[Stage Direction]
[ Translation]

Jean-Guy Guilbault: That, in the opinion of this House, the government should consider the advisability of establishing a special salary insurance protection fund or corporation, responsible for ensuring that workers will get salaries owed to them at the time when the Canadian enterprise where they are employed has declared bankruptcy.
-He said: Mr. Speaker, I want to thank you for this opportunity to present a motion that has been postponed several times, for various reasons, especially since Friday is not a day generally used to discuss Private Members' Business.
Mr. Speaker, I may add that after my motion was put on the Order Paper, there was a great deal of consultation, and the Government reacted favourably, since the Minister of Consumer and Corporate Affairs (Mr. Andre) said in the House this week that he expected to be able to introduce a bill, before the end of the next session, of course.
I would now like to explain my reasons for presenting this motion. First of all, corporate bankruptcies in Canada come under the Bankruptcy Act. This legislation, which came into effect in 1949, is now completely obsolete. Since 1970, various governments have, on six occasions, failed in their attempts to revise this Act. I think you will agree that protection of salaries in the case of corporate bankruptcy or receivership is an area where reform is badly needed, because workers are always hardest hit when factories close down. Any money they do receive is often paid many months later and generally represents only a small percentage of the amount owing.
Often, in cases of bankruptcy, the assets are not sufficient to pay secured creditors, so that there is no money left to pay the salaries of workers.
Mr. Speaker, improvements to this legislation have been in the works for twenty years, and during that time, just imagine how many workers, suddenly were out of a job that gave them a good living, lost their last week's wages!
Salary Insurance Protection Fund
As it stands today, the Bankruptcy Act ranks wage claims just before unsecured creditors. This means that wage claims rank only fourth and cover only wages due for services rendered during the three months immediately preceding the bankruptcy. The maximum amount of such claims is only $500.
Furthermore, bankruptcy procedures may take a very long time. It often takes months and even years to wind up a bankruptcy. However, the worker who has just been laid off and is unemployed needs those wages more than ever before. Unfortunately, the existing legislation does not provide for any compensation during that period.
Mr. Speaker, the inadequacy of these provisions has been an acknowledged fact for some time. Unfortunately, nothing has been done to remedy the problem. On May 5, 1975, Bill C-60 was tabled in the House of Commons. It proposed to give wages priority over any other secured or non-secured creditors, up to a total of $2,000 per employee. This kind of privileged treatment, known as top priority, would have given wage claims absolute priority, in other words, priority over any and all secured debts.
In its report on Bill C-60, the standing Senate committee responsible for bankruptcy indicated that giving wages top priority would substantially disrupt the business credit system. There are several reasons why the top priority clause is not the best way to protect wage-earners' rights. First of all, the clause would not guarantee absolutely payment of wages owing by a bankrupt business. In fact, the remaining assets of a company might not be sufficient to cover total wage claims. Furthermore, top priority for wage-earners would not necessarely guarantee speedy payment. In fact, it might take quite sometime before wage claims could be paid, since the sale and disposal of the assets of a bankrupt company can be a very lengthy procedure.
Furthermore, the courts would have to settle disputes and solve problems, which would likely prolong the process. A clause giving this top priority would not ensure that the employee could immediately obtain the funds needed to hold out until he finds work. The top priority clause is also very inconvenient, administratively. All money paid to the employee would have to be taken from the amounts owed to secured creditors. They too have deadlines to meet and they want to be paid. Distributing the salary claims payable would require a very complicated formula. For these reasons and many others, the top priority clause, although very attractive at first glance, is not the best way to protect employees of a company that goes bankrupt.
This was admitted by the Senate Committee, which recommended as an alternative the creation of a government-managed fund under the Bankruptcy Act to guarantee payment of wages owed when an employer declares bankruptcy. This proposal of a managed fund seems to have had the support of the Government of the time. The then-Minister of Consumer and Corporate Affairs, who is here today, the Hon.

May 20, 1988
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Member for Notre-Dame-de-Grace-Lachine East (Mr. Allmand), said, "If it can be shown to be justified, a funded insurance formula would obviously be the most desirable solution." However, nothing was done at the time. Bill C-12, presented in 1980, was another attempt to reform the Bankruptcy Act. In 1981, a committee chaired by Mr. Raymond Landry, now Dean of the Faculty of Law at the University of Ottawa and former Bankruptcy Superintendent, was charged with finding ways to protect employees.
In its report presented in October 1981, the Landry Committee recommended creating an employee protection fund. Despite the recommendations of the Landry Committee, Bill C-17, presented in 1984, contained essentially the same provisions concerning employees as Bill C-12. However, it was later amended to give priority to salary claims. Since Bill C-17 died on the Order Paper, we are still left with this old 1949 law, which, as I already said, protects employees very badly. It is precisely because I feel that this situation cannot continue that I have moved my motion.
In 1984, employees of bankrupt companies lost about $10 million in wages. Can you imagine, Mr. Speaker, how frustrating it must be for a worker to lose not only his job but even the wages earned over the previous weeks?
What impact does this have on the lives of the spouse, the children and the friends? If it's a company which provided a high percentage of the area's jobs, have you thought of the impact on local businesses? If there is no solution in view in that kind of a situation, then anxiety, terror, anger set into people's minds. This is generally what happens, and it becomes a tragedy. Sometimes, workers learn through the media that their business has been forced into bankrusptcy by a creditor. And the same evening the door is locked-no more pay, no more jobs! Sometimes, the misery last longer. A first pay cheque bounces, and as things go at the bank, the second goes through-the company makes promises, they ask for some time, one cheque goes through-two, three or six weeks go by, with every one on eages, and it happens again. What kind of an atmosphere does that create in a home? It must be kept in mind, Mr. Speaker, that we are living in 1988. At any rate, whether employees learn of their plight suddenly or they started wondering a few weeks or a few months earlier, the result is always the same. With the loss of job, the loss of earned income, it is the last straw.
Often the average worker will make small purchases on credit, especially in small towns where everyone knows everybody else, indicating to the store owner he will pay up on his next pay day. And all of a sudden his pay cheque bounces at the bank because the company is no longer solvent. You can imagine what kind of mess that worker finds himself in.
Hon. Members no doubt will recall Maislin Transport's demise in March 1984. That was a very good example of the lack of protection afforded by the Bankruptcy Act in the area of wage claims. More than 1,000 workers at that time went through hard times and sustained substantial financial losses.
All the 1160 Quebec and Ontario workers of that company could finally obtain in settlement of their wage claims was a meagre 35 cents on the dollar. To allow the same situation to happen again is simply unacceptable.
Mr. Speaker, the Hon. Member for Laurier (Mr. Berger), on March 21, 1984, said in this House, and I quote: "Recent events surrounding the Maislin bankruptcy settlement of unpaid employee's back salaries poignantly illustrate the immediate urgency for a new Bankruptcy Act providing wage protection for workers".
During the last election, Mr. Speaker, I met people who had suffered as a result of these corporate bankruptcies. In my riding as in all the other ridings in Canada, unfortunately, bankruptcies happen much too often. In the Drummond riding, some workers have incurred great losses. In August 1984, I was advised that a group of workers who had lost their jobs nearly one year before because of a bankruptcy, had received none of the wages they were entitled to. Yet, it was a supposedly prosperous business which had gone bankrupt and lost $5 million.
Mr. Speaker, I should like to emphasize that in the Drummond riding, between 1981 and 1984, over 1,500 industrial jobs were lost because of corporate bankruptcies. I remember that during the last election quite a number of Saint-Cyrille-de-Wendover owners with very large farms had gone bankrupt. As you know, today, our farmers investments are enormous. Each of these farms is worth over $1 million. Between 1981 and 1984, 40 per cent of the farm bankruptcies were in Central Quebec. You will understand that if we add these jobs lost to the 1,500 which I have just mentioned, it is a fairly enormous proportion. How much money do all these salaries lost combined represent? And how much distress was caused because the legislation was entirely inadequate?
You appreciate now the reason why I moved this motion and its importance, Mr. Speaker. A salary insurance protection fund would be a good social policy.
If I may, I should like to refer to only two cases of corporate bankrupcies. There is the case of Sincere Manufacturing Inc., a jeans manufacturer whose 300 employees agreed in 1982 to plow back into their company their vacation pay worth more than $80,000. They thought their gesture would help their company with its debt problems. Despite this, the company went into bankruptcy for some $700,000 and, a few weeks later, the employees lost everything: their money, their job, even their jeans.
The same thing happened in the case of Destel Inc., makers of kitchen-cabinets. After a period of substained growth, the company decided to reinvest more than a million dollars in a major project. The 1982 recession hit hard this industrial sector, and within 15 months, the company went into bankruptcy for 2.5 million dollars. Despite a recovery plan and the involvement of 125 workers, the employees lost their jobs and their money.
May 20, 1988

Mr. Speaker, the people of Canada, of Quebec and of Drummondville should not have to face such situations. The British North America Act of 1867 gives Parliament the right to legislate in matters concerning and I quote, "bankruptcy and insolvency". As I mentioned, however, in this area, the federal Government has only enacted the Bankruptcy Act which, to say the least, is outdated. That is why some provinces, given this legislative void, have tried to protect the rights of wage-earners by enacting legislation concerning receivership and bankruptcy.
In 1975, the Office de la construction du Quebec set up a fund to guarantee the payment of wages in the event of bankruptcies, insolvencies, disposal of personal assets and proposals of arrangements. This fund is financed by Canadian employers throughout Canada. Considering that there are approximately 12 million workers in this country, a contribution of about $2 per year by both employees and employers would be enough, whatever the industry, to create an insurance fund of some $50 million.
I suggest that there seems to be a consensus throughout Canada concerning this. Already, a number of provincial Governments have taken action, Manitoba and Ontario for instance. This trend can also be found at the international level. More and more industrialized nations have combined their priority status of salary claim scheme with another scheme providing for salary insurance protection for the payment of wages and other claims. Now over 20 industrialized nations have funds of this type.
Are we less civilized or compassionate than France or England? Most other industrialized nations have already taken steps to deal with salary protection in the event of a bankruptcy. Although it has been faced with this problem for a long time, Canada is still far behind, so far in fact that a number of provinces had to somewhat make up for that delay.
Mr. Speaker, I think it is time for us to remedy the situation. The time has come to implement a scheme to protect workers when their employers go bankrupt.
In view of the opinion expressed by several Parliamentary commissions and committees, both federal and provincial, in view of the leadership shown by member countries of the European Economic Community and the trend which already exists at the provincial level, it seems obvious that the best way to provide this protection is through the establishment of a salary insurance protection fund.
That is what I suggested in my motion, Mr. Speaker. This fund could be financed equally through contributions from both employers and employees and to achieve this aim, the amount of theses contributions does not need to be high. Red tape could be avoided by having the Unemployment Insurance Commission administer the fund. The UIC has the administrative mechanisms required to do the job and, as it happens, it already administers the Farm Credit Corporation AGR-3235 program under which a farmer is eligible for a sizeable amount the very day he declares bankruptcy. He also gets assistance,
Salary Insurance Protection Fund
training and counselling provided by a manpower centre consultant. The man goes right back to work and cannot be said to be flat broke, Mr. Speaker.
In conclusion, 1 believe the establishment of such a fund would make it possible to achieve most of the objectives. Payments would be guaranteed and made quickly, and fund administration would be simple and not costly. In addition, any priority given to wage claims would not really prejudice the availability of credit for Canadian companies.
Mr. Speaker, this problem is harmful to millions of Canadian workers, and it can be solved without upsetting everything. We must dust off our antiquated bankruptcy legislation and give Canadian workers the protection they deserve.
This Government is on the verge of doing whatever is necessary to overhaul the bankruptcy legislation, and I would suggest that my motion is one of the major elements of the reform. I am confident it will rally the support of all Hon. Members.
[DOT]	(1410)


Ms. Marion Dewar (Hamilton Mountain):: Mr. Speaker, I rise to support the Hon. Member For Drummond (Mr. Guilbault) on his resolution. I want to thank him for bringing it forward because it is very important. We are dealing with a very antiquated bankruptcy law one which goes back to 1949. There have been many attempts in the past to try to bring amendments to the law or to revamp the bankruptcy legislation. This has not been done because it always seems to fall between the cracks at the end of a parliamentary session or what have you. Especially in the 1980s many employees have through no fault of their own lost everything. As the Hon. Member has said, social pressures happen to a family when a bankruptcy occurs, which are very serious.
[DOT]	(1420)
In the last six months, 10 firms in my community have gone bankrupt. There has been absolutely no evidence of any kind of help for the employees involved, and certainly they are lowest on the priority list. There is no guarantee that they will get anything. It seems to me that it would make an awful lot of sense to look at some kind of legislation that would protect salaries.
New bankruptcy legislation should establish some kind of special salary protection fund and compensate workers for wages lost due to bankruptcies. When a company starts going into bankruptcy, the situation in the workplace is not always pleasant and there is a tremendous amount of tension. It becomes impossible for employees to put a little more effort into their jobs because their own worries and anxieties about what can happen to them take away from trying to save the companies involved. If the employees could put all their energies into trying to save the companies knowing that there was protection, it would be a great help.

May 20, 1988
Salary Insurance Protection Fund
France and Sweden have salary protection insurance schemes and it does not cost very much. It does not cost very much but it does work. If something like that could be implemented in Canada, I think this Parliament could be very proud of itself.
Canadian legislation does not see working people as a high priority. The bankruptcy law was brought in in 1949 and ignored the needs of the employees when companies went bankrupt.
In my community, major plants have closed, and we are still waiting for the Government to bring forward some kind of legislation that will help older workers. For those who are between 45 and 55 years of age, it is often very hard to get back into the workforce after jobs disappear. We as legislators have to deal with the majority of the people, and the majority of the people in Canada are working people. Certainly our laws should protect those people. We would do this if this resolution were implemented into legislation.
This is something New Democrats have been looking for over the years. In 1980, a Senate committee recommended that kind of legislation. Again, it fell between the cracks. I suppose that the Parliament of the day prorogued and by the time the new Parliament came in, it was no longer a priority.
Again, I would like to commend my hon. colleague for bringing forward what I think is a really important issue and something that should become a priority of this Parliament. It would not be very difficult to implement quite quickly legislation that would protect workers. It would not take very long to get the agreement of all Parties in the House on this. There are some things we do not agree on, but I think we could get agreement on something like this and quickly pass it. We would be leaving a legacy in that for the first time in 40 years, we would bring forward this kind of an amendment. It would not be very difficult to do, but it would change the lives of many working people.
In February of 1987, the Hon. Member for Nickel Belt (Mr. Rodriguez) introduced a Bill to change the priority of payments of claims so that wages and salaries of employees would be protected to a limit of $9,000. This resolution calls for something like a national insurance fund paid for by all employers in Canada. It would not cost very much, and they could get a very good return on this investment. When things get tense in the workplace, employees are more productive if they are secure.
I have read editorials in Canadian newspapers dealing with how antiquated our bankruptcy laws are and how important it is to protect employees. Such legislation, however, still has not come forward. I certainly think that such legislation is long overdue.
I do not think that we would see any major opposition to such a proposal from employers. There have been enough hills and valleys in Canadian business life in this last decade that the employers realize the kinds of risks they take. It is
important that they are able to protect their employees. As well, employers can be fairly open with their employees about the risks they are taking if they know that security exists, and it would be easier to build a team spirit which is so often important, particularly for small business.
With such legislation, not only would we help employees but we would reinforce the attitude that people are important, we do not simply treat them as commodities and then toss them aside when companies go bankrupt. We would be saying that our public policy cares about people who work and respects the dignity of work. We think it is important that that kind of attitude should exist.
I see in this resolution something that would have protected many people in my riding. I hope that we do not stop at bankruptcy but look at programs that provide assistance when plants are closed as well. Many plants in my riding have been closed, including Firestone, and now another one. I do not think the workers there will get benefits. Canada Packers in Winnipeg closed as well and the workers' severance pay has been cut off. Again, we have the attitude that the workers are not important, and I do not think that that is a Canadian value. The Canadian value is to treat people with dignity, and we want to make sure that when that work ceases through no fault of their own, the workers can continue on in some way.
Very often, homes are lost, families are dislocated and there is a tremendous amount of social pressure. That is what happens when employment is lost. We need some way to bridge that, and I think the resolution the Hon. Member has put forward is the first attempt to bridge that gap.
On behalf of the New Democratic Party, I want to say that we would support any kind of legislation that would flow from this resolution. It would be a step forward. However, I would ask the Hon. Member to support us when we deal with severance pay legislation and older worker readjustment programs. I see those as part and parcel of sudden unemployment.
Many people in my riding have applied for work, but because they are older, people would not hire them. They have given up and have become social dependents. That is not what we want to see when people have put 30 or 35 years of work into society.
I would conclude by saying that this is a first step in very important amendments to the Bankruptcy Act. The entire Act must be revamped because it is archaic. It was antiquated when it was brought in, and I do not think this Government has to feel responsible for that, but I would certainly like to see it do something about it. This resolution is an important amendment that could be brought in very quickly.


Mr. Edouard Desrosiers (Hochelaga-Maisonneuve):: Mr. Speaker, let me take a few minutes to congratulate the Hon. Member for Drummond (Mr. Guilbault) who tabled today what I consider to be a very important motion.
May 20, 1988

You know, Mr. Speaker, that for several years several members from all political parties have addressed the issue and it is well known that the Liberal Party has always turned a deaf ear to the recommendations made in this Chamber.
So, I will not be long, Mr. Speaker, for I know that after a certain time this motion cannot be passed. I will sit down with great pleasure and as the seconder of the motion, I congratulate the Hon. Member for Drummond (Mr. Guilbault), and I wish him luck with it.


Monique Bernatchez Tardif: Mr. Speaker, I would like first to congratulate my colleague from Drummond (Mr. Guilbault) for his motion to the effect that the Government should consider the advisibility of establishing a salary insurance protection fund, responsible for ensuring that workers of a bankrupt business will get the salaries owed to them.
Mr. Speaker, I would first like to say that I agree completely with my colleague, that the present bankruptcy legislation is obsolete giving no adequate protection to the worker whose employer is bankrupt. I agree with my colleague on another point: the absolute priority is not a practical solution for reasons he mentionned.
As to the solution he puts forward today, namely the establishment of a salary protection fund for workers, it is along the same lines as the solution recommended by the Senate committee which examined previous legislation and it is also similar to the solution put forward by the Advisory committee on Bankruptcy and Insolvency in its report published in January 1988, and to what the Government will propose.
Although we can say now that the details concerning the operation of the workers protection fund still needs some refinement, the protection of workers is paramount in the reform of the Bankruptcy Act which the Government is about to table.
Salary Insurance Protection Fund
Finally, Mr. Speaker, I can say that the Government is not prepared to let the bill end up where the six others did. We are now consulting all interested parties, among others the provincial and territorial governments, the Canadian Federation of Small Business, the Canadian Bar Association, and the ACEF of Quebec. These consultations will enable us to put the finishing touches and, hopefully, the bill will be tabled in the not too distant future.
Mr. Speaker, I might add that the bill the Government has in mind will not be a major overhaul of the legislation, but for openers it will deal with five or six issues which we think are much more urgent, so perhaps I might just mention them: first, protection for wage earners; second, secured creditors and receiverships; trade reorganizations; consumer arrangements and bankruptcies; preferred claims, including those of the Crown and, finally, amendments of a technical nature.
Mr. Speaker, such are the priorities of this Government, and I can say how very pleased I am that the Hon. Member chose to present this motion to the House. I hope the Bill will be up for consideration as soon as possible.


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


Some Hon. Members:: Agreed.


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


Some Hon. Members:: Agreed.
(Motion agreed to.)


Mr. Deputy Speaker:: Is there unanimous consent to call it three o'clock?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: Accordingly, it being 3 p.m., this House stands adjourned until Tuesday, May 24, at, 11 a.m.


[Stage Direction]
The House adjourned at 2.36 p.m.
[Stage Direction]

Tuesday, May 24, 1988
[Stage Direction]
Prayers