1989-04-25

Hon. Paul Dick (Minister of Supply and Services):: Mr. Speaker, on behalf of the Government of Canada and as Minister of Supply and Services, pursuant to Standing Order 32(2) of the House of Commons-

-lam pleased to have the honour to table the 1988 annual report of the Royal Canadian Mint in both official languages.


PETITIONS
Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is my honour to present a petition on behalf of a number of petitioners who believe that the tax burden on average families is roughly $1,000 greater than it was in 1984. They point out that millions of dollars have been taken from Canadian families through Government cuts to benefit programs. They also point out that one in six Canadian children is living in poverty.
Therefore, the petitioners are asking Parliament to provide tax relief and fairness to Canadian families and ask that it considers the advisability of increasing benefits paid through the family allowance and the refundable child tax credit.


Nelson Andrew Riis: Mr. Speaker, another group of petitioners are concerned that women working
full-time earn on average only 66 per cent of what men earn and that more than 18 per cent of women working full time and almost 79 per cent of those employed on a part-time basis earn less than $10,000. They point out that only 22 per cent of women employed full time earn $25,000 annually or more. They list a set of other concerns in terms of the bias against women in the workplace. They call upon Parliament to introduce and systematically enforce legislation guaranteeing Canadian women equal pay for work of equal value and equal opportunity for employment.


Mr. Ross Harvey (Edmonton East):: Mr. Speaker, I have the honour today to present a petition on behalf of a number of Canadians in which they argue that the Government of Canada has failed to take measures to remove Canadian petroleum assets from foreign control. They further point out that the Government of Canada has weakened its ability to ensure that Canadian gas and oil is developed in the national interest. On the basis of these two factors, they petition Parliament to ensure that 100 per cent of the ownership of Petro-Canada remains in the hands of the Government of Canada.


Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, would you be so kind as to call Starred Question No. 43.

NATIONAL CITIZENSHIP WEEK Question No. *43-Mr. Wappel:
Did Ihe Minister of State for Multiculturalism, upon announcing National Citizenship Week, issue an information package entitled Citizenship Activity Guide and. if so, what was the (a) per-unit (b) total-production cost (c) total number of units produced?


Albert Glen Cooper: Mr. Speaker, the answer is yes. Part (a) is 61 cents; (b) $36,500 and (c) 60,000 copies.
[English |
I ask that the remaining questions be allowed to stand.

April 25, 1989
Industry, Science and Technology


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


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, April 20, consideration of the motion of Mr. Mulroney that Bill C-3, an Act to establish the Department of Industry, Science and Technology, to repeal the Department of Regional Industrial Expansion Act and to make consequential amendments to to other Acts, be read the second time and referred to a legislative committee; and on the amendment of Mr. Langdon:
That the motion be amended by deleting all of the words after the word "That" and substituting the following therefor:
This House declines to give second reading to Bill C-3 because it fails to clearly define federal government responsibility for regional development, and specifically fails to reflect the requirement under s. 36(l)(b) of the Constitution Act, 1982, that Parliament is committed to "furthering economic development to reduce disparity in opportunities".
The Acting Speaker (Mrs. Champagne):: When Bill C-3 was last before the House, the Hon. Member for Saint-Leonard (Mr. Gagliano) had completed his speech. The question and comment period is now available to Members. Otherwise the Chair is prepared to recognize Hon. Members for debate.


Mr. John Harvard (Winnipeg -St. James):: Madam Speaker, I welcome this opportunity to take part in today's debate, a debate on a Bill to create a new Department of Industry, Science and Technology. Throughout the next few minutes I would like to bring forward a western point of view.
I want to to point out strongly that I do not want to sound parochial in this matter. After all, westerners, and particularly the good people in my province, feel that they are Canadians first, that they have a lot of faith in this country. We do have in our part of the country some very special concerns. I believe that these concerns must be addressed, and they ought to be addressed in this particular debate. I will touch on some of these concerns as we go along.
We recognize the crucial need to strengthen the economy, particularly in the regions. One way to increase the strength of the economy is to increase our commitment to research and development. In my opinion, that should be at the very top of our list. In an age of technology, research and development ought to be a top priority. One way of doing that is by providing adequate funding, not just bureaucratic shuffling. That is what we see in this particular Bill, bureaucratic shuffling, no real commitment to R and D. I believe this is consistent with this Government's record. I want to point out that since 1984 there has been an appalling neglect of R and D funding.
The Prime Minister (Mr. Mulroney) has made some pretty big promises in this regard. For example, he promised a doubling of research and development spending in the first four years of the first mandate of the Government. The Prime Minister did not keep that promise. I want to point out one particular fact. As a percentage of Gross Domestic Product, R and D spending slipped from 1.37 per cent to 1.35 per cent. So much for promises. So much for commitment to managing change in this country.
This is something I want to point out because it was stressed very heavily by the Conservative Party in the last election campaign. We all remember what the Prime Minister said. He said that it was his Party that was best equipped to manage change. How do we manage change in Canada? One way we do that is by staying on the leading edge of technology. It is central to economic growth. It is central to productivity. What have we received from the Government in this regard? We certainly have received promises, shrinking commitment to R and D. We have received bureaucratic games, shuffling people around, creating new positions, renaming Departments. That is not very impressive.
From a western perspective, there are a number of concerns that we have. The western economy, as most people understand, is based on resources and agriculture. That kind of an economy is at the mercy of external forces. We can do almost nothing about these external forces. There are many factors that come into this picture. For example, commodity prices can go up and down in just a matter of minutes. There is the ever present threat of a drought. We had one in the West last year, and it could happen again this year. Oil prices can go up and down at just about a moment's notice. We in the West are always in a rather precarious situation. We need to diversify. We have to give our economy more legs on which to stand. That is why industrial, scientific and technological development is most crucial to the West.
April 25, 1989

Adding to our concerns is the fact that our existing industries, ones that are there already, have been hit by a spate of recent mergers. I would like to mention a couple of them. One is the Molson merger. The other is the purchase of Wardair by PWA. These consolidations have led to fewer jobs. To make matters even worse for our region, high tech firms in the West have closed. Some of them have moved to eastern Canada. I believe that the Government has to take some responsibility in this regard. We have to point out the Government's lack of commitment in the encouragement of secondary industry in the West. That has to be told to the Canadian public.
The Government is weak in this area of encouraging secondary industry in the West. Instead of encouraging development of secondary industry in our region, the policies of the Government appear to have the opposite effect. They appear to have the effect of centralizing industry in central Canada. Instead of recognizing the importance of regional development, instead of developing policies to spur regional development, what do we get? We get bureaucratic shuffling and the renaming of Departments. That is not good enough.
The Government wants to create a Department which would be the focus of developing industrial policies. Fair enough. This particular Bill does not mention the West or what the role of the Department of Western Diversification will be. It does not specify what the role will be of that particular Department. That raises concerns in our minds. We must ask what will be the benefit of this new Department of Industry, Science and Technology to the West. What will be the benefit to our region? We fear that the concerns of the West will be overlooked. We fear this because the mandate for economic development in the West falls outside of the scope of this new Department, outside of its particular mandate. We fear that the economic development of the West will somehow become peripheral and secondary to that of central Canada. It is significant that only the Provinces of Ontario and Quebec are mentioned in this legislation. Our information is that the focus of industrial development will be fixed in central Canada and that the new Department of Industry, Science and Technology will institutionalize that focus.
Industry, Science and Technology
How then will the West fit in? That is the question. Can the Department of Western Economic Diversification deliver? Can it really get for the West the West's fair share? Will the Minister of that particular Department have the stature and the clout to ensure that the West gets its fair share?
There is another question. We consider this one crucial. The spending authority of the Department of Western Economic Diversification ends in just three years' time, in just 36 months. What happens then? Will we be left out in the cold? That is a real fear. That is exactly what has happened to the ERDA agreements. They have been left to wither on the vine.
We need to know the future of the Western Diversification Office. If it loses its spending authority, who then is left to pick up the pieces?
The Government could dismiss these concerns as just so much political talk, but these concerns are very real. We already know the Government's track record. We know of its insensitivity to regional development, particularly in my home province of Manitoba. We know what has happened to the ERDA agreements.
I would like to single out the ERDA agreements because in the recent past they have been a cornerstone of regional economic development. They were even recognized by the Prime Minister in an October 3, 1986 speech when he described the agreements as historic. Perhaps, instead, he should have said that they were history.
These agreements ought to be renegotiated. They should be renegotiated. We consider that the time to do that is now. The time is crucial. If the provinces want to renegotiate the agreements and they are ready to renegotiate, then why is the federal Government not ready?
I want to remind the House of something that was said by the Hon. Member for Champlain (Mr. Champagne). He said: "It was the Progressive Conservative Government that was not afraid to sit down with the provinces and see what, exactly, they wanted". So why now at this particular time is the Government suddenly afraid to sit down with the provinces calmly and with a spirit of co-operation to renegotiate these agreements with the provinces? I suggest that if the Government wants to be taken seriously on this particular matter, it should be prepared to do so, and to do so right now.

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The then Minister for International Trade in 1985 made one of those statements that often comes back to haunt him. He said: "The ERDAs would continue at the current rate of spending". I think that commitment was about as real as the Government's commitment to the UI system. The ERDA agreements were particularly important to my Province of Manitoba and were used in many projects such as reforestation, transportation, mineral and agri-food development. The ERDA agreements were good for the province, good for the region, good for our people, and are needed more than ever right now because of the difficult economic times that we face.
There is another matter which I consider particularly relevant in this debate, the matter of federal procurement in our region and in my province, for the Government has not delivered to the Province of Manitoba. It has not come through. Statistics on this issue are revealing.
While Manitoba is ranked fifth in terms of population with 4.2 per cent of the country's total population, my province's share of federal Government contracts is below 3 per cent. It is distressing to note that while a quarter of federal procurement in 1986-87 was for items valued in excess of $50 million, Manitoba did not get one contract worth that much. That does not do anything for western alienation.
There was an interesting article in the Winnipeg Free Press the past weekend. There are revelations in the article that I believe should be inserted into the House of Commons record. I want to refer specifically to the article in the Winnipeg Free Press where that particular newspaper looked at federal and provincial spending records and estimates, Statistics Canada summaries of transfer payments and federal employment, Government records of supply and services purchases, and a province-by-province breakdown of spending through Ottawa's Western Diversification Office. These are some of the findings by the Winnipeg Free Press.
First, the Manitoba Government received an estimated $10.58 of every $1,000 Ottawa spent in the year ending March 31, 1989, compared to $10.74 spent in the year ending March 31, 1984. That was the last full year of Liberal Government in this country.
Now that may not sound like very much but if Ottawa had continued, according to the Winnipeg Free Press article, giving the same share of total spending to the provincial Government, the Manitoba treasury would have received an added $307 million over the past five years. Three hundred and seven million dollars to a province like Manitoba is a lot of money.
Second, employment in Manitoba dropped by 2,446 people between October, 1984, and March, 1988, as Ottawa slashed the number of civil servants nation-wide. In Manitoba, the cut in the yearly federal payroll is about $71 million at today's average rate of pay. Seventy-one million dollars is not chicken feed to a small province like Manitoba.
Third, Manitoba municipalities have suffered as Ottawa cut support for local Governments through the country. Between 1984 and 1987, which is the last year of complete figures, average federal support for Manitoba municipalities dropped by 2.9 per cent or $600,000 a year, a significant contribution to the municipalities of the Province of Manitoba.
Fourth, Manitoba's share of federal supply and services purchases dropped to 2.84 per cent in 1987, compared with an average of 3.3 per cent during the eight years before the Prime Minister took office. That drop cost Manitoba suppliers $93 million In government business during the past three years, which is not chicken feed.
There is one more point that I want to raise that was contained in the Winnipeg Free Press article over the weekend. Per capita funding for Manitoba-based projects through the Western Diversification Office stood at $40 by April 7 compared to $43 in Alberta, $77 in British Columbia, and $118 in Saskatchewan. Manitoba would have received $28 million more had its share of funding corresponded to Manitoba's share of western Canada's population. Lamentably, those figures point out that my Province of Manitoba is not getting its fair share. All Manitoba has always asked for is its fair share.


An Hon. Member:: Where is Jake Epp?


John Harvard: Good question. Where is Jake Epp? Jake Epp is supposedly the senior Minister of the province, and I do not think he is delivering.
Am I almost out of time, Madam Speaker?


The Acting Speaker (Mrs. Champagne):: Order. I know the Hon. Member is fairly new to this place, but he should know at this time that Hon. Members do not refer to Members or to Ministers by their name, but by their title or by the name of their riding.
April 25, 1989

There is a minute left in the Hon. Member's presentation.


John Harvard: Thank you. I apologize for that error. I forgot. From now on I will refer to the Minister of Energy.
I just want to say in conclusion that in my opinion the Government has not delivered and has not come through. We have seen the Government abandon the ERDAs. We have seen a lack of commitment to research and development. We have seen a failure to provide Manitoba with its fair share of federal contracts.
In this particular Bill we see the Government's affinity for bureaucratic shuffling and renaming of Departments. We have truly seen the Government's approach to regional development. It is not good enough. We in the West have reason to have doubt. We have reason to be skeptical. We deserve something better. The regions deserve something better. The people of Canada deserve something better.


The Acting Speaker (Mrs. Champagne):: On questions or comments the Chair recognizes the Hon. Member for South Shore.


Mr. McCreath:: Madam Speaker, I compliment the Hon. Member for Winnipeg-St. James (Mr. Harvard) on his remarks. I must say that he leaves me in a little bit of doubt as to whether he is in favour or not in favour of the Bill.
I ask him to refer to Clause 7 of the Bill. Does he oppose what I consider to be the most laudable and comprehensive objective set forth in the Bill? It suggests that the Minister's responsibilities will strengthen the national economy, increase the international competitiveness of Canadian industry, and encourage the fullest and most efficient and effective development and use of science and technology. Clause 10 refers to the encouragement and pursuit of scientific knowledge, expanding Canada's intellectual resources in science and so on.
I am unclear as to whether the Hon. Member supports the Bill and intends to vote for it or whether he opposes it. That is my first question.
Industry, Science and Technology
Second, he makes reference to the fact that the Bill refers to Ontario and Quebec and to regional development in Ontario and Quebec. Surely, the Hon. Member recognizes this reference undoubtedly stems from the fact that we have the excellent programs that the Government has put in place in the area of western economic diversification. Indeed, in Atlantic Canada, we have benefited significantly and look forward to continuing to benefit from the Atlantic Canada Opportunities Agency.
Does the Hon. Member seriously think that the Party which forms the Government, which enjoys and has for so many years enjoyed the support of western Canadians, would forget for one minute to safeguard the economic development interests of western Canada, not to mention Atlantic Canada?


John Harvard: Madam Speaker, I appreciate the comments of my hon. friend. I suppose that his question is rhetorical. He asks whether the Government would abandon the West. On the surface one would say that, surely, it would not be good politics to abandon the West. However, the fact is that we have been shocked in the past. We have to be ready for almost anything that comes our way, particularly when it might represent or be tantamount to a punch in the nose.
My hon. friend may not remember that I represent the riding of Winnipeg-St. James. The people of Winnipeg-St. James will not forget for a long time what the Government did in terms of the CF-18 affair. We thought that we had won a contract. We thought that the Government had a commitment to the tendering process. We thought that the Government would not use politics and interfere with that time-honoured process. However, it did. A company in my riding, in my city, won a very rich contract fair and square. Yet the Government through sheer politics, through nothing more than a bid to garner votes in another province, interfered with that process and took that contract away from us. That was terrible. We are not going to forget it for a long time.
When the Hon. Member asks will the Government ever forget about the West, will it ever abandon the West, the answer is: "Yes, the Government will do that". We will not have short memories.
The Hon. Member also has to remember this. Perhaps he was not listening as closely as he should have been. The mandate of the Western Diversification Office will run out, according to legislation, in three years. What

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will happen after that? That is a responsible question on our part. It is a concern that we have. Who knows, the Government could just wind down and then what will happen? We have a legitimate concern.


Mr. Blaikie:: Madam Speaker, I would just like to make a comment by way of responding in part not only to what the Hon. Member for Winnipeg-St. James (Mr. Harvard) said but also to what the Member across the way said about western Canada.
There is a tendency in this House, and I have seen it ever since I came here in 1979, to talk about western Canada as if it is some sort of homogeneous lump that does not have debates within itself about what is the appropriate policy for western Canada. I recall at the time of the National Energy Program when people would get up to say: "Western Canada is against the National Energy Program" when there were many western Canadians who were for the National Energy Program. Western Canada came to be identified in the Tory minds with the boardrooms of Calgary, Alberta.
The point I want to make is that western Canadians have delivered the Conservatives a message. It is that there are almost 40 members of Parliament not from the Government side who come from western Canada. There are some 19 New Democrats from B.C., 10 New Democrats from Saskatchewan, one New Democrat from Alberta, two New Democrats from Manitoba, five Liberals from Manitoba and one Liberal from B.C. The Hon. Member pretends that the Government has some kind of monopoly on western Canada. The fact is that the Conservatives were almost shut out of Winnipeg. For him to try to refute the thesis that western Canadians, in particular Winnipegers, were not particularly offended by the CF-18 decision, is the height of folly as far as I am concerned. People were offended. They showed that on November 21, 1988 by returning record numbers of non-Conservatives to the House of Commons from western Canada.


Mr. Benoit Tremblay (Parliamentary Secretary to Minister of Regional Industrial Expansion and Minister of State for Science and Technology):: Madam Speaker, I would like to make the following comment, if you allow me.
I think that this Government in no way claims to have a monopoly on what should be done for regional development in Canada-in the West, the Maritimes or elsewhere.
As proof, unlike the previous Government, which had the habit of defining all regional development policies and procedures centrally, this Government has in fact decentralized, created advisory boards with people in the regions and reestablished the dialogue with the provincial governments; the regional policies have come out of consultations and cooperation with the local community.
Certainly, one can always do more for regional development. What this Government is trying to do by way of regional development policies with local people is to set long-term policies and strategies supported by local people so that everyone works together developing the economy. This approach yields results. Just look at the lower rates of unemployment and increased income.


The Acting Speaker (Mrs. Champagne):: There is one minute of rebuttal left for the Hon. Member for Winnipeg-St. James.


John Harvard: Madam Speaker, I simply want to point out one matter as it applies to the Province of Manitoba. In Manitoba we call it the politics of punishment. We have discovered that in the wake of the November 21 election the Government, and in particular the Prime Minister, is prone to wanting to punish our province. Canadians know that there were an additional four Liberals elected in the City of Winnipeg in the election. There is plenty of evidence to indicate that the Conservatives take umbrage with that and that they are already punishing the Province of Manitoba. For example, there are a couple of projects that were promised for the province. It now appears that one or both are now on hold. We are being punished for that. Again, we have our doubts and we are skeptical. That is why we want strong legislation to protect us in case the Prime Minister and his Government want to be vindictive and bully a province such as the Province of Manitoba.


Mr. Howard McCurdy (Windsor-Lake St. Clair):: Madam Speaker, I am pleased to have the opportunity to rise in this Chamber to engage in the debate on Bill C-3 which creates a new Department of Science and Industry from the old Department of Regional Industrial Expansion. In addition to the creation of a Minister of Science and a focus on science, there is the concern of this Party
April 25, 1989

with respect to this Department's responsibilities for regional development. Others of my colleagues will consider the deficiencies in that aspect of the Bill which limits this new Department's regional development responsibilities to Ontario and Quebec.
However, even with regard to those aspects which are favourable to its science and technology function, I find it extremely difficult to understand how it is going to be possible to integrate the science policy and regional development policy aspects of this new Department's responsibilities. There is a clear necessity for balanced development of science policy throughout the country if it is going to be appropriately integrated into industrial and economic growth. I hope that Members on the government side will address those questions, and perhaps some of my colleagues, in looking at the regional development aspect, will themselves consider it.
From the point of view of those of us who are very much concerned about the lack of an appropriate focus on research and development in this country, the creation of this new Department is a step forward. We certainly welcome a Minister of Science with a higher profile who will begin to accord the kind of recognition to science, research and development that we need. It certainly is an improvement over the old Minister of State status which was practically no status at all.
In contemplating what alternative actions might have been taken to bring about this increased profile to science to ensure that the Government gets proper advice, that there is within the government bureaucracy a commitment to the development of a science, research and development policy, one might have considered the alternative suggested by many of those preoccupied with basic research in universities, that a Department of Science, Research and Post-Secondary Education might have been created. This would have at least recognized the important role that universities play, not only with respect to providing the basic and fundamental research underpinning for any research enterprise in the country but also the critical role that post-secondary institutions are going to play in respect to providing the manpower, the scientists and the technicians that are going to be necessary for future growth.
Industry, Science and Technology
I am saying this in the context of a situation evolving in this country where we are suffering a severe shortage of trained personnel in those areas. Put another way, we are in a situation where not enough opportunity is being provided to young people who wish to become scientists. We are not providing enough appropriate support to the scientists we have to ensure that they will stay, either as scientists or as university teachers.
We are going to be facing a period in the 1990s when we are going to be suffering a severe shortage of university research scientists. We are not providing them through the pipeline of the universities. Since the United States is going to be facing the same problem, we are going to be facing a severe competitive situation in that respect.
I would have to concede, however, that a concept of a science and university or a research and university linkage in the designation of that kind of Department would be well taken. On the other hand, we could have had a free-standing Department of Science, Research and Development. We could have had a Minister who was quite independent of any other Minister, one who could have been equally able to address industrial and economic needs as well as the question of post-secondary institutions, basic research and so on. We could have had a Minister who accorded the kind of weight and importance to basic and fundamental research policies that most of us who understand science realize are necessary in order to ensure that we will have a viable scientific climate in this country. Basic research, if it is not there, is going to cost us dearly in the future.
I do not think that there is any compelling reason for opposing the Bill because we do not have a free-standing Department of Science, Research and Development, but one which is linked with industry. That is as acceptable as any other alternative except that one must worry about the bias which has been so frequently expressed by this Government which seems to disregard the role of basic research, which seems to disregard the role of the universities in ensuring that Canada has a viable research and development climate. We cannot borrow the findings of basic and fundamental research from other countries.
When I express this concern about this bias, it is not something that I draw from the air. The former Minister of DRIE said on a number of occasions that that science will be supported by a government which accords with

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Industry, Science and Technology
industrial priorities. It was said over and over again that science which is identified by politicians as being capable of generating industrial growth of new products in a relatively short time is the science that would be supported. This is expressed in a number of quite concrete ways. The granting councils, which are supposed to supply the essential funding to the universities for basic fundamental research, have not in the last several years received any significant increase in funding except that which accrues to them through the matching grants. It is strictly in the area of science by virtue of a granting program according to which moneys provided by industries to the universities will be matched by grants from the granting councils, which in turn will go to the universities. The bias is clear.
There is nothing inherently wrong with ensuring greater co-operation between the universities and industries in respect of research and development. There is something wrong and we have a serious problem when recommendations are ignored such as that made by the Lortie Commission-which derives from the National Advisory Council on Science and Technology, which advises the Prime Minister (Mr. Mulroney)-that the amount of money provided to the granting councils should be doubled over two years, and thereafter increases to those granting councils be 1.5 times the increases the Gross National Product.
Scientists who understand the role of basic research recommend that the Government take certain actions, but the Government has failed to do so. Again, we must caution that the twinning of science with industry will not so bias our emphasis as to cloud our minds, as the Tory minds are already clouded with respect to the role of basic research. The Government has not done especially well even with respect to its primary concern with basic research. Let me cite another example in this respect.
One of the flagships of government policy has been the new centres of excellence. I believe the centres of excellence reflect a step forward in a number of respects, but when one considers the criteria to be applied in the selection of which centres of excellence will be funded, overwhelmingly the criteria are those which correspond to direct industrial, relatively short-term needs. If the Government evinced an appreciation of the appropriate role of basic research in order to give some balance to this, the centres of excellence would also have criteria
that would have been applicable to basic research emphasis in some centres of excellence.
Let us examine what this may entail. I suppose there is not a Member in the House who is not aware of the excitement being generated in the scientific community over fusion research. I was shocked to read in the Toronto Star last week that for some months Canadian scientists at Electrofuel, a small laboratory in Toronto, were working on cold fusion and had generated perhaps some 15 patents and may even have beat the Utah investigators except for the fact that they were inadequately funded. This tells me that whatever might be the outcome of the scientific interaction to occur with respect to coal fusion in terms of its mechanism, it is an example of research that bureaucrats or even eminent scientists cannot identify as an area of appropriate emphasis.
In the past I have cited the instance of genetic engineering, in which no one I know would have given significant funds to research on snake venom, snail juice or bacterial viruses. Yet those are areas which have led to great breakthroughs in genetic engineering. We must ensure that Canada is not deprived of those possibilities inherent in basic research.
The Government has not even done its job with respect to its preoccupation with industrial and applied research. The extent of this failure was dramatized only in the last few days by the revelation that Connaught Laboratories, a great historical institution in this country which derives from the discovery of insulin in Canada, is to be sold to Merieux of France. At the same time, Lumonics, one of the most advanced and third largest laser technology firms in the world will be sold to Sumitomo. One of the interesting aspects of Lumonics is that it is part of a centre of excellence in Ontario. It challenges one's imagination to come to grips with this small fact, but in Ontario there is a centre for advanced laser and lightwave research which is funded by the Government of Ontario. Government funding provided the laser technology in the first place. Lumonics is being funded as part of a centre of excellence in Ontario. The federal Government, and now the provincial Government, contributed to the technological development of this place. Now it will be sold.
If the Government is going to come to grips with research and development policy, surely one elementary, fundamental premise must be that when the technology and R and D in this country are developed here and funded by this country, they must be owned in this
April 25, 1989

country. Yet this self-evident, elementary fact of research and development policy is not minimally recognized by the Government or Investment Canada. I have no doubt that it does not even ask the question.
It is not the first time that we have lost technology that was developed here. If we are to go beyond the empty promises of the Prime Minister, then this new Department had better come to grips with those elements of appropriate research and development policy that are necessary to increase the rate of expenditure from the present 1.35 per cent of GNP to the level maintained by other industrial nations, which is about 2.5 per cent. Sweden is approaching 3 per cent of Gross National Product in this area.
The twinning of science and industry in this Department at least calls attention to the absolutely critical requirement to place strong emphasis on the area of creation of new knowledge and new products if we are to get beyond our resource dependency.
I repeat, ownership is fundamental. What has the Government done? It signed a deal with the United States so that any of the companies in this country worth less than $150 million, those companies which do most of the basic industrial research and development, can be bought by Americans without even a review, and take our research and development, take our technology, and take our jobs back to the United States.
If Lumonics and Connaught had available to them some funding from the federal Government, or some federal mechanism to obtain the funding in order to pursue their markets and expand their technologies themselves rather than selling out to foreigners to do it, we could have saved Connaught and Lumonics. However, no such mechanism exists.
According to the subsidy rules to which the Government will almost surely agree with the United States under the Free Trade Agreement, we will not be able to be selective in ensuring that Canadian companies are getting the funding to develop the technology that is necessary for their survival and for the new products we will need in order to be competitive.
Industry, Science and Technology
One of the key elements in generating research and development and new technology in a country is procurement.


Ross Harvey: Ask the Japanese.


Howard Douglas McCurdy: Ask the Americans. There is defence procurement. There is space agency procurement.
Yet the Government says that when there is a contract to be let, anyone can bid on it. Americans and Canadians will bid on the same basis. The elephant and the mouse are on the same basis for procurement contracts in this country, for contracts that ought to be generating technology in Canada. The Government has taken away ownership, it has taken away procurement, it is taking away the granting and subsidy mechanisms. What kind of research and subsidy mechanisms and what kind of research and development policy will there be? Basic research has been deprived of funding. There has been no decision on how research in industry will be encouraged.
If this new Department is to do any good, it had better start coming to grips with the situation that finds Canada's relative position constantly deteriorating. This is true in government laboratories where morale has been virtually destroyed by the stupidity of the Government's policies and the lack of a long-term plan and it is true of the universities which are being robbed of test tubes, for God's sake, because of the niggardliness of the Government. Every time industry develops something, we sell it off.
We think that the symbolism in the Bill is good. It is probably a good thing that a message will be sent out to the general population that if we are to have economic growth, R and D had better be carried out in Canada. However, the Government will run into trouble because calling attention to that significant, fundamental relationship between research and development, knowledge, economic growth and jobs ought to put pressure on the Government to stop the BS and do something with respect to science, research and development in Canada. Canada's future is at stake.


Mr. Holtmann:: Madam Speaker, once again, it was interesting to hear my colleague from Windsor-Lake St. Clair address the House on an issue that I am certain many Canadians find very important. I do not know if he excited anyone with his almost hysterical approach to a subject matter that I can assure the Hon. Member the

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Prime Minister takes seriously. After all, it was the Prime Minister who established a council of science and research at a very high level and he himself is very actively involved in it. After many years of Liberal rule, he wanted to find the true direction Canada should take in terms of research and what the country's priorities should be. Instead of rhetoric, he actually sat down with some of the most progressive intellects in that field. The Hon. Member forgot to mention that. This exercise had never been conducted by any Prime Minister before. I wanted to make him aware of that.
The Hon. Member seemed to be rambling all over the field, not really saying anything about what Canada ought to be doing. Let me take him back to the days of the Liberal regime. At that time, in Winnipeg, Manitoba, the Liberal Government spent something like $34 million on a national research building and allocated $25 million to operate it. The building was not completed when the Tories took office. The former Liberal Government had no plans for the place. It had no idea where it was going. It was simply a pile of federal money going into a building, without being sure what kind of research ought to be done. Is this what the Hon. Member wants to go back to? That Liberal Government then said to the Canadian people that it was doing a lot for research because it had allocated "X" number of dollars and built a building.
Let me tell the Hon. Members what the Tories have done in Winnipeg. They have gotten free enterprise, the business community and the manufacturing sector to occupy 75 per cent of the building and pay 75 per cent of the cost of research rather than having the Government of Canada pay for research that it does not even need or know about. Industry is now doing its own R and D, something which was lacking for so many years. The Hon. Member would like the Government of Canada to say, "We will do your R and D, we will throw money at whatever you propose". He is telling us that what is going on today is wrong.
I would like to point out to the Hon. Member that the Government seems to have a lot of direction. It can fill the building with private enterprise without spending taxpayers' dollars. I would like the Hon. Member to comment on whether or not he would like to go back to that old system.


Howard Douglas McCurdy: Madam Speaker, the Hon. Member, not atypically, either did not hear or did not understand what I said. I clearly did not say that we should go back to the admittedly disgraceful record of the previous Liberal Government with respect to science, research and development.
The Hon. Member suggests that I did not mention the National Advisory Council on Science and Technology, but I did. There are a number of things that the Government did for which I congratulate it, including elements of this Bill. However, I am sure that the Hon. Member will recall, as I do, that before he came into office, indeed in 1983, the Prime Minister said that Canada was in the bush leagues of science and that by 1990 if not by the end of his first term, government expenditures on science, research and development would be doubled so that 2.5 per cent of GNP at least would be devoted to research and development. However, in fact, not a single additional penny of government money has gone into research and development. Right now, we stand exactly where we did when the Prime Minister made that statement.
The Government has thrown some money at science and technology. Canada has probably the most generous tax concessions, which result in indeterminate work by industry of any other country in the world, and it has not corresponded in any way to any coherent policy of science, research and development. The Government, on behalf of which that Hon. Member speaks, did that.
The Hon. Member can jump up and speak about what his Government has done to save a pretty building in Winnipeg from disuse as much as he wants. However, that will not convince anyone that the situation in science, research and development in Canada is not exactly where the Prime Minister found it when he came to office, in the bush leagues of the industrial nations of the world.
We plead with the Hon. Member, through you, Madam Speaker, to get himself into gear and to see if he cannot convince the Government that it must have a coherent policy, one that will overcome some of the negative elements of R and D which have been introduced and imposed upon Canada as a result of a Free Trade Agreement that is supposed to enhance competitiveness but very likely will abort it.
April 25, 1989


Benoît Tremblay: Madam Speaker, I would like to thank my colleague from Windsor-Lake St. Clair (Mr. McCurdy), who I think appreciates the centres of excellence program started by the Government. As my colleague pointed out, this is certainly a most welcome initiative that provides impetus not only to each university centre but also to inter-university relations in Canada.
I also think that our colleague considers connecting industry and research-not only immediate applied research, but also basic research-to be a good thing.
Madam Speaker, there is not just money-and I would like to have my colleague's comments. For example, on what the Government able to do with Bill C-22? I would like my colleague to take account of the very large investments that exceed what we anticipated when Bill C-22 was passed.
I also share my colleague's concern about new blood. I suppose he will understand that the Canadian bursary program is meant precisely to provide new people in the coming years.


The Acting Speaker (Mrs. Champagne):: A very short comment from the Hon. Member for Windsor-Lake St. Clair (Mr. McCurdy).


Howard Douglas McCurdy: Madam Speaker, Bill C-22 which, according to the Hon. Member, was supposed to encourage basic research, has done nothing in that respect. There has been an increase in investment in research by the drug companies, but not in basic research. It is not the kind of research that can give us what we need to support a Canadian initiative, an independent initiative for new industries, and so forth.
As far as grants are concerned, it's not bad, but it's minimal. It would be better if more funding were earmarked for the universities, with more support for all students, not just for scientists, because a country needs science, research and development to improve its economy. However, we also need to balance what science produces with teams of researchers who can help us ensure that science and technology will not affect us in a way that might not be a good thing for the entire country.
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The Acting Speaker (Mrs. Champagne):: The period for questions and comments has now expired. Resuming debate. The Hon. Member for Winnipeg North (Mr. Pagtakhan).


Mr. Rey Pagtakhan (Winnipeg North):: Madam Speaker, the objectives of Bill C-3 as listed in Clauses 7, 10 and 12 are laudable indeed. However, I am deeply concerned that this Bill, which puts the crucial areas of science and technology within the same Department as industry, might conveniently allow the Government to over-em-phasize industrial issues and ignore the pressing need to increase expenditure in research and development, as it has ignored this need for the past four and a half years.
If the Government does not improve research and development policies, Canadians risk becoming technologically backward in a world of rapidly unfolding technological innovation. If more research funds are not devoted to science and technology we risk becoming permanently relegated to the kindergarten of science.
My concern is shared by many prominent scientists and economists, such as Polanyi and de Grandpre.
The consequences of continued neglect of research and development by the Government are grave. Canada will be unable to compete in the world market and our standard of living will falter. Given the link between economic and social policies, Canada's social programs will also suffer.
In my reply to the Speech from the Throne I discussed my Party's commitment to our universal social programs. Now I wish to focus on the Government's lack of commitment to research and development in science. May I remind the Government that we need more than a legislative Bill on paper; we need a Government with a will to act.
I am concerned that the new Department that will be created by Bill C-3 will not adequately reflect the necessary link between continued success in industry and greater devotion of resources to research and development which will allow us to create the technology to become more competitive on the international economic scene.
My concern has a genuine basis. In the last four and a half years the Government has not fulfilled its promises in the areas of science and technology. Further, the Government's current obsession with reducing the deficit may cause it to neglect funding of research and development.

April 25, 1989
Industry, Science and Technology
Federal expenditure on research and development decreased 7 per cent from 1984 to 1988. In 1984 the Government promised to increase spending on research and development to 2.5 per cent of the Gross National Product before the end of its first mandate. However, funding actually decreased in real terms during this period. To use the words of the Hon. Minister of Regional Industrial Expansion and Minister of State for Science and Technology (Mr. Andre), this is an example of the Government "saying one thing and acting in another way."
Does the Government know and appreciate the difference between a promise and a commitment? The Government has capped the base budgets of Canada's principal research and granting councils. It has also limited tax credits to companies conducting research.
As if the onslaught on research and development was not serious enough, the Government also drastically cut the budget of the National Research Council. Has the Government forgotten that the National Research Council is Canada's national laboratory and the primary research and development organization of the federal Government?
Instead of increasing the National Research Council's budget by 20 per cent, as the Government had promised, it did the exact opposite. It chopped the budget by 20 per cent. These cuts not only cause lay-offs, but they demonstrated the Government's lack of crucial foresight in developing Canada's future technology.
The Government tax credit system has been plagued by inefficiency and delay. Some prolonged delays, as long as 18 months in the processing of claims, have seriously hindered genuine research efforts. Small companies are hit hardest by such delays. They are forced to restrict their research and development programs because they lack the necessary capital to wait for the decision of the Government.
Members of the House will be the first to admit that the Government's record on research and development is abysmal. I might add that neglecting research and development exacerbates Canada's debt problem, since our inability to compete effectively in the world market will increase our deficit in the long run. The Government does not seem to realize the extremely serious state of Canada's research and development efforts.
Canada was last of eight major countries in total research and development spending. In 1987 total research and development in Canada was approximately 1.4 per cent of Gross Domestic Product, about half that of the United States and Japan. Canada was last in company-funded research and development, with only 3 per cent of Canadian firms investing in any research and development at all. Canada is last in the number of scientists and engineers that we have, which is less than 10 per thousand. It is no comfort that Canada was fourth in government-performed research and development as a percentage of Gross Domestic Product.
Such statistics are frightening when one realizes that science and technology have a greater role than ever before in determining economic prosperity. The research and development efforts in other countries together with the rapidity of technological changes are posing major challenges to the international competitiveness of Canadian industries.
Since research and development is a significant creator of jobs and wealth, the Government's low spending in this area is alarming indeed. Mr. Fraser, President of the Canadian Institute of Advanced Research said:
We have failed to understand that we are ill equipped to survive in a global economy based increasingly on science and technology-based products.
This lack of understanding is reflected by the fact that this Government has no clear policy on how to promote research. Public policy is essential in promoting and financing Canada's relatively small high-tech industry. Because of the huge investment required and the long wait for profits to materialize, the free market alone cannot be relied upon to finance research. There is a need for more joint industry-govemment-unversity research and development. Two hundred and forty million dollars to centres of excellence is not enough. I worry that the Government's words are not matched with dollars.
It is absolutely necessary for the Canadian Government to increase spending in the area of research and development. Not only must the Government increase direct support of research and development through larger grants to universities and through better scholarship programs for students, for example, but the Government must provide better successful, loop-hole free investment incentives so that private companies will also increase their research and development spending.
April 25, 1989

I am also concerned that the Government is not taking enough account of public opinion on the need to increase research and development spending. In 1987, the Ministry of State for Science and Technology found that 80 per cent of Canadians would like to see more development of science and technology. This Government has failed to take into account that public opinion. The public believes that Government should take the lead in this area and share the costs with the private sector and, I emphasize, with the provinces. My Province of Manitoba asks for no less than a fair share of federal support.
The public is also receptive to efforts to improve Canada's scientific capability, to keep scientists and technologists in Canada and to train more of them. Yet the Government has not taken the wishes or the best interests of Canadians into consideration when it decided its spending policy in the areas of research and science. This is one more classic example of this Government's pachydermous insensitivity to the Canadian scientific community!
Canada does not produce enough people with advanced degrees in natural science and engineering. There is a brain-drain of scientists due to the inefficient financing of education and research in Canadian universities. The Liberal Party supports the recommendations of the Lortie Commission. In some research and development areas in high-growth industries the demand for highly qualified human resources exceeds the supply. In the area of basic, as opposed to applied, research, the Government has been even less encouraging toward its human resources. This is alarming as well for without basic science the application of new knowledge is difficult. Yet Canada's support for university research is among the lowest in the major industrial countries on a per capita basis. As a percentage of Gross Domestic Product the funding of research in universities and granting councils is less today than it was in 1970.
This is unacceptable. As Nobel Prize winner, Dr. Gerhard Herzberg points out, it can be historically demonstrated that the truly revolutionary discoveries have come from individuals of great merit pursuing a relatively unfettered path. This Government's research and development program, to the extent that it has one, reflects the Government's preoccupation with profit that takes precedence over concerns about our scientists making progress in the area of basic science.
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I submit, Madam Speaker, that investment in research and development should be made on the basis of the common good not on the basis of political expediency. Many Canadian scientists and teachers of science predict that unless more support is given to basic research Canadian universities will lose their stars, those people most likely to make major scientific breakthroughs. Promising scholars may also be steered away from basic research after deciding that there is no career to be had in science in Canada. Indeed, I am concerned that the Government will not do enough to promote both applied and basic research in universities, to encourage industry in Canada to increase research and development activity and to foster their research and development in renewable technologies which are essential to implementing environmental improvement.
I also have some concerns with some specific clauses in Bill C-3, which I will mention only briefly here, but which must be examined carefully at the committee stage. First, I question whether the Minister of this new integrated department will be so preoccupied with industry, market-forces and and profit that he or she will not devote full equal attention to research, science and technology and that the result of the creation of this new integrated department may just be a camouflage which will make it look like the Government plans to address the need to increase research and development while really just allowing the Government to continue stalling in this area.
Second, I worry whether the Minister for Science will act in concurrence with the chief Minister as specified in Clause 4(3) but will not be subject to such control by the chief Minister that the Science Minister is unable to act independently and is instead only a puppet in promoting the needs of science.
Third, I would like to be assured that any recommendations made by the chief science adviser who will be appointed by the Governor in Council under Clause 5(3) will be taken into serious consideration by the Government and not ignored.
Fourth, I am concerned that including the issue of regional development of Ontario and Quebec within the responsibilities of this new department and leaving the regional development of other provinces and territories to other provincial-federal arrangements may lead to an unfair regional allocation of research and development funds. Manitoba and other provinces and territories would not ask that Ontario and Quebec receive less funding for research. We in the West only demand that

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all regions receive their fair share and are not sacrificed by the federal Government. Any imbalance in regional development is not only unfair, it is unethical.
In conclusion, I wish to ask the assurance of this Government that it will, for once, make an honest effort to stop ignoring the need to push for more research and development for all parts of this country and to lend credence to its words by taking some effective action.
If this Bill passes let it be a redeeming document which will reflect the Canadian commitment to fairness and ethics. Finally, if this Bill passes I hope that the Government will recognize with deeds and not just words the importance of increasing research and development which will allow us to sustain our national pride in our scientific achievements and maintain our economic prosperity which, in turn, will enable us to promote social justice in the form of providing social nets in the areas of unemployment, health and welfare.
The last four years were abysmal for the scientific and technological community as a consequence of neglect by the Government. The Liberal Party is committed to call this Government to task in scientific research to ensure that the next four years will undo the neglect of the past four years.


The Acting Speaker (Mrs. Champagne):: Questions or comments. The Hon. Member for Portage-Interlake (Mr. Holtmann).


Felix Holtmann: I listened with interest to my colleague, the Hon. Member for Manitoba Winnipeg North (Mr. Pagakhan), and his concern about the Government's efforts in the area of science and technology. His historic rendition of what happened prior to 1984 brings about an automatic question. I am not sure if he was suggesting that this Government should treat science and technology as it was treated by the former Liberal administration who ran this country so deep into debt that we probably will have to pay forever. Unemployment under that regime increased dramatically. Since 1984 the statistics prove that our employment picture has improved. We have more Canadians working now as a result of this Government, not because of it.
He suggested that Manitoba and Winnipeg have suffered because of this Government, when in fact the new centre for sustainable development will be located in Manitoba and Winnipeg, as was indicated by the Prime Minister (Mr. Mulroney) in the Throne Speech, not because of some rhetoric and some words, as was suggested by the Member from Winnipeg North but because we have a science and technology lab now operating fairly efficiently. This was not the case prior to 1984, when money was thrown recklessly from coast to coast with no thought at all. If that is what he really wants Canadians to go back to, I would like to ask him, if he wants to spend money as was done by the previous administration, would the Member want to tax Canadians more for it?
His Leader said during the last campaign that he in fact also wants to reduce the national debt. He had a goal to reduce the national debt. How can the Member for Winnipeg North suggest that automatically a percentage of Gross National Product should be thrown in to science and technology with no regard to how it is spent and no control mechanisms, as we experienced prior to 1984? The Winnipeg Science and Technology Centre was built with nobody prepared to move in upon completion. If the Hon. Member would check the record, he will find there was none. Is that the way he wants Canadians to treat science and technology again, as it was treated prior to 1984? I suggest that the Member for Winnipeg North go back to his polls and find out. He would be very shocked at what went on under the Liberal administration of the day. I would like to know how he intends to spend this new- found money, as it was spent before?


Rey D. Pagtakhan: I am indeed shocked that the Tory Government has failed to heed public opinion. I am indeed shocked at that. To the extent the debt has increased, it is this Government that has doubled the debt during its mandate.


Some Hon. Members:: Shame!


Rey D. Pagtakhan: Let us also realize that for the debt we have created, that for the debt we have in the country, let us not blame the people of our country who have paid taxes to the Government. This debt has also resulted in many assets, in schools, hospitals and our universal social programs.
April 25, 1989

In terms of the science and technology building in Winnipeg, the building was not quite finished; and for the hon. gentleman to allude that there was no person inside, of course the building was still under construction.


Mr. St-Julien:: Madam Speaker, I was listening to what the Hon. Member said, and I would like to ask him whether he knows about the scam of the century that was perpetrated by the Liberals when they were in power. I am referring to the science and technology tax shelters, a program that was supposed to cost the Government of the time $200 million in 1983-84. When we came to power, we were stuck with-The first thing the Minister of Finance did was to get rid of those tax shelters.
Subsequently, we calculated that the scam of the century perpetrated by the Liberals of Canada did not cost $200 million but $3.9 billion. Madam Speaker.
I would like to ask the Hon. Member if he is aware that of those $3.9 billion, $1.9 billion in Canadian dollars was written off as fraud and losses. We could have built fifty hospitals in this country with that money. He should realize that when we talk about the deficit, we are talking about the previous Liberal government, so I wish he would tell us about the Liberal scam of the century, about those tax shelters.


Rey D. Pagtakhan: The Liberal Party does not, cannot and will never condone corruption in government and tax evaders. This Government was reluctant to act promptly when Members of the Government were being brought before the courts, or had cases before the courts.


Nelson Andrew Riis: I think we all recall the scientific tax credit boondoggle that was brought in by the last Liberal administration-


Some Hon. Members:: Two million dollars.


Nelson Andrew Riis: -that it costs, not as my hon. colleague pointed out, not hundreds of millions, but indeed a few billion dollars. What he failed to mention, just to clarify the record, was that when the administration changed and the Conservative Party took over as Government of Canada, they stopped the program from continuing, but all of the boondoggles that were in stream were allowed to play through. Because the Minister of Finance (Mr. Wilson) faded to act expeditiously and in a tough way, as he should have, it cost an extra $1 billion that could have
Industry, Science and Technology
been avoided had he in fact immediately closed that off. We will forget that, Madam Speaker. It is history now.
My question for my hon. colleague is the following: Considering that Canada finds itself now as the western industrialized country that has more foreign ownership and control of its economy than any other nation in the western industrialized countries, would he think that that is one of the main reasons that we have so little research and development going on, particularly in terms of the industrial sector? Companies would tend to do most of the research and development through to production back in their parent headquarters, as opposed to their distant branch plants. Would he agree that because we have a large sector of branch plant economy that that is one of the critical reasons that our record in terms of R and D is so abysmally low?


Rey D. Pagtakhan: Certainly we should encourage research in the country. We should not let Canada be a branch plant of any other country in research and development.


Mr. Manley:: One thing that has amazed me since coming here is the fact that after four and one-half years Members opposite continue to cite things that happened before 1984, in defence of lack of policy for the last four and one-half years.


Some Hon. Members:: Hear, hear!


John Paul Manley: We have just heard it a few minutes ago. It is time that they became aware of the record of their own Government, and started defending that.
I would like to congratulate the Member for Winnipeg North (Mr. Pagtakhan) on an excellent speech. He brings a very useful perspective to this Chamber, that of a medical practitioner as well as a distinguished scientific researcher. I think with that background it would be of value to the House to hear his views on the Government's policies with respect to university research, and what we might do in Canada to encourage more and better university research.


Rey D. Pagtakhan: I thank my colleague for his kind words. I can only reiterate that we truly have to develop a science culture policy in this country, not only in rhetoric, not only in words, but in deeds. Canada can no longer tolerate being second-class in research and development. We have a lot of brilliant minds. We have produced in this country a Polanyi. Let us continue to produce more. This Government must put action into its words.

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Mr. Jack Whittaker (Okanagan -Similkameen -Merritt):: Madam Speaker, it is indeed a pleasure today to speak on this Bill before the House, concerning industry, technology, and trade.
I listened with some interest to the Minister when he spoke of the Bill. On the surface I agree with him that the main thrust of the Bill appears to be one that is laudable. It speaks in words that would lead us to believe that in fact this Government is going to do something toward science, industry, technology, research and education.
I went back to the prior Bill which this Bill is repealing, the Regional Expansion Act. I looked through that Bill to find what was being changed, what we could look forward to in Government attitude from what was in the prior Bill. I found many of the same words in that Bill as are in this: develop, implement and promote international policies and entrepreneurship. Many of those are words that have been transplanted from that Bill into this Bill.
The Government must do more than talk in platitudes. It must do more than simply set down in words in a Bill what it will do. It must show through action what will happen under this administration. If it could not do it under the former Bill, it does not appear that, without the will and without the drive that is required, it is going to be able to do anything further with this Bill.
For instance, in the matter of research and development, we see that the thrust of this Bill is for increased research, increased development. I would suggest that one goes hand in hand with the other, and hand in hand with education, yet since 1984-1 think the figures will prove this-in fact the commitment of this Government to research has dropped substantially.
I was flipping through a position paper from the National Consortium of Scientific and Educational Societies and found some comments that I would like to read into the record.
On one page it states:
The concern of the member institutions of the National Consortium of Scientific and Education Societies of Canada is both with university education and research. The links between the health of these two economically essential sectors are obvious, and should be. Without productive, high quality undergraduate education, we cannot produce the right kind or number of graduate students. Without the right kind
and number of graduate students, the research enterprise will wither. Without research and development, no modern economy can assure or maintain for its citizens an acceptable standard of living - that Canada is seriously underinvesting in research and development. Also any attempt to raise the share of research and development in the national economy must be accompanied by a considerable increase in educated and trained researchers.
I suggest that the Government, while paying lip service to the research community, has been gutting that very institution. We have seen massive cut-backs for the past four and a half years in the area of research and in the area of development. That to us on this side of the House is unacceptable.
In my riding of Okanagan-Similkameen-Merritt we have an establishment, the Summerland Research Station for agriculture, which is an institution well respected around the world, not just in Canada. It is a magnificent facility built some years back with the capabilities, with the adequate funding, of doing something in the area of agriculture, for which the Okanagan is famous. Yet within that facility we have major research funding caps.
From my point of view I am pleased to see science, technology, and research coupled with small business. Certainly, in the agricultural area in my region one goes hand in hand with the other. Agriculture, after all, is a small business. The research done in the Summerland Research Station works with the agricultural community in taking fruit products and assisting those small businesses in developing by-products, what we know here and throughout Canada as value-added products. It is a small example of the value of research.
I would suggest to the House that for every dollar that we invest in the research community in the education of our young people and in maintaining that research community, we get back dividends far in excess not just for this generation but for generations of the future. Those dollars, whether they be for research in the agricultural area, the astrophysical area, the area of geriatric research or for medical research, will return dollars. However, we must provide those dollars to our scientific researchers in order that they can spread their wings and make these break-throughs and developments that will lead, in the future, to the cuts that we will be able to make in medical areas. The research that will be done will take away the necessity, perhaps, of so many trips of our aged and aging population to the doctors, the clinics, and the hospitals, thereby repaying a dividend in that area.
April 25, 1989

I would like to move on the area of small business. I have read Clause 8. On the surface it is laudable and applaudable. Using this Bill, the Minister will be able to strengthen the national economy, increase the international competitiveness of Canadian industry, encourage the fullest and most efficient and effective development and use of science and technology and develop, implement and promote national policies to foster an improvement in productivity and efficiency in industry. He will be able to develop and implement national policies to foster entrepreneurship and to start up growth and expansion of small business and promote and expand tourism. These thrusts are applaudable. However, I would suggest that they must be more than just words.
Small business in Canada since 1980 has created, according to Statistics Canada, just over 70 per cent of our new jobs. I suggest that of the approximately 800,000 small businesses in Canada, the small business persons are the economic backbone of our country. We in this House should do more than simply pay lip service, simply give out the usual platitudes. We should be bending over backward to assist small business, whether it be through financial assistance, assistance through the Federal Business Development Bank, assistance through our chartered banks, assistance through interest rates, or assistance through technology. We must do more for the small business community.
It was interesting in looking through the annual report of the Federal Business Development Bank and analysing some of the figures in it to find that in terms of the loans which it grants, over 82 per cent were over the $100,000 mark. The balance under that mark illustrates to some extent that the small business community is not gaining benefit from the Federal Business Development Bank. In going through facts and figures from small business, we find that 85 per cent of small business loans are made through chartered banks. It is interesting to note the problems that small businesses have in dealing with chartered banks. One of the largest complaints is that they are required to put up collateral much in excess of what would normally be required and much in excess of the loan that they are receiving. For each dollar of loan that a small business in Canada takes from a chartered bank, it must put up in collateral $2.78 worth of assets.
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Small businesses are also overburdened with the paperwork required in order to process many of these loans. Mountains of paperwork is involved. They have to deal with matters such as secured loans, mortgages, chattel mortgages, assignment of book debts, and the list goes on. Since most small businesses employ under five people, it is the business person who has to deal with this paperwork. He has to deal with the lawyers and the accountants in order to help them. Therefore, his overhead goes up. It is in this area that the Government could be cutting down on some of the red tape. It should be cutting down on some of the paperwork required. In this way he or she will have the opportunity to pursue their assistance to the economy with the aim of being able to put bread and butter on their tables.
On the surface the thrust of this Bill appears to be laudable. However, there is an unfortunate quirk in it about which everyone in Canada should be made aware. It has been pointed out in the House before. This Bill leaves the economic development across Canada in the hands of three different Ministers. Instead of pulling it all together under the auspices of one ministry, it is spread out among three. If it were pulled together under one, there would be a unified thrust. We must have unity in Canada. We must show unity. We must not have separate ministries for the West, the East or for central Canada. Economics, research and development and technology must be dealt with even-handedly throughout all the provinces and all the regions of Canada.
Unfortunately, this Bill leaves the way open for regional disparities to crop up and cause problems for the generation of the future. Instead of bringing forward a unified Bill which would bring the regions together, the Government appears to be dividing the country into three areas. They are the Atlantic, the West and central Canada. Over the years we have watched the growing disparities between the eastern provinces and central Canada and between the western provinces and central Canada. One of the arguments that we hear constantly on the doorsteps and the streets of our ridings is that we in the West are not receiving our fair share. I am sure the same is true with respect to the East. We need equality with the rest of Canada, a unified Canada that Sir John A. Macdonald worked so hard to bring together. We need a Government that will bring in policies to unify and govern with an even hand regardless of how the electorate voted in the last election or how it is perceived that it will vote in the next.

April 25, 1989
There are a number of areas in the Bill at which I think the Government should look. In terms of British Columbia and the West, the lumber industry is one of those areas. It can use some of that research and development assistance to create value-added products. Instead of shipping our lumber and logs raw, we should be looking at methods to add value to them. This would assist the people and entrepreneurs in the regions to use what we are producing in our sawmills and pulp mills, in the creation of products that would stimulate the number of jobs in Canada for Canadians, products not only for consumption in Canada but for consumption abroad. If Canada is to survive and thrive in the economics of today's world, we can no longer be hewers of wood and drawers of water. We must progress. We must do it with fervour and with one goal in mind. We must reach that goal. However, we cannot achieve it without the funding and the backing of the Government.
The unemployment rate in my region is enormous. It is over twice the national average. This is an area in which value-added products in agriculture, forestry and mining could add to the employment base.
I suggest that in the future the Government put the Federal Business Development Bank back into the business of making small entrepreneurs its first priority. I suggest the Government reduce the unnecessary forms and red tape and target federal contracts to the small business sector. I suggest the Government establish a more aggressive "buy Canada" program and an export marketing agency to help small manufacturers with limited resources to make contacts abroad. I suggest that the Government prohibit banks from requiring small businesses to meet unreasonable collateral requirements on loans. There should be a push from the Government for a commitment from the banks to stop discriminating against women who seek start-up loans.
Those are some of the suggestions that I put forward. I ask that the Government listen to them in the future before it puts this Bill into law.


The Acting Speaker (Mrs. Champagne):: At this point in time we could start the period for questions and comments. However, it is 12.59 p.m. and I would seek the unanimous consent of the House to call it one o'clock. Is it agreed?


Some Hon. Members:: Agreed.

It being one o'clock, I do now leave the Chair until two o'clock this afternoon.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Guy St-Julien: Mr. Speaker, Quebec Environment Minister Lise Bacon should immediately remove the PCBs in Quebec schools and hospitals and store them safely in the regions they come from, not send them to Senneterre in Abitibi-Temiscamingue. PCBs in Senneterre are just the thin edge of the wedge. Once they are all disposed of, other toxic waste will follow, as Ms. Bacon knows. Opening the door to PCBs from the South means opening Senneterre's door to all of Quebec's toxic wastes. The region is big and we are few, Mr. Speaker, but we are fully alive, in good health and love our environment.



HISTORIC EVENTS


Mr. Joe McGuire (Egmont):: Mr. Speaker, on September 1, 1864, 15 delegates from the Maritime provinces assembled in the legislative council chamber of Province-House in Charlottetown, P.E.I. They gathered to consider a proposal which would have New Brunswick, Nova Scotia and P.E.I. form a legislative union. To this meeting came five officials from Canada, John A. Macdonald, Georges Etienne Cartier, George Brown, Alexander Galt and Thomas D'Arcy McGee. They came, as an historian of the time stated:
April 25, 1989

To till the fertile soil of reason and to plant the seeds of a great nation.
This year Prince Edward Island and Canada are paying tribute to the memory of those men who were the fathers of our country who built better than they knew, who created a nation that is the envy of all others. This summer P.E.I. is celebrating the 125th anniversary of this historic meeting. From June through September, there will be celebrations ranging from a world softball championship in Summerside to a royal visit by Prince Andrew and the Duchess of York.
My three colleagues from P.E.I., the Government of Premier Joe Ghiz, and the Speaker of the Legislative Assembly, the Hon. Edward Clark, join me in inviting you, Mr. Speaker, all Members of this House and all our fellow Canadians to come to our friendly shores and join in these historic celebrations.



HEALTH CARE


Mr. Bill Attewell (Markham):: Mr. Speaker, last fall two and a half year-old Jeffrey Savage of Unionville was hit by a car and became a paraplegic. His mother, Deb, brought Jeffrey home from the hospital this month. The entire proceeds of the Unionville Village Festival dance in June will go towards Jeffrey's care and rehabilitation as he starts down a new and difficult path.
Earlier this year, 18 year-old Kurt Gengenbach of Unionville suffered a severe spinal injury in a hockey accident. Next week on May 4, over 1,200 people will be attending a fund-raising dinner for Kurt at $100 a plate. On May 7, a "Run for Kurt" will take place starting at Unionville High School. Proceeds from both these events will go toward Kurt's home care and renovations to his home for wheelchair accessibility.
I salute and applaud all those people of my riding of Markham who are participating in these warm and generous expressions of goodwill.



THE BUDGET


Mr. Len Taylor (The Battlefords -Meadow Lake):: Mr. Speaker, the Finance Minister's statement yesterday
that he will act alone without the assistance of the provinces to implement his pet project, a new national sales tax, indicates the futility of that exercise, and like his equally unmoving determination on interest rates, shows how out of step with Canadians he is on the economy.
Canadians do not want high interest rates and they do not want the new national sales tax program which threatens everything from new home construction, as argued by the Canadian Real Estate Association, to our children's music education.
This Government is continuing to fail to protect Canadian interests. The Free Trade Agreement, high interest rates and the value of the dollar are killing the small manufacturer. At the same time the proposed national sales tax will cripple the consumer. What we need in this country is a real tax reform and a Minister of Finance who understands the Canadian economy and the needs of the ordinary Canadian citizen.



IMMIGRATION


Rey D. Pagtakhan: Mr. Speaker, three months ago the Minister of Employment and Immigration allowed Violeta Juayong to remain in Canada. Sally Espineli, also of my community, was not so fortunate. She was deported eight months ago on the same grounds as Violeta, that she misrepresented her marital status.
Late last week the Canadian Human Rights Commission ruled that discrimination may have occurred in her case. The agony for Sally, and for many others who entered Winnipeg under similar conditions, have continued. I now urge the Minister to show the same humanitarian concern for Sally Espineli, and bring her back to Canada now instead of waiting for the final decision of the Human Rights Tribunal.
My sentiments are shared by all members of my community, by the Premier of Manitoba, by members of the Opposition and also by senior members of the Cabinet and government caucus. I am confident the Minister and the Prime Minister (Mr. Mulroney) will do the right and honourable thing and promptly end the human suffering of my community by taking action to rectify this intolerable situation.

April 25, 1989



FREE TRADE AGREEMENT


Mr. J. W. Bud Bird (Fredericton):: Mr. Speaker, I wish to take this opportunity to advise all Hon. Members about the Greater Fredericton Free Trade Forum which is an innovative community approach being taken throughout my riding of Fredericton and York Sunbury towards the realization of the opportunities offered by free trade with the United States.
Fredericton is well located in close proximity to the USA and many of our small businesses have already commenced to expand their horizons in pursuit of business in New England. There is a prevailing mood of optimism and challenge in the business community of greater Fredericton in this regard, and so it was recently decided to make free trade a co- operative undertaking by the whole community.
The movement will be led voluntarily by private business people sharing the support facilities available from our universities, the Research and Productivity Council, CFB Gagetown and our Chambers of Commerce. Altogether there have been eleven Mayors, eight provincial MLAs and three Members of Parliament working together on a non-partisan basis to help organize this campaign.
The purpose of the Greater Fredericton Free Trade Forum is to stimulate the total area to take advantage of the potential offered by free trade-


Mr. Speaker:: Fm sorry, but the Hon. Member's time has expired.



ELECTIONS ACT


Mr. Gilbert Parent (Welland -St. Catharines-Tho-rold):: Mr. Speaker, during the enumeration leading up to the last federal election, many of my constituents were out of town when enumeration took place. There were some people who were in the riding who were not enumerated and for that reason they lost the right to vote. It seems ironic that federal judges and lately the mentally handicapped have won the right to vote from a federal judge, yet urban dwellers such as those in my riding of Welland-St. Catharines-Thorold remained out in the cold.
Rural dwellers can register to vote right up to voting time, but urban dwellers must do so by the seventeenth day before the elections. I think that this is unfair. I believe that urban voters should be able to register to vote right up to election day just like rural people and that way they will not be disenfranchised.
Mr. Arthur Mills of my riding was one of the disenfranchised Canadians. On his behalf and on behalf of Canadians who did not have a chance to vote, I urge that the Government address this problem and correct it before the next federal election.



NATURAL RESOURCES


Mr. Arnold Malone (Crowfoot):: Mr. Speaker, I want to encourage the Government of Canada to do all that is necessary and practical to encourage the utilization of western Canada low-sulphur coal in the central Canadian industrial basin. The western coal would largely displace imported coal from Pennsylvania and elsewhere offshore. The implementation of this recommendation would accomplish two worthy objectives: First, by encouraging the use of a domestically produced coal, our nation's balance of payments would be improved. More important, because western Canada produces coal much lower in sulphur content, the subsequent emissions from the use of western coal is significantly preferred in protecting our environment from the contaminations of sulphur dioxide or acid rain. This suggestion could save Canada $2.4 billion, generate 13,000 permanent jobs and at the same time protect our soil, water and air from contamination.



TAXATION


Nelson Andrew Riis: Mr. Speaker, this morning I received a letter from a very troubled resident of Vavenby, British Columbia, who feels he has been excessively taxed. In 1986 on an income of $19,500 he paid $1,035 in income tax. However, by 1988 on an income of $23,000 he was forced to pay nearly $3,000 tax. In three years, while his income increased by 18 per cent, the Conservative Government increased his income tax by 175 per cent. He believes he has been unduly taxed. An $1,800 income tax grab from a man who has worked all his life for his community and his country is not right, especially when he knows that 60,000 large profitable corporations pay no taxes at all. This man from Vavenby,
April 25, 1989

British Columbia, whose income tax increased 175 per cent in three years says not that only will he not pay more income tax, he cannot pay more income tax. What will he say when he learns on Thursday that he soon will be forced to pay a new national sales tax for the purchase of clothing, books, car repairs, everything? I suggest that a taxpayer's revolt is in the making.



EMPLOYMENT


Mr. Marcel R. Tremblay (Quebec-Est):: Mr. Speaker, I am glad that my first statement in this Second Session of the 34th Parliament is good news for the young people in my riding.
Indeed, Mr. Speaker, with the approval of 131 Challenge '89 projects in Quebec-Est, I am proud to announce that 238 students this summer will be able to benefit from a quality well-paying work experience, thanks to a federal financial contribution of $293,639.
The Challenge program, created in 1985 by the Conservative Government, has been very successful throughout Canada. For example, 400 companies in my riding have been able to hire almost 700 students, thanks to this program.
This initiative of my Government must be emphasized and encouraged.



AIR CANADA


Hon. Roger E. Simmons (Burin-St. George's):: Mr. Speaker, Air Canada's plan to discontinue jet air service into Stephenville is an absolutely devastating body blow to the economy of southwestern Newfoundland.
Of course the move is a direct consequence of the Government's airline deregulation policy, a policy which decrees that the public's right to an adequate transportation network must play second fiddle to the whims and balance sheets of corporations.
It is a policy which is rapidly translating into inferior air service for people in less populated areas; a policy which, together with rural postal closings and railway abandonments,' is working wonders in the Government's grand scheme to shut down rural Canada.
There is just one way that Air Canada and its service to Stephenville can be saved, that is through the direct intervention of the Minister of Transport (Mr. B. Bouchard). His colleague, the Member for St. John's West (Mr. Crosbie), already asked him to instruct the National Transportation Agency to hold public hearings on the matter. I now ask the Minister to do exactly that, with a view to according Newfoundland special designation as the NTA Act provides.



NATIONAL SECRETARIES' DAY

Mr. Doug Fee (Red Deer):: Mr. Speaker, tomorrow is National Secretaries' Day and I want to encourage everyone who works with a secretary to take a few moments to consider their value.
I suggest that every Member of the House and every manager in the country assess his or her effectiveness and recognize the contribution that their assistant or secretary has made toward that effectiveness. Receptionists, clerks and secretaries are seldom given the credit or respect they deserve. Yet they are as responsible as anyone for the continued efficient operation of our industrial plants, hospitals, businesses and offices.
Florists and restaurants will do well tomorrow as people recognize National Secretaries' Day, but I would encourage those buying the flowers and lunches to recognize also the importance of the position and the person who fills it.



EDUCATION


Mr. Ronald J. Duhamel (Saint-Boniface):: Mr. Speaker, the Government has changed the formula for transfer payments to colleges and universities, a decision that will give these institutions several billion dollars less in financial assistance. The Government's financial support for research and development is half that in the United States, Japan and Sweden.

April 25, 1989
Oral Questions
The Government has capped grants to Native people who are interested in post-secondary education. It has invested less than $5 per person per year in literacy training.
The Government has not changed the criteria for student loans since 1984. Its program to help part-time students is a flop: less than half of 1 per cent of students have applied.
Mr. Speaker, because of the Conservative Government, we can no longer say that education is an investment. Nowadays, education is an investment people cannot afford.



CHEMICAL WARFARE


William Alexander (Bill) Blaikie: Mr. Speaker, the revelation that poison gas of some kind was used, fatally, against demonstrators in Georgia is very sorry news indeed. It must be widely condemned as totally reprehensible and never repeated again. Those who made the decision to use it should be brought to justice.
Unfortunately, it seems that the world is on a slippery slope to increased use and increased tolerance of chemical warfare, as we learned to our horror when Iraq employed chemical warfare on his Kurdish population in surely one of the most despicable acts in recent history.
There has been much talk of the need for a treaty to ban all such chemical weapons, as well there should be. It is certainly needed, not just to prevent nations from using such chemicals against each other but also to protect their own citizens. We urge the Government to actively promote such a treaty.



ORAL QUESTION PERIOD


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker,-relax Barbara-my question is directed to the Minister of Finance.


Mrs. McDougall:: Relax Michael.


Some Hon. Members:: Hear, hear!


John Napier Turner: I owe you one.


Some Hon. Members:: Oh, oh!


John Napier Turner: My question is directed to the Minister of Finance, the man who has so mismanged the economy of the country that after four budgets he now claims to have a budgetary crisis; a man who, in a short four years, has doubled the total public debt of this country. He is Minister of Finance in a Government that last year spent over $91 million of taxpayers' money on advertising-


Mr. McDermid:: Wrong.


Mr.   Dimer@Vancouver Quadra: -and a Minister of Finance who has just started running public ads at the taxpayers' expense to explain why government spending is out of control.
The Minister stated that the provinces refused to go along with the national sales tax. To what do the provinces object? Is it his new tax on books? Is it his new tax on music lessons? Is it his new tax on shoes, his new tax on auto insurance, or are the provinces really objecting to the fact that this is a Minister of Finance who, in an unprecedented way, has to go to public advertising at the taxpayers' expense to explain to Canadians why he will have to raise taxes?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I listened to the preamble by that well-known expert on deficit financing-


Some Hon. Members:: Hear, hear!


Mr. Mulroney:: The father of it.


Mr. Wilson (Etobicoke Centre):: As the Prime Minister says, the father of deficit financing. I encourage the Hon. Member to read Terry Wills' column in the Gazette of last Sunday which showed how government spending under his stewardship as Minister of Finance went from something like 13 per cent to 23 per cent to 29 per cent-
April 25, 1989


Mr. Gauthier:: You are the pro.


Michael Holcombe Wilson: -and then came back to 25 per cent.


Jean-Robert Gauthier: You are the pro.


Michael Holcombe Wilson: The Hon. Member behind the Leader of the Opposition says that I am the pro. Let us look at what happened.


Mr. Boudria:: You doubled the debt.


Michael Holcombe Wilson: In the last four years government spending on programs has averaged 3.5 per cent a year. I will match that 3.5 per cent a year any time against that 25 per cent average-


Some Hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, when I left the custody of the public finances of this country, the total public debt of Canada was $26 billion, less than the annual deficit of that Minister.


Some Hon. Members:: Hear, hear!


John Napier Turner: We are talking about a Minister who inherited a public debt of $170 billion and now gives Canadians a public debt of $330 billion-double in four years. That is his record.


THE NEW NATIONAL SALES TAX-REQUEST FOR CLARIFICATION
John Napier Turner: Mr. Speaker, the Minister of Finance says that the provinces object to his new national sales tax. And of course we would like to know why.
Do they object to his new tax on daycare services? To his new tax on train and bus travel? To his new tax on plumbers' or electricians' bills? Or to his new tax on life insurance and insurance of personal belongings? To his new tax on accounting fees or to his new tax on funeral expenses?
So explain that to Canadians!


Geoff Wilson: Mr. Speaker, this is political opportunism at its best.
Oral Questions


Some Hon. Members:: Oh, oh!


Mr. Allmand:: Strike two, Michael.


Michael Holcombe Wilson: The Hon. Leader of the Opposition rises, and in a very self-righteous way, he reads off this list. Let me read off something to him. This is the unanimous 15th report of the Finance Committee of this House, signed by his finance critic and his deputy finance critic in the last Parliament. It says that, in short, a single rate value added tax on the broadest possible base is a desirable objective.


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: The Leader of the Opposition is sitting there in his place saying that all that was said in the last Parliament is behind us, we do not look back, we do not look at anything that was said by the people who represented him on that Finance Committee. Canadians are not going to fall for that one. They know a political opportunist when they see one.


POSITION OF PROVINCES
John Napier Turner: Mr. Speaker, we opposed a value added tax or a national consumption tax before and during the election campaign. I can understand the Minister being sensitive. He will not only tax funerals, he will tax the reading of the will through this particular sales tax.
I see the Prime Minister coaching the Minister of Finance.


An Hon. Member:: He's in trouble.


John Napier Turner: He's in real trouble.
I would like to suggest to the Minister of Finance one way of eliminating the public debt of Canada-put a tax on every election promise made and broken by the Prime Minister since the last election.
What do the provinces really object to? Do they object to the Minister's new proposed tax on movie tickets, his new tax on clothing, his new tax on cleaning bills, his new tax on car repairs, his new tax on bank charges or his new tax on roofing repairs, or do the provinces really object to a new national sales tax which will increase the cost of a new home by thousands upon thousands of dollars?


Geoff Wilson: Mr. Speaker, the Leader of the Opposition just confirmed what I said when I said that he was a political opportunist. On March 16,1987, both his finance critics signed this report, and presumably, unless he has totally lost control of his Party, they did so with his knowledge and support.

April 25, 1989
Oral Questions
Then in late September, I believe about four days before the election was called, what happened? The road to Damascus is a long one. He changed his position totally because of the impending election. He saw himself going straight south in the polls and he thought he would have the biggest election defeat ever, even bigger than the one in 1984. That is why the Leader of the Opposition changed his mind then. Now he is grandstanding on the political stage, trying to-


Mr. Speaker:: The Hon. Member for Etobicoke North.


IMPACT OF PROPOSED SALES TAX
Hon. Roy MacLaren (Etobicoke North):: Mr. Speaker, my question is for the Minister of Finance. Since sales taxes by their very nature are regressive, lower and middle-income families will pay proportionately more of the new sales tax than will higher income families.
During the recent election campaign the Minister of Finance indicated that the new sales tax rate would be 9 per cent. For a middle-income family, estimates of additional taxes to be paid are $700 annually. Has the Minister recognized the widespread inflationary impact of such an additional tax as well as its greater cost to lower-income Canadians than to higher-income Canadians?


Geoff Wilson: Mr. Speaker, I wonder who the real Roy MacLaren is. It says here in The Ottawa Citizen of March 21, "MacLaren said he also supports-"


Some Hon. Members:: Answer the question!


Michael Holcombe Wilson: Hon. Members do not like to hear these things. "MacLaren said he also supports the need for a new broadly based national sales tax-"


Some Hon. Members:: Hear, hear!


Michael Holcombe Wilson: "-to replace the current narrowly based federal sales tax on manufacturers which he agreed is badly flawed".
I do not want to make this into a partisan game. I do not want to try to gain political points. I think the Hon. Member understands that the existing manufactured sales tax is flawed and must be changed.


John Napier Turner: What's the record? What's the record since Confederation?


Michael Holcombe Wilson: I think that the Leader of the Opposition, if he looked into his own heart, would also agree that it was in need of change. I ask Hon. Members opposite to come forward with how they would change the sales tax because they know that there has to be a change in the national sales tax.


MINISTER'S POSITION ON SALES TAX
Roy MacLaren: Mr. Speaker, I am not surprised that the Hon. Member would ask us how to deal with his problems. He obviously does not know himself.
The Minister is unable to give any assurances to Canadians that the regressive sales tax he intends to introduce will not impose an inflationary burden on them. If we are to believe him, lower-income Canadians will not pay more than higher-income Canadians. Is that what he is saying today? The Minister should come clean and tell Canadians that the burden of the new sales tax will be incurred more by lower-income Canadians than by higher-income Canadians and that it will be inflationary.
Does the Minister not recognize that the current federal sales tax is a hidden tax? Consumers do not see it. Can he now assure the House that any new sales tax he introduces will not be equally hidden? Can he assure the House that it will not be merely an additional and regressive way to increase taxes so as to reduce the Government's deficit?


Geoff Wilson: Mr. Speaker, the Hon. Member said that I am asking them, because I do not seem to know what I want to do. I know what this Government wants to do. We have made our decisions. Those decisions will be presented in the House on Thursday evening at 5 o'clock.
The Leader of the Opposition keeps referring to his record. He keeps interjecting about the record. Let us look at his record. The inflation rate jumped from 5.1 per cent to 10.6 per cent. The bank rate rose by 4.25 per cent during 33 months in office. Unemployment grew by
165.000.	Spending doubled. The Public Service grew by
66.000,	and the Auditor General stated that Parliament had lost or was close to losing effective control of the public purse. That is the record of the Leader of the Opposition, and we do not want any more of that.


Some Hon. Members:: Hear, hear!
April 25, 1989


TAX REDUCTIONS QUERY
Hon. Edward Broadbent (Oshawa):: Mr. Speaker, my question is for the Minister of Finance. We have just heard the Minister of Finance make some interesting accusations about political opportunism and the importance of staying with words one had uttered in the past when they are applicable to the future.
I have here a news story quoting the Minister of Finance who, in the middle of the fall, 1988, election campaign, was talking about the introduction of a new comprehensive sales tax.
In that article, he said that it would be introduced in the context of tax reform, that its impact would be revenue neutral, which is to say that any additional revenues coming from that tax would be offset by tax reductions, specifically tax reductions for middle-income families. The Minister of Finance has just talked about political opportunism. Does he stand by that commitment? Will the introduction of the new sales tax be offset by tax reductions?


Geoff Wilson: Mr. Speaker, my hon. friend has been in the House since approximately 1968. He knows that tax matters are dealt with in Budgets. Therefore, he knows perfectly well that I cannot give him an answer in anticipation of a Budget two days from now.


ELECTION CAMPAIGN COMMITMENT
John Edward Broadbent: Mr. Speaker, I say to the Minister of Finance that what he has said now is not the case. Two days ago he publicly announced that we were going to have a tax increase. He has a right to do that as Minister of Finance. He has the right now to make it clear that he is going to live up to his election promise that middle-income Canadians will get a tax cut. He knows he can say it, and he should say it.
Since the Minister has been so eloquent in his criticism of the Leader of the Official Opposition in quoting words back to him, why will he not come clean on his own commitment to the people of Canada, and in this year 1989 live up to his commitment made in the fall of 1988. Will the Minister do that?


Geoff Wilson: Mr. Speaker, I think the Hon. Member is referring to the concept of fairness.
Oral Questions


John Edward Broadbent: Yes.


Michael Holcombe Wilson: What I want to draw to his attention, as I have done many times in the past, is the record of this Government over the course of the past four years in improving the fairness of the tax system by taking out loophole after loophole.


John Napier Turner: What a joke!


Michael Holcombe Wilson: I hear another interjection from the Leader of the Opposition. Let me remind Hon. Members that it was when he was the Minister of Finance that a number of the loopholes that I removed from the tax system were put in by him.
I wish to remind Hon. Members of others, the scientific research tax credit that was removed, the carve-outs, the limited partnership bump, tax benefits for those who were buying yachts and hotels-


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


John Edward Broadbent: Mr. Speaker, the Minister of Finance did not even blush when he talked about the Conservatives producing tax reform. I can tell him average Canadians know that between 1984 and 1988 under this Government their taxes went up by some $1,300, while the richest Canadians' taxes went down by a few hundred dollars. That may be tax reform for the Tories, but it is not for the rest of the people of Canada.
{Translation]


TAXATION OF HIGHER-INCOME CITIZENS AND MINIMUM TAX ON PROFITABLE COMPANIES-GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, my last question is directed to the Minister of Finance. Instead of taxing Canadian families to the tune of $1,000 with the new sales tax, why didn't the Minister tax Canadians with very high incomes or introduce a minimum tax for profitable companies? That would be progressive, so why won't the Conservatives buy it?


Geoff Wilson: Mr. Speaker, I have never made any denial of the fact that taxes went up during the time that we were in office over the past four years.


John Edward Broadbent: Down for the rich, Michael; up for the rest.


Michael Holcombe Wilson: Let us put this in proper perspective.

April 25, 1989
Oral Questions


Mr. Shields:: You're shouting like Shirley Carr down there.


John Edward Broadbent: She's right sometimes.


Michael Holcombe Wilson: Revenues went up quite substantially during the last four and a half years, but 80 per cent of the increase in those revenues was because of a healthier economy. There were 1.5 million new jobs created during that period of time.
I want to remind the Hon. Member that when one looks at the increase in revenues and at the number of loopholes, and the changes that we made in the tax system to remove people from the tax system, and I believe it was 850,000 people-


Nelson Andrew Riis: Sixty thousand profitable corporations don't pay any income tax.


Michael Holcombe Wilson: There were 850,000 people who were taken off the tax rolls while we were bringing in tax reform in 1988. That is reform. That is progress. That is why we are looking forward with confidence to the years ahead.


UNILATERAL METHOD OF IMPOSING TAX-GOVERNMENT POSITION
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is directed to the Right Hon. Prime Minister. For some years now, the world unilateral has been anathema to the Prime Minister, who was tended to condemn every unilateral gesture made by previous governments. Considering that today, the Government of Quebec is condemning Ottawa's attitude, how can the Prime Minsiter justify introducing his own tax unilaterally, against the wishes of the Government of Quebec, and in the process take billions of dollars out of the pockets of Quebecers?


Geoff Wilson: Mr. Speaker, we made it quite clear from the release of the White Paper on Tax Reform in June, 1987, that there were three options that we were looking at. One was a national sales tax, and the other two were federal only forms of taxation.
During the course of this time we have had very good meetings with the provinces trying to get a better understanding of what the operations of a national sales tax would be, and whether or not there was a meaningful commitment on the part of the provinces to follow through on this objective.
As I indicated in the House yesterday, there is a different sense of urgency on the part of the provinces relative to the federal Government.
As the Hon. Member's seat-mate would agree, we must change the manufacturers' sales tax and bring in a fairer tax. The provinces have a sales tax system which is not broken. We felt that we had to move ahead, and that was the decision that we took last week.
[ Translation]


JUSTICE OF TAX
Jean-C. Lapierre: Mr. Speaker, if the Minister of Finance failed to convince his provincial colleagues, who know all the ins and outs, that this new national tax is fair and appropriate, how can he possibly expect to convince the general public that this tax is necessary, fair- Does he-


Mr. Clark (Yellowhead):: Ask Raymond Garneau. [Translation]


Jean-C. Lapierre: According to the former leader- In any case, the last two Liberals who agreed with the Minister of Finance on the VAT were defeated, and that is probably what is going to happen to this Government because of a tax that will go down in history as Brian's tax.
Could the Minister of Finance explain how he expects to convince the House and the general public that this tax is fair when he was unable to convince the Finance Ministers, who must be aware of Canada's fiscal situation? I can't believe it!


Geoff Wilson: Mr. Speaker, let me take a minute to remind the Hon. Member why the two finance critics of the Liberal Party in the last House agreed-


Jean-C. Lapierre: But they were defeated. They are not here. They paid highly.


Michael Holcombe Wilson: -that we should be moving from the existing sales tax to a new sales tax. It is a hidden tax. It is applied in a very arbitrary manner. It is a burden on our exports. It puts imports in a more favoured position than Canadian domestic production. For all these reasons it is a drag on our economy and it is costing us jobs.
April 25, 1989

Therefore, the Finance Committee, and the provincial Finance Ministers agreed that we must move to a new form of sales tax and scrap the existing sales tax because it is simply not working.


NEW TAX-EXEMPTION FOR MUNICIPALITIES-MINISTER'S POSITION
Mr. Paul Martin (LaSalle - Emard):: Mr. Speaker, my question is directed to the Minister of Finance. In 1987, the Minister said that the new sales tax would not increase the tax burden on Canadian municipalities. Yesterday, the Minister mentioned a number of exemptions, including hospitals. He forgot to mention municipalities. Could the Minister of Finance confirm today that Canadian municipalities will be exempted from his new sales tax?


Geoff Wilson: Mr. Speaker, the Hon. Member is quite right. We did make a statement. The provincial Finance Ministers and myself agreed on an approach that we would take to the municipal sector as well as the emanations of the provinces, the universities, schools, and hospitals, as the Hon. Member has pointed out.
At this time I would reiterate that the rebates of sales taxes paid on the purchases made by those organizations, including municipalities, ensure that reform of the federal sales tax imposes no greater tax burden than was the case before sales tax reform.


EFFECT OF TAX CHANGE ON MUNICIPALITIES
Paul Edgar Philippe Martin: Mr. Speaker, my supplementary question is the following. This tax will shift part of the federal Government's deficit to the municipalities, that level of government which has the least flexible means of meeting its tax base. It will also cripple the municipalities' efforts to meet those new social demands that are placed on them.
Will the Minister now tell us that all of those agencies in municipalities old age residences, golden age clubs, all the non-governmental organizations which meet the demands of the municipalities, will be exempted from this tax so that hundreds of thousands of Canadians will not have to face increased taxes to meet demands currently being met by them?
Oral Questions


Geoff Wilson: Mr. Speaker, I don't think that the Hon. Member listened to my answer, or possibly he had prepared his question before and didn't change it when he heard my first answer. Let me repeat.
The Government will provide rebates of sales tax paid on purchases to ensure that reform of the federal sales tax imposes no greater tax burden on municipalities than is the case before sales tax reform.


Some Hon. Members:: Hear, hear!


REQUEST FOR INCOME TAX REDUCTION FOR AVERAGE FAMILIES
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, yesterday the Minister of Finance announced one of the biggest tax grabs in Canadian history for ordinary people.


John Edward Broadbent: Shameful!


Lorne Edmund Nystrom: This national sales tax of 9 per cent will mean about a $1,000 tax increase for the average Canadian family.
The Minister made a promise in the election campaign that this tax would be revenue neutral. I have his quotes here and he said that one thing he would do would be to reduce the income tax for average families in this country. I want to know now whether or not he is going to keep his word, live up to his commitment, live up to his campaign promise and reduce income taxes for ordinary Canadians.


Geoff Wilson: Mr. Speaker, only the New Democrats would denounce a tax before they have seen any of the details of it.


John Edward Broadbent: Listen to the question.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, Hear!


Geoff Wilson: Mr. Speaker, I know that the Leader of the New Democratic Party is very anxious.


An Hon. Member:: Which one?


Geoff Wilson: It is hard to tell. But Thursday afternoon we will give him some answers.


Lorne Edmund Nystrom: The Minister of Finance has already announced this to be inflationary as well, Mr. Speaker. He has already made a lot of announcements.


MACDONALD COMMISSION REPORT
Lorne Edmund Nystrom: Mr. Speaker, I want to ask the Minister about tax fairness. The Macdonald Commission said, in 1986, that a shift away from a manufacturers' sales tax or national sales tax

April 25, 1989
Oral Questions
would shift the burden away from provinces with manufacturing to provinces that do not have manufacturing.
In light of the study by the Macdonald Royal Commission, how can the Minister justify the shifting of hundreds of millions of dollars of tax burdens from have provinces to have-not provinces like Saskatchewan, Manitoba, the Maritimes and Newfoundland? How can he justify this tax shift from the richer provinces to the poor people?


Geoff Wilson: Mr. Speaker, there was another Member from Saskatchewan by the name of de Jong who said on May 28, 1987: "I do not have to be convinced that the sales tax regime which now exists is in need of reform. It is, as I mentioned, very arbitrary and confusing."


Some Hon. Members:: Hear, hear!


Geoff Wilson: If the Member from Regina says that the sales tax regime is in need of reform, maybe he should advise the Member from Yorkton-Melville just how he would reform it.


Some Hon. Members:: Hear, hear!


Geoff Wilson: We are putting forward a proposal on Thursday. We have indicated that we have discussed this at some length for the last nearly two years. It will be a specific proposal, and I look forward to some more constructive comments from the Hon. Member.


REVENUE CANADA
Geoff Wilson: Mr. Speaker, my question is for the Minister of National Revenue. It concerns the business investment tax credit and the heavy equipment trade-in over allowance special audit.
As the Minister knows, there are some 600 taxpayers who were reassessed before this audit was curtailed and they have been awaiting the results of a test case.
Since the test case has been abandoned, and given the long delays in this matter, will the Minister consider instructing his officials to reverse these unfortunate reassessments? What is the Minister's intention now that the test case has been abandoned?


Hon. Otto Jelinek (Minister of National Revenue):: That is, of course, a very important question, Mr. Speaker, although I hate to interrupt the Minister of Finance who was on such a great roll. I am sure he will get back on it.


Some Hon. Members:: Hear, hear!


Otto John Jelinek: As the Hon. Member knows, both my predecessor and I have been working with the agricultural community and the appropriate individuals very closely in assisting them to follow the procedures of reassessment. We were hopeful that the test case which came forward would set a precedent for the rest of the cases. Unfortunately, that test case was withdrawn by those involved and they accepted Revenue Canada's decision.
We are now working with the community and looking for a new test case to come forward. The bottom line is that I am in touch with every affected individual in the agricultural community, working with them to try to find a satisfactory solution.


THE ECONOMY
Don Boudria: Mr. Speaker, my question is for the Prime Minister. During the last election campaign the Prime Minister said:
We have dealt with the deficit. Our promises are all within
Michael Wilson's fiscal framework. Every nickel has been accounted
for.
Assuming that the Prime Minister was telling Canadians the truth at that time, could he now explain why his Government is spending taxpayers' money to advertise across the country telling Canadians about the urgency to reduce the deficit?
In other words, why is the Government spending more money to convince itself to spend less money?


Some Hon. Members:: Oh, oh!


Geoff Wilson: Mr. Speaker, I presume from the way the Hon. Member puts the question that he agrees we do have a debt problem and a deficit problem and that it is important for us to get on and deal with them.
The purpose of the advertising is to make sure Canadians understand that and have a full appreciation of the magnitude of the problem. The Hon. Leader of the Opposition wants to get back to what happened in the fall. I thought he was trying to forget that.
April 25, 1989


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


Don Boudria: Through you, Mr. Speaker, I direct a supplementary to the Minister of Finance. I hate to quote the Prime Minister using his own words, because I know how unfair that could be.


GOVERNMENT EXPENDITURES-GOVERNMENT POSITION
Don Boudria: would like to ask the Prime Minister a supplementary question, Mr. Speaker. Over the past 12 months, the Government has spent some $91 million to explain to us the need to cut back. If it were so important to save money today, why did the Conservatives forget all that during the election campaign when they made $19 billion in election promises? And why did the Prime Minister forget all these commitments and all the financial difficulties of the Government during the Lac-Saint-Jean by-election, when $162 million in goodies were given out to get his friend elected to the House of Commons?


Geoff Wilson: Mr. Speaker, there are a range of advertising programs that we have introduced as a Government to advise Canadians of the types of programs available to them. Since we do have these programs it is important that Canadians understand that they are there and understand how they can take advantage of them. Surely it is a responsibility of the Government to do that type of advertising.


EXTERNAL AFFAIRS
Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, my question is for the Secretary of State for External Affairs. A spokesman for the Canada-Lebanese Association has criticized the Canadian Government for not offering sufficient aid to Lebanese refugees fleeing Beirut. There are 10,000 to 15,000 refugees in Cyprus who are forced to stay there while waiting for visas. Surely the Government cannot expect one official to
Oral Questions
process all of the refugees who are applying for visas to Canada.
Will the Government open a full consular office in Cyprus with sufficient immigration officers and support staff?


Charles Joseph Clark: Mr. Speaker, I was interested to note the news report to which the Hon. Member is referring. If the individual who is making those allegations would provide us with names and actual evidence we would be very much interested in having that. We have asked him for that material and to this point it has not been forthcoming.
There are two matters I should report to the House. One is with regard to Cyprus. We are checking on a daily basis, and there is no question that the Canadian officials who are there now are adequate to meet the requirements. If there is a greater requirement we will have officials there in order to ensure that the actual demand is responded to adequately by Canadian officials.
The larger question is how do we try to bring an end to the events in Lebanon which all of us find tragic. This Government is playing an active role. The Prime Minister of Canada has recently been in touch with leaders of the Lebanese community in Canada. He has been in touch with the President of France. We are in touch with other international organizations, including representatives of the Arab League, who, as the Hon. Member will know, are now bringing forward proposals which we all hope might bring some resolution to a regrettable situation in Lebanon.


Some Hon. Members:: Hear, hear!


REQUEST FOR EMERGENCY UNITED NATIONS DEBATE
Jesse Philip Flis: Mr. Speaker, the Minister knows that yesterday over 800 Canadian demonstrators in Montreal demanded that the Government increase staff in Cyprus, and urged the Secretary of State to ask for an emergency debate on this issue in the Security Council.
The Minister made reference to France and the initiatives of the Arab League. He knows that France has already tried and failed to get the superpowers and the European leaders interested in promoting a Lebanese peace process. The Arab League has tried to broker a cease-fire but has not been successful.

April 25, 1989
Oral Questions
Considering that the bombing is getting worse and more lives are being lost by the hour, would the Minister update this House on any meetings of the Security Council on this issue? Would he reconsider his position of last week and call for an emergency debate in the Security Council?


Charles Joseph Clark: As I indicated when the Hon. Member raised this serious question earlier in the House, we keep that matter under regular consideration, and when an occasion arises and it appears to us that a debate in the Security Council might advance the cause of peace and stability in Lebanon, certainly Canada will seek that kind of debate.
He asked for an update on developments. I should give him two. The Government of Canada is giving priority to family and relatives who are already in the system. I believe that that will be of some interest to the persons who were expressing their concern in Montreal and elsewhere.
I can report to him that tomorrow the Committee of Six Ministers established by the Arab League will be presenting its recommendations to the full Council of the Arab League. I think the Hon. Member would agree that that is one avenue that is worth pursuing.
The Government of Canada is encouraging the Arab League, as we continue to encourage the French, the Americans and others, at the highest levels of our Government, to ensure that there is the quickest possible progress made toward achieving some peace in Lebanon.


Some Hon. Members:: Hear, hear!


NUCLEAR ARMAMENTS
William Alexander (Bill) Blaikie: My question is also for the Right Hon. Secretary of State for External Affairs. The Minister will know of the discussions that are going on in Washington today with representatives of the German Government concerning the issue of the modernization of nuclear weapons in Europe.
Given the concern that many Canadians have over this issue and the threat that it poses to that which was accomplished by the INF Treaty if this modernization were to go ahead, and the inadequate response that that would be to things going on in the Soviet Union, I would like to ask whether the Minister is prepared to say today that the Canadian Government has changed what appears to be its position on the modernization of nuclear weapons, and is now prepared to support what appears to be the German position and reject the modernization of nuclear weapons.


Some Hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, the Hon. Member is making reference to discussions that are occurring in Washington now. The Foreign and Defence Ministers of the Federal Republic have been meeting with their counterparts in the United States. I do not think that either of us knows the exact nature of the discussions that were put forward at that time. We have both read news reports, and I expect to be fully briefed on those discussions before I comment upon them in any detail in the House of Commons.
With regard to modernization, it is the position of the Government of Canada that it is important for us to have together modernization and negotiation-


Some Hon. Members:: Oh, oh!


Charles Joseph Clark: The New Democratic Party which made light of the two-track decision which led us to the elimination of INF missiles is now continuing to make light of an approach in the Alliance-


An Hon. Member:: Joke, joke.


Charles Joseph Clark: -building on the kind of solidarity that has proven effective in the past. We believe that that kind of solidarity in the West, that proved effective in the past in eliminating a range of nuclear weapons, can help the West and help the East move together to achieve reductions in over-all levels.


Some Hon. Members:: Hear, hear!


William Alexander (Bill) Blaikie: Mr. Speaker, it is not a question of solidarity within NATO. It is a question of a debate within NATO with a number of countries on either side, and us asking the Canadian Government to take a particular position. I wish the Minister would stop hiding behind solidarity and start doing some thinking on his own for a change.


Some Hon. Members:: Right on!


TEST BAN TREATY
William Alexander (Bill) Blaikie: I would ask the Minister a supplementary question with respect to the nuclear arms race. The Minister will know that a conference has been triggered, thanks to the appropriate number of signatures being gathered at the UN, to reopen the whole matter of a comprehensive test ban treaty, something on which the Government of Canada has also been taking the wrong position. I am asking the
April 25, 1989

Minister today whether his Government is prepared to reconsider the position it has been taking on this and actively promote the arrival at a comprehensive test ban treaty.


Charles Joseph Clark: Mr. Speaker, the Hon. Member knows more than he lets on. He knows that agreeing-


An Hon. Member:: That wouldn't be hard.


Charles Joseph Clark: -that agreeing to that particular proposal with regard to the comprehensive test ban negotiations would not in fact move that process forward. He knows that. He knows it would be another empty gesture. The Hon. Member and his Party seem to believe that it is enough in foreign policy to make empty gestures on the floor of the House of Commons.


An Hon. Member:: Absolutely.


Charles Joseph Clark: That is not enough in foreign policy. What one has to do is try to follow concrete proposals, often in alliance with our allies, that will in fact achieve substantial reduction. The Hon. Member and his Party made light in the past of the two-track decision that led to a reduction in nuclear weapons. We believe-


Mr. Speaker:: The Hon. Member for Cochrane-Superior.


SOFTWOOD LUMBER EXPORT TAX-EFFECT ON NORTHERN ONTARIO
Mr. Reginald Belair (Cochrane -Superior):: Mr. Speaker, my question is directed to the Minister of International Trade. Levesque Lumber, a sawmill situated in northern Ontario, has announced that it will be laying off 350 workers for at least two weeks in order to reassess its financial situation.


An Hon. Member:: That is free trade.


Réginald Bélair: The owner has clearly indicated that the 15 per cent export tax on softwood lumber is a major contributing factor to its financial demise. This is casualty No. 7 in northern Ontario. Seventeen hundred jobs have been lost and there are more to come. What steps has the Minister undertaken in order to start the healing
Oral Questions
of this wound inflicted upon the sawmill workers of northern Ontario and of Canada?


Some Hon. Members:: Hear, hear!


Hon. John C. Crosbie (Minister for International Triade):: I thank the Hon. Member for his question.


An Hon. Member:: How's the beach-ball?


John Carnell Crosbie: You can't be away for a day, Mr. Speaker, but they are looking for you.
It is a coincidence, but the principal owner of Levesque Lumber Limited wrote me, as it happens, in December and he told me that the tax in question, the 15 per cent export charge, was one of about a dozen factors that were giving him difficulties in the sawmill and logging operation business.
The export charge is something we have been turning over to the Government of Ontario. The Government of Ontario has jurisdiction in the area of forestry. There were a number of factors affecting the competitiveness of northern Ontario mills in the U.S. markets, such as timber allocation policies, chip prices, and the market for softwood lumber generally.
So we are very sympathetic naturally to hear this news, but it is totally unfair to blame it on just one factor of probably a dozen affecting the situation.


Réginald Bélair: The Minister indicates that there are a dozen factors affecting this closure. Mr. Levesque is also on the record as saying the surtax is crippling his sawmill and that is the first reason it is closing as of Thursday.


DROP IN SOFTWOOD LUMBER EXPORTS-GOVERNMENT POSITION
Réginald Bélair: Mr. Speaker, I have a supplementary question.
I also hear some Hon. Members from Quebec. It will soon be your turn to ask your Minister the same question.
My supplementary question is the following, Mr. Speaker: Exports of softwood lumber to the United States from the sawmills of northern Ontario have dropped from a peak of 87 per cent in 1986 to 8 per cent in 1988.

April 25, 1989
Privilege-Mr. Kindy
In the context of free trade, which your Government praised so much, does the Minister not find this tax to be illogical, senseless and devastating for the lumber industry?


John Carnell Crosbie: Mr. Speaker, if the concept of free trade had never been thought of, if I had never existed and the honourable gentleman had never existed, the mill in question would have had difficulty and would now be closing down. That is the unfortunate fact. There is no point attempting to blame it on the Free Trade Agreement. There is no connection.
The softwood lumber tax has no connection with the Free Trade Agreement, and the honourable gentlemen opposite have no connection with reality.


PRIVILEGE
Mr. Alex Kindy (Calgary Northeast):: Mr. Speaker, as I rise today, it is not lightheartedly; it is after deep reflection. I rise on a point of privilege.
To start I would like to quote from the House of Commons Office of the Law Clerk and Parliamentary Counsel the definition of privilege. The official definition of privilege is found in Erskine May's Parliamentary Practice:
Parliamentary privilege is the sum of the peculiar rights enjoyed by each House collectively as a constituent part of the High Court of Parliament, and by members of each House individually, without which they could not discharge their functions, and which exceed those possessed by other bodies or individuals. Thus privilege, though part of the law of the land, is to a certain extent an exemption from the ordinaty law.
I will deal specifically with breaches of privilege, the one of obstructing, molesting, or attempting to intimidate a Member in the discharge of his or her duties as it relates directly to me. I quote again from the December, 1988, Parliamentary Privileges Booklet, page 15, line 21:
Direct threats, however, whether oral or written, made to a Member on account of his or her actual or intended parliamentary conduct is a contempt of Parliament.
My complaint relates to threats or intimidation by another Member of this House on April 11, 1989 in the afternoon of that same day, by the Hon. Member for Calgary West (Mr. Hawkes).
I want to put it in chronological order.
On April 5 the first draft of Standing Committees was given to Conservative Members. I had requested and was put on the Committee of Health and Welfare.
On April 11 the Conservative Members of that committee had an organizational meeting, which I attended. In the afternoon of that same day I was approached by my honourable colleague, the Member from Calgary West, and we had what he described as a friendly chat.
During that conversation he made it clear that he was not happy with my voting record in the Thirty-third Parliament and therefore could not trust me as long as I had this independent attitude. He threatened and told me he would take me off the committee unless I gave him a commitment to behave as a good boy, and if I would change my attitude he would reconsider and put me back on the committee and I would again be in his good graces. This friendly chat that took place can be confirmed by other Members.
Another means of intimidation was undertaken through the circulation of lists with names of Members who abstain on votes. The circulation of this list creates caucus peer pressure and in this way becomes a subtle form of intimidation.
I quote again from the December 8 Parliamentary Privileges Booklet. On page 15 it states:
Direct threats, however, whether oral or written, made to a
Member on account of his or her actual or intended parliamentary
conduct, is a contempt of Parliament.
The intimidation was done in two forms: one directly by threatening me to change my voting record, and indirectly it was done by publishing my name in pamphlets that were distributed to other Members.
Mr. Speaker, you are the embodiment of the spirit of parliamentary reform as exemplified by the McGrath Report, because you are the first Speaker of the House of Commons who was elected by Members of this House in a secret ballot, so as to be the servant of this House and its Members, but not to serve the Government or the governing Party of the day. You have the mandate to protect the spirit of parliamentary reform.
I would like to point out that the Prime Minister (Mr. Mulroney), who is also the Hon. Member for Charlevoix, after the McGrath Report was released said that one of the accomplishments he and his Government would be remembered for, and maybe the only accomplishment, would be parliamentary reform. So he certainly believed in this parliamentary reform and was very supportive of the recommendations of the Special Committee on the Reform of the House of Commons presided over by the
April 25, 1989

Hon. James McGrath. I would like to quote this report, chapter 2. It is the confidence convention which is re-examined, particularly page 9 that deals with attitudi-nal change:
Free votes have customarily been allowed on such matters of conscience as capital punishment, but our proposal extends and goes beyond that principle. Implementing this practice would call for a change in attitude on the part of governments.
It would also call for a change of attitude on the part of opposition Parties, which would cease to be able to extract the maximum political advantage from defeat of government measures. They also would need to reciprocate by relaxing discipline of their own supporters.
But if neither government nor opposition Parties could be persuaded to change their attitudes, it would still be open to Private Members to take the initiative by changing theirs. Once elected, Members of Parliament are legally and constitutionally entitled to act independently.
On line 24 the report continues:
Rigid discipline is hardly compatible with the philosophy of a democratic political party, and reasonable latitude consistent with loyalty to the Party should be permitted the individual members of any Party.
I would like to quote again from page 10 on the positive effect of dissent:
The expression of dissent can have positive effects for both the institution of Parliament and its Members. It may have a direct and sometimes observable impact on public policy. As a result of defeated measures, the threat of defeat, or simple dissent not entailing defeat, governments might modify or withdraw certain measures. This opens the way for the House to become more vital and significant in influencing policy than it has been for a long time and a more accurate reflection of Canadian opinion. Private Members should take the lead in impressing this on the leadership of their respective Parties.
One Member taking an independent stand might end up paying a heavy political price, but a sizeable body of Members following the same line could not be ignored. Private Members could exert their own pressures, even cross-Party pressures, but this kind of initiative would require new procedures and new attitudes-Ideally, we would like to see a change of attitude on all sides.
Those quotes, Mr. Speaker, are made in the spirit of putting you in a position to understand why I raise this serious question on a point of privilege.
In that spirit of parliamentary reform, I have served my constituents in the Thirty-third Parliament. As ViceChairman of the Official Languages Committee I voted in the House against Bill C-72, because I felt that it discriminated against unilingual Canadians, and I
Privilege-Mr. Kindy
brought in some amendments to protect unilingual Canadians from being discriminated against.
As a member of the Standing Committee of Justice and the Solicitor General, I voted on many occasions with the opposition Parties, when I felt that it was in the interest of improving a given Bill. When the Meech Lake Accord came before the House, I voted for the amendments and recorded my final vote as an abstention.
On Bill C-71, the War Criminals Act, I did not give unanimous consent because I wanted this Bill to go to committee and be studied clause by clause instead of being rushed through Parliament without being debated properly.
During the election campaign of November, 1988, I made a commitment to my constituents that I would continue to represent them in the spirit of parliamentary reform. I made it clear to the electorate of Calgary Northeast in my literature and at the door that I will oppose any tax reform that will be done on the backs of small business and the consumer.


Some Hon. Members:: Hear, hear!


Alex Kindy: My voting record is indicative of the fact that I believe in parliamentary reform and the independence of a Member of Parliament to be able to represent the views of his constituents, in my case the constituents of Calgary Northeast.
Nothing I have done violates the law or the spirit of the Constitution in our parliamentary system. I have exercised my rights as a freely elected Member. I have spoken and voted according to my conscience in my honest judgment. I have acted within the spirit of parliamentary reform, whole-heartedly supported, as he gave us reason to believe, by the Prime Minister (Mr. Mulroney). As a consequence I have been subjected to improper pressure in an attempt to force me to be a good boy-


Some Hon. Members:: Oh, oh!


Alex Kindy: -in other words, to perform my parliamentary duties as a puppet instead of as a representative of the people who elected me. I believe this to be a serious infringement of my rights as a Member.

April 25, 1989
Privilege-Mr. Kindy
I hereby submit supporting evidence to the table.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: More!


Mr. Speaker:: Order, please. I think I should say to Hon. Members that the Hon. Member for Calgary Northeast (Mr. Kindy) has raised a matter which is obviously of great concern to him. He is rising on a question of privilege. I think that probably in this case it would be appropriate if Hon. Members allowed others to intervene and give them the courtesies that ought to be extended in a matter of this importance.
The Hon. Member for Calgary West.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Boo!


Some Hon. Members:: Hear, hear!


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, it is particularly encouraging to have the Whip of the Official Opposition join in the applause.
It is a very unique experience for members of any Party to be asked to take on the appointment of Party Whip on behalf of one's colleagues in the finest of British parliamentary tradition. This is a role which arose a long time ago on the basis of a perceived need in parliamentarians who have long passed on. It has continued over the ages and continues around the world because there is a role and there is a place.
I think that the role and the place begins on behalf of the institution of Parliament. It is the institution of Parliament which protects us all in a society and protects our democratic traditions and tries to make sure that a Parliament functions as well as it can at any particular time in any particular place on behalf of the citizens of a country.
I have listened with great care to the Hon. Member for Calgary Northeast (Mr. Kindy). Mr. Speaker, when you examine the rules and the precedents you might indeed find that the Hon. Member has a grievance. I think it will be difficult for Your Honour to find that this is indeed a question of privilege.
One of the fundamental traditions of parliamentary procedure and really the basis of privilege is open and free access. When one is chosen by one's electors, one has open and free access to this Chamber and to the proceedings of this Chamber as expressed in committees. We all know and understand that every one of us has the right to attend all committee meetings which take place in the name of Parliament. We all have that right.


Some Hon. Members:: Hear, hear!


Frederick James (Jim) Hawkes: Membership on a committee is controlled in our Parliament by a Striking Committee with members from all Parties represented on that Striking Committee. It is a responsibility of us all. There are seven of us in this Chamber who serve on the Striking Committee. I have the honour to serve as the chairman of the Striking Committee. That was determined by a free and open vote of the committee members. I appreciate their trust in me as a member of the Striking Committee and as its chairman.
Our job in the Striking Committee is to put forward for consideration by all of us, members of all three Parties, names of people to serve as members on standing committees. Indeed, under parliamentary reform that membership is of a different order than it was prior to parliamentary reform. I take great pride in serving in the Party which brought about parliamentary reform.


Some Hon. Members:: Hear, hear!


Frederick James (Jim) Hawkes: Membership today in a standing committee, for those Members who are new to the Chamber, is very different from what it was before. The membership belongs to the Member. Once a year there is an occasion, just after Labour Day, for the Striking Committee to meet to change committee memberships. In between the membership belongs to the Member who was appointed by this House to the committee. This House concurred unanimously in our recent report which set up the membership that now prevails in our standing committees.
The potential for public scrutiny of those assignments is of that order. That is what parliamentary reform said it should be. It said that it should be a striking committee. It said that the report should be public and in the hands of all Members of this Chamber. The Members, all of us, had to concur in that report to set up these committees. There was not a voice raised in dissent, including the voice of the Hon. Member for Calgary Northeast.
What are those new responsibilities? Because the membership resides in the Members, we have an obligation in our Standing Orders for the Member to put forward to the Clerk a list of personal substitutes. Failure to put forward that list automatically ends the membership on the committee. That is because the seat belongs to the Member and the Member has to put forward substitutes.
April 25, 1989

Would any of us in this Chamber want to put forward names of Members who would not accept the obligation of providing their substitute lists, of contacting those substitutes so that they can substitute on occasions when they are absent? The lists are created to represent regional interests, to represent Party interests, and to ensure that standing committees have a screening mechanism on behalf of all of us to examine the very serious issues which face us. Attendance, previous record of attendance and conversations about future attendance are central to the obligation that goes with committee membership. There is a responsibility. We on the Striking Committee have a responsibility to put forward no names for any committees of this Chamber when a Member indicates to us that he is not willing to accept the responsibility of membership which relates to attendance and the substitutes when the Member will not be present.


Some Hon. Members:: Hear, hear!


Frederick James (Jim) Hawkes: It is not my habit or my pattern-and I feel somewhat ill at ease standing in this Chamber today-to make my conversation with Members public in any way, shape or form. I say that because I have many conversations with many Members. However, I cannot let go unchallenged the assertion that it is necessary to be in my good graces. That is simply false. I serve on behalf of this caucus in the position of Whip. I serve on behalf of all Members in this caucus to do what is best for this Parliament and for the people of the country.
As long as I hold this office, it will not be necessary for me to like a member of my caucus, to enjoy their company, to be a friend, but it will be my responsibility to make sure that my suggestions are put forward in good faith in the belief that the Member will fulfil the obligations that go with membership on a committee or any other role. I would like to make it clear that I have published no list. What happens inside my caucus with my caucus members in the finest tradition of this place is secret. It is confidential to the members of my caucus, and I will not talk about the existence of a published list because I have published personally no list-


An Hon. Member:: Hear, hear!
Privilege-Mr. Kindy


Frederick James (Jim) Hawkes: -anywhere, anytime. I have shared information in the best form possible with members of my caucus on many issues, and I will continue to do so in the belief that all members of my caucus have an obligation to keep it secret and will indeed keep it secret.


Some Hon. Members:: Hear, hear!


Frederick James (Jim) Hawkes: To fail to do that is to give in to threats. There lies the denial of the privileges of all of us when one or more people in our society, in this Chamber or outside of this Chamber, threatens any of us in any way possible that would interfere with our capacity to do this job. Stealing in secret in a caucus, and a failure to hold to that principle, is the real threat to the continuance of this Chamber and to our processes that have grown over so many years. Secrecy in caucus must be preserved.
There are many members of this House in all three Parties who have a well-deserved reputation for independent thought and independent action. In most cases, it is well vetted independent thought and independent action. I challenge any Member of this Parliament to conclude that anybody in our caucus has denied access to committee membership or anything else on the basis of past behaviour and being outspoken. We simply have to look at the chairman of the Finance Committee. That proposal came out of the striking committee.
We have other members who took a different conclusion and acted in a different way than I did when the last Parliament faced Bill C-72. If you look around, they have roles, they have responsibilities and they have memberships in this Parliament on the committees. As long as I am Whip for the Party, it is the responsibility, the willingness to be responsible, to do a job that counts, and that is all that will ever count. If that is a barrier of some kind, if that is an infringement on a Member's privileges, then it is not the Parliament and not the place I thought it was.


Some Hon. Members:: Hear, hear!


Jean-Robert Gauthier: Mr. Speaker, I listened carefully to what was said by the Hon. Member for Calgary Northeast (Mr. Kindy) and the Government Whip.
I indicated my support for the Whip, and I think we should understand it is not necessarily the easiest position in the world for a Member of this House. He must not only have the confidence of his Leader but also gain the confidence and support of his fellow Members.

April 25, 1989
Privilege-Mr. Blaikie
I do not believe there are grounds for a question of privilege, Mr. Speaker, but there are certainly grounds for a serious grievance. I must say that we try to deal with our problems in the privacy of caucus, and I think that is where this problem should be dealt with. Perhaps the Conservative Caucus should settle their own problems, but I will be interested to hear your ruling on the question of privilege.


Mr. Murphy:: This does not represent all-Party agreement, Mr. Speaker, but there is a tradition in this House that the Whips are also officers of the House. I believe that if a Member wants to get up and complain about what happens in his caucus, that is properly a procedure of the caucus. It is something that should be done in the Conservative caucus or within the Liberal caucus or within the New Democratic Party caucus.


Mr. Rodriguez:: This does not happen in the Liberal caucus, does it?


Rodney Edward Murphy: Actually my good friend from Nickel Belt who ran against me for Whip at one time-


John R. Rodriguez: I would have made a better one.


Mr. Speaker:: It seems to me that I have more than one dispute to settle.


Rodney Edward Murphy: Well, we certainly are not going to kiss and make up, but I can tell you that the Member for Nickel Belt (Mr. Rodriguez) has been a very constructive and supportive member of our caucus. On the question with regard to the Liberals, I remember before we had parliamentary reform that the Whip of the Liberal Party lost his position as the chair of a committee because he would not go along with the Government of the day.
It is very important that all Members have access to committees, all Members can go to committee as the Conservative Whip indicated. It gives a Member a chance to talk to witnesses. It gives a Member a chance to speak at the various committee meetings. But it is a fact that not all members of a caucus will be a member of a standing committee. One-third of our caucus does not have regular membership on standing committees, but all of them have the opportunity to be alternates for the committees that they wish to serve on.


Mr. Speaker:: I want to thank Hon. Members. I have listened with great interest, and I will consider the position and report back to the House as soon as possible. I have another question of privilege. The Hon. Member for Winnipeg Transcona (Mr. Blaikie).


CHERNOBYL NUCLEAR ACCIDENT-REQUESTS FOR INFORMATION
William Alexander (Bill) Blaikie: Mr. Speaker, I rise on a point of privilege arising from answers given to me by the Minister of Energy, the Hon. Member for Provencher (Mr. Epp) in his former capacity as Minister of Health and Welfare. It is appropriate that I rise today because tomorrow will be the third anniversary of the horrendous nuclear accident at Chernobyl in Ukraine. My point of privilege arises out of answers given to me by the Hon. Minister in this place.


Charles Joseph Clark: When were those questions asked?


William Alexander (Bill) Blaikie: You wait for it.


Charles Joseph Clark: Three years ago?


William Alexander (Bill) Blaikie: In the aftermath of the Chernobyl explosion and fire, many Canadians were justifiably concerned about possible health effects that the fall-out may have had on them. I, as the NDP Environment critic at the time, asked the Hon. Member about what the Canadian Government was doing to measure the fall-out and what was being found. The Hon. Minister was consistently adamant that he was being forthcoming with all information that he had at the time, and that he was not holding anything back. In a response to a question that I put to him on April 27, 1987, a full year after the accident, the Hon. Minister told me, and I quote from page 5234 of Hansard:
I am not witholding any information which has come to me or that
I know is within the Department.
Prior to that on December 11, 1986, the Hon. Minister tabled in the House a document entitled the impact of the Chernobyl nuclear accident in Canada. This was done in response to demands that I had made for more information. But this document did not contain any of the detailed information I and other Canadians were looking for; specifically what sorts of isotopes were being looked for in the fall-out, what had been discovered, where they had been discovered and in what quantities. I raised my dissatisfaction with the Hon. Minister in an adjournment debate on March 12, 1987. At that time he told me, again I quote from page 4135 of Hansard:
April 25, 1989

I wish to convey very directly that there is nothing that we are hiding in terms of information. As I have previously stated, if there is additional information that can be made available, I will make that available.
I have discovered that there was in fact additional information available. It was within the Minister's Department. The Health Physics Journal received a study conducted by two Health and Welfare scientists called "transfer to milk of iodine 131 and caesium 137 released during the Chernobyl reactor accident''. Dated September 30, 1986, it details a search for iodine and caesium in the air, precipitation, grass, and a dairy herd in the Ottawa area. This study has the level of precision and accuracy that I had been searching for and asking the Minister for, and that had not been made available by the Minister. If this study was submitted by two Health and Welfare scientists-


Mr. Speaker:: The Hon. Member is making a case which is based on the fact that, as a consequence of questions put by him and answers made by the former Minister, certain information was given to him and was given to him, as I understand it, with an assurance at that time by the then Minister that all information available was being made available to the Hon. Member.
The Hon. Member now says that he has found out that there was some other information. That is not something that comes to the Speaker as any great surprise in this place. I am having difficulty in seeing just how the Hon. Member can say that this is a matter of privilege. It certainly is a matter which ought very properly to be raised in Question Period, in the "Late Show", or in some other way. But it is difficult for the Chair to see that it is a question of privilege.
There may be a perfectly logical explanation for the fact that more information has come to light or that information was there that the Minister did not know about, but I have difficulty, under these circumstances, in seeing how it is a question of privilege. The Member has been very careful not to allege that the Hon. Minister in any intentional way misled him or the House. I note that.
I will hear the Hon. Member but I want him to take into account my concern as to where the argument is going.
Privilege-Mr. Blaikie


William Alexander (Bill) Blaikie: Mr. Speaker, perhaps I was being too methodical for my own good. That is precisely what I want to allege, that we were being misled. That is the case I was building.
It is not much longer, but that is the case I intend to make.


Mr. Speaker:: I think the Chair had better know what the charge is. A charge of deliberate misleading is a very serious one indeed. The Hon. Member might look very carefully at the letter he properly sent to me. He said: "I was misled", and that may be, but for the Hon. Member to say now that the Hon. Minister deliberately misled him, that is indeed a very serious charge. I am sure the Hon. Member would want to consider very carefully whether he wishes to proceed in that way.
He may in fact have been misled. There is a big difference between being misled and being deliberately misled, because deliberately misled means the Hon. Minister has been acting with dishonest motive. That is a veiy serious accusation.


William Alexander (Bill) Blaikie: Mr. Speaker, I intended to make the case as to why we were misled. I notified the Hon. Member for Provencher (Mr. Epp), who is here, and if I were able to complete my argument and the Hon. Member for Provencher was able to get up and say that he did not know of these studies, then I would not be in any position to accuse him of deliberately misleading the House.
I have not made that accusation, as you noted, but I think, with respect to this issue, I asked the Minister numerous times whether this was all the information that was available. It was not as if this was a one-shot affair. This went on for over a year, in which I tried to get from the Minister certain information with respect to isotopes that may have been detected not only from Chernobyl but from the "Mighty Oak" test at Nevada.
I would have proceeded to say that the Minister said they had detected no fall-out from the "Mighty Oak" test when, in fact, at the same time the Minister was telling me that, there was a study in the hands of his own Department which has since come to my attention which said there was fall-out detected from the "Mighty Oak" test.
If there is not a question of privilege, I want to know what was going on. Why was the Minister giving me answers that were patently false? He was either deliberately misleading the House or he did not know what he was talking about. When it comes to something like that,

April 25, 1989
Privilege-Mr. Blaikie
he should have known what he was talking about. I would like to be able to make the case, cite the studies, and table them. I have them here if you will permit me to do so.


Mr. Speaker:: The Hon. Member is a veteran Member of this place and certainly is highly respected by all his colleagues. I will certainly accept the material he has. I have no quarrel with what the Hon. Member has said so far, as his recitation of the facts go.
I will hear the Hon. Minister, but I think perhaps it might be helpful to me if the Hon. Member did file with me the background material, which I will look at. I think he has made his point. I have his point.
I must also say that I accept, with some gratitude, the fact that the Hon. Member has not strayed too far in making an allegation at this time. I also respect the fact that the Hon. Member has indicated that he would be prepared to listen to what the Hon. Minister has to say. The Hon. Member may complete his remarks and file the material.


William Alexander (Bill) Blaikie: Mr. Speaker, I will file these studies with the Chair. But I also ask if I could not be permitted to tell the story as I see it so the Minister would be responding to the whole story instead of trying to respond to things I have not said yet.


Mr. Speaker:: I might say to the Hon. Member that the difficulty facing the Chair is that this is getting way beyond raising a question of privilege. This is getting into extensive debate. I really feel it is leaving argument and getting into debate.
I would seek the Hon. Member's co-operation. I have his point. If I need some more help I will come back to the Hon. Member. I would like to hear the Minister.


Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, I will be very brief. I thank you for your indulgence in letting me reply to the point made by the Member for Winnipeg-Transcona (Mr. Blaikie), even though it falls in a capacity that I once held and I do not now hold in the House.


Mr. Speaker:: I should make clear to Hon. Members and the public why the Minister, who is no longer in the portfolio he was at the time of the alleged incidents, is responding. This is a question of privilege and the Hon. Minister, of course, has every right to come into the House and respond to the question of privilege that is raised.
Just so that everyone fully understand this, the Hon. Member for Winnipeg-Transcona would not be able in Question Period to put questions to the Minister because the Minister now holds a different portfolio. The Hon. Member for Winnipeg-Transcona fully understands that, but I want Members and the public to understand that.


Arthur Jacob (Jake) Epp: Thank you for making that explanation for me, Mr. Speaker.
I received notification from the Member for Winnipeg-Transcona (Mr. Blaikie), when I came into the House today at approximately 2.10 p.m. that: "I will be raising a point of privilege concerning answers you gave me on Chernobyl". He signed the note.
I can only make one or two points. Shortly after the Chernobyl incident took place I was obligated to go to Geneva to the World Health Conference. I told my officials that I intended to make everything public that we had in respect of the Chernobyl incident.
The reason I raised the Geneva situation is that even from Geneva, where I was for three nights, I believe, I reported to the national press here in Ottawa on any details that I was picking up in Geneva. That was obviously an issue at the World Health Organization in Geneva at the time, events just having happened shortly prior to the convening of the annual meeting of the WHO. As well, I was getting information from Canada with respect to my Department.
The Hon. Member is correct. When I returned, he and I had a number of exchanges, both inside the House and outside the House, about information relating to the effect of Chernobyl on Canada, principally Canada's North and its effect on the food chain in the North relating to the absorption of radioactive materials through lichen, eventually to the caribou and then humans.
Additionally, there was a very close monitoring by the radiation unit of the Department of National Health and Welfare of any other radiation that might be occurring in other parts of Canada. There were geographic divisions of Canada relating to the type of fallout that might be possible, and we were monitoring that on a constant basis. I was receiving a 24-hour report, and if anything untoward was happening, I would receive a report more frequently than that.
April 25, 1989

I said repeatedly to my officials at the Department of National Health and Welfare that the way I was going to handle the Chernobyl incident was to make available to the public, either through the House or through press conferences, every scintilla of information that came to hand in the belief that if information was given to Canadians, they could then make informed decisions. The Government would not use any governmental privilege to hold back any material.
All I can say as a Member of the House is that those were my instructions. To my recollection, everything that came to hand I made public. If there were other studies that have become public or have been drawn to the Hon. Member's notice, I was not aware of them, and that is where I stand as a Member of this House.


Mr. Speaker:: First, I thank the Hon. Minister of Justice (Mr. Lewis), but I do not think I need to hear further argument.
I am not taking the situation lightly. I do not think anyone in the Chamber is. It is a matter of very grave concern to all of us. The Hon. Member for Winnipeg- Transcona has come before the House on a question of privilege and he has raised what he certainly deems to be a grievance. I have to find that it is not a question of privilege but that it is very much a situation which the Hon. Member for Winnipeg-Transcona may properly be able, if he wishes, to pursue further in another way.
The Hon. Member for Winnipeg-Transcona has been very careful, and I have thanked him for that, not to make a charge against the Minister in his former capacity as having deliberately misled. It may well be that given the facts that have been related by the Hon. Member for Winnipeg-Transcona, someone should have been a lot more careful in providing information that the Hon. Member was looking for. I have to accept, of course, the word of the Minister, which is the tradition in this place. That does not mean that someone somewhere might not have been a lot more careful than he or she may well have been, but I will invite the Hon. Member to pursue the matter in another place. He is extremely diligent in doing so and I know he will probably assist us all in finding the answer.
It is not a question of privilege. It certainly is a grievance and the Chair can understand it. I want to thank the Hon. Member for Winnipeg-Transcona for courteously accepting several of my interventions. I know it is not always easy, when one is making an argument, to have the Speaker interject, and I appreci-
Industry, Science and Technology
ate the Hon. Member's courtesy. I think the matter is closed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the Motion of Mr. Mulroney that Bill C-3, an Act to establish the Department of Industry, Science and Technology, to repeal the Department of Regional Industrial Expansion Act and to make consequential amendments to other Acts, be read the second time and referred to a legislative committee; and on the amendment of Mr. Langdon (P-724).
The Acting Speaker (Mrs. Champagne):: When the House rose at one o'clock, the Hon. Member for Okanagan-Similkameen-Merritt (Mr. Whittaker) had just completed his presentation. We will resume debate with the Hon. Member for Kamouraska-Riviere-du-Loup (Mr. Plourde).


Mr. Andre Plourde (Kamouraska-Riviere-du-Loup):: Madam Speaker, I welcome this opportunity today to draw the attention of Hon. Members to one of the most ambitious projects of the Government of Canada, the national policy on entrepreneurship. It is ambitious because it required a series of consultations that were almost unprecedented in this country.
We are not talking about a policy designed to camouflage reality and with practically no long-term benefits. It is not an opportunity for politicians to enhance their public image and dazzle the public with a shower of millions of dollars in grants.
There is quite a difference, Madam Speaker, between the usual financial assistance given by the Government to sectors where such assistance can be justified and adopting a genuine policy with guidelines that may influence the course of events for years to come.
In this particular case, I defy anyone to say that this is an exercise in deceit. The national entrepreneurship policy is the result of intense consultation for more than two years with every possible party with a concern in this area, all of whom were able to make their priorities known to federal officials.

April 25, 1989
Industry, Science and Technology
We systematically reviewed all our small business assistance programs to determine their relevance and to make any changes suggested by those on the receiving end. The decision to carry out this review was not made on the spur of the moment. We felt that the sweeping changes taking place in our economic and social climate made it incumbent upon us to get involved. There is so much going on in this world of ours that we cannot afford to leave Canada's small business people to their own devices, and we must not forget, Madam Speaker, that the Government appreciates the decisive role played by small businesses across this country. Small businesses are the principal generators of employment, and they are started by people with a great sense of innovation and drive, the real go-getters.
Experience has shown time and time again that small businesses have the peculiar ability to adapt quickly to change. The reason is that in small businesses, the decision-making process is often simplified. Small businesses learned years ago to adjust to changing circumstances and to get their share of the pie through sheer tenacity. Small businesses may be well managed and well motivated, however, but that does not make them any less vulnerable when confronted with the tremendous technological upheaval that has taken place during the last decade and is expected to accelerate as we near the year 2000.
Madam Speaker, we not only have a duty to preserve existing small businesses, we must prepare for the next generation, since the Canadian economy is largely dependent on this type of enterprise.
Entrepreneurship is a dynamic mechanism that makes it possible for companies to renew themselves. It is not the prerogative of a small group. In fact, it should be possible for every business.
Aware of changing circumstances that demanded new solutions, the Government decided to make entrepreneurship one of the linch-pins of the Department of Industry, Science and Technology.
I wish to recall this policy statement here, because from it flow all the measures taken by us and by our partners to enable small businesses to grow and to create a vast pool of entrepreneurs.
The policy of the federal Government thus involves mobilizing entrepreneurship for the purposes of the economic, social and cultural development of all regions of the country, with the participation of the private sector, provincial and territorial governments and the academic community.
This definition well summarizes the Government's deep and irreversible commitment to those who contribute day after day to building a strong Canadian economy.
The Government takes seriously the hopes, concerns and plans of Canada's entrepreneurs and the purpose of the new policy we have adopted is therefore to promote and encourage entrepreneurship while eliminating obstacles to the creation of businesses.
Among other things, this means that we wish to sensitize all kinds of potential entrepreneurs and not only those who were called "family heads" in the past. The target group of potential entrepreneurs has grown considerably in recent years.
I do not have to stress, Madam Speaker, the most spectacular rise of women in the business world. Examples of successful women have become so numerous and commonplace that very few people now pay much attention to it, except perhaps in some professions traditionally considered male bastions.
We have other target groups that previous Governments did not always deal with properly. For example, I want to talk about the young people who aspire very early to economic independence, native people, seniors, the elderly and new Canadians.
If our social climate provides enough encouragement to entrepreneurship, we will see a flowering of "entrepreneurial culture".
We have agreed to adopt many initiatives. I shall mention only a few, Madam Speaker.
First, the creation of a national entrepreneurship development institute is one of our top priorities. This institute will be a focal point for research, information and creative ideas on entrepreneurship. All those interested will have easy access to it, whether they are in business or teaching.
The national institute that we will establish is not meant to take the place of the educational programs offered throughout the country. Its role will rather be complementary; it will expand on and modernize the very concept of entrepreneurship and make it more attractive.
April 25, 1989

Unlike the United States, very few Canadian educational institutions emphasize the entrepreneurial spirit. As a result, students attach little importance to self-employment and business creation in choosing their career.
It is not surprising that in such a context, Madam Speaker, many professions are subject to strict quotas and it is increasingly difficult for students to have a university education in many so-called classical disciplines.
We must therefore keep a critical eye on all obstacles to entrepreneurship and consider fiscal measures to stimulate the entrepreneurial spirit. Among the obstacles most often mentioned is the flood of federal paperwork that has caused many nightmares for small corporations that have neither the time nor the resources to handle it. Too much paperwork is also damaging to the perception of the Government too many people still have, namely that governments hurt more often than help those who call upon them.
In this regard, the federal Government adopted a plan of action in May 1987 to reduce paperwork, resulting in the creation of an advisory committee on the subject. Through that committee, small businesses can propose ways to gradually reduce forms, statistical research and other forms of red tape.
Parliament will now receive an annual report on the status of small business in Canada, which will give all those concerned the information they need to take stock and plan for their future.
The Government also favors promoting regional development by emphasizing regional decision making so that small businesses will have more say in the matter and be able to influence the development of programs affecting them.
We also have the firm intention of promoting entrepreneurship in the public opinion, which is one way to reach non-traditional groups of entrepreneurs I talked about earlier.
Madam Speaker, with advertising campaigns and the establishment of prestigious forums to spread our message, we will show Canadians the benefits of owning a business.
Industry, Science and Technology
Certainly, the Department of Industry, Science and Technology will continue to give its Canada Awards for Business Excellence, which bring to the general public's attention the exceptional accomplishments of big and small entrepreneurs. We have noticed that these awards are increasingly coveted, and the growing number of competing companies confirms their validity.
With respect to another issue, I would be remiss if I did not stress that a new national entrepreneurship policy would never have seen the light of day had it not been for the favourable federal-provincial climate of co-operation. As it happens, the various levels of government meet regularly and, generally speaking, their exchanges take place harmoniously, a far cry from the pre-1984 power struggles. There can be no doubt that the stabilization of relations with our partners is the major factor behind the implementation-in relatively short time-of a multi-faceted entrepreneurship policy.
Madam Speaker, I would remind you that thanks to a program developed with the co-operation of Supply and Services Canada, small businesses can more easily bid on public contracts. In addition, the program designed to promote sub-contracting makes allowance for the establishment of new positions for small business ombudsmen within the Supply and Services Canada purchasing system.
In my estimation this goes to show that the Government of Canada did not limit the scope of its entrepreneurship policy to the department directly involved. On the contrary, we step in whenever we can foster the spirit of entrepreneurship, even at the risk of playing havoc with certain programs sponsored by other departments.
And so it will be at every stage of implementation of the entrepreneuship policy. The active participation of all kinds of agencies will become ever more necessary, and they will co-operate even more closely regardless of the progress which may or may not have been accomplished thus far. The innovation spirit of our policy will enable us to extend throughout the country the scope of successful endeavours adapted to other levels.
Such is the case, among others, of the Canada investment opportunity network which proved to be quite effective in Ontario and which is being extended to the rest of the country.

April 25, 1989
Industry, Science and Technology
Operated with the participation of various chambers of commerce, it brings together people who have challenging ideas and others who are looking for promising investment opportunities. Combining new ideas and capital investment will give renewed vigour to the creation of new businesses, and that can only benefit all Canadians.
I must simply say a few words about the small business and entrepreneurship office whose mission is to support the Minister of State for Small Businesses and Tourism (Mr. Hockin) in Cabinet. The office is responsible for formulating and evaluating policies that are relevant to small business and to national programs for this sector.
Here we have an agency with very concrete terms of reference, since it has the authority to order studies, to carry out analyses and to make recommendations for scrutiny by the Minister or Cabinet. The entrepreneurship and small business office embodies and consolidates the Government's principal instruments for supporting small businesses.
Madam Speaker, some Hon. Members may still wonder why we are putting so much energy into defending and promoting small businesses. My answer is that 98.8 per cent of Canadian businesses are small businesses. If we don't take care of them, we are headed for an economic impasse.
The term small business designates companies that employ fewer than 100 employees in the manufacturing sector and fewer than 50 in the services sector. The total number of small businesses across the country is 812,000, while the total number of companies registered in Canada is 822,000.
They are found in all industrial sectors, and in fact they are the majority. In the primary industries, small businesses represent 99.9 per cent of all companies: transportation, communications, mining and manufacturing, construction, finance, and so forth, and it is accurate to say that small businesses still represent over 98 per cent of the total number of companies.
In the past we have often said, with the figures to prove it, that small businesses were the best job creators.
However, small business' contribution to research and development is often overlooked. Our studies in this respect prove there is no doubt about that. The percentage of spending on research and development is higher among businesses with fewer than 50 employees. In fact,
we found that the smaller the enterprise, the greater the relative share spent on research and development.
We concluded that because of their energy and drive, small businesses were far better able than we expected to adapt to technological change.
This is good news for free trade, whose initial consequence will be to stimulate the growth of small businesses eager to enter the North American market. This means that our exportable small businesses will have to follow the technological change that will prevail in the United States, especially in the so-called vulnerable sectors.
The Government is not overly concerned by that indirect effect of free trade, because our small businesses have shown long ago that they can adjust faster than big companies to market fluctuations and technological changes.
Certainly, Madam Speaker, our small businesses will have to change, by specializing and offering unique services, for example. They must also improve productivity and aim for excellence at all times.
As we said before, the Free Trade Agreement is not a seven-headed ogre waiting to devour the weakest in the coming months. Custom duties are being eliminated over a ten-year period and protective mechanisms have been put in place so that less competitive sectors will have time to adjust to the new trade environment.
In addition, the Department of Industry, Science and Technology will propose new programs to give small business better access to new technologies. They will therefore have time to improve their productivity and competitiveness as free trade is being gradually implemented.
Madam Speaker, Canadians have been informed, I am sure, of the main recommandations made by the Adjustment Committee in what the media dubbed the "de Grandpre Report".
It is not my responsibility to elaborate on its detailed contents but I want to bring to your attention the excellent grade the commissioners gave the Canadian Government for its series of measures already in place to make adjustment easier.
In fact, there are more than 400 programs to help employers and employees flexibly join a labour market where technological change is an everyday reality. Many of these training and adjustment programs are sponsored by Employment and Immigration Canada. Madam Speaker, it is not an exaggeration to say that the Government correctly foresaw the major world trends that would affect our country's labour force.
April 25, 1989

Since 1984, "adjustment" is part of the vocabulary of our elected officials and has guided their most important policies. In large part, this explains why the de Grandpre Report did not recommend a thorough overhaul of our programs.
One minute more. Madam Speaker, and I am through. The Government foresaw the arrival of a one-way technological wave. We had to follow along because the survival of the Canadian economy depended on it. Gradually, we made some changes like reforming the Department of Regional Economic Expansion to be in step with the new world economic realities.
Today, Madam Speaker, we have resources and policies that let us look ahead with optimism. Everything is already in place. We just hope that all Canadians, men and women, will follow along and support us in reaching our economic destiny which is so promising.


Mr. Harb:: Madam Speaker, first, I would like to congratulate the Hon. Member for his speech. He is certainly aware of what is happening in this field. He is certainly very interested in this subject.
I have in my hand a report published by the Canadian Chamber of Commerce which contains several recommendations that a task force made for industries and to inform politicians on the federal level.

I will just quote a couple of paragraphs from this report. First, it talks about bureaucratic objectives rather than market impulses which have prevailed in Canadian science and technology policy. Further it reads:
Without a private sector agenda and forum for discussion, the government programs that have emerged do not necessarily stimulate entrepreneurial initiative. In most cases they provide funds for technology development and innovation -
It goes on to the point where the task force suggests the following:
It is the opinion of the task force that despite the proliferation of activities during the past year in the area of technology policy, business has lost ground in defining the agenda.
Industry, Science and Technology
The Government has done quite a bit over past few years in setting up the National Advisory Board on Science and Technology, chaired by the Prime Minister (Mr. Mulroney); in setting up InovAction-the Canadian Strategy for Science and Technology; in setting up the federal-provincial science and technology subagreements; in setting up the industry led advisory boards which were established by the National Research Council and so on; and in setting up the Standing Committee on Research, Science and Technology.
Those are all very commendable initiatives. Unfortunately, in the area of research and development, when we compare Canada with the rest of the industrialized world, we are falling way behind with the amount of financial support from the private sector and the number of scientists per million that we have.
While industry over and over again, both in the private and in the public sector, is suggesting that rather than throwing money at the problem the role of the Government should be to provide tax incentives and to act as a facilitator to the industry. Therefore, it is entrusted in seeing more focus on the area of development rather than on pure science and research. Pure science does not lead to anything unless it is put into application.
Does the Hon. Member see the Government moving in the right direction in putting more funds into setting up an agency, or does he see it working better with the private sector, and also the other partners in the provinces?


André Plourde: Madam Speaker, as the Hon. Member for Ottawa-Centre (Mr. Harb) just said, I think my speech more or less reflects the 28 years I spent in the private sector and in manufacturing. When we consider an issue as general as basic research or technology, we must consider what part of the country we are talking about. We know for instance that Ontario, the province where the Hon. Member's riding is located, receives the lion's share of federal funding for research and development. Our counterparts in Quebec have complained that the federal Government does not invest enough money in research and development, and I must say. Madam Speaker, that I am enclined to believe what the Government of Quebec has told us in this respect. These are things that might be changed in the weeks to come.

April 25, 1989
Industry, Science and Technology
I also wanted to say that I am from a riding Kamouras-ka-Riviere-du-Loup that qualifies as a remote area. We have no businesses with 2,000, 3,000 or 4,000 employees in Eastern Quebec. We have small businesses. As a person who has been exposed to and has promoted this kind of business in the past, I can say that research and development was done by the businesses themselves.
I have nothing against what they teach in universities. In the speeches I heard this morning, there was great emphasis on putting a lot of money into the universities for research and development. I agree, but money should also go to industry.
In concluding, Madam Speaker, I would like to give you an example. In 1984, when I was the elected representative for Kamouraska-Riviere-du-Loup, I decided we should do something about the peat lands. As you know, the area is very rich in peat. Before, people used to bag peat moss and export it to the United States for use in horticulture. However, since 1984, we now have a peat research centre that belongs to Tourbiere Premier and is going to expand within the next few months. We also have a research centre that was developed at the Riviere-du-Loup Cegep, also for peat. Since 1984, Riviere-du-Loup no longer has any doubts about the peat market, because through the research and development done with industry and with the help of the public sector and the Cegep we have no universities in our area we managed to develop a market that has now become quite substantial.


The Acting Speaker (Mrs. Champagne):: The Hon. Member for Nepean (Mrs. Gaffney).


Mrs. Beryl Gaffney (Nepean):: It gives me a great deal of pleasure to address the House this afternoon on Bill C-3. In the Government's repeal of the Department of Regional and Industrial Expansion Act, the federal Government's creation of the Department of Industry, Science and Technology may appear to be constructive enough. Its aims, some of which include the development, implementation and promotion of national policies to foster international competitiveness of industry, enhancement of industrial, scientific and technological development and so on, as outlined in Part I of Bill C-3, might also appear to be attractive.
The object is obviously an attempt to elevate science to full department status. The question remains as to whether the Government's restructuring is merely cosmetic. Staff morale continues to be low, and at the committee level there is not much hope for any positive change in the Government's commitment to science and technology.
The Government's track record in the area of science and technology, and research and development has been for the past four years, to say the least, dismal.
Let us look at the Government's actual performance in this area. Research and development is the essential impetus for technological development, the foundation of today's high technology companies. As the high tech capital of Canada, therefore research and development is particularly important to my Nepean riding which represents more than 100 high tech companies. Nepean is the home of Canada's largest research and development organization, Bell Northern Research.
This company has pioneered fully digital telecommunications technology, and employs 4,200 people locally. Northern Telecom, also in Nepean, of which BNR is a subsidiary, is Canada's largest telecommunication equipment supplier, specializing in voice and data communications, and employs 1,400 people locally. CDC, Computing Devices of Canada, employs 1,300 people in Nepean. They produce advanced electronic systems for military and commercial use world-wide. Gandalf, which specializes in information networking systems such as modems, multiplexes, data switches and large network processes, employs 650 people in Nepean. These are only four of over 100 companies working in the technological field, our largest employers that were developed in full co-operation and assistance from government, not in spite of them.
Beyond Nepean's boundaries in our sister cities are high tech companies of international status, such as the Mitel Corporation, Digital, Cognos, Lumonics and Sys-temhouse, just to name a few. Practically all of these companies started out in someone's garage or basement. Most were on the receiving end of research and development grants from the then Liberal federal Government. Young companies today need the same infusion of money through research and development, or start-up grants, as their counterparts did, if they are to survive in an international market. It is an international competitiveness, as the Canadian market is not sufficient to sustain the high tech industry.
April 25, 1989

Ottawa Carleton Regional Government, along with Carleton University, Ottawa University, Algonquin College and leaders in the high tech community have created an organization called the Ottawa Carleton Research Institute. The institute monitors what is happening in the high tech field. The industry works with the universities to ensure that our students are being trained in the latest technology.
On December 1, 1988, the Province of Ontario formed TRIO, the Telecommunications Research Institute of Ontario. Its new president comes from Bell Northern Research. Its role is to understand university-driven technology. Coupling the institute with industry will give businesses the opportunity to better position themselves vis-a-vis technology. However, the Government has proceeded to cut back in different areas in Environment Canada at a time when Canadians are more concerned with the environment than ever before in history. The Government has cut back on energy research, completely wiping out the energy department at the National Research Council when it should be cutting back on Canada's reliance on fossil fuels and developing environmentally cleaner energy sources.
A program also being worked on by Energy, Mines and Resources when major cut-backs happened at EMR caused the cancellation of this research. With the lessons of the softwood lumber a recent and bitter memory, and the needs of the forest industry and what the forest industry does for Canada as outlined in "Wood Leader'', it is important that Canada increase the yields from its forests by increasing the effort and money put into research and development.
The Government has cut back at Atomic Energy of Canada Ltd. when it should be looking at the exciting opportunities presented by the recent developments in fusion technology.
The Government has cut back in every area of basic research. Those areas particularly hard hit by cuts to government point to short-term gain for long-term pain.
In addition, the Government has allowed important issues to be governed by politics rather than what is best for the industry concerned, and I might cite a few examples. The CF-18 contract was taken away from Manitoba. The space agency was moved from the Na-
Industry, Science and Technology
tional Capital Region in spite of repeated briefs from the industry that it was in the nation's best interest to locate in the nation's capital. Canada now has the exclusive role of being the only country in the world where the administering body to the space industry is located outside its capital.
The fact is that research and development has suffered badly under the present Government.
Total expenditure on research and development as a percentage of the Gross Domestic Product has decreased from an all-time high of almost 1.4 per cent during the Liberal administration four years ago to a low of 1.35 per cent during the past four years. This Government must be committed to increasing R and D expenditures to at least 2.5 per cent of the Gross Domestic Product in line with that of other major industrial nations in the world.
Canada presently ranks last among the G-7 nations. As well, research and development expenditures were roughly half those of other nations in the world.
The Government has consistently spoken the praises of R and D on the one hand while decimating Canada's effort on the other, from the well publicized cuts to the National Research Council of over $100 million to the reduction of the R and D tax credit to 75 per cent.
In my riding Northern Telecom Electronics cut 60 jobs at its Nepean plant, and several other firms have also laid off many employees.
High interest rates threaten the viability of other high-tech companies, and in terms of government investment Nepean has lost millions of dollars of research and development related activity over the past four years.
The $90 million animal virus laboratory slated for Nepean was initially cancelled and is now moved elsewhere. Government cuts to research and development tax incentives have cost companies like BNR and Gan-dalf millions.
In terms of the Department of Industry, Science and Technology, another warning sign to note is the fact that the 34-member National Advisory Committee on Science and Technology, chaired by the Prime Minister (Mr. Mulroney) and touted as a signal of his commitment, has not met since last summer.

April 25, 1989
Industry, Science and Technology
The Liberal position in the area of science and technology and research and development is clear. We condemn the Government for breaking its promise to double Canada's R and D effort to 2.5 per cent of the GNP and for the measures announced since September, 1984, which are undermining R and D, long-term economic growth, and the competitiveness of Canadian business in world markets.
We condemn the Conservative approach to R and D funding in Canada as inefficient and damaging to Canadian industries, particularly to small business, which brings me back to my original point.
Is the federal Government's action in its creation of this new Department merely cosmetic? Is the Government addressing the real issue? How does the Government answer to the research and development cut-backs it has implemented? How does the Government plan to deal effectively with the issues of decentralization and regional development?
The federal Government's credibility, in its consistency on science and technology research and development policy, is at stake. In the creation of the Department of Industry, Science and Technology, in conjunction with its actual track record in this area, the Government has given and taken with the same hand.
The cut-backs at the National Research Council should be rescinded and the commitment to provide funding for basic research should be reaffirmed, and the base budget of granting councils must be increased above inflation, along with university research. The Government must look for imaginative ways of increasing the technology transfer to industry and assisting industry in the critical early stages of the start of a high-tech company.


The Acting Speaker (Mrs. Champagne):: Questions and comments? The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria).


Don Boudria: Madam Speaker, I want to start off by congratulating my colleague, the Hon. Member for Nepean (Mrs. Gaffney). I am sure that I speak on behalf of all of us when I say that Members of Parliament, particularly those from eastern Ontario, are very proud to have elected such a fine Member.
My question is particularly on eastern Ontario. Given that our colleague who just spoke has been a long-time resident of eastern Ontario, and as a matter of fact
chaired with great distinction our municipal council here in Nepean, undoubtedly as someone who sat in the municipal office and who knows the area so well she will probably be aware that in eastern Ontario under previous Governments there used to be a consideration of the fact that largely rural eastern Ontario is disadvantaged vis-a-vis the rest of the province.
In other words there were programs in the past, because there was more than one, that recognized the fact that rural Ontario by and large was not doing as well economically as some of the adjacent urban areas, particularly Ottawa and Toronto and southwestern Ontario. In order to assist the rural parts of eastern Ontario previous Governments had regional development programs like we have in the Atlantic, like we have in western Canada, and there was a recognition that, in Ontario, northern Ontario and eastern Ontario needed special incentives to attract industry to these areas.
I wonder if she noted in the last Throne Speech, as I did, there was a mention of northern Ontario, which is fine and of which I approve. However, eastern Ontario was omitted completely from any consideration in terms of being mentioned as an area that needed further economic development. I want to bring that to the attention of my colleague and ask if she has noted that, as I did, particularly in light of comments made by a certain Member from the Mississauga area shortly after the last election to the effect that eastern Ontario was not going to be rewarded for having chosen to elect 12 out of 14 Members who are of a political persuasion different from that of the present Government.
I ask my colleague if she would agree with me that eastern Ontario certainly deserves all the consideration that it traditionally received from all Governments, be they Liberal or Conservative, and if she agrees with me as well that rural eastern Ontario is still disadvantaged economically and requires special attention from this new Ministry which we are talking of establishing so that we can attract industry into eastern Ontario and get our fair share of the economic pie.


Beryl Gaffney: I thank the Hon. Member for his question. I think all of us from eastern Ontario veiy much noticed the absence of any initiatives taken in eastern Ontario. A lot of people think of eastern Ontario as the Ottawa-Carleton area. Eastern Ontario runs all the way from the Hon. Member for Pembroke's riding, the Renfrew area, all the way through to the St.
April 25, 1989

Lawrence River, Hawkesbury, Cornwall, and it is not just this particular area right here where the nation's capital is situated. My riding is part of this Ottawa-Carleton area, and I sometimes think that we are probably better equipped to survive or initiate development than our friends in the far rural areas further away from the nation's capital than we are. Maybe we became winners in this area under a Government that was conducive to development in this area and that recognized that this was an area that was prime for development.
The municipalities bordering the City of Ottawa had the initiative, the foresight and the planning principles in place to enable them to move ahead. As a member of the very innovative council in my municipality, we were able to entice industry into our community. However, our rural neighbours do not have the financial resources to do that. They have to rely on Government more than we do in an urban setting.
Members of my caucus and I, as well as other members of the national caucus, were disappointed to see that there was not a greater emphasis placed on development in the rural municipalities of eastern Ontario. That was a grave oversight on the part of the Government. It is not too late for the Government to rectify that. I encourage my colleagues across the way to take note of rural Ontario.


Mr. Brian Gardiner (Prince George-Bulkley Valley):: Madam Speaker, I am pleased to rise this afternoon to speak on Bill C-3, an Act to establish the Department of Industry, Science and Technology, to repeal the Department of Regional Industrial Expansion Act and to make consequential amendments to other Acts.
In the debate today Members on this side of the House, and I hope Members opposite, will have an opportunity to bring out some of the concerns we have with respect to economic development in Canada, which is the subject matter of the motion we are debating this afternoon. To give a brief description of this legislation, it is to establish in law-to create-the Department of Industry, Science and Technology which will replace the Department of Regional Industrial Expansion, which has had most of its functions replaced by the Atlantic Opportunities Agency and the Western Diversification Office. As the previous speaker said, these two entities will be meshed together in an attempt to have industrial policy in science and technology within the same Department.
Industry, Science and Technology
It is creditable that the Government should undertake such a measure. As the debate goes on, it will be carried by our critics who are stick-handling this particular discussion from our side of the House. I refer to the Hon. Member for Windsor-Lake St. Clair (Mr. McCurdy) and the Hon. Member for Essex-Windsor (Mr. Langdon) who will be discussing the Bill further as it proceeds through the House.
We are debating today a motion moved by the Hon. Member for Essex-Windsor. I would like to read it since it points out the importance that Members on this side of the House place on the debate we have leading up to the Budget on Thursday in terms of our economic development. The motion states:
"this House declines to give second reading to Bill C-3 because it fails to clearly define federal Government responsibility for regional development and specifically fails to reflect the requirement under s. 36(l)(b) of the Constitution Act, 1982 that Parliament is committed to "furthering economic development to reduce disparity in opportunities"."
The concern now is with respect to what we will see in the Budget on Thursday night. In my discussion I would like to focus on what my research has turned up in terms of the vehicles for that economic development which I suggest will be threatened on Thursday night by the Minister of Finance (Mr. Wilson) as well as what may be suggested in the future.
I want to focus on what is a critical development tool in my Province of British Columbia. I think the same applies to other provinces as well. I refer to the forestry agreements which come under the umbrella of economic agreements which the Government currently has up for review. It is revealing that at this point in time there are economic agreements in limbo with some six provinces. In fact, official negotiations have not even started in those agreements. Particularly revealing is the importance that this has to all Members in those areas, be it with respect to tourism, mining or forestiy. It is shocking to see that we have reached such a stage in economic development in Canada.
In British Columbia prior to the election we talked about the silent 19 Tories who had nothing to say about B.C. Their number has been reduced. They are now invisible. They are now the invisible 12. We will have to send out a search and rescue team quickly to find those Tories from B.C. They are not representing the interests of their constituents in this House, especially when the Minister of Finance will start to dismantle economic agreements and forestry agreements on Thursday night.

April 25, 1989
Industry, Science and Technology
These economic agreements are vehicles by which different levels of Government can participate in economic development in a particular area. In British Columbia there is a forestry resource development agreement. We have a science and technology subagreement. We also have an agriculture subagreement, as well as agreements in mining and other areas. There has been a great deal of debate about what the Government will do with economic development in the Budget. There has been written notice given to the House that something is afoot in terms of how these agreements will be rewritten. I refer to a letter sent to me on April 18 by the Minister of State for Forestry (Mr. Oberle) who stated: "A full year remains in the present agreement and formal negotiations for new agreements cannot be undertaken until such time as a new economic regional development agreement policy framework has been approved by Cabinet". What is that new economic regional development agreement policy framework that is being discussed?
The Budget on Thursday will be more than a Budget of numbers. It will create a furore in the country, a furore such as Members opposite claimed was created by the National Energy Program which was introduced by the Liberals when they were in office. It is extremely important that all Members pay careful attention to the debate that follows the Budget.
We also know from comments made by the Minister of Regional Industrial Expansion (Mr. Andre) that the Government will try to change the agreements because it is not getting the credit that it wishes. I have a clipping in my hand from The Ottawa Citizen in which the Minister is quoted as having said: "Candidly, some of our members are ticked off".
Do you know what the debate comes down to. Madam Speaker? It comes down to who gets the biggest four-byeight on a project site. It is the Government's own fault if it cannot turn its incredible and massive public relations operation to obtaining a nicely painted four-byeight on a site for which it feels it should get credit. It is ludicrous to think that for some PR we will see a complete rewriting of economic development agreements. That is the level to which the debate has sunk when we talk about economic agreements in the country.
I would like to comment briefly on one particular subagreement which is critical to a great many smaller communities, such as the ones in my riding. I refer to tourism. There is a sense in my province that when it comes to assistance from the federal or provincial Government for tourist development projects or destination points, that if one is not a Whistler or a site like it then it is difficult to get the ear of the Government. If one has a development like Whistler and one needs $6 million, the Government's response is: "The cheque will be ready on Friday. Is that too late?" As most Hon. Members know there is a host of smaller tourist facilities throughout my province, as well as throughout many other areas of the country, which need some help with landscaping, sewer or electrical access and that type of thing.
If there is not a complete emasculation of the economic development agreements this Thursday night, then those types of discussions can take place, at least in British Columbia where we have an economic agreement in place, unless something happens to it. It is regrettable that the economic agreements which are currently in place are in limbo in six provinces. There are six provinces in the country which have economic agreements between the Government and their respective provincial governments that have lapsed. No official negotiations have taken place with respect to them. It is incredible that such a thing would happen and we all wonder what is going to happen after Thursday night. The importance of tourism to the provinces is to ensure that the money gets out of, in our case in British Columbia, the lower mainland, that the interior, Kamloops, the Shuswap area and North Peace, has the opportunity to access some of those funds.
I know the Member from Okanagan-Shuswap (Mr. MacWilliam), the tourism critic for our Party, raised this matter last week in the House in the debate on this motion. He put very clearly how important those opportunities are for a lot of the small tourist operators, many of them run by volunteer organizations that struggle from grant to grant, from employment program to employment program, and put in many hours of volunteer work to ensure that their particular sites are well taken care of and ready for the tourists that come and visit their area.
April 25, 1989

The economic agreements, I suggest to you, are the nature and reason for our motion. To express our concerns about what has happened to date with those economic agreements is all the more pointed out by a letter of April 12 from the Canadian Forestry Association to the Prime Minister (Mr. Mulroney) expressing concern about the renewal of those forestry agreements. The Forestry Association is making that their number one priority, because of the concern in our provinces regarding forest regeneration, the silvicultural work that has to be done in each of these areas.
On this side of the House we think that on Thursday night the Budget is going to be about more than just numbers. The correspondence that I have received from the Minister indicates there is going to be a wholesale change in the way the economic agreements currently exist between the federal Government and the provinces. It is a wholesale change that we will want to watch closely to ensure that in western Canada, at least, the right that we have in terms of the re-investment of tax dollars into our region is taken care of. We want to make sure that is done effectively.
Earlier in this session I put a question to the Minister of State for Forestry (Mr. Oberle) that he would give this House his assurance that it would be his Department and his Department alone that would administer the federal-provincial forestry agreements. We did not get that commitment.
I am concerned that what is going to come out of the Budget on Thursday night is going to be a funnelling, if you like, of the complete administrative control to the various agencies like the Western Diversification Fund and the Atlantic Opportunities Agency. Those are the agencies that are going to become the new channels for federal power in this country. I have some concerns about that.
In our province we have a Premier in Victoria who has created states throughout our province. Granted, in one or two places it is working. In others, it has created a whole new level of government that the various agencies have to go through. What we are seeing there and what we are going to see here is the "Zamming" of Canada from this Government on Thursday night.
Adjournment Debate
I know the debate will continue, after this motion has been disposed of, into the discussion around science and technology and the concerns that we have on this side of the House about the research that is needed in that field. But I would like to suggest to the Government before closing that it has a mandate to follow through on another election promise they made, a promise they made two elections ago. That was about the introduction of legislation to establish a Department of Forests and to create a National Forests Act. We know that the Minister of State has said that it is not a high priority of the Government. That is from the January 31 issue of The Prince George Citizen. That is regrettable, but I checked the status of Bills and motions. We have gone as far as Bill C-10. Let us see if tomorrow we can bring forward Bill C-ll, legislation to enact the National Forests Act and the Ministry of Forests so we know we can start debating that legislation as well.
In closing, I want to say that I look forward to some of the future debate on this legislation. I know the Member from Prince George-Peace River (Mr. Oberle) is aware of the work that is being done in our community for a northern university and the role that science and technology can play, and some of the representations I have made to him about the need for a forest research centre in Prince George. I think we will hear more about that in the future as we discuss science and technology as it relates to the forest industry in this country.
Most of all, I urge all Members of this House and the Canadian public to watch and listen to the Budget closely on Thursday night because I suspect that we will have a full plate to deal with. I trust this Government will listen to the concerns that we raise and that they will hear Canadians and their concerns about economic development in this country. Thank you, Madam Speaker.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mrs. Champagne):: It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the Hon. Member for Glengarry- Prescott-Russell	(Mr.	Boudria)-Unemployment

April 25, 1989
Industry, Science and Technology
Insurance-Changes to system-Effect on rural areas- Effect of changes on Newfoundland; the Hon. Member for	Haldimand-Norfolk (Mr. Speller)-Canada-
United States Free Trade Agreement-Effect on agricultural workers-Supply management systems; the Hon. Member for New Westminster-Burnaby-Unemployment Insurance-Impact of-Request for assurance women will not be penalized.
[English\



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mulroney that Bill C-3, an Act to establish the Department of Industry, Science and Technology, to repeal the Department of Regional Industrial Expansion Act and to make consequential amendments to other Acts, be read the second time and referred to a legislative committee; and the amendment of Mr. Langdon (p. 724).
Rodney Edward Murphy: Madam Speaker, it is great to hear the Member speak in the House. I know that he represents northern B.C. He and I have been working on a project dealing with the fact that many northern communities are being denied the northern tax benefit. Madam Speaker, you will remember that last week I presented a petition signed by over 5,000 people in the communities of Thompson-Wabowden complaining about the fact that they are being cut back by one-third on the northern tax benefit. Since this Bill deals with regional development, I wonder if the Hon. Member could explain the feeling of the communities in northern B.C. about this unfair treatment by the Finance Minister on this very important issue.


Brian L. Gardiner: Madam Speaker, I want to thank the Member for Churchill (Mr. Murphy) for that question because I know he has been doing a lot of work in this area. He has been the leader in our caucus in discussing the northern tax allowance and its benefits to residents of not just northern Canada, but remote and isolated areas. In some parts of our various provinces, you do not
necessarily have to live in the north to be remote and isolated.
The question the Member puts in regard to the feelings in northern British Columbia about the northern tax allowance I can respond to very easily. They are concerned. If there is one consistent question that was asked of me during the election campaign and since, it is: What is the status of the northern tax allowance? When are we going to expect something from this Government? We expected something, and got a report on the status of that northern tax allowance, which was very much like closing the bam door after the horse has gotten out. In this case it was a confused horse. All Members know the confusion that this Government created when they were implementing that tax benefit.
It is a question that people are asking because they are concerned about how unfair the Minister has been in already cutting a third when he wanted to hear from his commission that travelled throughout the country about the northern tax allowance. Unless the Minister of Finance deals with this matter on Thursday night, the unfairness will continue. I think the Member for Churchill should be congratulated by all Members who have areas like that in their ridings for the ongoing work he is doing in this field.


Mr. Hopkins:: Madam Speaker, when this Bill was first introduced in the House by the Minister-


The Acting Speaker (Mrs. Champagne):: Order, please. Is the Hon. Member rising on debate or question and comment?


Leonard Donald Hopkins: I am rising on a question, Madam Speaker.


The Acting Speaker (Mrs. Champagne):: Please proceed. I apologize.


Leonard Donald Hopkins: The Minister said: "To remain competitive in today's international market we must adjust our priorities and spread our resources more evenly along the continuum from science to marketing".
What does the Hon. Member think the Minister meant when he said "adjust our priorities"? What are his priorities in this Bill? How will he spread resources more evenly when he is reducing them? What does he mean by "from science to marketing" when the Government is putting far less emphasis on science than we have seen in this country for years?
April 25, 1989


Brian L. Gardiner: Madam Speaker, being a new Member to the House, I was not here when these comments were made. In any case, they certainly sound like wonderful words. We have learned to expect that from the Government when it states its intentions. It is an excellent question to ask how it will be accomplished.
I suppose I can give the same answer as Ministers opposite give: "We will have to wait until the Budget to find out because, as you know, I am not allowed to reveal that information". That is the answer we get from Members opposite.
I suggest that one of the vehicles for achieving that goal and making those wonderful words into policy of "tech transfer", is the vehicle of the economic agreements and various technological subagreements that exist in there.
If there is going to be a complete new framework, as was stated to me in the letter from the Minister of State for Forests (Mr. Oberle), we will have to study that closely to ensure that the laudatory words we heard when this legislation was first introduced in the previous Parliament are carried through.


Mr. Kristiansen:: Madam Speaker, I thank the Hon. Member for Prince George-Bulkley Valley (Mr. Gardiner) for his remarks on Bill C-3. My comments arise from a meeting I attended in Nelson, British Columbia, last week. It was a week-long convention attended by well over 200 people in the mining industry from the Chamber of Mines in eastern British Columbia. It was the largest convention of its kind since 1933 in the southeastern part of that province. They expressed very strong concerns relating directly to this Bill. My first comment concerns the mineral development agreement. The Canada-British Columbia Mineral Development Agreement at $10 million is the smallest of the eight subagreements made under the $580 million Economic Regional Development Agreements in British Columbia.
The B.C. Mineral Development Agreement, from a Canadian perspective, is very small. The agreement is larger than those of only two provinces, Saskatchewan and Prince Edward Island, when the mining industry in British Columbia is one of the key employers and producers of wealth in the region.
Furthermore, the geoscience data-base in British Columbia is inferior to that of several other provinces.
Industry, Science and Technology
For instance, 90 per cent of the province remains to be mapped at a scale which is required for basic exploration in the province. Yet, this is one of the smallest agreements in Canada.
The Chamber of Mines in eastern British Columbia had several concerns, particularly with regard to Bill C-3. According to Bill C-3, the Government is eliminating the current regime for regional economic expansion. It is likely that the Budget on April 27 will result in a further removal of this whole area of regional subagreements under the Western Economic Diversification Fund, as far as western Canada is concerned.
I want to refer briefly to the British Columbia-Yukon Chambers of Mines letter written to me on March 28. It states:
We believe the Western Diversification Fund's policies and objectives are not compatible with the current structure of Mineral Development Agreements inasmuch as the Western Diversification Fund's mandate is to diversify through industry with industry delivering the product.
In a letter dated February 28, addressed to the Minister of Energy, Mines and Resources (Mr. Epp), the Chamber of Mines of Eastern British Columbia said:
We have a concern that your government may confuse MDA funding with funds allocated by the Western Diversification Office. Sir, the policy and objectives of the two programs are totally incompatible: the fundamental objective of MDA is to deliver basic geoscientific data to a variety of users including government (as well as to industry to foster the discovery and development of new mines).
Does the Hon. Member share these concerns of the miners and the mining industry in British Columbia? How does he view the presumed intent of the Government to lump this in with regional development programs under the Western Diversification Fund?


Brian L. Gardiner: Madam Speaker, I thank my colleague, the Member for Kootenay West-Revelstoke (Mr. Kristiansen) for the question. It points out to the House the concerns that I have raised about the changes that are likely imminent under the regional development programs of the Government.
The question is similar to the one about forestry, when we asked the Minister if he could give us the assurance that his Department alone would administer the forestry agreements with the provinces. The same question could rightfully be put in terms of the mining subagreement.

April 25, 1989
Industry, Science and Technology
Certainly in British Columbia, New Democrats are not taking this sitting down. Just yesterday we announced an action plan in terms of forestry. New Democrats, with my colleagues from the Kootenays, are looking as well at the mining subagreement to make sure the Government understands the importance of those agreements and how they are administered. It should not take comments lightly about how Members on this side view those agreements and how they can be implemented.


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Madam Speaker, I have a great deal of concern about Bill C-3. I think it will reduce the emphasis on regional development in this country. I believe this Bill is another step in the Government's attempt to gloss over the whole question of regional development. I believe this legislation is an attempt to isolate regional development to Ontario and Quebec, while leaving Atlantic Canada to the Atlantic Canada Opportunities Agency, western Canada to the Western Diversification Office and northern Ontario to its own fund. The Government's attitude seems to be that the regions should take care of themselves with those funds so it may concentrate on southern Ontario and Quebec. That attitude will do a tremendous amount of damage to this country.
Canada depends on regional development to keep it as a unit. Rather than Balkanize Canada, the Government should see the country as a whole to determine what areas need the most attention.
Canadians in Atlantic Canada, western Canada, and northern Canada will not have their lives pigeonholed with these various development programs. The Government cannot shift its responsibilities to these various regional development agencies and still maintain this country as the great unit it has been since Confederation. That concept which the Government is trying to create is totally unacceptable. The Government will try to make Atlantic Canadians believe that this approach will be beneficial to them.
It could be beneficial to Atlantic Canadians if the Government really wanted to develop the concept of regional development. It could be beneficial if the Government, without political patronage, wanted to develop Atlantic Canada and do what was best for the various areas of Atlantic Canada. The same is true of western Canada and northern Canada. The Government
should treat these regions as a part of Canada. However, this is not what is being done.
I am afraid that the concept of regional development is being gradually whittled away. The thrust of this originated with the Free Trade Agreement. There is no definition of a subsidy in the Free Trade Agreement. The Government wants us to believe that regional development will not be considered a subsidy. However, that is not what the Americans are saying. They are saying that regional development is considered a subsidy. This is evidenced by the decision taken regarding Sydney Steel Corporation.
A countervail has been placed against Sydney Steel Corporation by the United States Department of Commerce, a countervail in the amount of 103.55 per cent. How was that figure reached? The Department of Commerce listed every bit of government assistance the Sydney Steel Corporation receives, either federal or provincial, and applied a certain percentage of countervail against each item. It came up with the figure of 103.55 per cent.
Sydney Steel Corporation is in an area that is undergoing economic difficulties right now. The programs Sydney Steel took advantage of were programs that were made available by the federal and provincial Governments. It is a provincial Crown corporation which did not break any laws, but if this American countervail is ratified, Sydney Steel will suffer but not as a result of Canadian law. The company took advantage of Canadian programs that were made available and it obeyed the laws of Canada. As a result of the Free Trade Agreement, it will be punished retroactively by the laws of the United States of America.
Regional development is becoming something that is determined by the United States of America. Any industry that locates in Atlantic Canada, northern Canada or western Canada and receives a subsidy from the Government or the respective province will be seen by the United States as a company that is receiving a subsidy. Because it is seen as a company that receives a subsidy, the company will be countervailed against when it exports into the United States. It will be punished by that agreement which was supposed to be of such benefit to all Canada, an agreement that was supposed to help Canadians living in the regions that were undergoing economic difficulties. Instead, we are being punished by it.
April 25, 1989

We in Atlantic Canada were told that the trade agreement would be the salvation of the economy because we would be able to ship things made in Atlantic Canada by water to the eastern United States. That would be wonderful if we could do so without punishment. It would be of tremendous benefit. I do not hesitate to say that.
Before Confederation the natural markets of Atlantic Canada were in the eastern United States and the West Indies because goods were shipped by water and water transportation is the cheapest form of transportation. If a company locates in Atlantic Canada and receives assistance from the federal Government or the province, and if in turn it is judged by the United States to have received a subsidy because of regional development assistance and is countervailed against with a 7 per cent penalty, how can we expect the company to compete?
What is the Free Trade Agreement doing for Atlantic Canada? It is a catch-22 situation. We will be worse off if the United States perceives that we have broken an agreement that was entered into between the two countries. It would not be a rule of thumb of the U.S. Congress. It would be a determination by the United States that we breached an agreement entered into with the United States.
We have entered into a trade agreement with the United States. That could be very beneficial, but if you went to a lawyer, Madam Speaker, and said that you wanted an agreement that would allow you to carry on your business in a certain way, an agreement on which you could rely, and then you went back in a month's time and the lawyer said that the agreement was ready but there were a couple of clauses that had not yet been defined, but told you to sign the agreement and he would fill in the definitions later, you would get another lawyer. If you did not, one would wonder why you did not. However, this is what Canada did. It has said it would sign the agreement without specifying that regional development is not a subsidy.
We are now subject to the American determination of a subsidy and the Americans think that regional development assistance is a subsidy. I say this because of the Sydney Steel Corporation example. The Department of Commerce of the Government of the United States, not an ad hoc body, has put a percentage figure beside every subsidy Sydney Steel receives from the federal and provincial Governments, added up those percentages and came out with the figure of 103.55 per cent for a countervail. In today's competitive market, if it were a 5
Industry, Science and Technology
per cent countervail, it would be difficult for Sydney Steel to sell its products in the United States. However, the countervail is 103.55 per cent.
Two of the items included in that list are ERDAs and General Development Agreements. Those are the backbone of the regional development program. What could be less offensive than an ERDA or a GDA? This is funding entered into through an agreement between the federal Government and the provinces. Since Nova Scotia is considered to be a province that is having more economic difficulty than Ontario, for example, the federal Government may contribute more to an agreement with it than it would to an agreement with Ontario. These agreements cover various aspects of the economy including agriculture, fisheries and forestry.
Included in that list compiled by the United States Department of Commerce is the assistance Sydney Steel Corporation receives under ERDAs and GDAs. These are considered subsidies by the Government of the United States. That is a frightening situation of very great concern.
The Government has stated that it is not going to sign any ERDA agreements until after the Budget. Why is the Government saying that? As the lesser of the two evils the Government would like us to think that because it has to get into a cost cutting mode it is going to cut out regional development assistance. However, what the Government is not saying is that it is not a question of cutting out regional development assistance in the Budget. It is a question that it has already given away the right to regional development assistance through the Free Trade Agreement with the United States.
The Budget has nothing to do with it. In the matter of regional development we are going to be restricted to infrastructure agreements with municipalities and agreements that do not relate in any way to specific industries that may, will, or, by some hope in the future, have any trade with the United States. If those industries in Canada receive any assistance they will be countervailed by the United States.
That is treachery against the areas of the country that were hoping to increase their economic performance and to reduce economic disparity instead of having that economic disparity widen. It is treacherous that the Government signed an agreement without having all of the definitions filled out and meaningful clauses put in. The Government bailed out on the "have not" areas of the country.

April 25. 1989
Industry, Science and Technology
The Minister for International Trade (Mr. Crosbie) is now saying that it will take seven years to define a subsidy. He also stated: "What two countries have been able to agree on what is a subsidy?" That is cold comfort now, after we entered into the agreement which was finalized four months ago.
The Minister tells us that it will be the full seven years and that we should not expect a definition of a subsidy because in his opinion no two countries have ever been able to agree on the definition of a subsidy.
That certainly is cold comfort for people in Atlantic Canada, northern Ontario, and large parts of western Canada who hoped to be able to close the economic disparity gap. They were told by the Government that that gap was going to be closed. Instead it is widening, and the Government is fostering that at the present time. That is the problem and that is the misleading that has been going on.
What are the ramifications going to be? Those people who would have established in Atlantic Canada because they were on tide water and could ship from a port in Atlantic Canada to tide water in the United States and take advantage of one of the cheaper means of transportation, will not be able to do that now. If they receive assistance from the province or the federal Government to relocate in Atlantic Canada, they will not be able to ship into the United States without a countervail because the American Government will consider that they have received a subsidy.
In this Act the Government is belittling the whole scheme of regional development. Gradually it is erasing it from the vocabulary of Canadians. This is happening at a time when it is particularly difficult in areas such as Atlantic Canada. In Atlantic Canada, northern Canada, and western Canada people have to deal with higher interest rates. The Government is now telling us that we have to deal with those higher interest rates because we have to cool down the economy in southern Ontario.
Why is the Government now saying that the economy in southern Ontario has to be cooled down? The Government previously stated that it could not reduce the deficit more because that would cause a decline in the activity in southern Ontario and in other parts of the country. It would throw cold water on the economic revival. That is why the deficit could not be further
reduced. Yet we are now being told that the deficit has to be reduced more and that we have to cool down the economy in southern Ontario. Right across the country people will have to bear the brunt of higher interest rates.
The other side of the coin is extremely interesting. While the economy in southern Ontario has to be cooled down, the economy in Atlantic Canada certainly does not need to be cooled down. Far from it. It needs to be fostered by the Government with some action instead of platitudes and excuses.
However, we are going to have the economy in Atlantic Canada cooled down anyway because high interest rates apply across the country. Because of the Government's policy of deregulation in the airline industry we now have Air Canada and Canadian Airlines International forming subsidiary companies. In northern Ontario and in western Canada those subsidiary companies are being formed. In Atlantic Canada we have Air Nova, which is a subsidiary of Air Canada, and Air Atlantic, which is a subsidiary of Canadian Airlines International. Air Canada and Canadian Airlines are to cut down service to some of the less populated areas, not in the major centres.
However, they are also stating: "Lucky you in Atlantic Canada, because you are going to get more flights". We are to get a Dash-8 service sponsored by Air Nova or Air Atlantic. Jump up and down because this is a great day is what they would have us believe.
There will be more flights, but there will be less capacity for cargo. The big problem is that Air Canada employees in those areas where service is being phased out will all have to take severance pay, early retirement, or move to some other location. The people who will work for Air Nova and Air Atlantic will be replacing those employees who worked for Air Canada and Canadian Airlines. They will only be paid 50 per cent to 60 per cent of what Canadian Airlines and Air Canada employees were paid. They are only to receive 50 per cent to 60 per cent for doing the same work that was done by employees of Air Canada and Canadian Airlines. They will be doing the same work done by those people employed in Halifax, Montreal, and Toronto. The same work is being done in the major centres, but those people in the major centres are paid considerably more.
April 25, 1989

That is the Government's idea of regional development. This Bill is only another step further along the road to widening the disparity gap between the major centres and those areas undergoing economic difficulties at the present time. It is a big step backward and another step backward fostered by the Government.


The Acting Speaker (Mrs. Champagne):: On questions or comments, the Hon. Member for Renfrew.


Leonard Donald Hopkins: Madam Speaker, the Hon. Member mentioned the regional development policies of the Government as being a Balkanizing factor in Canada, and they certainly are. The Government is bringing in a new system with all of western Canada under one agreement and all of Atlantic Canada under one agreement, lumping regional development in Ontario and Quebec and indeed splitting Ontario and Quebec. The Ottawa Valley is a good example. The Quebec side of the Ottawa River was previously designated under DRIE and is now under Regional Development, and the Ontario side is not.
Would the Hon. Member agree that what the Government is actually doing is downplaying the whole scenario of regional development assistance simply because in a very sneaky, underhanded manner it wants to get away from being seen to be giving subsidies to any industry whatsoever? It wants to get away from being seen as giving subsidies to the forest industry for research and development, which relates directly to this Bill. The Government is simply bringing in this new Department to downplay and get rid of all subsidies. It is afraid that the United States will complain on a continuing basis if there is more subsidization of Canada's regions.


Russell Gregoire MacLellan: Madam Speaker, I would like to thank my colleague for his question. He has made a very pertinent and important point. The Government in the Budget will be cutting back on regional development. It is going to try to cut back on regional development in many ways. We will be told that it is a cost cutting measure and that we have to reduce the deficit.
What the Government will not be telling us is that we are losing regional development because that has already been negotiated away in the trade agreement with the United States.
Industry, Science and Technology
The most insulting thing that gives us a picture of what this Government thinks of our great nation is that it has set aside some funds in the Atlantic Canada Opportunities Agency, in the Western Diversification Fund, and for northern Ontario. Then it said: "Now, look boys and girls, go away. Don't bother us anymore. Here is your money. We are going to bring in this Bill for a Department called Industry, Science and Technology which will have the real big money, the real meat. We are going to work on Southern Ontario and Quebec and allocate this whole Department to them, parcelling pockets of funds to these outer areas."
The very Bill leans toward the Balkanization of Canada. It makes Canada become a country with two levels of economy.
What did the Government do through its decentralization of airlines and through the closing of the Gainers plant in Cape Breton, when the Atlantic Canada Opportunities Agency gave Gainers money to locate in another part of Nova Scotia but did not allow the workers to transfer? I hope that situation will be changed.
The Government is fostering two levels of success in this country. It is saying to the people in the areas undergoing regional economic problems right now that they cannot aspire to get to the premier level of economic success because the Government is grading, creating, two levels of success and they have been relegated to the second level.


Arnold John Malone: I would have preferred it, Madam Speaker, had the Hon. Member for Cape Breton-The Sydneys (Mr. MacLellan), when he looked under the bed this morning, not seen so many spooks in addition to dust.


Some Hon. Members:: Oh, oh!


Mrs. Campbell (South West Nova):: Speak about your own province.


Arnold John Malone: There is a fine idea coming from a Member opposite who says that we should speak about our own province.
When the Member from Cape Breton-The Sydneys says that there are two levels of success because of the trade arrangement in this country, he fails to realize that the arrangement does away with the history of this country which had two levels of success in place. It was the discriminatory freight rates that worked against both East and West and toward the centre. It disappeared with Bill C-18 and Bill C-19 and the protection of tariffs in central industries which kept the Atlantic provinces and the West from developing their capacity.

April 25, 1989
Industry, Science and Technology
Since free trade, there has been, at least in Western Canada, an avalanche of opportunity into the west coast market for Canadians. In High River, Alberta there is a brand new, technical, huge, ultra-modem meat packing plant going into place. Under the old freight systems and with tariff barriers against them, they moved raw product out and did away with the manufacturing potential for Atlantic provinces and Western Canada.
Basically, more than anything else, from where would the Hon. Member find confidence in economics to come to the conclusion that his region could never survive if it were not for subsidies? Surely this is a land that is equal and I believe better than anywhere else in the world. Given fair opportunity and market size we can penetrate that market.
Why sell potatoes from Prince Edward Island when we can sell potato chips? Why sell any product that comes from a province without value adding, manufacturing and processing to another level and keeping the jobs at home?
I come from the Province of Alberta. We export ethane and methane through pipelines at 16 per cent and 18 per cent tariff rates. Because there is a tariff imposed against us we cannot manufacture the product. Down that pipeline not only goes natural gas but the jobs of our sons and daughters.
Surely the Hon. Member for Cape Breton-The Sydneys would realize that there are opportunities in his region of Canada, as long as they have the confidence to believe they can add to raw product manufacture and sell it at another level. We all know the citizens in their area have the ability to do so.


Russell Gregoire MacLellan: Madam Speaker, I would like to tell the Hon. Member for Crowfoot (Mr. Malone), although I have a good deal of respect for him, that he is not aware of what is going on in his own province.
We were told when we were in government between 1980 and 1984 that we were picking winners and losers and that we were doing things to detract from the western sedimentary basin and from the conventional industry in Western Canada, which is exactly what this Government is doing at the present time. It is concentrating on the major projects and ignoring the conventional industry in western Canada, which is causing a very serious economic problem in the western sedimen-taiy basin.
Small companies cannot get the funding from the banks. Big companies are using their money for mergers and buy-outs instead of exploration. The service industries are unable to work. Rigs are standing idle.
What is the Government trying to do? It is trying to get us to believe that it has brought in the Canadian Exploration Development Incentive Program and that it has spent much money. The Government spent money but that money did not go to the smaller companies as the Government would have us believe.
Some 90 per cent of applicants under the CIDA program got less than 20 per cent of the funds. The Government will now wind up CIDA, patting itself on the back and saying "aren't we great, look at what we have done." The Government could do something sensible and reduce the ceiling from $10 million to $1 million and still satisfy 90 per cent of the people who apply under the program and save 65 per cent of the money.
The program cost so much money because government made a complete mess of it. The Government costed it in a way that defies even someone with Grade 5 arithmetic. The Government made a mess. It is trying to punish the small producer and the service industry in western Canada for their mistakes yet is patting itself on the back. At the same time it is a Government in charge of the country's economy.


The Acting Speaker (Mrs. Champagne):: Resuming debate with the Hon. Member for Churchill.


Arnold John Malone: Surely I can respond to that.


Rodney Edward Murphy: Madam Speaker, perhaps you could point out to the Conservative Member that Conservative Members are allowed to get up in the House and debate anything they want. If the Member wished to respond to Liberal Members he, as a Member of Parliament I presume duly elected by his constituents, could rise and speak to them.


Some Hon. Members:: Oh, oh!


An Hon. Member:: How did you get in?
April 25, 1989


Rodney Edward Murphy: By a big margin. All the area that used to be part of the riding of the Minister of Energy, Mines and Resources (Mr. Epp) voted solidly for me.


Some Hon. Members:: Oh, oh!


Rodney Edward Murphy: For that matter the only problem I had during the campaign was in Barons River. One person living in that community spoke Cree to me and gave me heck. He was an elderly native person. I did not know what he was saying, but I knew I was in trouble. My MLA from that region translated. He said that he was giving me heck because I had not been there for the last eight years. I said, the last eight years? I have not been the MP for this region for the last eight years. It is the Member for Provencher (Mr. Epp) who has been your MP. It is he you have not seen. I would like to thank the Minister of Energy, Mines and Resources for the solid vote he has created for me in my riding. I think he could not have done a better job if he had tried. And this legislation, Madam Speaker, is going to do the same type of thing.


Some Hon. Members:: Oh, oh!


Rodney Edward Murphy: I will certainly refer to Madam Speaker throughout my speech.
Madam Speaker, this legislation states it is an Act to establish the Department of Industry, Science and Technology, and to repeal the Department of Regional Industrial Expansion. When we saw this legislation, we wanted to support the idea of creating a department which was responsible for science and technology because we believe that is important in this nation. We support that part of C-3, the legislation that is before us today, but we cannot support the further dismantling of regional economic expansion in this country.


Some Hon. Members:: Hear, hear!


Rodney Edward Murphy: When the Liberals were in power from 1980 to 1984, they destroyed the Department of Regional Economic Expansion. They deliberately took it apart and that department no longer existed. They created the Department of Regional Industrial Expansion.
Mr. Speaker, I was the critic for regional expansion at that time and I will tell you-


An Hon. Member:: You did not know what was going on.
Industry, Science and Technology


Rodney Edward Murphy: The Liberal Member stated I do not know what is going on. He can go to the other House, the other chamber, and talk to the senator there who was the Minister-


An Hon. Member:: Don't believe it.


Rodney Edward Murphy: He was the Liberal Minister at the time and he told me it was a mistake that the Government made. It was a mistake the Liberal Government made when they destroyed the Department of Regional Economic Expansion.


An Hon. Member:: There is no such thing.


Rodney Edward Murphy: He has admitted that. He is in public on that.
Mr. Speaker, what this legislation is doing is taking us further down that road. That is why my colleague, the Member for Essex-Windsor (Mr. Langdon), seconded by the Member for Mission-Coquitlam (Ms. Langan), offered this reasoned amendment to the House. The amendment states:
"this House declines to give second reading to Bill C-3 because it fails to clearly define federal Government responsibility for regional development and specifically fails to reflect the requirement of s.36(l)(b) of the Constitutional Act, 1982 that Parliament is committed to "furthering economic development to reduce disparity in opportunities".
What has happened is that this legislation makes it even more difficult to have a voice in Ottawa, a mandarin in Ottawa who is committed to regional economic expansion right across this country.
That was one of the problems when we went from the old Department of DREE to the new Department of DRIE, the one that is now being eliminated by this legislation. What happens is that there are a lot of voices in Ottawa speaking out against regional economic expansion. There are corporate interests in Ottawa, lobbyists in Ottawa, speaking out against giving money, grants and tax benefits to the disadvantaged parts of our country.


An Hon. Member:: Washington.


Rodney Edward Murphy: As my colleague for Kootenay West- Revelstoke (Mr. Kristiansen) pointed out, we will now have a situation where a lot of our plans, a lot of lobbyists from the United States will be here also speaking against our regional development programs.
It is no accident that all the ERDA agreements have been allowed to lapse. It is no accident that this Government has refused to sign agreements that are very important to Atlantic Canada, very important to Quebec and Ontario, and very important to western Canada. In my own region the Northern Development Agreement

April 25, 1989
Industry, Science and Technology
was allowed to lapse at the end of March of this year. It is not because the Government did not have time to plan. It had all the time. This Government has been in power for over four years.
An Hon.Member: Too long.


Rodney Edward Murphy: Not only that, the Northern Development Agreement originally expired in 1987.
An Hon. Member Those were the good old days.


Rodney Edward Murphy: They fought for a two-year extension because they needed more time to do the planning and to make sure a new northern development agreement was in place. The Province of Manitoba agreed to the two-year expansion. The native groups that were affected agreed to the two-year expansion. Those two years have come and gone and now the agreement has gone as well.
That is an agreement which created many opportunities for people in northern Manitoba. I would just like to talk about some of them. It is interesting, Mr. Speaker, that when the legislation came down and the Northern Development Agreement was first put in place, the Government had money to put out a brochure called "Update", which stated that the NDA is part of long term strategy. It is such a long term strategy that they could not even put a new agreement in place after a two-year extension. There is no long term strategy. There is no planning. We have obviously lost any emphasis, any strategy, any focus for regional development.
We do not have voices in the Department working in Ottawa, represented at the Cabinet table doing the work to make sure these regional development agreements are continued and expanded. Instead, what you have is other loud voices, actually working and making sure that we do not have the types of regional development programs we need in this country. That is why this legislation is flawed.
We know that as a result of the Free Trade Agreement the very nature of our regional development programs and subsidies is threatened. We know that over the next number of years this Government will be negotiating from its weak-kneed position with the United States over what type of regional development programs we will be allowed to have. The fact that the Government has allowed the present agreements to expire, the fact that the Minister of Finance (Mr. Wilson) is going to use the deficit as an excuse for reducing these programs, is
going to hurt the regions of our country. It is going to make it that much more difficult for a young boy or girl in the poorer parts of this country to get the training and the jobs, to have the economic opportunities in their own communities that they want to have.
I mentioned earlier that I would talk about some of the things that happened under the regional development agreements in my area, programs that have been allowed to expire. For example, we did not have an airport in the community of Tadoule Fake, a community that was hundreds of miles away from the nearest community. If there were an accident and someone had to be flown out, we had to hope that the lakes were frozen and we could land a plane on skis. Or we had to hope it was a calm day in summer so one could land a float plane. There was no other way in or out of that community. So the Northern Development Agreement helped to create and build an airport there.
We have other communities that do not have airstrips. If the new Northern Development Agreement were in place, those communities could have their airstrip and someone's life could be saved. If we do not have a means of getting people in to help, and people out when the need is there to get medical attention, obviously their lives will be threatened in break-up and in freeze-up. So that is a need that used to be met through our regional development programs but which is not happening at the present time because this Government, even after a two-year extension, would not negotiate a new Northern Development Agreement.
It is always interesting that when the Government has programs there is always a federal Cabinet Minister who is always so happy to announce a program, happy to announce a grant and say how wonderful the program is and how the program is uniquely suited to help the people in this community. I have press release after press release after press release from various federal Ministers saying exactly that.
Here is another project which is extremely important to the communities in my riding, a commercial complex opened in the community of Pukatawagan. That does not sound like much to people living in large cities, but this community of over 1,400 residents did not have a commercial complex, did not have a restaurant, did not have a place to do laundry. All of that was made possible through the Northern Development Agreement.
April 25, 1989

Library specialists were helped to graduate through a northern development program. Funds were used to help an aquaculture project in Norway House. Money was provided to The Pas Indian band to defray management training costs. Money was used to help a fish farming business in Wabowden. Money was used to help native art. Money was used for a number of other programs. Money was used for the friendship centre, to make sure there was a place for people to stay when they came into the larger communities. Money was used for another market which, again, a Conservative Cabinet Minister found it important enough to get out and make the announcement. Money was used to provide worker advisers for the Limestone project in northern Manitoba, the huge hydro-energy program. Money was used for a wild rice processing plant.
There are many, many more but I would run out of time and would not have a chance to talk about anything else, but all of those programs and all of those opportunities, basically for native people in my riding, existed because the federal Government recognized that they had a responsibility.


An Hon. Member:: A Liberal Government.


Rodney Edward Murphy: Did someone say a Liberal Government recognized this?


An Hon. Member:: What Government was it? Was it an NDP Government?


Rodney Edward Murphy: No, it was not. I will go back further in my notes.
In 1981, when the Liberals were in government, we had to fight like hell to get that agreement renegotiated.


An Hon. Member:: No doubt you were responsible for it.


Rodney Edward Murphy: Was I responsible? The speaker who wants to speak so much was not in the House at the time. But if he had been here he would remember that we got up in the House of Commons. Herb Gray, the Deputy Leader of the Liberal Party, was the Minister responsible and had refused to meet with the provincial NDP Government in Manitoba to renegotiate that agreement. They had refused to meet time after time. The agreement was not negotiated. What we had to do in order to get a meeting between the federal Liberal Government and the provincial NDP Government was to bring provincial Cabinet Ministers up into the Opposition gallery and point them out in the House and say, "Mr. Industry, Science and Technology
Gray, will you meet with the provincial representatives of the people of Manitoba"?


An Hon. Member:: How dreadful.


Rodney Edward Murphy: That is what we had to do. The new Hon. Member should learn that he should not make too many comments without knowing some history.


An Hon. Member:: They met right away.


Rodney Edward Murphy: Yes, they met right away because they had no choice. And the cameras followed them, the provincial and the federal Cabinet Ministers. They met in a room downstairs which is now a washroom, but they met and they did get that agreement.


Arthur Jacob (Jake) Epp: It was used for a good purpose.


An Hon. Member:: Then there was a vote.


Rodney Edward Murphy: We had to fight to get that agreement in 1981 and here we are having to fight not the Liberals this time, we are having to fight the Conservatives for this agreement. But it is not just this agreement, and I do not want to talk just about my riding because it is the same problem right across this country.
When we did have a Department of Regional Economic Expansion, the Department the Liberals dismantled, it was a lot easier to negotiate these federal-provincial agreements. It was a lot easier to find a Minister who would negotiate with the Province of Manitoba, it was a lot easier to find a Minister who would negotiate with the Province of B.C. or the Province of Nova Scotia, or the Province of P.E.I., because there was someone in the Cabinet who knew that his or her responsibility was regional economic expansion.
We knew, when we created DRIE instead of DREE, those voices that were concerned with industry would win out and that those voices that were concerned with regional economic expansion would lose. It was very clear.
The senior officials here admitted that they did not like the focus on regional economic expansion. They did not want to be in a situation of telling a company they should locate in Cape Breton, or that they should locate in P.E.I. or they should locate in northern B.C. or northern Manitoba. That was their attitude. They said "We will give the company the money but we will not tell them where to locate". That did not help. That created more jobs in central Ontario, but it did not help the regions. That was the problem.

April 25, 1989
Industry, Science and Technology
Here we were, using money that used to be allocated for regional economic expansion, where we would grant money through a corporation to set up in Cape Breton, set up in Nova Scotia, set up in New Brunswick, but now that money was still being given to firms but they were going to end up locating their plants in Ontario.
That happened where we went from DREE to DRIE, and now we are going to a situation where we are even getting rid of DRIE, the Department of Regional Industrial Expansion. We are going to eliminate any reference whatsoever to regional economic expansion in this new Department.
That will hurt the regions in the long run. When the House of Commons also decided to get rid of its own Standing Committee on Regional Economic Expansion, the same thing happened because we lost the focus. We lost the focus on regional economic expansion. Again, that is something that happened under the previous Liberal regime and I think there are members of the Liberal Party who regret that now, because what used to happen-


An Hon. Member:: There are very few of them here, very few left. They are almost all new, newer than the New Democrats.


Rodney Edward Murphy: There are a few of the old ones here.
But I will tell you that when we used to have a standing committee that was specifically set up to deal with regional economic expansion, because it only had one focus it was easy to get that committee to travel across the country. It was easy to get MPs who would hold hearings in Comer Brook, hold hearings in New Brunswick, hold hearings in parts of Quebec, hold hearings in western Canada. That committee had a focus and it knew it should be out there hearing from people who were receiving grants and hearing from people who were not receiving grants and to look at the situation right across this country.
That committee did a lot of good work but it had a lot of reports. We do not have that committee and we do not have Members of Parliament travelling as a standing committee investigating regional economic expansion and the problems in the regions. All of us in this House are much poorer for that.
With the reorganization of the Cabinet, which is what this legislation does, we are going to suffer again. Now we are in a situation where we are going to have a bureaucratic decision-making process, decisions made behind closed doors, and quite often decisions made for political reasons rather than regional economic expansion reasons.
There is really no focus. You have an Atlantic committee or an Atlantic agency which is supposed to help develop things. However, it does not really report to the House of Commons. It does not really report to the Members of this House. The same thing is true of the Western Diversification Office. Again, it does not really report to the Members of Parliament.
We have lost control of our own regional economic development, and this process is going to destroy the regions of Canada.
I do believe, Madam Speaker, that it is a result of the Free Trade Agreement. I do believe the quotes that have been mentioned by other Members, when we talk of Mickey Cohen, the former Deputy Minister, when we look at the American agenda, when we know that the Americans do not like our system of regional development grants and assistance programs. We are aiding and abetting them. We are aiding and abetting their ability to run and control our Government and our country. That is why we have to oppose the legislation as it now stands.


Brian L. Gardiner: Being a new Member to the House I am certainly pleased to hear the Member for Churchill (Mr. Murphy) who I understand has put in some ten years of fine service to his riding and to this House in the anniversary coming up with a number of Members. I certainly respect the work he does with our caucus and all of the work that he does in this chamber.
My question to the Hon. Member in light of the debate today on Bill C-3 is in regard to the cost-shared forestry agreement in Manitoba. There were some $27 million that went into the development of the forestry resource in his province. Unfortunately, that is now in limbo because the Government has not done anything about it. Does the Hon. Member think that if there were a full department of forests and a Minister responsible for forests and that if we had a commitment to a national forest Act, we may then have a chance to rescue this agreement before facing the possible emasculation of economic agreements on Thursday night in the Budget?
April 25, 1989


Rodney Edward Murphy: Madam Speaker, I would like to thank the Hon. Member for his question. I should point out that he might be a new Member but he has been around the Hill for almost all of those 10 years. He used to work for the Hon. Member for Skeena (Mr. Fulton). I know that in that capacity he was very interested in the forestry portfolio and very concerned that we did not have a full department at the federal level.
His question is valid. He points out a serious problem that exists. We do not have forestry agreements in place, not only in Manitoba but in other provinces as well. There really is not anyone speaking up in the inner Cabinet, in the powerful committees that have been set up to represent the interests of those of us who come from ridings and provinces in which the forest industry is very important.
Madam Speaker, you know that the forest industry is one of our most important industries, not only for its raw resources or the jobs that it creates but because it has been a steady source of income for all Canadians. We have not managed that resource very well.
One of the advantages of the forestry agreements is that they have enabled us to perform reforestation and to undertake training. This has ensured that we have people in place who know how to manage our forests and how to make sure that we were doing a better job. Unfortunately, by allowing the agreements to lapse and by allowing the Thursday night butcher to control everything the Government does, we will all be in a situation in which the forests of our nation will suffer. Those who work in the forests and those who work with the natural resources that come from our forests will lose their jobs as a result of that.


Lyle Stuart Kristiansen: Madam Speaker, I know that my colleague from Churchill has been a Member for some 10 years now. I know that he was not able to maintain that record and reputation in his area without being fair. I am sure that he would want to be fair to the Government since there is at least one element of Bill C-3 before us which I think we have agreed is a positive one, that is, the one which places more emphasis on the area of science and technology. Many of us have looked forward to a priority being placed on that area.
Industry, Science and Technology
As I read the legislation and consider some of the other actions of the Government, I begin to wonder if they do not fit in with Frank R. Scott's poem about William Lyon Mackenzie King who once said that he never let his on the one hand know what his on the other hand was doing. While the Government is placing more emphasis on science and technology in the legislation before us and giving it full ministerial status, it has at the same time refused to intervene in the case of Connaught Industries. Merieux of France, a state corporation, is being given a free hand to take over a major Canadian company that has made a significant and great contribution to research and development in the area of pharmaceuticals. This is an area which is vital to the future progress of much of science and technology and industry in Canada.
The Government is so committed to privatization and the idea that if it is foreign-ownership then it must be good because it will bring us new foreign technology and management. The Government thinks that that will give us broader entry into world markets. However, the Government is blind. It is like Lord Nelson at the Battle of Trafalgar. The Government sees the flag flying and the French colours and thinks that because it is foreign it must be good. The Government puts the telescope to its blind eye and charges ahead.
The Government is so committed to foreign ownership as a way of improving the status of our research, development, technology and trade that it has given over a private Canadian corporation, which has done an excellent job in research and development, to a French state corporation.
Perhaps my colleague can comment on this. I never thought I would see a Conservative Government embrace state technology and state ownership so overwhelmingly, even if it is foreign state technology. Does the Hon. Member think that in Conservative minds, even if it is a state corporation from abroad, it is preferable to a Canadian privately owned corporation, which in this case has done an excellent job of research and development?


Rodney Edward Murphy: Madam Speaker, I thank the Hon. Member for his question.


Don Boudria: Remember, you have to be fair.

April 25, 1989
Adjournment Debate


Rodney Edward Murphy: I can be fair to the Conservatives. They just do not like it when I am fair to them. That is the problem.
It is obvious that socialism is okay as long as it is not Canadian socialism. The humour about the situation is ironic and tragic. Every time we have a choice between making decisions in Canada and letting others make decisions for us this Government has always sided with letting others make the decisions.
In the free trade debate the Conservatives talked about how they were creating new opportunities for Canadians and how great it would be for our young people. They said that they will have all sorts of wonderful opportunities and that they will be able to do things in Canada. Who will they be doing them for? They will be doing whatever they are being told to do by, in this case, the French, and in other cases the Americans, and in even other cases by European nations. We will be in a situation where there might be jobs in Canada but they will not be jobs for Canadians. The management and the scientific and research decisions will not be made by Canadians. The benefits of the research, the technology and what is done in Canada will be exported. If any main office is given an opportunity, and that main office is located outside Canada, then its primary interests will be outside Canada. If some Canadian in some firm which used to be independent and which has been bought out develops a new technology, a new device or a new mechanism, the main office will not let that stay in Canada for the benefit of Canadians.
It will be brought back to the main office and jobs will be created there. The money that we use for our research technology and our scientific development, the money we use to educate our youth will not be to the benefit of Canadians. It will be for the benefit of others who will be controlling our economy and our minds.


The Acting Speaker (Mrs. Champagne):: The period for questions and comments has expired.


Don Boudria: Madam Speaker, I rise on a point of order. My colleague from Renfrew has quite a profound speech he wants to make. I am now wondering about the wisdom of having him start at 5.59 p.m. Perhaps we could call it six o'clock and then my colleague could have a full 20 minutes tomorrow.


Frederick James (Jim) Hawkes: Madam Speaker, I too rise on a point of order. We would be quite happy to vote on the amendment at this point and then go back to the main motion
for further debate, allowing the Hon. Member to speak tonight.


Leonard Donald Hopkins: May I call it six o'clock, Madam Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Don Boudria: Madam Speaker, I rise today to express my dissatisfaction with an answer given by the Hon. Minister of Employment and Immigration (Mrs. McDougall) to a question that I raised in the House of Commons on April 17.
The Government of Canada, on April 11, established what it called its labour force development strategy. That is a euphemism for cutting back on UIC. This plan is in conflict with solemn promises made by the Government of Canada during the election campaign. I am sure, Madam Speaker, you being the non-partisan person that you are would want to be apprised of what the Minister responsible for external trade said during the election campaign. He said, and I quote:
No one is planning any changes in the unemployment insurance program. There hasn't been any change proposed to us since we dealt with the Forget Commission. We are not contemplating any changes.
That is from The Evening Telegram of St. John's, Newfoundland of October 14, 1988, page 3. Now it is quite clear to me that no changes were planned to the unemployment insurance program.
As it turned out there were changes planned which will have a profound effect in many areas of our country, in particular on the people of eastern Ontario who are so ably represented in this House by my distinguished colleagues sitting around me.
In the Ottawa area, according to Employment Insurance Canada, the unemployment rate is 5.7 per cent. At the present time one must work 14 weeks in order to receive 46 weeks of unemployment insurance.
April 25, 1989

Under the proposed system one would have to contribute 20 weeks in order to receive 35 weeks of benefit. That is in conflict with the promise made to us by the Minister for external trade.
However, it goes beyond that. The fact that this Government has broken a promise is something that we expect from these Tories, but I refuse to accept the unfairness of this system. Even if it were true that where unemployment is lower warrants a tightening up of unemployment insurance rules, and I am not even saying that that in itself is an acceptable way of doing things, it certainly is not true in the constituency that I represent.
In Hawkesbury, Ontario, in my riding, the unemployment rate is 12.6 per cent. In Cornwall, in the riding of Stormont-Dundas ably represented by my colleague, the unemployment rate is 11 per cent. In Pembroke, so ably represented again by my colleague from Renfrew, the unemployment rate is 9 per cent. That 9 per cent unemployment rate has factors in it such as those living closer to Ottawa. The point is that the people of my riding are being asked to receive less unemployment insurance benefits because they are allegedly living in an area of low unemployment. I have just demonstrated that such is not the case. Unemployment is very high in the constituency I represent.
The Minister of Employment and Immigration, in an answer to a question I raised in the House on April 17, said that her colleague, the Minister of State, "announced that we would be revising the boundaries for unemployment insurance and that they will recognize regional differences".
Part of that answer may be correct. However, my question was specific. I want to know whether those boundaries will be changed before the new rules are applied. I want an ironclad guarantee for my constituents, as well as the constituents of Stormont-Dundas, Renfrew and elsewhere in eastern Ontario, that those rules will not be changed, the ones pertaining to UIC benefits, until they redo the map. Otherwise people living areas of 12 per cent and 13 per cent unemployment, such as the one my colleagues and I represent, will be punished by this unfair measure of the Government.
Adjournment Debate
Today I am asking the Government to take this occasion to reassure my constituents about this very vital issue.


Mr. Bill Kempling (Parliamentary Secretary to Minister of Employment and Immigration):: Madam Speaker, I welcome the opportunity to expand upon the reply given by the Hon. Minister of Employment and Immigration (Mrs. McDougall) to the Hon. Member for Glengarry- Prescott-Russell (Mr. Boudria) on April 17.
The Hon. Member raised the issue of regional economic boundaries and wanted an assurance that people in rural areas would not be adversely affected by the proposed unemployment insurance changes.
With respect to regional boundaries, I want to inform the Hon. Member about the study initiated by the Hon. Minister of State for Employment and Immigration (Mrs. Vezina) in August 1988. I can assure the Hon. Member that this study of regional boundaries is still taking place. I am positive it will be completed long before the legislation passes the House.
About 23 per cent of unemployment insurance beneficiaries reside in rural areas, traditionally characterized by high unemployment rates. The proposed changes do not impact on high unemployment regions, and rural centres will continue to receive the same protection under the unemployment insurance program.
Indeed, the proposal will not increase entrance requirements nor reduce benefit entitlement where unemployment is highest. Moreover, the proposal eliminates the repeater provision to make it easier for seasonal workers to qualify.
I also want to bring the attention of the Hon. Member to aspects of the Labour Force Development Strategy announced by the Hon. Minister of Employment and Immigration on April 11. The Hon. Minister then proposed, among other things, additional funding for human resource planning, business development centres in designated communities, as well as assisting displaced and older workers. These initiatives and others take into consideration the specific labour market conditions of rural areas.

April 25, 1989
Adjournment Debate


CANADA-UNITED STATES FREE TRADE AGREEMENT-EFFECT ON AGRICULTURAL WORKERS-SUPPLY MANAGEMENT SYSTEMS
Mr. Bob Speller (Haldimand-Norfolk):: Madam Speaker, on April 4, in the House, I specifically asked the Deputy Prime Minister (Mr. Mazankowski) to set up programs which the Prime Minister (Mr. Mulroney) had promised to Canadians during the election.
The Prime Minister said at that time: "I want to tell Canadians we shall ensure that innovative and generous adjustment and retraining programs will be introduced whenever and wherever required".
Quite frankly, the Hon. Minister did not answer my question. I cautioned those in the House on April 20, 1989, that the food conglomerates like Heinz and Nabisco were threatening reduction in their labour force caused by free trade. In fact, the Council of Canadians, in its third report card on the Free Trade Agreement, listed 26 companies with a possible loss of 7,619 jobs due to companies moving to the United States or being taken over by mergers with other companies.
One does not need much imagination to estimate the dire consequences and complete demolition of communities around which these companies are built and of employees which make up these companies.
The Deputy Prime Minister has refused to recognize what is happening and is completely ignoring the need for any of the "innovative and generous adjustment and retraining programs" promised by the Prime Minister. The time is now, not tomorrow, not next week or the week after, for the Government to bring in the programs that were promised during the election.
My supplementary question concerns the well organized supply management systems we have in Canada, which I stress duly comply with the GATT laws. Unfortunately, the Deputy Prime Minister and the de Grandpre report totally ignored the importance of supply management to Canadians and Canadian farmers.
I am of the opinion, which is supported by many supply managed industries, that we should not dismantle these effective and working organizations. The Deputy Prime Minister stated that de Grandpre fully endorsed the concept of supply management. That is just it. It is a concept. It is a form only.
In reality free trade undermines supply managed systems at every opportunity. By introducing an unworkable two-price proposal, de Grandpre continues to chip away at the supply managed industries.
According to the Canadian Dairy Commission, the two-price system would create an artificial incentive for highly processed products. If dairies made cream cheese, for instance, they would pay the regular price for milk. However, if they made pineapple flavoured cream cheese, they could claim to be engaged in further processing and pay the lower rate.
Furthermore, such a system would be a nightmare to monitor. It would be impossible to regulate the procedure that de Grandpre has introduced. We do not have enough people now to monitor our present inspection system without creating another one.
The Consumers' Association of Canada does not think very much of the two-price proposal either. It believes that the recommendations amount to protecting processors and producers by dipping into the consumers' pockets. The National Farmers Union observes that the proposals are an attempt to Americanize Canadian agriculture. The Chicken Marketing Board is doubtful if a two-price system would work.
The report urged the chicken, turkey and dairy boards to hold meetings within six months with provincial agencies and processors to discuss a two-price system. If the boards refuse to consider a two-price system, the Government should permit higher annual levels of imports to help the processors. Talk about holding a club over the heads of producers. That is what chicken producers feared from the free trade deal in the first place. In fact, there is already a lot of U.S. produced chicken moving into Saskatchewan and it has already depressed prices.
The Deputy Prime Minister went on to say that the fact of the matter is that the supply management service is in place, and that what we have to do as a Government and as an industry is to ensure that the systems are preserved and enhanced. This a flagrant dichotomy if there ever was one. The national and provincial farm organizations representing poultry producers strongly oppose free trade. The Ontario Chicken Producers' Marketing Board, the Tbrkey Producers' Marketing Board and the Ontario Egg Producers Marketing Board maintain that the national supply management programs have served producers, processors, government and consumers well. They do not support this attempt to attack the supply management system.
April 25, 1989

The Ontario Hatcheries Association also supports the maintenance of supply management. Marketing boards opposed to any changes in the present tariff and non-tariff barriers include asparagus producers, tender fruit producers and grape growers. All these groups have pointed out that Ontario is at a significant climatic disadvantage when competing with American states, not to mention the variance in operation costs, wages and employment benefits.
Our system is a good one. It is not only good but it is functional. When I asked the Deputy Prime Minister for his response, he said that he was considering the de Grandpre proposals. That is not good enough. Throughout the election campaign, we listened to the Deputy Prime Minister say that he would have programs available for farmers. To date, we have seen nothing.
A couple of weeks ago, I became the godfather of Michael Barilla, a person from Hagersville whom I would be proud to see grow up to be a farmer. I cannot ask him to do that today, particularly with a Government which is not prepared to help farmers.
I see that you are signalling that my time is up. Madam Speaker. I would like to end by saying that we on this side of the House are prepared to do something for farmers. We are prepared to stand up for farmers and we are prepared to propose policies that we feel will help the farming community.


Mr. Murray Cardiff (Parliamentary Secretary to Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Madam Speaker, I would first like to thank the Hon. Member for Haldimand- Norfolk (Mr. Speller) for his concern regarding supply managed commodities under the Canada-U.S. Free Trade Agreement. I would like to assure the Hon. Member that Canadian farmers will continue to benefit from supply management programs in the new trade environment.
The Hon. Member said that the Government has done nothing for farmers. I can proudly say that the Government has probably done more for agriculture than any Government in history that either I can remember or the Hon. Member can remember. We have done what we said we would do for agriculture.
Adjournment Debate
Under Article 710 of the Canada-U.S. Free Trade Agreement, both countries maintain the rights outlined in the General Agreement on Tariffs and Trade. These rights, which were reaffirmed just last week in Geneva, allow Canada to continue to operate domestic supply management systems.
In other words, we have retained our right to add products to the import control list if they threaten to undermine an industry operating under supply management. We have exercised this right. Since the agreement went into effect at the beginning of the year, the Government has expanded the import control list to include yoghurt, ice cream, and other dairy products, to ensure that our dairy markets are not disrupted.
The slight increase in import quotas for chicken, turkey, and eggs under Article 706 of the agreement should not be interpreted as a threat to the supply management programs operating for these commodities. The quota changes simply reflect actual imports required to meet domestic consumer demand over the past few years.


Robert (Bob) Speller: Come on.


Murray Cardiff: That is correct, and the Hon. Member knows it.
The changes will have no impact on prices. Domestic producers still retain the exclusive right to supply almost all of the domestic market. Steps are also being taken to strengthen the supply management powers of the Canadian Broiler Hatching Egg Marketing Agency.
The Government intends to extend the authority of the agency to include the movement of chicks from unregulated provinces into provinces where the marketing of hatching eggs is regulated by the agency. This action will complete the national supply management system for broiler hatching eggs and chicks introduced when the agency was established in 1986. The Government established that agency.
My colleagues and I made a commitment to producers of supply managed commodities. We told them we would ensure that strong supply management systems continue to exist in this country as long as they are favoured by a majority of producers. The Government stood by this commitment when the Canada-U.S. Free Trade Agreement was negotiated. It continues to stand by it and the farmers.

April 25, 1989
Adjournment Debate


UNEMPLOYMENT INSURANCE-IMPACT OF-REQUEST FOR ASSURANCE WOMEN WILL NOT BE PENALIZED
Ms. Dawn Black (New Westminster-Burnaby):: Madam Speaker, I rose in the House last week to question the Minister for Employment and Immigration (Mrs. McDougall) who is also the Minister responsible for the status of women. I asked her for guarantees that women would not be unduly hurt by the new cuts to the unemployment insurance program. She was unable to give me those guarantees.
How will these new outrageous UI penalties help women? How is cutting women off UI and plunging whole families into poverty good for women? The Government made these changes to help itself, certainly not to help women or other workers.
I am very much afraid that women will be penalized for quitting their jobs because they are being sexually harassed. They will have to suffer the new seven to twelve-week penalty. I am afraid that women who refuse employment while on UI because they cannot find child care or because the hours of work do not allow them to take care of family responsibilities will be punished by the Government through these new penalties. I am afraid that women who are fired due to some type of sexist discrimination will have to forgo UI benefits for which they have paid through their premiums. These women and their families will face up to three months with no income.
Women are not supposed to suffer penalties for those reasons. However, it is left up to an employment officer in a Canada Employment Centre to decide whether a woman has just cause to quit, or whether her refusing employment was for a good reason. I wonder how much training in women's issues these employment officers have received.
I would like to read into the record a letter sent to me by a woman in British Columbia. This letter was sent to her by an officer with Employment and Immigration in the UI program. Rose Marie Roux has given me permission to use her name. The letter is dated April 10, 1989 and it states:
Dear Rose Marie Roux
The following information is required to establish the permanency of your relationship. It is not to be construed as a moral issue.
Are you living common-law with your fiance? If so, how long have you been living together? Have you set a definite date for your wedding? When was this date established? What is the date of your planned wedding? Are there any children involved?
Yours truly, R McLeod Insurance Agent
This letter was sent from the Canada Employment Centre, 124 East Fifteenth Street, North Vancouver.
This is an invasion of privacy. It shows the insensitivity of the present system, yet the Minister did not choose to improve the system. Employment officers will be making arbitrary decisions about women's lives. The Minister was unable to guarantee that women would not fall through the cracks of the new system.
Women treated unfairly have the right to appeal, but what will they live on during the long appeal process? What will their children eat, Madam Speaker? These are serious questions that were not addressed by the Minister.
I am also very concerned that a woman unfairly treated at work and then unfairly treated by UI may just give up. Will she take on the UI system by herself? I raised these concerns in my supplementary question to the Minister but she skirted around them and was unwilling to give us a straight answer. The Minister patted herself on the back for bringing the unemployment insurance parental leave benefits in line with the Charter of Rights and Freedoms. Denying benefits to natural fathers while giving them to adoptive fathers is discrimination that should never have taken place in the first place.
The Government's policy forced a decision on young families that it must be the natural mother and not the natural father, if that was their choice, who could care for the children. Is this what the Minister was being self-congratulatory about, the fact that for years this Government practised an unconstitutional policy? Perhaps it was the fact that it took the case of Shalom Schachter, who took the Government to court on this issue and won, thus forcing the Government to change its discriminatory practices. Maybe the Minister is proud of the fact that the Government initially appealed the Schachter decision to try to rob further natural fathers of the benefits which they should have been receiving all along.
What is lost in the whole parental benefits debate is that the Minister cut adoptive leave benefits from 15 weeks to 10 weeks.
April 25, 1989

The Minister stated that her new UI scheme would benefit immigrant women and that this Government had done a lot for immigrant women. That may be the Minister's position, but the National Organization of Immigrant and Visible Minority Women does not think so. It does not think the Government has done anything positive for immigrant women. If the Government cares so much about immigrant women, why does it not remove the long-standing discrimination against immigrant women inherent in its language training programs? How can immigrant women benefit from the Minister's job training if they do not have language skills?
I am concerned about the type of job training the Minister speaks about. Does the Minister mean subsidization of wages for for low skill occupations? The Government has been less than honest all along about the UI program. The Conservative Party did not campaign on the platform of "elect me and I will slash the UI program", but that is what it has done.
Of course, more and better training is necessary, especially after the devastating effects of free trade on women's jobs in Canada, but these training programs should not come at the expense of those in our society who can least afford it.


William James Kempling: Madam Speaker, one of the difficulties in replying to these matters is that those raised by the Member on the late show are not the matters that were addressed when the question was first raised in the House.
I welcome the opportunity to expand on the reply given by the Hon. Minister of Employment and Immigration (Mrs. McDougall) to the Hon. Member for New Westminster-Burnaby (Ms. Black) on April 12. The Hon. Member wanted an assurance that women will not be adversely affected by the proposals contained in the policy paper tabled by the Hon. Minister of Employment and Immigration on April 11.
Women will be among the chief beneficiaries of the amendments introduced in the UI program as part of the labour force development strategy. The changes brought to maternity and parental benefits represent a breakthrough for Canadian social policy.
In 1988 more than 120,000 families benefited from the income protection offered by the UI maternity benefits. The changes we have proposed will enhance the protec-
Adjoumment Debate
tion currently available to women by making receipt of these benefits more flexible and by providing 10 weeks of parental benefits to new parents. These measures also correct some of the unfairness which existed in the application of the current program.
For example, women who must claim both sickness and maternity benefits in the same year will no longer have their duration of benefits limited to 15 weeks. They will now benefit from the full income protection they are due.
Thousands of women have benefited from programs offered under the Canadian Jobs Strategy introduced by this Government in September 1985. During the 1987-88 period more than 160,000 women, youth and disadvantaged workers participated in programs under the job entry component of the Canadian Jobs Strategy. The increased emphasis on active spending will further benefit women by providing them with opportunity to acquire the skills necessary to get a good job.
Another element of the labour force development strategy is an expansion of the program to encourage self-employment and entrepreneurship.
I might note that the Canadian Federation of Independent Business tells us that there are more women entering business as entrepreneurs in the last couple of years than there are men. These programs will also benefit women.
A recent study by Statistics Canada showed that since 1975 the number of self-employed women has been rising three times as fast as the number of self-employed men. By 1986 women's share of total self-employment had reached 27 per cent, up from only 19 per cent in 1975.
The measures introduced regarding voluntary quitters without just cause will have no effect on women who must leave the job with cause. Women who face circumstances such as sexual harassment, the transfer of a spouse to another city, or unsafe working conditions, will continue to have full access to UI benefits.
I can assure the Hon. Member that the labour force development strategy is intended to benefit women. These new proposals, combined with the Government's commitment to employment equity goals and action plans in the private sector, will ensure the continued integration of women in the labour market.

April 25, 1989
Adjournment Debate


The Acting Speaker (Mrs. Champagne):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow afternoon at two o'clock, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.28 p.m.
[Stage Direction]
Wednesday, April 26, 1989