1992-02-07

Hon. Marcel Danis (for the Minister of State (Finance and Privatization)) moved: that Bill S-2, an act to implement conventions between Canada and Finland, Canada and the Czech and Slovak Federal Republic and Canada and the United Mexican States for the avoidance of double taxation with respect to income tax and the prevention of fiscal evasion and a convention between Canada and the United Mexican States for the exchange of information with respect to taxes be read the second time and referred to Legislative committee F.
He said: Madam Speaker, I am pleased on behalf of the government to begin the debate on Bill S-2, an act to implement tax conventions between Canada and Finland, Canada and Czechoslovakia, Canada and Mexico, and an exchange of information treaty with Mexico.
The purpose of this bill is to implement conventions between Canada and Finland, Canada and the Czechoslovak Federal Republic, and Canada and the United Mexican States for the avoidance of double taxation with respect to income tax and a convention between Canada and the United Mexican States for the exchange of information with respect to taxes.
The role of tax treaties is to promote international trade and facilitate international investment. The existence of tax treaties generates an air of stability for investors by providing certainty both as to the method
and the rates of taxation of income flowing between two countries.
Tax treaties also seek to eliminate or alleviate double taxation of income arising from international transactions. The three tax treaties under review follow the pattern of treaties previously approved by Parliament. The major reform of Canada's income tax legislation in 1971 required Canada both to expand its network of tax treaties and to revise treaties previously concluded with other countries.
Negotiations have resulted in the conclusion of new or revised treaties with almost 75 countries. Canada now has 50 tax treaties in force. The bill before the House today represents a continuation of that process.
The rates of tax provided in a treaty cannot be increased unless the treaty itself is revised.
Any revision requires the agreement of the two governments and is a lengthy process. Termination of a treaty is a rare event. As an example, I would note that Canada terminated its treaty with South Africa in 1985. Both in the case of a revision of a treaty and the termination of a treaty, taxpayers are given advance notice of the changes.
Administrative benefits are also provided for taxpayers under our tax treaties. The requirement to pay tax on business profits in the country of source, that is, in the country where the profit is actually made, is eliminated unless the taxpayer has a permanent establishment in that country. A mechanism is provided under the terms of the treaty to settle various problems encountered by taxpayers both as to the interpretation and the application of the treaty.
One of the most important aspects of tax treaties is the elimination or the alleviation of double taxation. Double taxation of international transactions arises when the same income is taxed in the hands of the same person by two different countries. It generally occurs because of the difference in taxation legislation of the two countries.

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This type of double taxation arises in three situation: first, where each contracting state-the two states that are involved in the particular treaty-subjects the same person to tax on a world-wide income; second, where a person is a resident of a contracting state and derives income from the other contracting state and both state imposes tax on that income; and third, where each contracting state subjects the same person, not being a resident of either contracting state, to tax on income derived from a contracting state. This may result, for instance, in a situation where a non-resident person has a permanent establishment in one contracting state through which income is derived from the other contracting state.
per cent-15 per cent in the case of Mexico-will apply. There are, however, a number of exceptions.
Interest paid in respect of a bond or similar obligation of the government, a political subdivision or local authority thereof, is exempt in the country in which it arises. Also, the three treaties contain a provision that would allow that interest paid in respect of a loan made, guaranteed or insured, or a credit extended, guaranteed or insured by a certain state entities-in Canada for example the Export Development Corporation-be taxable only in the state where the recipient of such interest resides.
Tax treaties eliminate double taxation in these situations by either providing one of the states with the exclusive right to tax or by ensuring that taxes paid in one state can be used to offset taxes payable in the other state.
Treaties confer on only one of the contracting states an exclusive right to tax a number of items of income. For these items of income, double taxation is avoided since the other contracting state is prevented from taxing.
For some items of income, the right to tax is not an exclusive one. The treaties confer on the state of source a full or limited right to tax. Although the state of residence of the taxpayer may also tax these items of income, the treaty allows relief for the taxes paid to the other state so as to avoid double taxation.
I would now like to briefly indicate the main elements of these tax treaties. I will deal with the exchange of information convention later in my remarks.
These treaties provide generally that dividends may be taxed in the source country at a maximum rate of 15 per cent. However, in the case of dividends paid to a company that is resident of a contracting state, a 10 per cent rate will apply if the company receiving the dividends holds an equity interest of at least 10 per cent-25 per cent in the case of the treaty with Mexico-of the voting power of the company paying the dividends.
In the case of interest paid by a resident of one country to a resident of the other country, a general rate of 10
With respect to royalties, the conventions provide for a general rate of 10 per cent-15 in the case of Mexico-in the source country. Copyright royalties in respect of most cultural or artistic works are generally exempt under the three treaties. In the case of Czechoslovakia and Mexico, they must be subject to tax in the state where the recipient resides in order to qualify for the exemption from taxation at source.
Some of the other matters also dealt with in these treaties include the subject of capital gains. The treaty provision dealing with capital gains reflects the standard Canadian position enabling the source country to tax gains arising on the sale of real property, business assets and shares in real estate companies.
Second, non-discrimination. Under the treaties, discrimination on the basis of nationality is prohibited, thereby ensuring nationals of a country equal treatment with nationals of the other country in the same circumstances. However, this does not prevent a country from providing fiscal incentives-for example, a small business deduction-on the basis of the residence of the taxpayer.
Third, pensions. Canada has preserved its right to tax pensions paid to residents of Czechoslovakia, Finland and Mexico. In the case of Czechoslovakia and Mexico, the maximum rate of tax applicable by a contracting state to periodic pension and annuity payments to residents of the other state is 15 per cent. In the case of Finland, the maximum rate of tax applicable to periodic pension payments is 20 per cent. Finally war veterans pensions are generally exempt from tax under the three treaties.
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Fourth, double taxation relief. The treaties provide that in Canada double taxation of foreign source income of Canadian residents is alleviated by way of a foreign tax credit, in accordance with the limitations provided for in the Canadian legislation. In addition, dividends received by a company resident in Canada from the exempt surplus of its foreign affiliate resident in a treaty country are exempt from tax in Canada. Reciprocally relief from double taxation is granted in the other treaty country in accordance with a method recognized by that country.
As to the exchange of information convention with Mexico, this exchange of information convention was signed before the signature of the comprehensive double tax convention referred to previously. It is limited to the exchange of tax information between Canada and Mexico and will be used as a complement to exchange of information provisions found in the comprehensive treaty.
The exchange of information convention will assist the revenue authorities in combating tax evasion. It allows three types of exchange of information: (1) information that will be sent to the other state on a regular and automatic basis, (2) information that will be sent to the other state on a spontaneous basis when it comes to the attention of the sending state, and (3) information that is specifically requested by the other state.
The convention contains a number of safeguards intended to ensure that the information will only be provided for tax purposes and only if providing such information would not violate any law, disclose any trade secret or impose on a state the obligation to carry out measures different from its normal administrative practices.
In conclusion, Madam Speaker, equitable solutions are provided under the terms of these three tax conventions for the various problems of double taxation existing between Canada and these countries. The exchange of information convention with Mexico represents a complement to the comprehensive tax treaty with that country. Each of these countries hopes to implement the bilateral convention as soon as possible and consequently I commend this bill to the most favourable consideration of this House.


Mr. Peter Milliken (Kingston and the Islands):: Madam Speaker, I wish to take part in this debate on Bill S-2, an act to implement conventions between Canada and Finland, Canada and the Czech and Slovak Federal Republic and Canada and the United Mexican States for the avoidance of double taxation with respect to income tax and the prevention of fiscal evasion and a convention between Canada and the United Mexican States for the exchange of information with respect to taxes.
You can understand that, with such a title, this bill is hard to read and understand. Reading the four conventions attached to this bill is a difficult exercise for a member of this House.

As a lawyer, even I find the words extremely difficult.
However, the purpose of this bill, which is to avoid double taxation and to prevent fiscal evasion, that is evasion of taxes between the countries that are signatories to the various conventions, is a worth-while one. As the parliamentary secretary has stated, there are 50 such conventions in force at the present time. This act will bring into place three more that deal with those two issues and the additional one with Mexico to provide for the exchange of information.
If I may say, Madam Speaker, when I was practising law on a regular basis, I occasionally had some dealings with these conventions and their application in respect of the Income Tax Act of Canada. I note, as the parliamentary secretary I think stated, these conventions take precedence over the Income Tax Act. The bill before us ensures that in one of its provisions. In other words, where there is a conflict between the Income Thx Act and the convention, the convention takes precedence.
Obviously our main convention is with the United States. It is the one most frequently dealt with in this country by tax experts. I may say that I was not a tax expert. In reading the U.S. convention and trying to decide how it took precedence over the Income Ikx Act and over which section is always a bit of a conundrum. Usually I end up relying on advice from the Department of National Revenue. I can only hope that advice was always correct. After all, they are the ones who interpret

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the act for their own purposes. They are the ones also involved in it on a regular basis and presumably know how it would be applied.
One of my partners, Mr. David Bonham, who is an expert, can cite the Canada-U.S. tax treaty chapter and verse, but I never had such facility with the technical language of the treaty, let alone the technical language of the Income Ikx Act, which is even worse, as most people who have had any dealings with it can attest.
However, in dealing with this bill, I suggest the proper course is to have the bill referred to a legislative committee where it can receive the detailed study that it deserves to ensure that the words of the act are sufficient to bring the treaties into full force and also to review the treaties to see that they are in accordance with past practices in this regard.
I note that in the material provided to us to assist in dealing with this bill, it is stated that the treaties are generally patterned on the model Double Taxation Convention prepared by the Organization for Economic Co-operation and Development. The committee will want to ensure that is the case in the course of its deliberations.
I notice also that the treaties were signed by the Minister of National Revenue, the Minister of Finance and now the minister of fisheries. I assume they were signed at different times when those ministers occupied various other portfolios. I can imagine that the ministers spent a great deal of time negotiating these important treaties and making sure the words were entirely satisfactory for Canada. Perhaps if they had spent a little more time here, we would not be in the fiscal mess that we are in this country today. Anyway, I am sure the parliamentary secretary will speak to them in that regard and encourage them to devote their efforts to fixing up the fiscal mess in Canada rather than dealing necessarily with these treaties, helpful as they may be.
However, Canadian taxpayers ultimately should be the beneficiary under these arrangements, especially those taxpayers who have assets in foreign countries and are subject to taxation there because it will provide for the avoidance of double taxation on their incomes derived from those places and will also assist the Canadian government, on the other hand, in ensuring that taxes
are paid by those who are earning foreign income and may wish to avoid payment on it for various reasons.
Perhaps we are all the net beneficiaries as a result of these treaties. The committee will want to look into it. We are pleased to (a) support the bill and (b) assist in ensuring its swift passage in order that the detailed consideration it deserves can be forthcoming. I am sure the bill will be reported back to the House and dealt with at third reading in due course.


Mr. Bill Blaikie (Winnipeg IVanscona):: Madam Speaker, it is quite common for these bills with respect to tax treaties between Canada and other countries to come up in the House, to be treated rather briefly, have them go to committee, have them come back and be passed. I think that is appropriate because they generally are not matters of contention between the parties. There is a standard procedure that exists between some countries and that we hope will come to exist between Canada and all countries, that these kinds of understandings be reached and be enshrined in legislation. This is a special one. I am not saying that we are going to obstruct it in any significant way. We too want to see it go to committee quickly, have it looked at and sent back. We do not intend to vote against the bill, but we do intend to use this opportunity just for a little while to talk about the relationship between Canada and one of the countries to which this bill applies. That is, of course, the relationship between Canada and Mexico.
This bill provides for an exchange of information with respect to taxes between Canada and Mexico. I am sure the government will argue that this exchange of information with respect to taxes is simply a matter of obtaining the information that is necessary in order to draft the appropriate regulations pursuant to the legislation.
We also think that this question of exchange of information between Canada and Mexico could be related or preparatory in some way for the North American Free Trade Agreement which the government would like to sign with the United States and Mexico. At the very least, we would like to argue that there has not been enough exchange of information about Canada-Mexico relations here in this House, never mind between Canada and Mexico.
Just this very week the hon. member for Esquimalt- Juan de Fuca wanted the Minister of State for Small Businesses, or for that matter the Minister for International Trade, to table in this House documents which are
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reported to be available to Mexican politicians with respect to the negotiations going on now between Canada, the United States and Mexico. We were not able to obtain that document. We have had further proof since that these so-called draft agreements actually exist and that Mexican senators have had access to these draft agreements. Yet, we here in the Canadian House of Commons, on the other side of the negotiations, are still left in the dark. We cannot see these agreements. We do not have any idea what these agreements contain. We are left to speculate as to what is actually in these draft agreements.
I am sure the hon. member for Esquimalt-Juan de Fuca, whom I see in the House, will have more to say about the details of these particular documents, how we know that they exist and why the government refuses so far to bring us into the light on this so that Canadian members of Parliament can know what Mexican members of Parliament know about the current state of the negotiations.


Mr. McCreath:: Point of order, Madam Speaker.
I know my hon. friend has a very sincere and deep interest in the subject of free trade negotiations in North America and the Canada-Mexico-U.S. trade negotiations. I would hope and expect that in due course there would be an opportunity for the House to debate those issues. However, I would respectfully suggest that is not the issue on the floor today. The issue today is a tax treaty similar to 50 other tax treaties, none of which have led to free trade agreements.
I would respectfully suggest that the subject of trade negotiations between Canada and Mexico or Canada and anybody else has nothing to do with the debate before the House today.


Madam Deputy Speaker:: The subject of relevancy is probably one of the most difficult things the House asks its Speaker to deal with. I understand what the hon. member is saying. I have read the bill and I have listened to the hon. member for Winnipeg Transcona very carefully. At this point, there is a definite link between the bill in front of us and what the hon. member has been talking about.
I will keep on listening very carefully. I agree with the hon. member that this should not turn into a debate on the good and the bad things about a possible North American trade deal, but I can understand the hon. member making some references to it when reading the bill.
I will make sure that all hon. members who will be talking about it will carefully be choosing their words when talking about the bill that is now in front of the House. I would not want to have to say this every 10 minutes during the discussion of this bill. Let us be very serious about it, let us be relevant and let us debate.


William Alexander (Bill) Blaikie: Madam Speaker, I certainly will do my best to stay within the parameters that you have outlined, but obviously, as you say yourself, if we are talking about Canada-Mexico relations, what could be more apropos than a major development in Canada-Mexico relations which is just around the comer.
The government wants us to just sort of casually let go here in the House today this bill which sets up one stage of this new relationship with Mexico, which may or may not be integral to the next stage. Nevertheless, it does talk about, as I said before, exchange of information. We are saying that it is nice to have an exchange of information between Canada and Mexico with respect to taxes, but why do we not have an exchange of information between the government and the opposition here in Canada about what is going on in this other dimension of the Canada-Mexico relations which is, of course, the negotiations having to do with the North American free trade agreement.
We are talking here of process, not substance. I could go on and on, but out of respect for the rules of the House, I would not go on and on about the matter of substance having to do with the advisability of a North American free trade agreement. I happen to think it would be a disaster, but I would not do that because I want to stick to process and to what is actually going on between Canada and Mexico that is being kept from Canadian members of Parliament when we know, thanks to information obtained by the member for Esquimalt- Juan de Fuca, that Mexican senators have access to this kind of information.

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We say to the government: Would this not have been a wonderful opportunity for the government in speaking to us today to have also brought us onboard with respect to other aspects of the Canada-Mexico relationships? That was not done.
I noticed that my colleagues to the right, the members of the Liberal Party, did not seize this opportunity. It is not surprising to me that they would not want to talk about the North American free trade agreement because they could not agree among themselves what they would want to say about it, whether it had to do with process or substance. The fact of the matter is that they are for it. Their member on the committee who was considering this issue did his own minority report because he could not bring himself to take the position that the NDP was taking.
When Canadians have a good look at what has been said in the last little while and what will be said, they will know if they are concerned about the North American free trade agreement that it is to the NDP they will have to look for real and honest and trustworthy opposition to that.
That is not what I primarily wanted to talk about today, that is to say I did not want to talk just about the Liberals because again you might call me into question with respect to relevance, Madam Speaker.


An hon. member:: And they are not relevant.


William Alexander (Bill) Blaikie: And the Liberals are not relevant. I would understand if you would try to rule me out of order because I was talking about people who are irrelevant. I would hope that someone on the government side might use this opportunity because we have asked questions in the House on this issue and may ask them again. Get up. Now is the time. We have a debate now on Canada-Mexico relations. Someone on the government side of the House-the Minister for International Trade, the Minister of State for Small Businesses and Tourism or whoever knows what is going on-can use this opportunity to bring Canadian members of Parliament up to speed about what is going on and tell us what Mexican politicians already know.
Or is there something to hide? It would certainly seem to us, according to documents which have been obtained by Southam through access to information and other
background papers prepared by the government, that Canada stands to lose a lot in our upcoming treaty, so to speak, with Mexico.
When this bill goes to committee I am sure it will be treated in the manner which other bills like it have been treated. However, while we are on the floor of the House, why does the government not take the opportunity to bring us up to scratch on what is going on in the Canada-Mexico negotiations? Also, why do the Liberals not take the opportunity to explain to the Canadian people where they stand on the North American free trade agreement? These people were in the fight of their life in 1988 over the free trade agreement but now seem to be in the stupor of their life with respect to the North American free trade agreement, which will be even worse.
I could perhaps conclude by repeating what I said in the House the other day. This country is bleeding to death as a result of the GST and the free trade agreement. What the government has in mind for us with respect to our new relationship with Mexico is not to apply the needed tourniquet but to finally slash our throats, finish the job and do away with Canada as we have known it in any significant respect.
I think that we have done a service to the debate on this particular issue by using this bill as an opportunity to give the government and the Liberals, who are of a piece on this issue, the opportunity to say where they stand.


Peter L. McCreath: Madam Speaker, I certainly respect your ruling on my earlier point of order. I am not greatly surprised that my hon. friends opposite would wish to avail themselves of the opportunity resulting from the word Mexico to engage themselves in discussions perhaps a little more far ranging than this bill.
I know it is not my hon. friend's intention to in any way mislead the House. Therefore, I do want to correct one impression that he might have left with some hon. members. That is, that the exchange of information convention has anything whatsoever to do with any other negotiations that may be going on between Canada and Mexico. In fact, it is quite common within tax treaty provisions to have this type of exchange of information
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provision dealing exclusively with assisting, in our case, Revenue Canada in dealing with tax evaders.
In the case of the negotiations with Mexico, the Mexicans have been reluctant to engage in tax treaties with anybody. In fact, these negotiations and the treaty with Mexico included within this bill are a result of 15 years of negotiations. After 13 years the Mexicans agreed at the very least to enter into a convention relating to exchanging information to nail down tax evaders. Now they came on side and decided to enter into an agreement in the normal fashion. Therefore, the subsequent agreement, the tax treaty, was signed as well.
I want to assure my hon. friend that the tax treaty in substance, including the exchange of information convention, is substantially no different from the 50 others Canada has signed with countries all around the world.


William Alexander (Bill) Blaikie: Madam Speaker, the hon. member wants to assure me, and I take him at his word, that is what he understands the situation to be. Would it not be a lot easier for all of us to believe what he is telling us if we knew more about the actual negotiations going on between Canada and Mexico? As a result of the fact that we seem to be systematically kept in the dark about what is actually going on, I do not think we would be doing our job if we were not at least a little bit suspicious.
If the government wants to take the opportunity we have offered it this morning by prolonging this debate a little to give us a bigger and more detailed picture of what is actually going on in the Canada-Mexico negotiations, and in so doing reinforce the view the hon. member just stated, all the better.
We will wait and see whether that opportunity is seized. I think we have good reason to be concerned. I asked the Minister for International Trade, when he was the Minister of Finance, many questions in this House about taxes, about which this treaty concerns itself. Many times he got up and refuted the many suggestions I made about the real alternatives to the GST by saying that we have to maintain what the minister calls tax competitiveness.
My fear is that in an exchange of information about taxes with Mexico the Minister for International Trade might get it in his head that we want to be tax competitive with Mexico, because obviously this notion of competitiveness is loaded. It is loaded with the notion that
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we somehow have to become like the nations we trade with in terms of our tax policy, our social policy and many other things. That is one of the great concerns those of us critical of the FTA, and now the North American free trade agreement, have.
These things are related whether the hon. member likes to think so or not. I agree that it would be much tidier if we could all just say that Bill S-2 really does not have anything to do with this.
The fact is that tax competitiveness, exchange of information, and the fact that Mexican politicians have a lot more information than we do about a variety of things pertaining to the Canadian-Mexican relationship are real issues, and the government should take the opportunity to deal with them.


Mr. Dennis Mills (Broadview-Greenwood):: Madam Speaker, when the member of the New Democratic Party began his debate I really thought he was sincere in trying to link the tax preferences hidden in international treaties to a reason we should be concerned.
My colleague from Newfoundland gave a beautiful example yesterday in which the Canadian taxpayer lost close to a billion dollars because of a loophole going back to 1971. However he then went off topic and started to talk about this virtue only the NDP has in terms of its concerns for the welfare of the people of Canada, specifically getting them back to work.
I want to inform the hon. member that in the province of Ontario in the last year members of the New Democratic Party systematically worked to sabotage Canada's bid for the Olympic Games, which would have created thousands and thousands of jobs in the greater metropolitan Toronto area, not to mention the tourism opportunity-
In the last year foreign investment in the province of Ontario is down 50 per cent. Therefore, when he starts throwing cheap shots in this House at both the government and the Liberal Party, he should examine his own creative process and the damage the NDP has done in the province of Ontario.
In one year it has managed to double the number of people on welfare in Toronto, which was at one time the great economic engine of this country. In the greater metropolitan area there are now over 350,000 people unemployed.

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I have absolutely no problem with the hon. member if he really wants to deal with the substance of the bill and discuss how treaties with countries like Mexico might lead to a situation in which Ontario, never mind Canada, could be turned into another Mexico. I have no problem if he was really sincere. However, his actions and those of his party in the province of Ontario demonstrate just the opposite.
In talking about relevance, he tried to link this to job creation. However, he should take that same passion and that same energy to the NDP premier in the province of Ontario and try to give him some ideas about how to once again rekindle an image which would attract foreign investment, attract orders to Canada, and fill our factories so that our people could get back to work.
Yesterday, when the New Democratic leader talked about the $30 billion being spent on welfare and UI which should be put into productive capacity, I agreed with her totally. She was being constructive. However, the member from Winnipeg is forgetting that his book needs to be revised to be constructive.


William Alexander (Bill) Blaikie: Madam Speaker, we had a debate about relevance earlier but the hon. member has really pushed the limits by trying to relate the Olympics to the debate we are having today. That does not surprise me, considering the source. To be lectured by a Liberal on the virtues of sincerity is a bit like being lectured by a skunk on the virtues of air fresheners.
The member has studiously ignored taking the opportunity I offered the government and the Liberal Party to say anything about the Liberal Party's position on the North American free trade agreement, which was what I was talking about. The fact that he did not say a word about it speaks volumes. The silence of the Liberal Party on the North American free trade agreement speaks volumes to those Canadians who want to know in the next election whon they can trust to really be against the Canada-U.S. Free Trade Agreement and the North American free trade agreement. The silence of the member for Broadview-Greenwood speaks volumes to those Canadians about whom they can actually trust on this issue. He just showed us where they stand. They have no stand at all.


Dennis Joseph Mills: The hon. member talked talk about hypocrisy in this House. This Speaker knows that I campaigned against the free trade agreement. In my first speech in this House I talked about the free trade agreement. You referred to the member for Broadview-Greenwood, it is absolutely clear where I stood on the free trade agreement. I am opposed to it, my leader said he would rip it up. What more do you need?


An hon. member:: Where does the Liberal Party stand?


Madam Deputy Speaker:: There are only 45 seconds left in the question and comment period. Does the hon. member for Lethbridge want to use a few of them or is he rising on debate?


Mr. Thacker:: I just wanted to comment. I have not been to the House for some time and I am sorry to see that the lovers are quarrelling over there.


Mr. George S. Baker (Gander-Grand Falls):: Madam Speaker, I am surprised that the NDP did not talk at all about our tax system, how it applies to the very big business community, and the fairness or unfairness of it, because that is the subject under debate in this particular bill.
It is a very important piece of legislation. It is so important that it should be perhaps the main subject of debate in this House of Commons. We have just introduced the GST. We have just increased taxes in Canada. We have just said to all Canadians that they have to tighten their belts. Yet, operating in our Income Tax Act, our taxation policies and agreements, we have taxes and systems of write-offs which say today that Gulf Canada can pull out of Hibernia on the east coast of Canada, can pull out and leave $370 million spent, draw out of the agreement, not get any money back directly-


Peter L. McCreath: On a point of order, Madam Speaker. I wonder if the hon. member could explain whether his remarks relate to the tax treaty with Finland, Czechoslovakia or Mexico.


Madam Deputy Speaker:: If the hon. member will show a little bit of patience we will get there.


George Baker: I can tell the hon. member that my remarks relate to the tax treaty with Siberia, where Gulf is going to spend its money.


An hon. member:: The taxpayers' money.
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George Baker: My remarks relate to the tax treaty with Burma where Petro-Canada is going to spend its money. My remarks relate to the fact that those two companies have just pulled out of Canadian operations, have just announced lay-offs in Canada. In preference for what? To spend money in Burma for oil development and spend money in Siberia for oil development.
I am talking about these tax treaties and our Income Thx Act which say that these companies get every cent spent in those foreign nations back on their taxable income as a deduction here in this country, every single penny spent. Imagine if every Canadian had that kind of a deal. Imagine, every penny spent by a Canadian company in Burma for an oil development will be returned to the company as a deduction from its taxable income.
The system operates like this. In the income tax return of an oil company, for example, as we see in this treaty today there is a deduction called-and let us be fair about this, there are deductions for Canadian development of oil, gas and mines, there are deductions for Canadian exploration-"foreign exploration and development".
This is the way it works. A company can take from its taxable income in Canada 10 per cent of what it invested in a foreign nation or the profits it made in a foreign nation from oil and gas development, either one, until 100 per cent is recovered. Of course the same thing applies to Canada, does it not? Gulf, in pulling out of Hibernia and being committed to 243 more days of payments into the project though it is no longer there, can get back the $370 million it spent because 100 per cent of its investment can be taken from its taxable income regardless of whether it is in Canada or a foreign nation.
I looked at this bill today. The hon. parliamentary secretary stood in the House and said: "They are all the same". Well, they are not all the same. All of the 50 other tax arrangements he mentioned are not all the same. This agreement with Finland he just asked me about a few moments ago has a section which says this: "Earnings means the profits after deducting therefrom $500,000 Canadian". Madam Speaker, do you know what that is? That is the deduction on capital gains. It was introduced a few years ago. It is in this bill as it applies to
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profits and gains. The policy of the Government of Canada is that it is only $100,000 now but if they invest in Finland it is $500,000.
That is not in the agreement with Czechoslovakia or Mexico. The hon. parliamentary secretary said: "Oh, just look at it. Just pass it all. It is all the same". It is not all the same at all. However, I will tell you what is the same.
The rationale for allowing an oil and gas company under our income tax laws, not any other company investing in foreign nations, to be able to deduct the money it spends in a foreign nation is-and the tax department and the tax experts in Revenue Canada will tell you this, they told it to me a hundred times because I have argued with them- if you do not allow a company to deduct all of its expenses overseas it will pull up its roots in Canada and will set up an establishment in that foreign country. That foreign country will then tax its profits, not the Canadian government.
All one needs to do is look at any of these conventions. What do you see? You see a description of where the company pays its taxes. Does it pay it here if it invests in Siberia as Gulf Canada is doing? Does it pay its taxes on its profits here in Canada if it is investing in Burma as Petro-Canada is doing after it closed down a thousand service stations the other day?
The law and the income tax department are pretty difficult things to get around. It spells it out pretty clearly, and I want to put it on the record because it destroys the argument used by Revenue Canada. It destroys the argument used by the Government of Canada that you need to give a 100 per cent write-off for investing in a foreign nation.
Companies are taxed on the basis of which state is the contracting one. In other words, a Canadian company investing in Siberia would be considered to be the contracting state. It says: "By reason of domicile or residence or place of management". Then it says: "Supposing there is a residence in both countries", and then: "A permanent home will be the criteria".
What if there is a permanent home in both countries? Then it will be determined by your personal and economic relations, wherever that takes place; in other words, under law, the centre of vital interest.
What if the business proves it has personal and economic relations in both of those countries? Then it boils down to where it is a national. If it is a national in

February 7, 1992
both countries then it is up to negotiations between the states.
In other words, this argument that somebody, a company or a business, can just set up an office in Siberia or set one up in Burma because it is pulling out of Hibernia, off the coast of Newfoundland, and pay taxes in that country is a complete and utter fallacy. It is a complete and utter fallacy.
It is an argument put forward by people who say and who believe that certain people should not pay taxes. If you are big enough, if you are rich enough, if you are influential enough, if you lobby enough, if you can afford the big guys then you should not pay taxes.
That is the system promoted by this bill. Did you notice what the tax on dividends is? You know what it is? It can only go up to 10 per cent.
Madam Speaker, I understand you are getting ready to cut me off.


Madam Deputy Speaker:: Unfortunately I will have to. The hon. member will want to use the time remaining after Question Period.

It being eleven o'clock, pursuant to Standing Order 30(5) the House will now proceed to Statements by Members, pursuant to Standing Order 31.


STATEMENTS PURSUANT TO S. 0. 31
Peter L. McCreath: Madam Speaker, on January 26, I arrived in the town of Batticaloa in the eastern province of Sri Lanka to be met by an elderly man who presented me with a letter neatly typed in English on an old piece of paper. In the letter the man asked me to help find his son who had disappeared some 18 months ago.
I was in Sri Lanka on a human rights fact finding mission with a group of distinguished Canadians, including my hon. colleagues from Nepean and Burnaby- Kingsway.
Little did I know that that man's letter would be the first of 261 personal submissions I would receive from people whose sons, daughters or spouses have simply disappeared.
The peace committee in Batticaloa has documented 3,418 such disappearances since June 1990.
We concluded that a tragedy of appalling proportion is occurring in Sri Lanka and frankly the government and the insurgent LTTE are equally to blame.
Only third party intervention will stop the killing and hopefully lead to a negotiated settlement. I urge the Government of Canada to show leadership through the United Nations, the Commonwealth or, better still, the-


Madam Deputy Speaker:: The hon. member for Nepean.


SRI LANKA
Mrs. Beryl Gaffney (Nepean):: Madam Speaker, Sri Lanka, incredibly beautiful with enormous potential, is being decimated by an ethnic conflict between the state and the Liberation Tigers of Tamil Elam.
There are human rights violations on both sides of the conflict: kidnapping, massacres, individuals held for ransom, forced removal of Muslim population and arbitrary detention.
There is a climate of distrust, fear and repression throughout the country. Media is state controlled. Two hundred and fifty thousand people live in refugee camps. Every young male Thmil is in fear of persecution. Women and children are without proper food and health supplies.
Canada must take a lead position at the United Nations. Canada must ensure there is a complete embargo on all arms exports to Sri Lanka and must call on the international community to do likewise.
Canada should press the Sri Lankan government and the LTTE through the international community to agree to an immediate cease-fire. Canada should suspend the part of Canadian development assistance that is channelled through the Sri Lankan government. These funds should be reallocated to other programs in Sri Lanka.
February 7, 1992


OLYMPIC GAMES
Mr. Jean-Marc Robitaille (Terrebonne):: Madam Speaker, I would like to draw the attention of the House today to the fact that this is the eve of the opening ceremonies for the XVI Winter Olympic Games in Albertville, France, and that 145 Canadians are eager to take part in the competitions under the watchful eyes of the whole world.
I take this opportunity to ask hon. members to pay tribute today to the men and women of this wonderful country who have trained and sacrificed their time and leisure so generously in order to represent Canada with great distinction and unshakeable determination at these games.
As Pierre de Coubertin, the founder of the modem Olympic Games, said in 1936, the important thing about the Olympics is not so much winning but rather taking part in them.
Let us extend to our athletes our best wishes for success in France and let them know that we look forward to their return to honour them for participating in the Olympic Games.
Good luck to all our athletes.



Mr. Bob Kilger (Stormont-Dundas):: Madam Speaker, the XVI Winter Olympic Games will begin tomorrow in Albertville, France. From February 8 to 23, athletes from around the world will be competing for the gold in the spirit of universal friendship and fair play which symbolizes the Olympics.

Our country will be represented by about 240 Canadian men and women, the elite of our athletes, our coaches and our administrative support staff. Our athletes have worked very hard in their respective disciplines to earn a place on Canada's Olympic team. They certainly deserve our admiration and our respect for their talent and their dedication to amateur sport.
I know that all members of this House join me in wishing our athletes the greatest possible success. May they turn in the best performance ever for Canada at the Winter Olympic Games.
Good luck to our athletes.


SRI LANKA
Mr. Svend J. Robinson (Burnaby-Kingsway):: Madam Speaker, I join with my colleagues from South Shore and Nepean in urging the Government of Canada to play a leadership role to help bring to an end the tragedy which is occurring in Sri Lanka.
There have been literally tens of thousands of deaths, of disappearances, of individuals who are victims of torture, murder and disappearance.
The human rights delegation, led by the very distinguished Dr. Lois Wilson, made a number of recommendations both to the Government of Canada and internationally.
I would note that today in Paris, the Sri Lanka donors consortium is meeting. I hope that Canada will play a lead in ensuring that there is a direct linkage between development assistance, other financial support and a clear timetable by the Government of Sri Lanka for improvements in the human rights situation and, as well, mechanisms for monitoring the human rights situation in Sri Lanka by the donor community. The cycle of violence must end. All deaths must be condemned. Jaffna and the north must be allowed to have the desperately needed food, medicine and fuel that they-


Madam Deputy Speaker:: The hon. member for Don Valley East.


BUY CANADIAN
Hon. Alan Redway (Don Valley East):: Madam Speaker, while some companies are closing Canadian plants and shifting production abroad, others are moving product lines from foreign countries to Canada.
Some of these good Canadian corporate citizens include Upjohn, Christie Brown, Canadian Thermos Products, 3M, Xerox, Proctor & Gamble, General Foods,

February 7, 1992
Rubbermaid, Stanley Tools, GTE Sylvania, Dow Chemical and Dupont.
If we are concerned about plant closings and manufacturing job losses, we should be buying the products of these good Canadian corporate citizens, buying Canadian.
The government should be helping us by identifying Canadian products and initiating a buy Canadian campaign. What better way can we celebrate Canada's 125th birthday.


HIBERNIA
Mr. Fred J. Mifflin (Bonavista-TVinity-Conception):: On Tuesday of this week, February 4, Gulf Oil Canada announced its required eight-month notice that it was withdrawing from the Hibernia offshore megaproject.
The remaining three consortium members, Mobil Oil, Petro-Canada and Chevron, together with the federal government, have vowed that the project will go ahead as scheduled and remain within the budget.
The next eight months will be critical to the future of Hibernia. Despite the announcement of business as usual, I have become aware that Gulf's announcement has added a great deal of uncertainty regarding Hibernia's development and has the considerable potential of dampening future business opportunities in Newfoundland and in Canada.
I therefore urge the government to quickly negotiate a deal for a new buyer and in the meantime develop a worst case scenario that will be a contingency if a buyer cannot be found and the other consortium members cannot afford to split the annual expenditures. The crunch date is October 5 of this year.


MEMBER FOR SHEFFORD
Mr. Guy Saint-Julien (Abitibi):: Madam Speaker, last night in this House, the separatist Bloc Quebecois member for Shefford spoke about the $400 billion national debt. He has a short memory. He forgot that he was a minister in the Liberal cabinet in 1983-84 and that he and his party left a national debt of $206 billion in September 1984. Compound interest of over $238 billion
has been added to this Liberal debt since 1984-85, for a grand total of $444 billion.
Today this member is shocked about this national debt. Could he also have forgotten the famous Liberal scandal of the century in 1983-84: $3.9 billion in scientific research tax credits when he was a cabinet minister in the Liberal government? Madam Speaker, that is the heritage which this separatist member of the Bloc Quebecois has left to our children and the people of Canada and Quebec.


HEALTH CARE
Mr. Jim Karpoff (Surrey North):: Americans spend $2,600 per person or 12 per cent of their GNP for health care. Canadians spend only $1,900 per person or 9 per cent of their GNP. Yet, despite spending 30 per cent more, 34 million Americans have no health coverage and 50 million more have inadequate health coverage.
So who has the better health care system? Is it the Canadian who can go to a hospital or a doctor's office and get immediate treatment without fear of financial ruin, or is it the Americans that have to negotiate with an insurance company for coverage they hope they can afford, wait for a few available low-standard spaces in public facilities or face financial ruin?
George Bush has joined an organized U.S. attack on our system by insurance companies, organized medicine and private hospitals because they want to maintain the U.S. system in order to maintain their high profits. They do not like the Canadian system because it is successful and is a powerful example to Americans.
I want to congratulate the Minister of National Health and Welfare for responding to these ill-advised attacks. However, he will truly defend Canadian medicare when he reverses the $64 billion in spending cuts his government has targeted.


PENSIONS
Mrs. Sheila Finestone (Mount Royal):: Hundreds of seniors in my riding and across Canada have a message for the Prime Minister's 75-cent cost of living increase in their monthly pension cheques: Thanks a whole lot for nothing.

Seniors are calling my riding office saying this increase is a slap in the face and is quite insulting. Does the Prime Minister not realize that 75 cents will not buy a litre of milk or a loaf of bread any more? Does he not realize that 75 cents hardly covers the cost of a $10 purchase?
Why doesn't the Prime Minister or his Minister of National Health and Welfare remove the partial deindexation on seniors' pensions and remember that living on tea and toast may not be a problem for some seniors, but it is reality for thousands of others in this country. Another 75 cents sure doesn't help.


WHITE CANE WEEK
Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, I would like to draw the attention of the House to the fact that this week is designated White Cane Week. Organized and promoted by the Canadian National Institute for the Blind, the purpose of the week is to make all Canadians aware of the very special challenges faced by blind and visually impaired persons in our society.
The first White Cane Week grew out of the experiences of a small group of blind people who had discovered that the public generally did not understand the meaning of the white cane as a symbol of blindness. That was in 1946. Every year since then, the first week of February has been dedicated to White Cane Week.
This year's theme for White Cane Week is access to information. It is important that the public understand that blindness and severe visual impairment represent a major depravation of information about the environment that affects many aspects of daily life, including reading a newspaper, managing your home and travelling in your neighbourhood.
The CNIB and volunteers are to be congratulated for their contribution and commitment.


EXTERNAL AFFAIRS
Mr. George S. Rideout (Moncton):: Madam Speaker, I am sure you realize that two Canadians are languishing in a Brazilian jail, sentenced to 28 years for a crime that they may not have committed.
There is an answer and we can solve their problem. But the Secretary of State for External Affairs continues to drag her feet, refusing to initiate procedures which could see these two, Mr. Spencer and Ms. Lamont, return to Canada and to their families. Now we are told that the Brazilian government is anxious to accede to a request from Canada and that it would do everything that was necessary to see these two expelled from Brazil.
The families and Canadians cannot understand why the minister is delaying. Why the reticence? Why did the minister undertake to have an answer in January and why has she not yet delivered that answer? Why will the minister not help Canadians, Canadians in need of our help? It would be so easy for the minister to request the Brazilian government to expel these two Canadians and see them come home. Why?


DUCKS UNLIMITED
William Alexander (Bill) Blaikie: Madam Speaker, the Oldman River dam decision should now finally prompt the Minister of the Environment to do the right thing concerning the Ducks Unlimited office complex presently being constructed in the Oak Hammock marsh wildlife management area in Manitoba.
Oak Hammock Marsh is a Manitoba heritage marsh and an international RAMSAR site, and yet Ducks Unlimited has been able to proceed without an adequate environmental impact assessment. The federal government, given its responsibilities under the Migratory Birds Act, should not have let this be dealt with only through the Western Economic Diversification Office which proceeded on the basis of a sweetheart evaluation from the Canadian Wildlife Service.
The Friends of Oak Hammock Marsh request an independent, non-governmental panel, as the law requires, the cessation of funding until the process is

February 7, 1992
Oral Questions
complete and the enforcement of the current guideline orders.
I used to think well of the work that Ducks Unlimited did, but it has brought shame on itself and on the wildlife community through this hare-brained scheme of theirs at Oak Hammock marsh.


WINE INDUSTRY
Mr. A1 Horning (Okanagan Centre):: Madam Speaker, many of us will recall the predictions in 1988 of the demise of the British Columbia wine industry should free trade ever happen. Instead of the industry being devastated, the complete opposite has happened.
Through an aggressive marketing plan and emphasis on a much stricter quality control, the wine industry is expanding in leaps and bounds. Increased sales in many B.C. wineries have skyrocketed to as high as 496 per cent for Calona wines. These are extraordinary increases. On top of these astounding sales figures, at a recent international wine tasting of 15 Pinot Blancs, the top three places went to B.C. products. First was the Calona Wines 1988 vintage, second Sumac Ridge 1989 vintage, third Grey Monk 1989 vintage.
The new symbol VQA has become a symbol of excellence and I am sure I join all of you in congratulating these B.C. wineries for an outstanding achievement.



ORAL QUESTION PERIOD


Hon. Herb Gray (Windsor West):: Madam Speaker, my question is for the Minister of Finance. After remaining at an unacceptably high level of 10.3 per cent for three months in a row, today we learn that unemployment actually increased in January to 10.4 per cent. This means that 70,000 more people were looking for work in January than at the same time last year.
I want to ask the minister this: If his economic policies are the right ones, why is unemployment going up and
not down? If those policies are so great, where is the recovery?


Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):: Madam Speaker, of course I am deeply concerned about the increase in the unemployment levels. It is a modest increase in unemployment. However, I recognize the serious difficulties that this imposes upon all Canadians but particularly those who are looking for jobs.
As I have said before, there are no quick fixes to the problems we face. It is part of a world-wide situation. Growth in the industrialized countries has faltered, particularly in the United States. We are endeavouring to put in place the fundamentals that will provide for sustained growth and price stability. In the meantime, we are attempting to look at specific sectors that require attention, such as the agricultural industry.
I remind the hon. member that in this fiscal year we put $5.8 billion into the agricultural sector; transportation, which is experiencing serious difficulties, received a $200 million package; the de Havilland assistance package that was put together with the co-operation of the Government of Ontario; the equalization changes which will also help the less wealthy provinces. We are attempting to address the serious sectoral difficulties within our fiscal means. That is the policy of the government.


Herbert Eser (Herb) Gray: Madam Speaker, the minister compares us with the United States. Why does he not recognize that our unemployment rate is much, much higher than that of the United States and due to the policies of this government. Those policies are creating misery and not recovery for thousands of Canadians. The government's policies are not working and that is why Canadians are not working either.
A few days ago we learned that the help wanted index was down. We learned that bankruptcies last year were at record levels. Thousands of people are losing their jobs through plant and store closings and lay-offs. Every day we learn of another one. The figures out today do not even begin to take into account the thousands of jobs to be lost in the lay-offs at places like Esso and the Stone Paper Mill in New Brunswick that were announced just earlier this week.
February 7, 1992

I ask the minister: Does this not prove we need an urgent economic recovery plan beyond anything the government has done so far? I ask the minister and the government to come to their senses and put into effect a new total economic recovery plan without any further delay.


Donald Frank Mazankowski: Madam Speaker, the hon. member will recognize that the adjustment process, the restructuring that the Canadian industry is undergoing, the downsizing, the consolidation, the changes in the way in which the industrial sector is doing business in order to improve their competitive position is really one of the pressures that has added to the difficulties of the recession.
While the hon. member suggests that the United States has a better unemployment rate, I remind him that at the same time I think he will find that our participation rate in the labour force is higher than the United States. As well, I should point out that notwithstanding the fact that the help wanted index has not improved, I am informed that 76 occupations accounting for 23 per cent of total employment experienced annual growth rates above 2 per cent between 1989 and 1991 and 18 occupations accounting for 3.7 per cent of the total employment experienced annual growth rates above 4 per cent during this period.
What that tells me is that it is important to engage in the skills upgrading, the training programs and the retraining programs. That is why we are increasing that training budget from $3.1 billion to $3.4 billion and the labour development program from $1.4 billion to $1.8 billion. Those are important elements that will address this difficulty to which the hon. member refers.


Herbert Eser (Herb) Gray: Madam Speaker, the minister in his answer talks of the economy downsizing. Canadians say that the economy should not be downsizing; it should be growing. With answers like that the government's rate of support in the public opinion polls is soon going to be below the rate of unemployment. It is probably there already.
Oral Questions

Madam Speaker, the unemployment rate is still rising and soon it will pass the government's share of support in the polls. Canadians are looking for work and they need more action from the government.
When will the minister present a new total action plan for a real economic recovery?


Donald Frank Mazankowski: Madam Speaker, I do not want to be indifferent to the hon. member but, in fairness, nine years ago when he was over here on the Treasury benches the unemployment rate in Canada was 12.6 per cent and he certainly was not pushing the panic button then. That was certainly too high then and 10.4 is too high today.
As I indicated to him, I am in the process of completing my pre-budget consultations. I have met and discussed the economic situation widely with Canadians across the country. We will be meeting with the premiers. I have met with the finance ministers. I can assure the hon. member that any realistic suggestion that is advanced will be considered. But I have to remind the hon. member that we cannot exceed in a dramatic way our fiscal targets and we cannot consider borrowing our way out of this difficulty. Nor can we consider the option of taxing our way out of this difficulty.


Mr. David Dingwall (Cape Breton-East Richmond):: Madam Speaker, my question is for the Minister for International Trade.
This morning we learned that The Ottawa Citizen has obtained 17 declassified federal background studies on the impact of the proposed trade agreement between the United States, Canada and Mexico.
I want to ask the minister why he did not adhere to his responsibility to table all relevant information, including those background papers, in the House of Commons. Why did the minister and the government not want to keep Parliament and Canadians fully abreast of the facts and of the analysis of those background papers?

Oral Questions


Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International Trade):: Madam Speaker, I think my hon. friend is well aware that my predecessor and I have both met with the parliamentary committee. We have discussed various aspects of the negotiations and are prepared to continue to do so.
You will also note, Madam Speaker, that in the reports that were released under access to information, there were a number of areas that have not been released because of the significance of some of those conclusions in relation to the negotiating position we would want to take in the NAFTA talks right now. It is for that reason that we did not feel it was appropriate to release the reports in their entirety.


David Charles Dingwall: Madam Speaker, the Minister for International Trade has now admitted on the floor of the House of Commons that we are only going to get some of the facts, not all of the facts. That is what he has just said.
The minister also knows that any trade agreement with the United States and Mexico will have serious impacts on a whole range of Canadian sectors including textiles, auto parts and plastics.
If the government is so confident of its position with regard to the bargaining process that is taking place, why have the minister and the government chosen the course to hide all of the facts from Parliament and from Canadians across this country?


Michael Holcombe Wilson: Madam Speaker, I think anybody who is watching will see how my hon. friend has distorted the answer to the first question.
Just to put it on the record again, the point that I think bears repeating is that if we release all of the information my colleague would like to have, that would undermine the national interest of the country in pursuing the negotiations.
My hon. friend also said that we are trying to hide things. We are not trying to hide things. What we are trying to do is ensure that the negotiating position is as strong as possible.
If my hon. friend was fair in his interpretation of what those reports said, he would say that they were a
balanced reflection of what the negotiating objectives should be of the Government of Canada in these negotiations so that we can understand what the strengths, the benefits and the clear reasons are for us to be in those negotiations in the national interest relative to some of the things that we should be looking out for in the conduct of the negotiations.


EMPLOYMENT
Hon. Audrey McLaughlin (Yukon):: Madam Speaker, my question is for the Minister of Finance. Today statistics show that the number of unemployed is still growing: 40,000 permanent jobs have disappeared since November. Unemployment costs the taxpayers $30 billion a year and the bill is going up every day. How will the government pay for unemployment? Will it raise taxes, add to the deficit or finally put these people back to work?


Donald Frank Mazankowski: Madam Speaker, as I have indicated in the House on a number of occasions, we are taking steps in the various sectors to help those sectors that are in difficulties, such as agriculture, the transportation sector in regional development programs, tourism programs, saving jobs for example in the de Havilland plant in Toronto.
My colleague, the Minister of Communications, announced a program to support the book publishing industry. My colleague from Newfoundland, the minister of fisheries, announced a Newfoundland roads agreement the other day.
Equalization has been modified which will put $600 million into the hands of the provinces over the next two years. The 95 per cent CMHC guaranteed mortgage has been introduced. Increases in the UI development fund, all of these things are initiatives that we are doing within the fiscal capacity of the government.
I remind the hon. member who suggests that we can spend our way out of this recession of what her own colleague, the premier of British Columbia, said. I share this view because it is a view that is shared by many of the provincial premiers. He said: "We are determined to
February 7, 1992

lower our deficit. You cannot spend your way out of the recession". Mr. Harcourt said that, and I agree.


Audrey Marlene McLaughlin: Madam Speaker, what Canadians know is that 40,000 permanent jobs have been lost since November.
What Canadians know is that 56,000 Canadians have even given up looking for work. They have lost hope recently. I want to say to the Minister of Finance, another 56,000 people who have given up hope is like the entire city of Waterloo or Lethbridge or Brossard stopping to look for work. No jobs and no hope, that is the message that this government is giving to Canadians.
My question to the Minister of Finance is this: Will he, his government and his Prime Minister seriously consider at the First Ministers Conference listening to ideas for job creation like the municipal infrastructure program and give Canadians some hope and some jobs?


Donald Frank Mazankowski: Madam Speaker, of course we will listen and we will do whatever we can afford to do that will be helpful.
I understand what the hon. member is getting at and I share that concern. Also, I think she should recognize with the gradual reduction in interest rates and the lowering of inflation which reduces cost, all of this has had a very positive effect.
There is a headline that says: "Signs of Life in the Canadian Economy". That is encouraging.


Mr. Harvey (Edmonton East):: They're wrong.


Donald Frank Mazankowski: My hon. friend from Edmonton thinks that is a joke. He may think it is a joke, but here is another one.
The Toronto Globe and Mail today, and coming from western Canada I am sure he would appreciate that, says that wheat prices can continue to reach for the sky. That will certainly provide some optimism and confidence for the agricultural producers.
The Financial Post of February 3 said: "GDP-".


Madam Deputy Speaker:: I think we must go on.


Audrey Marlene McLaughlin: Madam Speaker, I have a supplementary.
Oral Questions
I think Canadians who are listening to this must wonder if trying to understand the government's economic policies is like milking a cow for eggs. I want to raise again with this government that its policies are leading to unemployment. Every day we read the number of lay-offs, almost 500,000 jobs since the trade deal came into effect, and today formerly secret documents indicate that studies done on the potential trade deal with Mexico indicate that jobs will be lost in several sectors: auto parts, textiles, and footwear.
I want to say to the government that we do not even know what will happen in the environment because most of that was blacked out in the documents.
I ask the minister responsible for international trade why these studies were not made public. Why can Canadians not see the draft agreement? Why can we in Parliament not be able to debate what this government's position is when it knows that the trade deal will not be in the best interests of Canada as these studies indicate and as many Canadians know?


Michael Holcombe Wilson: Madam Speaker, as always we have very selective reading of the reports that my hon. friend is talking about.
If she is seriously thinking of the national interest, as I responded to her friend from Nova Scotia, she would understand that providing all the information that she wants would undermine our negotiating position. I would also remind her that the draft agreement, which has an awful lot of what we call bracketed tax elements of the agreement that are still subject to extensive negotiation, has not been made available to people in the United States or to people in Mexico.
As I have indicated in the past I am-


Some hon. members:: Oh, oh.


Michael Holcombe Wilson: My friends over there say they are not true. I would ask them to go and seek out the information. Very clearly they will find that it is true.
My friend says Carla Hills has already confirmed it. He says Carla Hills says that the Mexican senators have it. I know that the Mexican senators do not have it.


Some hon. members:: Oh, oh.

Oral Questions TRADE


Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Madam Speaker, in the face of the continued unacceptably massive levels of unemployment in this country, and the papers released today give Canadians reason to be concerned that further additional jobs are going to be rapidly lost in this country, the government continues in the negotiation now under way in the Canada-U.S.-Mexico trade pact.
I want to quote from a document from the minister's own department that says: "If major NU sectors such as automotive and electrical electronics migrate south as a result of the liberalization of trade with Mexico, supplier industries such as plastics would be required to relocate close to their customers to the disadvantage of Canadian facilities. A U.S-Mexico FTA might have the effect of accelerating industry rationalization along the Mexico-U.S. border".
That is not a selective reading. That is a direct quote of the document.
Should Canadians not know that the minister who gave them the Canada-U.S. trade deal is now in the middle of giving them the gears with a Canada-U.S.-Mexico trade deal, and should they not have all the facts, not selected facts, from this government?


Michael Holcombe Wilson: Madam Speaker, the level of someone's voice does not help in understanding the nature of the debate we are having today. What I have said very clearly is that if we provide this information in full as the iron, member wants, it will undermine the position of the Government of Canada in negotiating.
My hon. friend also neglects to point out that the underlying conclusion, the bottom line conclusion, of the studies is that it is appropriate and entirely right for Canada to enter into these negotiations to seek out ways of protecting our interests and ensuring that the Canadian industry is well served through what will undoubtedly be an agreement between the United States and Mexico. Surely, and I believe it was the position of his party, it is the right thing for us to be at that table protecting the Canadian interests.
My hon. friend talks about the free trade agreement with the United States. Did he not listen to the member for Okanagan who was talking about the wine industry in B.C.? There is a report in the paper about the wine industry in Ontario. Both have done well under the free trade agreement. The position of the Liberal Party of Canada-


Madam Deputy Speaker:: If I may pass a comment to the House, I think we would all gain by shorter questions and shorter answers. Today we have had very long questions and very long answers.


Brian Vincent Tobin: Madam Speaker, I will attempt to put a short supplementary. I have a short quote: "Under a U.S.-Mexico FTA, Canadian exports to Mexico could be displaced by U.S. exports ". That is with respect to textiles. That again is the minister's own department.
I ask the minister this: Is it not reasonable, given the promised benefits and the actual reality of the Canada-U.S. Free Trade Agreement, that the government now come clean with Canadians on the benefits and on the cost of a Canada-U.S.-Mexico trade deal? Is it not time to end the cover-up in the negotiations?


Michael Holcombe Wilson: Madam Speaker, the bottom line conclusion of the reports that my hon. friend refers to is that Canada should be at the table. What my hon. friend is referring to is trade between Mexico and the United States.
If there is going to be an agreement between Mexico and the United States that will affect trade between Mexico and the United States and could have an impact on Canada, surely we should be at the table to protect the Canadian interest in that particular sector.



Mr. John Nunziata (York South-Weston):: Madam Speaker, my question is for the minister of employment.
One million, four hundred and twenty-nine thousand Canadians are out of work. Forty thousand full-time jobs were lost last month. Not only is this unacceptable, it is unconscionable. Nine months ago the Minister of Finance told Canadians that the recession was over, yet the bleeding continues right across the country.

I would like to ask the minister of employment what hope does he have for these million and a half Canadians who are desperately searching for work?


Hon. Bernard Valcourt (Minister of Employment and Immigration):: Madam Speaker, I think that we share the concern of the hon. member for unemployed people. I guess we have a different approach. The Liberal Party and the NDP call for further taxes and more deficit for make work projects. We are getting the fundamentals of the economy right so that the private sector can create lasting jobs, not make work projects.
This is the path we are following. When I look at the provisions of the OECD, I see they point to Canada as the country that should have the best performance in
1992.1	think that our people can take comfort in having programs in place to do what is right, and that is training them so that they have the skills to occupy those better jobs.


John V. Nunziata: My supplementary is for to the minister of unemployment.
The government is abandoning Canadians on all fronts. There are 399,000 unemployed in Quebec,
504,000	Canadians unemployed in Ontario, and in the minister's home province there are now 42,000 people unemployed.
I would like to ask the minister this: What does he say to his constituents, what does he say to the people in his very own province, those who are looking for some hope, some employment? Has he abandoned them as well?


Bernard Valcourt: No, Madam Speaker, I have not abandoned them. The government is not abandoning anyone. But the government will not put in place band-aid solutions.
Would Canadians believe that at this time of high unemployment there are some 300,000 vacancies in this country that cannot be filled because of a skill shortage?
The emphasis that we put on providing training and skills for Canadians is a sure way of ensuring lower unemployment in the future. I think that is the right direction to take.
Oral Questions TRADE


Mr. David Barrett (Esquimalt-Juan de Fuca):: Madam Speaker, as a prelude to my question, I want to say that I have been in public life for 25 years. When a member gets up and suggests that an issue I raised in this House means that I am not telling the truth, I am prepared to stake my seat against his seat over that issue.
Last Monday and Tbesday I asked the minister, and I intend to ask again today, if he would confirm or deny the fact that Mexican senators have had access to the U.S.-Canada-Mexico draft bracketed agreement. This was confirmed to me by Carla Hills' office and by a spokesperson from the Mexican Embassy.
Yesterday I just learned-


Some hon. members:: Question.


David Barrett: My question to the minister is this: Last week the U.S. Congress budget committee on external trade had briefings on the bracketed Mexico treaty.


Madam Deputy Speaker:: I ask the hon. member to put his question, please.


David Barrett: I put the question; I ask the minister this question: if the Mexican senators have had access to the draft bracketed treaty, if the American congressmen have had access to the draft bracketed treaty, why are not Canadian politicians given access to the same treaty?


Michael Holcombe Wilson: Madam Speaker, I think my hon. friend will realize, in his question, that he is talking about two things: one is access to the actual text and the other is briefings.


David Barrett: They have had both.


Michael Holcombe Wilson: My understanding, from what I have been told by both the Americans and the Mexicans, is that there have been briefings but there has not been access to the actual text. That is the purport of the question that my hon. friend yelled across the House at me a few minutes ago.


David Barrett: Madam Speaker, let me be clear when I say access.

February 7, 1992
Oral Questions
My question to the minister is this: The Mexican senators have had access and briefings on the document. The document was given to them in a room and they were briefed from the document. They held the document in their hands.
The American Congress counterparts have had access and the document in their hands. American congressmen went into the room and were handed copies of the draft bracketed agreement. Staff after security clearance were handed copies of the draft bracketed agreement. They have had copies. They have had access. They have had briefings. We have had nothing.
What are you keeping secret from the Canadian people?


Michael Holcombe Wilson: Madam Speaker, I said on Tuesday that I would be appearing before the external affairs-


David Barrett: That is not my question, that is not my question.


Michael Holcombe Wilson: If my hon. friend would let me give a reply to him, I said on Tuesday that I would be prepared to discuss with the committee the various aspects of the text-of the negotiations of interest to them.
His information is different from my information. There is an honest difference-


David Barrett: Don't you call me a liar.


Michael Holcombe Wilson: I beg your pardon.


David Barrett: Don't you call me a liar.


Some hon. members:: Oh, oh.


Madam Deputy Speaker:: Order, please. There is obviously a difference of opinion, but I do not think that calling anyone a liar or trying to make someone say that
someone has said something else will help things at this point. I think we should go on.


BUY CANADIAN
Alan Redway: Madam Speaker, I have a question for the Minister of Consumer and Corporate Affairs.
A great many Canadians who are concerned about plant closings and manufacturing job losses want to buy Canadian.
Will the government undertake to initiate a buy Canadian campaign across the country? Will it also publish a list of Canadian made products, or are we prohibited from doing this by the free trade agreement?


Hon. Pierre Blais (Minister of Consumer and Corporate Affairs and Minister of State (Agriculture)):: Madam Speaker, I think what my hon. friend is asking an important question. To inform Canadians about the facts is important as well.
As said yesterday, when we look at housing, transportation, food, health and education and we compare with the Americans, the cost of living in Canada is lower than in the United States. So it is not that bad. I think the initiative of my colleagues, the Minister of Industry, Science and Technology and the Minister of Employment and Immigration, on competitiveness will make the market more competitive.
What we need is a market that is competitive. When the market is competitive the consumers get the benefit. What the member says about the fact that Canadian businesses could ask Canadians to buy Canadian is a good idea for them. However, I think it should be initiated by Canadians, by the business community.


YOUTH EMPLOYMENT
Mr. Maurizio Bevilacqua (York North):: Madam Speaker, while this government continues to suffer from its decision-making paralysis, young people's hopes are being shattered in this nation. There are nearly 100,000 more unemployed young people in Canada this January than last January.
February 7, 1992

When will the Minister of Employment and Immigration realize that our youth want a green light, not a pink slip?


Bernard Valcourt: Madam Speaker, I do not know what this kind of question accomplishes. I know one thing, that this government, along with Canadians in the private sector, has shifted the priority from make work projects to training in order to help the youth, in order to help young Canadians obtain jobs that can last.
I know that the Liberal Party is for make work projects, but not this government. We believe in the future of our youth and the investment we make is in skills for people. We would rather invest in people than in poverty.


Maurizio Bevilacqua: Madam Speaker, in order to lead a nation one must show people a future. The future that our young people see in Canada today is very bleak and very dark. We have a generation of chronically unemployed young Canadians.
What is the minister going to do immediately to put an end to this very desperate human tragedy?


Bernard Valcourt: Madam Speaker, it is of no comfort to young Canadians to tell them that. In 1984, when we took office, the rate of unemployment among young people was higher than it is today, much higher.
What we are doing for young Canadians is providing them with a range of programs that will allow them to have the skills to occupy those jobs in the private sector that will last and not make-work jobs.


GENERAL AGREEMENT ON TARIFFS AND TRADE
Mr. Don Boudria (Glengarry-Prescott-Russell):: Madam Speaker, my question is for the Minister for International Trade. Yesterday the minister admitted in this House that the government had failed to do an impact study on the Dunkel proposals at the GATT.
The 1,500 farmers presently demonstrating in front of the office of the Minister of Agriculture want to know when the government will explain its gross negligence when 100,000 jobs are at stake.
Is it not true that the real reason is because the government has already given up at the GATT?
Oral Questions


Michael Holcombe Wilson: Madam Speaker, again another indication of gross distortion by the other side.
We have made it very clear that our position is not to accept tariffication but to seek ways of strengthening and clarifying article XI of the GATT
We have at the request of the farmers developed some information which we have provided to them to help them understand the impact. We have told the farmers themselves that if they want to join with us in the development of the impacts, we would be happy for them to do so. They are the ones who can best help us in that. At this point in time they have not offered to help with the work on developing what the impact would actually be.


Don Boudria: Madam Speaker, I guess the minister wants the farmers to do the negotiating at the GATT as well as do the farming.

Madam Speaker, I have here in my hand a document from the minister that tells Conservative members how to avoid answering questions about GATT. It is on the minister's letterhead. How come the minister had the time to prepare this document telling members how not to answer questions from their constituents but did not have time to study the impact on an endangered industry and on 100,000 jobs that might be lost? Is it not true that the real reason is that the minister and his government have already conceded in GATT?


Michael Holcombe Wilson: Madam Speaker, throughout the GATT negotiations on agricultural issues we have consulted closely and in depth with the farm communities and have developed the positions during that time in consultation and with the full support of the farm community.
Surely my hon friend would expect, if we were to take this another step further and do an in depth study on the impact of the Dunkel proposal, that we would do the study in consultation with the people who are affected, the people who have a fuller understanding of the impacts. That has not been the position of the agricultural communities.

February 7, 1992
Oral Questions
We have said quite clearly that we are prepared to have that sort of an impact study done on a joint basis. Whenever they accept that we will be prepared to start to work.


TAXATION
Mr. Garth Tbrner (Halton-Peel):: Madam Speaker, my question is for the Minister of National Revenue.
Yesterday in this House we heard that Petro-Canada and Gulf Canada, while cutting back on operations in this country, are at the same time investing in foreign ventures and that they have the ability to deduct those investment costs from Canadian earnings.
At a time when our country is just beginning to witness economic recovery, how can the minister justify giving major concessions and advantages to Canadian oil companies that are making these foreign investments?


Hon. Otto Jelinek (Minister of National Revenue):: Madam Speaker, yesterday my very good friend from Gander-Grand Falls suggested that-


An hon. member:: Oh, oh.


Otto John Jelinek: He is a good friend. He suggested that Revenue Canada gave advance rulings to Petro-Canada and Gulf Canada approving massive write-offs from offshore. Nothing could be further from the truth. In fact there were no representations made to Revenue Canada by either of those companies.
In any event, the hon. member who just asked the question knows that all Canadians, individuals or corporate, who make profits outside the country have to pay tax within Canada, even though the profits are made offshore. Therefore, it goes without saying that if they pay tax in Canada from profits offshore, they will also receive deduction provisions according to the Income Tax Act.


MINING INDUSTRY
Mr. Jim Fulton (Skeena):: Madam Speaker, my question is for the Minister of Finance who I am sure is well aware of the close this week of the asbestos mine at Cassiar in northwestern B.C. Hundreds of workers and their families are about to move out of Cassiar and
urgently require federal decisions on tax status of severance pay both from the union and from the receiver.
Will the minister give his assurance that he will fast track decisions on federal assistance and programs like relocation and training, and in particular on an exemption like that given to Pine Point on severance pay, because Cassiar meets all of the requirements of the Ministry of Finance such as isolation, single industry and no other economic opportunities. The workers need the money now because they are moving, not two or three months from now.


Donald Frank Mazankowski: Madam Speaker, there is no formal or general policy governing this kind of a situation. But the hon. member is correct when he indicates that remissions have been granted in certain cases, depending upon the degree of isolation and the opportunities that exist for alternative employment.
I would advise the hon. member that we will look at this situation as we have looked at other cases on a case-by-case basis. If the hon. member would instruct Cassiar to send the information to us with all the details, I would assure him and the people of Cassiar that we would look into it and get back to them as quickly as possible.


James Ross Fulton: Madam Speaker, I thank the Minister of Finance for that positive reply.
My supplementary question on the same situation is for the Minister of Indian Affairs and Northern Development. I am sure he is aware that the Dease River Band immediately north of Cassiar and the Thaltans immediately to the south in Dease Lake, Telegraph Creek and Iskut are similarly going to be negatively impacted.
Since the minister knows that the province of B.C. has made a multi-million dollar proposal to soften the landing for those in the community of Cassiar, does the minister of Indian affairs have a comparable plan for the aboriginal residents who are going to be negatively impacted in the nearby communities?


Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):: Madam Speaker, I appreciate the question of my hon. friend.
Of course I and other ministers of this cabinet are very concerned about employment loss, particularly in single resort communities such as Cassiar.
February 7, 1992

I am sure my colleague, the Minister of Employment and Immigration, is considering the possible benefits of work force adjustment and Community Futures programs. I have asked my officials also to do an inventory of the impact on the Dease Lake and the Thaltan communities.
I would remind the hon. member that it is important he as a member of Parliament give his support to major economic development projects in northern British Columbia such as the Golden Bear Mine, which was recently approved, where the Thaltan community is very much a partner in that venture.


UKRAINE
Mr. Alex Kindy (Calgary Northeast):: Madam Speaker, my question is for the Deputy Prime Minister, the Minister of Finance. It concerns the liabilities and assets of the former U.S.S.R.
The Prime Minister of Ukraine, Mr. Fokin, has invited the creditor nations of the former U.S.S.R., the International Monetary Fund and the World Bank to a conference to be held in Kiev on February 18, to discuss the problem of the partition of the liabilities and assets of the former U.S.S.R.
Ukraine has accepted its share of liabilities but wants to discuss as well the assets that the former U.S.S.R. is holding abroad, including in Canada.
Would the minister indicate to the House who is going to represent Canada at this conference? What is the position of the Canadian government concerning this important matter?


Donald Frank Mazankowski: Madam Speaker, that is an ongoing issue that is discussed within the aegis of the G-7 countries.


EMPLOYMENT
Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Madam Speaker, my question is for the Minister of Employment and Immigration. I would like him to explain to us how his government intends to build the
Oral Questions
future of the country when 40,000 jobs were lost in January alone, 4,000 of these in Quebec. Is he waiting till just before the election to announce job creation projects or will he act today?


Bernard Valcourt: Madam Speaker, we intend to build the country by not following the policies embodied by the Liberal Party of Canada, which would raise the deficit and tax people even more. We know that is the Liberal Party's solution. Our economic policy is meant to create a climate that is favorable to investment and in which the labour force can hold these jobs. That is the plan we are following and it is working, Madam Speaker.


Shirley Maheu: Madam Speaker, before the government talks about Bombardier, which is in my riding, I remind you that it is only one employer and that other companies like Kraft and Pratt & Whitney regularly cut employment. The jobless rate is going up all the time in Quebec. Right now in the Montreal area nearly 195,000 people are desperately looking for work. What does the government intend to do this year to help these people?


Bernard Valcourt: Madam Speaker, to help these people, the government intends to spend over $3 billion on a host of adjustment programs from which these people can benefit. There are $150 million for community development, $412 million for job entry and $78 million for on the job training. Furthermore, these programs are in addition to support programs like unemployment insurance, which amounts to some $17 billion. They are all programs available to these people so that they can, we hope, acquire the skills needed to hold a job.
As I said earlier, Madam Speaker, despite the high unemployment rate, our information shows that about
300,000	jobs in this country cannot be filled because people do not have the required skills. This is the problem that must be addressed.


CENTRAL GUARANTY TRUST
Mr. Douglas Young (Acadie-Bathurst):: Madam Speaker, my question is for the minister responsible for financial institutions.

February 7, 1992
Routine Proceedings
The sad saga of Central Guaranty Trust Company continues to unfold with indecision and confusion contributing to some of its shares fluctuating in value from $2.25 to $11 in the last month. Small shareholders in the Atlantic provinces and across Canada have been and are being badly burned while the regulator fiddles.
What is the government going to do to protect the interest of shareholders, depositors and taxpayers as Canadians' trust and confidence erode in a very important segment of our financial system?


Donald Frank Mazankowski: Madam Speaker, the Office of the Superintendent of Financial Institutions is reviewing this matter and has not as yet brought a recommendation to me. I am told that it is under very active consideration. I think the hon. member would recognize it would be inappropriate for me to comment while these negotiations are ongoing, but as soon as we get word I would be pleased to let the hon. member know.


VIA RAIL
Guy St-Julien: Madam Speaker, my question is for the Minister of Transport. Can the minister tell us or confirm today when a final decision will be made on the survival of VIA in Abitibi?


Hon. Jean Corbeil (Minister of Transport):: Madam Speaker, the hon. member for Abitibi will surely be pleased to know that as a result of his involvement we have been able to arrange meetings between the VIA authorities and representatives of the Senneterre Chamber of Commerce that yielded results which seem satisfactory to both parties. Their discussions at that time are part of the study that VIA is now completing on all services to remote regions. We hope to be able to provide him with a detailed answer in a few weeks.



ROUTINE PROCEEDINGS


Mr. Albert Cooper (Parliamentary Secretary to Minister of State and Leader of the Government in the House of Commons):: Madam Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 107 petitions.
[Editor's Note: See today's Votes and Proceedings.]



SCIENTIFIC RESEARCH


Hon. Doug Lewis (Solicitor General of Canada):: Madam Speaker, I am pleased to have this opportunity to rise on behalf of my colleague, the Minister for Science who has an unavoidable previous commitment, to make reference to the announcement on Wednesday in the media that a major breakthrough had been made in the study of the most common form of muscular dystrophy, myotonic dystrophy.
Hon. members may be aware that this debilitating disease affects the muscles but can also involve the eyes, heart, lungs or digestive system. In Canada about one person in 7,000 suffers from this disease, but in some areas the incidence runs as high as one in 500.
The Canadian Genetic Diseases Network announced that Dr. Robert Korneluk of the Children's Hospital of Eastern Ontario, one of the network's 23 principal investigators, has isolated the genetic defect responsible for the myotonic dystrophy. This is the latest in a series of genetic discoveries in Canada. The cystic fibrosis gene was discovered by another member of the network. The muscular dystrophy gene was discovered by Dr. Ronald Worton.
I would like to point out to the House that each of these researchers is a member of the Canadian Genetic Diseases Network. Since the network was created in 1989 as part of the networks of centres of excellence program it has quickly demonstrated the effectiveness of national collaboration in fostering scientific research.

Since last year the network's program has been funded to the rate of $450,000 over the next five years for Dr. Korneluk's research. As my colleague, the hon. member for Calgary Southwest pointed out yesterday, another $400,000 in funding was also provided by the Medical Research Council, which is Canada's major agency funding medical research.
The Muscular Dystrophy Association of Canada and its United States counterparts as well as the Research Institute of the Children's Hospital of Eastern Ontario and the Children's Hospital of Eastern Ontario Auxiliary contributed to the research.
Madam Speaker, you know the alliances, the partnerships and the collaborations that are key to scientific research both in Canada and around the world. Dr. Korneluk worked with colleagues in the United States, Netherlands and Great Britain in isolating the gene. On behalf of the Government of Canada I would like to congratulate Dr. Korneluk and his colleagues.
I would also like to thank the 165 families in the Ottawa area who participated in Dr. Korneluk's research. This was the largest group of families affected by myotonic dystrophy ever to be studied. I know that these families and many more across Canada and around the world will take heart from this discovery.
In the short term it is going to mean more rapid diagnosis of myotonic dystrophy. In the long term it may mean new breakthroughs in ways to treat the disease.
In addition, the discovery will help advance the course of science in Canada, science that is not only key to Canada's prosperity but is also helping Canadians to live healthier lives.


Ms. Beth Phinney (Hamilton Mountain):: Madam Speaker, it is with great pleasure that I rise to offer congratulations to those who have isolated the genetic defect responsible for myotonic muscular dystrophy.
This landmark breakthrough was made here in Ottawa by Dr. Robert Korneluk and a research team at the Children's Hospital of Eastern Ontario.
As we all know, muscular dystrophy is a tragic disease. Myotonic dystrophy is the most common form affecting adults. Its symptoms are progressive weakness and myotonia, which is an inability to relax muscles after they have contracted.
Routine Proceedings
At this time there is no treatment for this form of muscular dystrophy. All that can be provided is physical therapy and medication to help muscles relax. This discovery will mean dramatically improved diagnosis. Most important, doctors will be better able to advise parents who come from families with a history of the disease so they will know whether they risk passing on this genetic defect.
Of course the discovery raises our hopes that we are much closer to finding a treatment or cure for this disease.
Madam Speaker, it often seems in this House that we have a lot of problems to address, a lot of negative issues to deal with. In a world where things so often go wrong, these medical advances seem nothing less than a miracle.
It is one of those times when members of the scientific research community, who spend so many years of their lives in often frustrating research, are publicly recognized for their great efforts.
Again, on behalf of the Liberal Party and all the families and victims of this disease, my congratulations to all those involved in this breakthrough.


Mr. Riis:: Madam Speaker, our spokesperson on this very important issue is en route to the Chamber as we speak. I wonder if we could simply agree to progress with the Routine Proceedings and as soon as he- It is appropriate that he speak now, Madam Speaker.


James Capsey (Jim) Karpoff: Madam Speaker, all Canadians have a right to be proud of some of the scientific work of our people in the medical field. Canada has had a history of medical research going back to the discovery of insulin. I am delighted to see this government supporting that effort.
However, one of the things that has bothered me over the last two years while I have been in this House and on the health committee is watching the government's dedication to health research being eroded. In the last year the government has consistently cut back on the research funds it has available both in terms of grants to organizations and grants to colleges and universities.
We can all be proud of the discoveries that have been announced in the last week. Certainly it will have an impact on our health care system because it deals with a major breakthrough in one of the more disabling diseases. I wonder how many more breakthroughs we could

Routine Proceedings
have had if this government had maintained its commitment to medical research and its commitment to developing a high calibre of medical scientific research in Canada.
It is very nice for the government and all of us to take credit, but the best way this government could take credit would be to encourage medical research and new breakthroughs and restore the funding that they have cut from medical research budgets in the last few years.



MOTION OF NON-CONFIDENCE IN GOVERNMENT

["I want to thank the hon. member for Bonavista-Trinity-Conception.\nHis request did come to the attention of the Chair yesterday. I will tell the hon. member that this was discussed yesterday with Mr. Speaker. We came to the conclusion that, without in any way diminishing the importance of the Hibernia situation in the Atlantic region, the hon. member's request today for an emergency debate does not meet with the requirements of Standing Order 52.\nFebruary 7, 1992", 'Hopefully there will be other times and other moments to discuss this matter which is very important to the hon. member and particularly to the region he represents.']
Nelson Andrew Riis: Madam Speaker, I wonder if I could seek unanimous consent of the House to put the following motion:
That during the supply period ending March 31,1992, all motions moved pursuant to Standing Order 81(14) be deemed not to be motions of confidence in the government.
I would like to seek unanimous consent to be able to put this motion today.


Madam Deputy Speaker:: Does the hon. member for Kamloops have unanimous consent to present his motion?


Some hon. members:: Agreed.


Some hon. members:: No.


Madam Deputy Speaker:: There is not unanimous consent.



Don Boudria: Madam Speaker, I have the honour and the privilege to present a petition signed by 600 constituents of Glengarry-Prescott-Russell to convince the government to protect the supply management system that now exists under article XI of GATT. This petition is in addition to ones that 1,900 other people have already sent to me in the past.


Don Boudria: Madam Speaker, I also have a petition signed by a number of constituents of Glengarry-Prescott-Russell and elsewhere who have asked me to table it for them in regard to crimes in society and, in particular, bringing to our attention the case of Nina de Villiers.
I want to take this opportunity to congratulate my colleague from Hamilton Mountain who has been such a vocal spokesperson for our caucus and indeed for all Canadians on this important issue.


Svend Johannes Robinson: Madam Speaker, I have the honour to present a petition which was signed by hundreds of Canadians from Burnaby, Vancouver and elsewhere in British Columbia which notes that in February 1985 the House of Commons mandated the Standing Committee on Justice and Legal Affairs to prepare a report on equality rights in Canada. That committee unanimously recommended to the government in October that the Human Rights Act be amended to prohibit discrimination based on sexual orientation in all areas of federal jurisdiction. We have been waiting almost six years now for the government to keep that promise.
Therefore the petitioners urge the government to bring forward an amendment to add sexual orientation to the Canadian Human Rights Act as a prohibited ground of discrimination.


Nelson Andrew Riis: Madam Speaker, it is an honour to present a petition on behalf of a number of residents of the interior of British Columbia from a whole set of communities too numerous to list. They are concerned about plans to divert one of the major British Columbia rivers partly into a number of channels that would eventually end up delivering British Columbia water into the Los Angeles, California area.
The petitioners are asking that the Government of Canada state categorically that our rivers in Canada are not for sale.
February 7, 1992


Nelson Andrew Riis: Madam Speaker, pursuant to Standing Order 36, I present a petition on behalf of a number of the residents of the Kamloops region of British Columbia who are concerned about the cutbacks in financial support to the RCM Police. The petitioners are indicating a number of concerns they have in terms of the ability of the RCMP to fulfil its mandate and are asking the federal government to ensure that proper funding is provided to the police force in Canada.


Robert Alfred Corbett: Madam Speaker, following the tragic murder of Nina de Villiers on August 9, 1991, my constituents have asked me to present a petition to the House of Commons asking that the government revise the Parole Act, the Bail Reform Act, as well as the Criminal Code of Canada, to deal with people who are out on parole and who in this case has committed a further grievous crime.


Mr. John Manley (Ottawa South):: Madam Speaker, I have petitions on three matters that I would like to present this afternoon.
First, quite a large number of constituents who have joined our Canadian family from the country of Bangladesh are petitioning that the government establish a full service immigration program at the Canadian Embassy in Dakar, Bangladesh. People from that country have experienced great difficulty in having to travel to India in order to pursue their immigration files.


John Paul Manley: Second, Madam Speaker, I would like to present a petition on behalf of a number of residents of my constituency of Ottawa South who are calling upon the government to correct an injustice which seems to be occurring in the marketing of petroleum products in the eastern Ontario area. All members will be aware of how expensive it is to buy gasoline in Ottawa compared to almost every other part of Canada.
Routine Proceedings


John Paul Manley: Finally, Madam Speaker, I too would like to present a petition from a number of my constituents who have responded to the tragic circumstances of the death of Nina de Villiers. These petitioners are calling upon Parliament to amend the Criminal Code of Canada, the Bail Reform Act and the Parole Act in response to the circumstances surrounding that tragic event.
I too would like to congratulate the member for Hamilton Mountain for her initiative in respect of this matter.


Ms. Dawn Black (New Westminster-Burnaby):: Madam Speaker, I am pleased to present petitions from a large number of people from Quebec who state that six years ago this government promised to amend the Human Rights Code to ensure that sexual orientation be a prohibited ground for discrimination. The Canadian Human Rights Commission has also called for this amendment. The Minister of Justice has made a commitment to this amendment but still there has been no action.
These petitioners are calling on Parliament to bring forward immediately an amendment to add sexual orientation to the Canadian Human Rights Act as a prohibited ground for discrimination.


Mr. Robert E. Skelly (Comox-Albemi):: Madam Speaker, I have a petition from approximately 100 residents of the municipality of Tofino on the west coast of Vancouver Island urging the government to restore proper funding to the RCMP so that it can fulfil its mandate and its role as the only visible police force for communities across British Columbia and remain as a visible symbol of Canadian unity.


Robert Evans Skelly: I have a further petition, Madam Speaker, signed by 750 people from numerous communities across British Columbia and the other provinces of Canada calling on Parliament to bring forward immediately an amendment to add sexual orientation to the Canadian Human Rights Act as a prohibited ground for discrimination.

Routine Proceedings


Mr. Lyle Kristiansen (Kootenay West-Revelstoke):: Madam Speaker, I have three petitions to present, pursuant to Standing Order 36, the first signed by a large number of Canadians from one coast to another who are petitioning Parliament to bring forward immediately an amendment to add sexual orientation to the Canadian Human Rights Act as a prohibited ground for discrimination.


Lyle Stuart Kristiansen: Second, Madam Speaker, I have a petition signed by a number of citizens of my own constituency, from the cities of Nelson and Castlegar and the village of Salmo and the communities of Crescent Valley, Procter and South Slocan.
The petitioners state that whereas the goods and services tax is applied to feminine sanitary products such as tampons and pads, and whereas these products are necessities for women in the same way that other products are necessities for other Canadians, the petitioners humbly pray and call upon Parliament to consider removing the goods and services tax from women's sanitary products.


Lyle Stuart Kristiansen: Finally, a number of my constituents from a number of cities, villages and communities throughout Kootenay West-Revelstoke point out that especially at a time of serious instability in the international oil markets Canadians need Petro-Canada to act as a watch-dog in the mostly foreign owned and controlled oil industry to ensure that Canadians are not being gouged in the purchase of their own energy resources.
The petitioners humbly pray and call upon Parliament to repeal Bill C-84 and keep Petro-Canada as a Crown corporation acting in the best interests of all Canadians.


Ms. Joy Langan (Mission-Coquitlam):: Madam Speaker, I rise to present a petition from women across Canada-and I see that there are even men who have signed the petition-who are increasingly concerned about the scientific evidence which has raised doubts about the safety of the Meme breast implant. They are even more concerned about the health protection branch
of the Department of National Health and Welfare and its handling of dangers of the Meme breast implant, which it has known about for the past several years.
The petitioners ask Parliament to establish an independent judicial inquiry into the testing and approval process for all medical devices, and in particular the Meme breast implant.


Joy Langan: In addition, I have a petition similar to several others introduced today. This particular petition is from people from Toronto concerned about that the fact that it has been four years since the statement of the government about taking whatever measures were necessary to ensure that sexual orientation is prohibited as a ground for discrimination. In view of the fact that Quebec, Ontario, Manitoba and Yukon have such protection already included in the Human Rights Act, they humbly call upon Parliament to ensure that the government and Parliament act to bring forward immediately an amendment to add sexual orientation to the Canadian Human Rights Act as a prohibited ground of discrimination.


Mr. Steven W. Langdon (Essex-Windsor):: Madam Speaker, I too have a petition which has been signed by hundreds of Canadians, including a great many from the Windsor area, pointing out that the House of Commons Standing Committee on Justice and Legal Affairs prepared a report on equality rights in Canada. In that report it suggested that there should be a number of changes in the Canadian Human Rights Act, including an end to discrimination on the basis of sexual orientation.
In March 1986 the government accepted the report and the petitioners call upon the government to follow through on that commitment made six years ago and put it into legislation.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk)
Albert Glen Cooper: Madam Speaker, Question No. 173 will be answered today.

Routine Proceedings


Mr. Young: 1.	With respect to the 1985-86 Treasury Board announcement on the decontrol of certain person-years, by department, how many person-years have been reduced from the 1985-86 base year up to and including the 1990-91 Main Estimates?
2.	Since 1985-86 to 1990-91 how many person-years in the Department of Indian and Northern Development have been eliminated as a result of transferring program funds and responsibilities to Indian bands where these bands have hired staff from the funds provided?


Hon. Gilles Loiselle (President of the Treasury Board and Minister of State (Finance)):: In total the government reduced 23,542 person-years from the Public Service over the five years between 1985-86 and 1990-91. This represented a reduction of approximately 10 per cent of the adjusted 1985-86 authorized person-year levels (see Note 1). From this amount, 11,165 person-years were reallocated to respond to new priorities and to maintain critical service levels related to health, safety and security. The net result was that there were 12,377 fewer person-years authorized in the 1990-91 Main Estimates than in 1985-86.
Note 1: Over the years the Treasury Board has approved a number of adjustments to its policy on person-year controls, which had the effect of eliminating such controls over specific organizations or particular groups or classes of employee. To ensure a consistent comparison, the analysis above adjusts the authorized person-year levels originally reported in all years including the base year to reflect any changes in the size of the Treasury Board person-year controlled universe.
2. (i) The Department of Indian Affairs and Northern Development was reduced by 2,143 person-years from its 1985-86 base level of 6,245 to its 1990-91 level of 4,102.
(ii) Of the total departmental reduction of 2,143 person-years 1,370 is attributable to the transfer of program funds and responsibilities to First Nations and their organizations. The other person-year reductions resulted from transfers of program funds and responsibilities to the territorial governments and from efficiency gains made throughout the department.


Madam Deputy Speaker:: The question as enumerated by the parliamentary secretary has been answered.


M. Cooper:: Madam Speaker, I would ask that the remaining questions be allowed to stand.


Peter Andrew Stewart Milliken: Madam Speaker, I know that the parliamentary secretary has been doing his best and we have had a veritable flurry of answers to questions this week. However I cannot help but draw to his attention, and I know he would want me to draw it to his attention, the slowness with which the government has proceeded on Question No. 4, as an example, on the Order Paper. It has been there since May 13 of last year. It has been Almost 12 months now.
There is also Question No. 49 of May 21 last year. Both those questions requested a response within 45 days.
It is making a bit of a laughing stock of the Order Paper. I know that the members who put the questions down are not objecting to the government's delay and foot-dragging on this issue. However I am, because I think it is an outrage.
The Solicitor General knows full well that there are rules requiring his department to answer within 45 days. The questions are on the Order Paper and then the members cannot put more on because if members are at their maximum of four questions they are stuck.
The 45-day rule is being worse than ignored; it is trampled underfoot by this uncaring government. I would ask if the parliamentary secretary would perhaps take the House into his confidence and give members some reason the government has failed to respond in a timely manner to their questions?


Albert Glen Cooper: Madam Speaker, I am very impressed with the thoughtfulness of the hon. member in his concern for his colleagues. I hope that perhaps we could transfer him for the debate.
Otherwise, I can tell him that we are continuing to look at the questions. We are doing our best to get them answered. He knows I have answered a significant number of questions this week. It is no wonder I have bags under my eyes as we come to this Friday.

February 7, 1992
Routine Proceedings


Don Boudria: Madam Speaker, I also want to put on record the few questions that I have asked, particularly in regard to the Secor contract of last September 16. Another one concerned the hospitality expenses of every deputy minister. Finally, on September 181 asked about golf club memberships paid by the government and all of its agencies. I know that those three questions are probably difficult to understand. They may even touch a nerve. The rules of this House do not provide for different circumstances when one's nerves are touched. They provide for 45 days. None of the three questions have been answered.
Furthermore, members cannot place any more than four questions on the Order Paper. By not answering these questions the government is preventing me from asking more questions.


Madam Deputy Speaker:: I do understand what the hon. member is saying. However he must realize that his colleague from Kingston and the Islands rose on a point of order. He was close to a speech. Now the hon. member is getting into debate. It is a point of order which does not require a speech to make the point.


Albert Glen Cooper: Madam Speaker, I want to simply reply to the hon. member. He asked that his questions be delivered to all departments, all agencies and, in one case, all Crown corporations.
Even he should understand that this is a considerable amount of work to be done and I am sorry it takes so long. Perhaps next time he could be a little more specific in his questions. I am sure we could respond quicker.


Shirley Maheu: Madam Speaker, I have been listening attentively to the responses from the government side on these questions on the Order Paper.
My question requires a simple yes or no answer. It has been on the Order Paper since May 13.1 was asking the government if it intends to table the report on the race relations task force headed by Mr. Linton Gamer.


An hon. member:: What could be simpler?


Albert Glen Cooper: Question No. 4, I do not know.


Madam Deputy Speaker:: Shall the remaining questions stand?


Some hon. members:: Agreed.


Fred J. Mifflin: Madam Speaker, I appreciate the opportunity to rise on this particular occasion on this subject.
I submitted a request to the Speaker yesterday for an emergency debate under Standing Order 52 on the Hibernia situation. As I pointed out in my letter, this request was made to adjourn the House to debate this subject because the recent notice given by Gulf Canada to withdraw from the Hibernia offshore oil management project has added a great deal of uncertainty regarding Hibernia's development and could have, if it has not already, a dampening effect on future contracts and business opportunities in Newfoundland and Canada.
This negative cascade, this cumulative effect, the uncertainty this engenders in a dismal economic outlook in Newfoundland, indeed in Canada, deserves debate under the rules of Standing Order 52 in the House of Commons.
I humbly request and ask leave to move adjournment of this House now for the purpose of discussing a matter of urgency, namely that measures be undertaken by the government to preserve the continuity of this project.


Some hon. members:: Hear, hear.


Madam Deputy Speaker:: I want to thank the hon. member for Bonavista-Trinity-Conception.
His request did come to the attention of the Chair yesterday. I will tell the hon. member that this was discussed yesterday with Mr. Speaker. We came to the conclusion that, without in any way diminishing the importance of the Hibernia situation in the Atlantic region, the hon. member's request today for an emergency debate does not meet with the requirements of Standing Order 52.
February 7, 1992

Hopefully there will be other times and other moments to discuss this matter which is very important to the hon. member and particularly to the region he represents.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. McDermid that Bill S-2, an act to implement conventions between Canada and Finland, Canada and the Czech and Slovak Federal Republic and Canada and the United Mexican States for the avoidance of double taxation with respect to income tax and the prevention of fiscal evasion and a convention between Canada and the United Mexican States for the exchange of information with respect to taxes, be read the second time and referred to Legislative Committee F.
Madam Deputy Speaker:: I wish to inform the House that pursuant to Standing Order 33(2)(b), because of the ministerial statement, Government Orders will be extended by six minutes.


George Baker: Madam Speaker, as I was saying about this bill on double taxation, my concern is that there is no taxation.
What the hon. member for Bonavista-Trinity-Conception just tried to move in this House regarding an emergency debate on Hibernia relates to this bill because Gulf Canada decided to pull out of Hibernia in Canada and to go ahead with an investment in Siberia.
Petro-Canada, our great national oil company put in place by the taxpayers of Canada, recently announced the closure of gas stations across Canada. It is an enormous cutback. At the same time Petro-Canada is investing in an oil development in Burma.
The bill we have before us today relates to agreements concerning income tax. Income tax was introduced in this country on the basis of progressive taxation. The term income tax as it emerged in Canada during the First
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World War was demanded by the farmers of western Canada and the workers of eastern Canada. It was demanded by the people. It is the only tax I know of that was demanded by the people of Canada, as it was demanded by the people of the United States before 1900. It was based on the fact that when you say "income tax" it means a tax on income. We have a system that says to Gulf Canada that it can pull out of a development in Canada and go into a development in Siberia and deduct from its taxable income in Canada every cent of money it is spending in Siberia.
The government says to Petro-Canada: "You can pull out of operations in Canada and lay off people in 1,700 service stations, get that pool of money, go ahead with your investment in Burma and every cent, to the penny, the hundreds of millions of dollars, you can get it all back because you can subtract it from your taxable income in Canada for this year, next year, next year, for the year after and the year after until you get it all back. If you have $100,000 of taxable income this year in Canada, you can take $100,000 off that billion you are spending in Burma and you pay no taxes".
What kind of a system is this at this time of recession, at this time of saying to ordinary Canadians: "Tighten your belt. Pay new taxes". Talk about double taxation. Ordinary Canadians are paying triple taxation. However, the government says to the oil companies: "If you do not want to pay any taxes, if you do not want to pay any income tax, invest in Siberia, invest in Burma. Pull out of Newfoundland, pull out of your gas stations".
At times to use the income tax system to promote a development is not a bad thing; it is a good thing. Whether or not it was good or bad or justified that this government initially approved a tax write-off for the purchase of Gulf Canada in the beginning is debatable. I seriously doubt it, when a tax concession of $500 million was approved for a company that has $7 billion in assets. But that is what was done.
As the minister said in the House yesterday, that was called the Little Egypt Bump. We can call this movement of Gulf the Siberian shove because it has decided to invest in Siberia and pull out of its development off the coast of Newfoundland.
Perhaps the time has come for the Government of Canada to step back a little bit and look at all of these

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taxation agreements and look at the income tax system as it relates to the companies covered in these agreements so that the encouragement is there for them to invest in this country and not to use the money they are saving in Canada to invest in a foreign nation and have the taxpayers of Canada foot the bill.


Peter L. McCreath: Madam Speaker, I am not sure exactly how my hon. friend's remarks relate to tax treaties between Finland, Czechoslovakia, Mexico and our own country. However, since his comments evidently fall within the scope of the debate I do want to say that while he talks on the surface of double taxation I think what he provides to a certain extent is double-talk.
I am not sure whether it is the policy of his party that the Government of Canada should direct people who are in business on how to do their business, or whether these businesses should be free to try to operate on a basis that makes it worth while for them. It is my understanding that most businesses are in business to make money and to do those things that make sound business sense.
With respect to the issue of taxation, my hon. friend points out that there are deductions for business expenses against income tax. I think the point he should make is that those deductions apply whether those investments are in Canada or abroad.
What he fails to do is go the next step, as the minister did earlier today, and point out that they are taxed on the profits or indeed the income that results from those business investments. At one point he seemed to imply that there should be different standards for taxation applied to different companies or indeed different taxpayers.
I would like to ask him first: Does he believe that the same standards of taxation should apply to all taxpayers in Canada or should there be different rules for different taxpayers? Second, does he believe in the notion that there should be deductions before the determination of tax rates to be paid by taxpayers, and does he disagree with the notion that Canadians or Canadian companies should be taxed on profits they accrue from overseas revenues?


George Baker: Madam Speaker, I shall tiy to answer each one of these questions in the order in which they were put.
First of all, he mentioned the profits that are taxed in foreign nations. I remind the hon. member and the Minister for National Revenue that the foreign exploration and development deductions on the income tax returns of these oil companies allow them to deduct 10 per cent each year-it does go down to 9.6 per cent in the second year in the case of Gulf-of their total amount of exploration and development expenses. But it also allows them to deduct from their taxable income in Canada 100 per cent of their profits from their oil development in Siberia.
That is the system that is in effect in our income tax for companies which invest in foreign nations, so do not talk to me about profits in foreign nations. The higher the profit, the bigger deduction they have from their taxable income in Canada.
Now that I have explained that, let me move to the second point. Should there be, he says, deductions before income tax is paid. Of course there should be deductions. But there is not a Canadian who agrees with a system that says that those deductions can be used not only to totally evade taxes but also to allow somebody making a quarter of a million dollars a year in this country to claim benefits that are due to low and modest income people. Nobody in this country agrees with somebody making over $100,000 a year and being able to claim the child tax credit as they do when the maximum you can make is $26,500 to get the child tax credit and then it goes down. The deductions, the business losses, the RSPs; there are 11 deductions before your net income is arrived at and your net income is used to determine every single income tested benefit under the tax system: The child tax credit, GST rebate, federal sales tax rebate, name them all.
Now the next question: Should there be the same standards of taxation for everybody? There should be a standard. The standard of taxation was arrived at, at the turn of this century, by a Tory government by the way. In 1917 that government wanted conscription in Canada and the farmers were demanding income taxes because there were some wealthy families in two cities in this country that were importing cars from Europe.
February 7, 1992

They demanded fair taxation because all we had was a commodity tax that, as you know, placed an unfair burden on ordinary people because they used the majority of their income just to live.
For example, lower income people have to spend all that money on the GST so they pay a greater percentage in GST. Somebody making $200,000 a year can put money into RRSPs, investments. The percentage spent on the GST is lower.
When the income tax system came into this country, brought in by a Tory government, it did not want to bring it in. It wanted conscription because we were in a war. Its members met in the back rooms of this Chamber with the Liberal opposition. The Liberals said: "We will vote for conscription if you agree to bring in an income tax based on a person's income. It should be progressive. The higher the amount of money you make, the greater percentage you pay in taxes".
That is how income tax began in Canada. If you go back, that is how it began in the United States. It was a demand of the people. It went to the Supreme Court of the U.S. and was judged unconstitutional. The judges said: "How could the majority impose a system of taxation on the minority" who were the rich. The Constitution had to be changed to make it legal.
Do I believe in the same standards of taxes for everyone? Yes, I certainly do. The unfortunate part of it is that over the years since we brought in income taxes, there has been one group of people in this country who do not pay any income taxes at all. The hon. member knows that number is rising. Statistics for last year show that there are many hundreds of people making over $250,000 total income who pay not one penny of income tax, not a single penny.
Do I believe in a standard of taxes for everyone? Sure I do. I believe in the standard that was brought in when the income tax system was set up in this country during the First World War, a system that has not been followed. It is a system that now has got to this bill that we are passing here today, this agreement with these foreign nations that has as its base our own income tax system which says that if you are Gulf Canada you can invest in Siberia and get the same tax benefits as if you invested in Canada.
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You get 100 per cent of it deducted. It says to Petro-Canada: "You can close service stations. Invest in Burma". That country does not exactly have a good record on human rights, does it? "Invest there and you get the same benefits as if you invested in Canada".
In fact, when you really examine the taxation systems that are in effect in those nations, you will discover that it is to the company's benefit to invest in those countries and not to invest in Canada. That is why I say that the government has to rethink this whole system because Canadians are sick and tired of being told that they have to tighten their belts and pay more taxes. They can see that these companies are paying nothing and they are living off the taxpayers of Canada while they invest in foreign nations.


David Barrett: Madam Speaker, I first of all want to say how impressed I am with the previous speaker's analysis of what is taking place. Frankly his scope of bringing the whole double taxation question into a very important bill is important in this House.
Tragically the framework within this bill has been defined in a sense of time by one of the government spokespersons. This goes back to 1971.1 do not intend to do Liberal government bashing. What we knew in 1971 and what we knew 15 years ago when we started these discussions, and it is relevant to provincial governments as well, is entirely different from what we know today.
My good friend has pointed out, by case, what we know today that we did not know in 1971 when this opening was allowed. My good friend has pointed that out in case what we know now applies to Mexico did not apply then as well.
In a world that is being described as the new global economy, we are framing legislation in this bill that is in a world which no longer exists. We think that by sector by sector agreements, for instance with the Mexican government, we are protecting our turf. We also understand, and my friend through his illustration gave proof to this, that money moves within seconds internationally. Money can move from Zurich, from Tokyo, from Hong Kong, from Toronto, from Washington and from London at the press of a computer button. That did not exist in 1971 and I am not going to blame the Liberal govern-

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ment for giving this loophole. That did not exist 15 years ago when my friend talked about the attempt to get a deal. It exists now.
While we politicians sometimes are trapped in classic debates about you said this and you did that, our classic debates are no longer relevant to the technological changes and trade changes that have taken place in this country and in the world.
No one would deliberately set out to allow Gulf to get away with what it did. Gulf got away with it. There has been no clear leadership from this government, as my colleague has clearly pointed out, to close this loophole. This bill will not close the loophole for Mexico or for anyone else.
The appeal is being made by those of us who are reading this and beginning to understand the rapidly changing global world economy. We are elected in Canada, and I am not talking about supemationalism; I am talking about basic political responsibility to the taxpayers of this country. Our basic responsibility is to take as a base line the question of what we need to protect here in Canada as the people who sit on the other side of the table say: "What is it we need here to protect in Mexico?"
Frankly I do not assume that the person you sit down with is going to cheat you. I do not assume that anybody is going to distort the facts. Everybody sits at the table in this kind of legislation with the motivation of enlightened self-interest.
I do not think this government has done enough work. I will stick clearly to the relevance that the Chair so wisely suggested to the House and I will only talk about Mexico and the avoidance of double taxation.
Since this particular bill was introduced, we have had placed in our hands information concerning government documents that indicate a profound potential negative effect of the treaty that the United States and Canada are discussing. That profound negative effect in the documents applies to taxation as well. I will be relevant in dealing with that taxation aspect.
In the areas of textiles, auto parts, plastics, and secondary and tertiary manufacturing for basic resources, there will be no clear-cut explanation once this bill is passed of its implication based on an agreement that is being negotiated.
For the wisdom of all the members of this House, for the protection of the Canadian taxpayers, it would be far better if this bill were withdrawn until the House knows exactly what deck the government is dealing from.
What else is there behind the scenes that we have to force out of secret documents? Why is it that the press has to apply for freedom of information on negotiating positions that have major implications on this bill? I am making a plea to this House, neither for nor against this bill but that we simply do not know enough about what is going on behind the scenes to make a rational decision on this bill. We cannot even have an ideological debate, traditionally from the right, the centre or the left on this bill, because the facts are not before us.
I do not think there is any ill intent by the government in pursuing this bill at this time. I just think there was no thought given to the timing of this bill relative to other things that are happening in a rapidly changing global economy.
It would be far better if this bill were withdrawn for about six months. It would be far better if a committee of this House were struck to deal with that specific broad problem in which this bill falls, and that is the changing global economy.
I think it is absolutely essential in this day and age that every parliamentarian be armed with updated information about this rapidly changing world instead of being fixed here in an almost analogous situation of trying to drive a steam tractor when there are already other operations of carbon driven engines. The House is being hampered by being left in a back frame of time that no longer exists.
It does not surprise me that in some instances when I go back to my constituency people ask me: "Why did you vote this way on this bill? Why did you not think of this or that?" We cannot think of everything. In the crunch we ultimately have to make a decision about many things every single day and we do our best in terms of what is humanly possible.
In this instance, our best in terms of what is humanly possible is to put this bill aside until we as parliamentarians have every single known fact available to us, not kept secret, about our changing relationship with Mexico, because this bill deals with double taxation in Mexico.
February 7, 1992

What is that changing relationship going to be in terms of one major area, tariffs and content and taxation around the automobile parts industry? How does this bill apply? What does it mean if we change the content rule, as is being discussed in the Canada-Mexico free trade agreement, to the question of double taxation on a Canadian investor who is an auto parts manufacturer if he decides to close his plant here, move to Mexico, manufacture there, cut himself back into the market, avoid the tariffs, take his money out of Canada and not be taxed at all out of the Mexican operation and still have a piece of the action?
What does it mean? What does it mean to Quebec and its textile industry, or what is left of it? What does it mean to the plastics industry and double taxation? There is not a single sector of secondary or tertiary manufacturing in terms of investment and double taxation that is not impacted by those talks.
I would like to know what the Canadian government position is. I would like to know where we are going. Although we may have a difference of where we are going and how we get there, how can we possibly deal with this bill until we know where the government is going, how it wants to get there and what its bottom line is? This is like giving a licence to a 10-year-old to drive a car so that when he reaches 18 we hope he will know what he is doing. This is certainly putting the cart before the horse.
I ask my friends to seriously consider exactly the kind of situation they are placing the House in. We do not know enough. We simply do not know enough about the implication of this bill and its meaning to those who wish to invest in Canada and who wish to invest in Mexico.
If I were a Mexican investor and I were faced with this legislation, the questions that I would ask about investment back in or joint ventures with Canadians could not be answered at this time.
There is no possible way even with this bill being passed, in the framework of the negotiations that are going on with a whole new change of trading partners, that this bill will have any relevance a year from now or two years from now if we sign the agreement.
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I think that this bill just got stuck in the government's house works. Its name appeared on the Order Paper and was presented and the government thought: well, this is just a routine thing; let's get it through. It is not a routine bill, but it got captured in the bureaucracy. It got captured in the structure. It is thrust up in the House at a time when we are incapable of dealing with it.
This is not entirely a partisan appeal. It certainly is not without some partisanship, but beyond the partisan appeal that I am making there is a very real appeal that I am trying to present to the government. That is that this bill now is fraught with potential dangers just down the road, 18 months or 36 months from now.
When we take into consideration my hon. friend's historical analysis of how long it took to get this bill here, he suggested 15 years, once the bill is passed it would probably take another 15 years before we would get around to correcting it.
By that time, we could potentially be losing tens or hundreds of millions of dollars worth of taxes that should be coming back to the Canadian people.
I appeal to this government. If it is looking for items on the agenda of this House to do busy work there is other legislation that is far more advanced in terms of information, far more able to get through this House with a consensus, far more important at this point to deal with current problems than this bill.
This bill would entrench a system of taxation and counter taxation that may not have any relevance with Mexico whatsoever within a year or a year and a half.
I want to come to what a suspicious mind might think about this. Not mine, because I am a trusting soul. A suspicious mind might suggest that the government is rushing this bill through the House knowing in advance what the implications are in terms of double taxation on a treaty that it is negotiating without informing the House of the details of what its negotiating position is. That is what a suspicious mind would raise.
Far be it from me to raise any public suspicion on this government. It is too far down in the polls for me to add to that. But if that suspicious mind were accurate then it would go further to say that the way to get this bill though without controversy is ahead of the Canada-U.S.-Mexico free trade agreement, is ahead of the revelations of exactly what Canada's position is, and

February 7, 1992
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ahead of any more release of secret documents as they were today under the aegis of Southam News.
I am the least suspicious member in this House, but I have it as a matter of fact that there are some who are far more suspicious than I am. They seem to have a great deal more experience than I as an ingenue in this Chamber, a somewhat chubby ingenue but an ingenue nonetheless.
I say with all great seriousness, the speaker who spoke before me in his articulate analysis of what Gulf has got away with, in his clear-cut and perfectly in order speech about the implication of those tax avoiders, has raised doubts in my mind that perhaps, to be charitable, this government knows not what it is doing.
But perhaps my colleague who spoke before has a suspicion that indeed it knows what it is doing, that indeed its friends who may supply campaign funds are anxious to see this kind of legislation. There are some sceptics in this country that actually believe the old axiom that Canada gets the best politicians that money can buy. I do not know if that is the kind of political science law that is being taught, but the nasty haste around this bill makes even an ingenue like me suspicious.
On this quiet Friday we will gently get this bill through. Not to worry about the changing dramatics of the Canada-U.S.-Mexico free trade agreement, not to worry about the implications of what Gulf has already got away with in Hibernia, not to focus on Siberia, as my good friend has used as an apt example in terms of this legislation and Mexico, but to quietly get this through so that those who will benefit are well protected before the t's are crossed and the i's are dotted under the Canada-U.S.-Mexico agreement.
My appeal is not made on partisanship, as much as I always love to appeal on partisanship. My appeal is made on common sense of which there is an absence of a great deal in this House.
Why the rush? Pull the bill. Let us find out all the facts before we are asked to vote. Otherwise, and I do not say this as a threat, I will be forced to publicly say that the assessment of my friend in the Liberal Party is absolutely correct. This is another bill to cover another sell out of Canadian taxpayers' interests.
It has nothing to do with Liberal ideology, nothing to do with the NDP and its philosophical position, nothing
to do with the government's philosophical position. But it has everything to do with paying off the wealthy corporations that have used loopholes in this country time and time again to escape their fair share of taxes.
Fairness is what this is all about and fairness we must have. To be decent in attempting to reach that fairness, I ask the government to pull this bill off the floor. I know that after I have made this appeal it will immediately do so.


Peter L. McCreath: Mr. Speaker, I would like to begin by complimenting my hon. friend opposite for the skilful manner in which I believe he tied his remarks to the subject on the floor, unlike some previous speakers.
I heard him say earlier that he had been a parliamentarian for 25 years and I thought he was very skilful in doing that.
However, I would like to remind the hon. member he suggested the bill should be pulled. I notice he made no identification, at least I did not hear him identify any flaws in any of the three treaties or the convention. He does not seem to have any difficulty with them.
He is suggesting that we should hold up the implementation of this bill, one element of which for example provides an opportunity for Revenue Canada, and indeed for its counterpart in Mexico, to exchange information to chase down tax evaders.
I assume that he would agree with the government that catching up with tax evaders is an extremely important thing and that we should do that.
I would remind him as well that right now there are 50 tax treaties virtually the same as these in force between Canada and various countries in the world. I would be glad to share with him a list of those countries.
I would remind him that we are in negotiation with 26 countries of the world to put together similar tax treaties. When we bring forward this bill, it would put in force three further tax treaties that have been signed but not yet put in force by legislation. That is what this bill is about.
This bill has nothing to do whatsoever, with all due respect, with trade negotiations between Canada and Mexico. It has to do with fulfilling the implications of the income tax revisions of 1971, putting together a system which makes it possible for Canadians to participate in
February 7, 1992

business and to do investments and not to be subjected to double taxation. That is what this bill is about.
It is not about Canada-Mexico free trade. I am wondering why my hon. friend is not expressing the same amount of concern about having tax treaties with the other 50 countries that we have them with or indeed with the 26 other countries that we are now negotiating with.
I would respectfully suggest and I would ask him therefore if he would identify specifically the flaws in the three treaties and the information exchange convention now before this House. If there are indeed flaws there, I wish he would identify them and bring them forth.
Otherwise I see no relevance whatsoever to his suggestion, which I know he puts in the best of faith, that we should withdraw this bill for six months.


David Barrett: Mr. Speaker, I thank the member for his expression of closely held beliefs. On a Friday, to dispel myths for such an earnest speaker I do with difficulty. Since I am challenged to do it, I must do it.
My good friend suggests that this is a simple bill to avoid double taxation, that we have agreements with 50 other countries already, none of which is sitting down at the table changing the rules as Mexico is right now. Why not wait until we have decided what rule changes take place before we pass this?
Let me give one simple example to my friend, simply put so it is simply understood. If you, under this bill, intend to move your auto parts manufacturing to Mexico and this bill is enforced, what will happen is that existing rules under this bill will pursue your personal profits for taxation.
I put this to you on the belief that everybody is playing fair and square. My friend who spoke from the Liberal Party suggests that Gulf is playing within the rules, but are the rules fair and square?
The example I want to give is that rules of origin identify ultimately where a product is made and traced back and taxation is made based on rules of origin.
After we signed the Canada-U.S. Free Trade Agreement we had to be vigilant about rules of origin. I raised
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that question with the minister at that time. He said that we are making massive attempts to tighten up because of the change in the agreement. I said: "What have you done?" He said: "We have hired six more customs inspectors".
Cross-border shopping takes 106 more customs inspectors, let alone rules of origin. What is the impact of this when we sign the Canada-Mexico agreement?
The rules of origin are still flaunted. Some of the parts manufactured in Mexico today are unidentified. They are shipped across the border under the Maquiladora program. They are incorporated into American parts. That whole part is identified. That is shipped into Canada.
The only area of taxation that exists between Mexico and Canada now is eliminated because of the Canada-U.S. FTA and they are companies sending in subparts without identity and avoiding taxation to the Canadian taxpayer.
It is estimated that with that one loophole $3 billion is lost to the taxpayers of this country. Do you know what $3 billion would do if we close that loophole? A lot of jobs.
I did not mean to be harsh. I do not mean to punish this government. But when it displays such stupidity and then at times to compound it with ignorance, then it is far too much for me to take and my gentleness disappears.
By giving that one example I am trying to point out that we should not burden the Canadian taxpayers with further loopholes, unless we know exactly the kind of situation we are getting into with Mexico.
The government cannot say it today. It cannot even announce it today. The press has to pick out information that was secret. My questions were not even answered. My sensitivities were insulted for a week.
On top of that we have this bill. We are going to get hosed again. That is not good enough; it is simply not good enough.
I must now make a comment that I did not intend to make. This is a government that says it is businesslike. Businesslike administration run by businessmen, and I add for businessmen, by an astute, thoughtful group of

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politicians. You do not even know when they are trying to sell you the Brooklyn Bridge.
This thing is full of loopholes, particularly when you do not even know yourself or cannot even say publicly what kind of agreement you are going to sign with Mexico.
Do not appeal to me with the idea of shells. Which shell is the pea under? In this shell game we have three shells and no peas under any one of them. We are being asked to sign it.
Just look at the rules of origin as they exist now and see the loopholes that exist. Pass this, and there will be loopholes to drive VIA trains through, that is the ones that are still running.


Nelson Andrew Riis: Mr. Speaker, it is with a great deal of pleasure that I follow the very thoughtful remarks of my hon. colleague from Esquimalt-Juan de Fuca who has laid out very, very clearly what is actually happening here today.
For those who might be watching this presentation this afternoon on a Friday in the House of Commons, I want to remind people that we are dealing with a bill that originated in the Senate, a bill called S-2. Its title is: "an act to implement conventions between Canada and Finland, Canada and the Czech and Slovak Federal Republic and Canada and the United Mexican States for the avoidance of double taxation with respect to income tax and the prevention of fiscal evasion and a convention between Canada and the United Mexican States for the exchange of information with respect to taxes".
There is an old myth around this place that if the government has something it wants to slip through, or if it has an announcement it wants to make and it wants to get as little public recognition as possible, the time to do it is late on a Friday. Late on a Friday is when the press gallery wraps up its affairs for the week and people's attention turns to items other than what is going on in the Parliament of Canada. It is a long-standing tradition that this is the way to low-ball data and information, this is the way to minimize public attention.
We were looking at the legislation in the last few days and we noticed this rather innocuous looking bill, Bill S-2, to establish taxation conventions between a number of countries. As everybody knows, Canada now has tax treaties with 50 different nations. Over the last number
of months we have been negotiating six more tax agreements and there are still 26 outstanding for future negotiations.
It is not a surprise that we do this on a regular basis. We negotiate these tax arrangements to facilitate business between countries. In looking at the bill, Mr. Speaker, you will notice that, yes, it deals with Finland. There are certainly no difficulties there. It deals with Czechoslovakia, again there are no particular difficulties there. Then you start looking at some of the fine details.
When it comes to Mexico it says that it deals with factories, workshops, offices, branch plants, the development of natural resources and tax issues, of course, related to those. It deals with income from immovable property and business profits. It involves shipping and air transport taxation. It involves associated enterprises and the taxation thereof. It involves dividends and how they are dealt with, interest payments and how they are dealt with, royalties and how they are dealt with, personal services and how they are going to be taxed, capital gains, and the matter of apprentices and the taxation surrounding apprenticeships.' It goes on and on.
We noticed that these would be of serious concern to those individuals wanting to do business in Mexico, to those corporations presently involved in the free trade zone in northern Mexico and the migration of many branch plants, American branch plants and others in Canada, to that free trade zone in Mexico in anticipation of the Canada-U.S.-Mexico free trade agreement being signed in the next few weeks.
Here we are then. We are asked to approve today a special taxation arrangement with Mexico while we all know that we are negotiating a free trade deal with Mexico at the same time. Those of us in the New Democratic Party think that this is folly. This is something we ought not to be doing, period.
We know what happened to Canada when we negotiated a free trade deal with the United States. We got hosed. At last count, if memory serves me, 500,000 jobs in the manufacturing sector have disappeared in Canada, largely because of the implications of the Canada-U.S. trade agreement. Many have been very up front. After all, we recognize that corporations exist to do business and maximize their profits for their shareholders.
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They have announced day after day that they are closing down the Canadian operation and moving to Tennessee, Florida, Texas, Louisiana, Mississippi and Alabama to take advantage of lower wages, more lax health and safety regulations, and softer environmental regulations. In other words, it is a lot cheaper because a great deal more exploitation can be conducted.
As we enter into a free trade agreement with Mexico, we have concerns about the implications. What does it mean for Canada? What will happen to Canadian businesses? How will it assist us? What will be the cost? Of course, we do not know because all the negotiations are being done in secret. They are being done behind closed doors.
Today in the newspaper it said: "Secret papers show Canada to get less than it bargains for in the Canada-Mexico trade negotiations".
Another headline says: "The pact would cost jobs, government papers indicate". What government papers are these? Earlier today my hon. colleague from Esquimau-Juan de Fuca asked the Minister for International Trade that considering senators from Mexico's parliament have had access to the documents being negotiated and have had the benefit of direct briefings and selected congressmen in the United States have had access to the agreement being discussed and have had intensive and extensive briefings, why have the parliamentarians of Canada and thereby the people of Canada been kept in the dark and have no idea what the negotiations are all about?
We read, presumably from papers that the Americans and Mexicans have seen, that jobs in the textile industries of Canada would be lost to a significant degree, that jobs in the footwear sector would be hammered mercilessly. As for agriculture, it says that grain growers, livestock producers, pork producers, and oilseed growers will have some problems. It also says there will be a massive shift of the auto parts and automobile industry to Mexico, particularly the free trade zones, from both Canada and the U.S. In other words, just a cursory glance at what is in those documents-


The Acting Speaker (Mr. Paproski):: May I just ask the hon. member if he is reading from the bill or from some other notes? I am just trying to figure out why we are
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discussing free trade in terms of this particular bill. It concerns double taxation and property and development more than anything else. I do not see free trade in there and I would just like to know from where the hon. member is getting his information, other than out of this Bill S-2.


Nelson Andrew Riis: Mr. Speaker, I understand the concern. First,
I was getting my information from American and Mexican excerpts, presumably from the secret free trade agreements which we have not seen but they have, as reported in today's papers.
Mr. Speaker, you ask about the relevancy of quoting from these secret papers that we have not seen. It is because Bill S-2 deals with double taxation, and double taxation occurs when Canadian firms do business in Mexico or Mexican firms do business in Canada. The free trade agreement is all about enhancing the amount of interaction between our two countries.
If we are negotiating a free trade agreement to expand and facilitate business activity between two countries and are debating today the taxation implications, the linkage does not seem to be particularly vague to me. As a matter of fact, it seems to be perfectly clear. That is why my hon. friend from Esquimalt-Juan de Fuca said this is out of step. We are entering into detailed taxation agreements not only before the free trade agreement has been signed but before a single one of us has even seen it, been briefed on it, or before we knew anything about it, other than what we have seen from leaked documents from Mexico or the United States.


Peter L. McCreath: We do not have free trade with the other 50 countries involved.


Nelson Andrew Riis: My hon. colleague rightfully points out, and I think it is a very thoughtful intervention, that we do not have free trade agreements with some of the other countries we have entered into tax negotiations with, particularly Norway, Malta, Thailand, Spain, Singapore, Romania and others. He is absolutely correct. That is why I would propose to facilitate the taxation negotiations taking place and the signatures now required for Finland and the Czech and Slovak Federal Republic. I think we should do this expeditiously. After all, that is straightforward.
However, let us be cautious. After all, the third part of this bill deals with Mexico. I have indicated some of the

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areas in which it deals with trade with Mexico: shipping and air transport, dividends, royalties, property, profits, workshops, branch plants and natural resource development. In other words, this seems to have serious implications for what we are apparently negotiating with Mexico and the United States.
I would suggest that a prudent approach would be to agree to proceed with parts I and II of this legislation, dealing with Finland and the Czech and Slovak Federal Republic, and set aside part m, dealing with Canada and the United Mexican States, until we see what this free trade agreement is going to mean for Canada.
I think it is fair to say that anyone who would speak honestly would say that the benefits of the Canada-U.S. agreement are difficult to find. I am not going to say that there are absolutely none. I do not think that would be fair. Obviously there have been some Canadian firms and Canadian workers who have benefited from access to the United States markets when there might have been more difficulties in past times.
I would suggest that for every job we have gained we probably have lost 100 jobs. I will give one example. My hon. colleague looks puzzled. Just the other day the response to an Order Paper question showed that there are thousands and thousands of Americans who have now used chapter fifteen of the Canada-U.S. Free Trade Agreement to access Canada who normally would not have been here pursuing those jobs which would be filled by Canadian workers. The free trade agreement has made it a lot easier for skilled tradesmen from the United States and professionals from the United States to do business in Canada.


Robert Evans Skelly: And vice versa.


Nelson Andrew Riis: Technically vice versa, yes. My hon. friend will also know that there are a number of hurdles in the United States that make it much more difficult for Canadians to do business there than for Americans to do business in Canada. Somewhere between 40 and 100 per cent, depending on what sector you look at, is foreign owned in Canada as opposed to a foreign ownership of 4 per cent of the United States' economy. Naturally there are a lot more Americans doing business in Canada on an ongoing basis because they own such a large part of
Canada. The free trade agreement simply made it easier for them to operate.
We all know that. That is on the table. We all understand that. Some want to continue. Others want to abrogate the free trade deal and get on with developing our own bilateral relations with the United States in terms of trade. However, the reality is that, although we in Canada know nothing about it because we are being kept in the dark, a trade deal is being negotiated between Canada and Mexico.
Our Mexican colleagues know about it, our American colleagues know about it, but parliamentarians in Canada have to rely on our American and Mexican friends in order to get any information. This is wrong. That is why I say it is also wrong to proceed today with this legislation to harmonize the tax laws between Canada and the United Mexican States to facilitate economic development between the two countries. It is misguided to proceed. I have yet to hear a good reason why we ought to proceed with this part of the bill.
I would urge the government members to give consideration to splitting. As it stands, I regretfully have to say that our party, the New Democratic Party, is not able to support this legislation in its present form. If it was to be split so that we can facilitate our agreements with Finland and the Czech and Slovak Federal Republic certainly we would endorse that.
Let us not put the cart before the horse. Let us not sign a taxation agreement with Mexico until we see what is in this free trade agreement with Mexico and whether we are going to benefit in Canada or be net losers as we are under the Canada-U.S. FTA.


Robert Evans Skelly: Mr. Speaker,
I have a question for my colleague concerning the issue of double taxation. Right now double taxation is an inhibitor to Canadian companies moving down to Mexico, while other things might be more attractive. For example, in a recent news item I saw that Green Giant Foods, located in Texas, was paying its workers wages of $7 an hour. A worker for Green Giant would go to the plant and make $56 a day canning produce or processing food.

Then Green Giant suddenly closed its plant in Texas, I believe it was, or Arizona, and moved across the border into Mexico where it was paying its workers $4.80 a day.
Think of that: wages of $56 a day being paid in the United States, and that company moved almost within sight of the original plant, across the border into Mexico, and was paying its Mexican workers $4.80 a day. The savings in wages was something like 90 per cent over what it was paying its American workers.
The same thing would apply in Canada if a Canadian plant were moved to the United States. It would be saving something like 90 per cent of its wage bills.
Nobody saw the can of Green Giant corn go down in price by 90 per cent. There was no benefit to the consumers. All of that money went to additional profit for the processing company.
If we had the current tax regime as exists between Canada and Mexico, Canada would be able to tax that whole 90 per cent increase in profit which that company gained as a result of the lower wages in Mexico. Canada would be able to pay, for example, for adjustment programs, for unemployment insurance programs for the workers who were put out of work in Canada. Under this piece of legislation, the government not only wants to give those jobs to the Mexicans, the investment to the Mexicans, and the profit to that company, but it also wants to give it a tax credit. It wants to give that company a tax credit for the tax it pays in Mexico.
Canada loses out on all counts. I have not heard anything in the government's position in this debate today that Canada is going to gain anything from this piece of legislation in conjunction with the Mexican free trade legislation.
I would like my colleague to elaborate on that. Should we be giving jobs from highly paid Canadian plants to Mexico, where they make one-tenth in wages of what they make here, and allow the profits to increase accordingly for that company for moving from Canada to Mexico? Not only that, but based on this legislation, should we make sure that the Mexican government gets to collect the taxes and we give the company credit for the taxes that it pays in Mexico?
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What a bunch of losers. They are creating a situation for themselves in which Canadians lose on all counts. I appreciate the speech that my colleague from Kamloops made and hopefully he can elaborate on that.


Nelson Andrew Riis: Mr. Speaker, I do not believe there is much to elaborate upon when I listen to the point made by my hon. colleague. He paints a puzzling picture.
I will simply elaborate on the most recent statistics I have seen in terms of manufacturing wage rates. Consider a situation in which a person who had $20 million at his disposal and wished to begin a manufacturing line. He wanted to start a new plant to manufacture some product. You have three choices under our Canada-U.S.-Mexico free trade deal. You can locate your plant in Canada and you would pay your employees on the average between $10 and $15 an hour, or you could move to the southern United States and open in South Carolina, Alabama, in Mississippi or in Louisiana, and you would be paying on the average between $6 and $8 an hour, or you could go over the line into the northern tier of Mexico and pay between $24 and $28 a week.
Unless you were insane, where would you be tempted to locate your plant if labour were an important criterion in your operation? Obviously, if it were power, if there were some other elements, you might be encouraged to locate elsewhere in the North American context. Labour is critical and we see it in the news today. That is why the American congressmen and the Mexican senators are saying that the businesses in Canada, particularly in the auto industry, the auto parts industry, the textile industry, the footwear industry and in agricultural processing, had better be careful.
You could open a factory or a plant in Mexico and pay people $24 to $28 per week for labour. That is working six days a week, I might add, with virtually no environmental, health and safety laws being enforced and virtually no labour regulations enforced. That is what we are seeing. We are seeing exploitation in that free trade zone in northern Mexico.
It is perfectly clear that Canada cannot be a net winner in this kind of an arrangement. We have seen under the Canada-U.S. Free Trade Agreement the migration of plants to the southern United States. Even within the United States, Americans are noticing that there is an exodus out of the northern rust belt into the sun belt. The United States Congress is becoming increasingly

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concerned that entering into a free trade deal with Mexico may not be in the best interest of American citizens. American corporations, yes.
Let us face it. When we tear away all of the dialogue and all of the rhetoric surrounding the Canada-U.S. Free Trade Agreement, there are people who benefited. The corporations benefited. They can do business more cheaply. They can make more money for their shareholders. For Canada and Canadians, unquestionably we were losers.


Peter L. McCreath: Mr. Speaker, just very briefly. I look forward someday to debating Canada-U.S.-Mexican free trade in this House. Today is not the day because that is not the subject on the floor.
I listened to my hon. friend from Kamloops very carefully and I took down one sentence he used. It seems to me that my hon. friends in the New Democratic Party have shared a lot of gobbledegook with us today.
One statement my hon. friend made in his initial speech when referring to the Canada-U.S. Free Trade Agreement was, and I quote: "We should abrogate the free trade deal, then get on with developing bilateral trade with the United States". I think that demonstrates that my hon. friend really has a lot to learn about trade.


Nelson Andrew Riis: I guess we will have a chance to debate the Canada-U.S.-Mexico free trade deal. I hope we never have that opportunity. That is one opportunity I would just as soon miss.
I believe, from what I have heard Canadians say, that they do not like the free trade agreement with the United States. They think it should be abrogated. That is why I think I can say without any hesitation that, speaking on behalf of the New Democrats in the House of Commons, if we have an opportunity after the next general election, in whatever capacity, to abrogate the free trade agreement with the United States, we will. That is clear. We will end the GST and we will end the free trade deal with the United States.


Hon. Shirley Martin (Minister of State (Transport)):: Mr. Speaker, the hon. member has just said that he
speaks for Canadians who want the free trade agreement abrogated. There are others who do not. I think the facts speak for themselves. The Federation of Canadian Municipalities states in its latest publication: "Canadian exports to the U.S. have increased by 8 per cent since the agreement went into effect, but exports to the rest of the world have declined. Furthermore, since 1988, Canadian exports have performed more poorly in sectors where they were not subject to the free trade agreement".
I hope that we can keep our senses here so that we do not also have to abrogate a free trade deal with Canada, the United States and Mexico.
Also, Mr. Rutley, Economist for the Canadian Manufacturers' Association states:
Manufacturing job losses in industrialized countries during recessions traditionally average between five and eight per cent of the entire manufacturing work force. So far, Canada is in the middle, with 6.6. per cent loss between October 1989 and October 1990. By comparison, during the last recession of 1981-1982 and in the absence of a free trade agreement, losses were nearly double for the same period of time. Between October 1981 and October 1982, some 11.8 per cent of our manufacturing jobs were wiped out.
The article goes on to say:
Free trade has been and will continue to be good economic policy because it ensures access to the world's best market and forces Canada to become more efficient. About the only serious negative since free trade has been the misconceptions visited upon a gullible public.
Most of those misconceptions have been made by the NDP.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate.


Peter Andrew Stewart Milliken: Questions are not terminated.


The Acting Speaker (Mr. Paproski):: Yes, they are. Would you like to have a question or a comment?


Peter Andrew Stewart Milliken: Yes.


The Acting Speaker (Mr. Paproski):: The hon. member for Kingston and the Islands. I will recognize him on a question or a comment.


Peter Andrew Stewart Milliken: Mr. Speaker, I thought you had mentioned that the time had expired.
February 7, 1992


The Acting Speaker (Mr. Paproski):: The hon. member for Kamloops would like to rebut the hon. minister.


Nelson Andrew Riis: Mr. Speaker, on a point of order, I do not want to rebut. I will respond to the minister, but I assume if we are going to continue I will have a chance to respond to the question.


Peter Andrew Stewart Milliken: The hon. member is trying to kill the time if he can.


The Acting Speaker (Mr. Paproski):: The hon. member can respond to the minister.


Nelson Andrew Riis: Mr. Speaker, my hon. friend from Kingston and the Islands suggests that I am trying to avoid the time. I am prepared to stay here all day and respond to points and queries that people will make. I say that very seriously. I am prepared to stay the whole night as well.
I think this is excellent. For the first time we are getting to the base of this, and the government is trying to sneak through a piece of legislation that is connected to the Canada Mexico free trade deal before we in this House have ever seen it.
In response to my hon. friend, she mentions the Canada-U.S. Free Trade Agreement. I want to remind my hon. friend that before the free trade agreement with the United States was entered into, 80 per cent of all of our trade with the United States was tariff-free.
As a matter of fact, in excess of 90 per cent, 94 per cent or 96 per cent, of our trade with the United States was with tariffs no greater than 5 per cent. In other words, to a large degree, we have been trading freely across the Canada-U.S. border for years and years.
There were certain areas in which obviously we had concerns. The auto pact was a good example of that. We had an auto pact which was negotiated to protect the Canadian auto industry and auto parts industry and the tens of thousands of jobs therein.
That has gone by the board now. We are seeing in today's papers that apparently in this new round of discussions with the Mexicans further erosion is going to occur in that critical sector of the manufacturing economy of Canada.
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It is for those reasons that many of us are concerned. That is why I say categorically that given the opportunity, the free trade deal with the United States will be abrogated.


The Acting Speaker (Mr. Paproski):: I still do not see
the relevance here as far as this bill is concerned. I hate to say that.
The hon. member for Kingston and the Islands has a question or comment. There are three minutes left.


Peter Andrew Stewart Milliken: Mr. Speaker, I enjoy the hon. member for Kamloops, flights of fancy as much as anyone in the House.
I agree with the comments the Chair has made that the relevance of this bill to any free trade agreement seems so far-fetched to be beyond any belief.
Since he has raised the issue and says that the New Democratic Party is committed to abrogating the free trade agreement, I wanted to ask about his former colleague, now the premier of Ontario, Mr. Bob Rae.
Mr. Rae has a position of some prominence in the country. He makes pronouncements on various issues, and he professes not to be a great friend of the present government, although he acts very much like the former Minister of Finance, the member for Etobicoke Centre. When there are any financial dealings coming along, we see the similarity between the policies of the government here and the government in Toronto every day. It is unbelievable. It is a mirror image one of the other. I have never heard him say that he is against the free trade agreement. I have never heard him ask the federal government to tear up the free trade agreement.
If that is the policy of the federal New Democratic Party, why is there no support for this policy forthcoming from the premier of Ontario? Why do we not have someone in a position who can make this claim and ask the federal government to act responsibly and get rid of this agreement? If that is the position of the New Democratic Party, why does the premier not come out and say that with force? Why does he not make a public pronouncement calling on the Government of Canada to get rid of this agreement?
That is what I would like to know.

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Nelson Andrew Riis: It seems that my hon. friend is still somewhat vague as to what the policy may be in terms of the free trade agreement with the United States.
Unlike the Liberal Party, let me make it very clear: It is to abrogate the free trade agreement. It is to do away with the free trade agreement. It is to oppose the free trade agreement.
That has been the New Democratic Party position since the very beginning. I find the question somewhat puzzling because the previous Liberal premier of Ontario was one of the more outspoken opponents of the free trade deal.
That tradition goes on. With all due respect to the Liberal premier, he realized that the free trade deal would devastate the manufacturing base of Ontario. He knew that. Bob Rae knows that as well.
That is why it is our policy, unlike the Liberal policy and certainly not the Tory policy, to abrogate the free trade agreement. This is not a trade agreement in the best interest of Canada or Canadians.


The Acting Speaker (Mr. Paproski):: Is the House ready for the question?


Some hon. members:: Question.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


Some hon. members:: On division.


[Stage Direction]
Motion agreed to, bill read the second time and referred to Legislative Committee F.

[Stage Direction]
The House resumed from Thursday, February 6, consideration of the motion of the Ms. Campbell (Vancouver Centre) that Bill C-35, an act to correct certain anomalies, inconsistencies, archaisms and errors in the Statutes of Canada, to deal with other matters of non-controversial and uncomplicated nature therein and to repeal certain provisions thereof that have expired or lapsed or otherwise ceased to have effect, be read the third time and passed.
The Acting Speaker (Mr. Paproski):: When the House rose on yesterday there were two minutes remaining in the question and comment period following the speech of the hon. member for Moncton. I will now recognize hon. members who wish to continue the question and comment period. Are there any questions or comments?


George Baker: Mr. Speaker, members of the Official Opposition, the Liberal Party of Canada, have observed in this legislation the complexity and the non-existence of explanatory notes as they pertain to all of these pieces of legislation.
The danger in passing a bill like this one is that perhaps the House of Commons is passing a major change to legislation that is called in the title non-controversial and of a non-complicated nature therein.
I was looking through this bill a moment ago and it has prompted me to make an intervention. I arrived at the portion of the bill, at page 15, concerning a change to the Coastal Fisheries Protection Act. The change is to paragraph 6(b). That is a famous part of that legislation. It is so controversial in Canada. In fact it is the most controversial part of any fisheries legislation that has ever passed in this country since we have been passing legislation. It is the most controversial part of the Coastal Fisheries Protection Act.
The explanatory notes say this:
Clause 43. This amendment, which would add the underlined and
sidelined words, would ensure that the terms and conditions that are
specified in licences need not be prescribed by regulation.
What licences? The amendment says:
(b) respecting the issuance, suspension and cancellation of any licences or permits-the fees payable-their terms and conditions-
Then the additional words: "which are in addition to such terms and conditions, if any, that the minister may specify therein".
I will tell you what this is. I do not blame the drafters of the legislation because they are not to blame. We have some of the best drafters of legislation in the world. It is what they are told to put in. The licences they are referring to here are the licences for foreign fishing vessels in Canadian waters.
Hidden away, not mentioned, they are the licences of foreign fishing vessels in Canadian waters. The bill now allows the Minister of Fisheries and Oceans to change
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whatever portion of those licences he wishes and the fees to be charged in those licences.
There is such a thing as parliamentary democracy. We are supposed to be told these things because the people of Canada only know through this Parliament a lot of things that go on in government.
I am holding here a remission order that forgives the Government of France a half a million dollars on its fishing licences. When we pass this legislation we will never know when things such as this take place in the future. We will never know.
What the government does not explain in this legislation is that part A of the original act, the Coastal Fisheries Protection Act, sets out all of the terms and conditions of licences that are granted to foreign vessels to fish in Canadian waters. It spells them all out. It talks about the people who can work aboard those vessels, that is foreign crew members. It talks about what they can do, where they can go. It spells out all of those things.
In paragraph (b) that we are amending, it talks about the forms. It now says in an amendment that all of this, all that bill requiring it to be done by regulation can now be done by the minister.
How serious is that? Well, it is very serious. In this month, in this week, on this day there are foreign factory freezer trawlers licensed by the Government of Canada under these regulations off the coast of Canada up at a fishing zone called 2G and 2H. These trawlers receive their licences under this bill and they are fishing for codfish. They have a higher quota for cod in zones 2G and 2H on the Labrador coast than Canada does. They have a higher cod quota than Canada does.
Why is that so serious? It is so serious because we are now into the month of February. The month of February is the pre-spawning time for our codfish, the great northern cod stock that feeds all of our fish plants on the east coast of Canada. They are wintering and preparing for their spawning season in the month of March.
These are the only boats that are disturbing those spawning groups. It is not the ordinary Canadian inshore fisherman. He cannot get up there because of the ice. It is not the trawler of National Sea Products Limited or
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Fisheries Products International. Why you could take a Canadian trawler of 175 feet long, drop it in the hold of one of those Soviet mother factory freezer trawler ships, they call them, and you would need search and rescue to find the Canadian boat. These are 470-foot vessels with the latest in technology.


Peter Andrew Stewart Milliken: They've got a licence.


George Baker: They are licensed by the Government of Canada under the section we are dealing with here today. Under this section the minister will be able to give whatever licences he wants. He will be able to set whatever terms he wishes and he will be able to forgive the money that he forgave in a cabinet order for the government of France, but he will be able to do it Secretly.
It is not only the damage that is done to the spawning and the pre-spawning fish stocks, for four weeks those cod involve themselves in a very complex exercise prior to spawning and they cannot be disturbed. All of the scientific studies that have been done in Norway, Sweden and Denmark show that you cannot even drop food into that zone of pre-spawning activity because they will then not spawn. It is the foreign vessels licensed by Canada that is disturbing this process. Not only that, but they are catching fish.
The minister says: "Some of those fish are underutilized". Granted, you could say yes. I notice that nine foreign nations have quotas for what they call grenadier. I have never seen a grenadier in my life, but I am told it is a long, slinky fish with a great big swelled head like some people I know in the Government of Canada. They are given capelin that Canadians cannot fish because it is a restricted fishery. They are given squid and they are given mackerel. Mackerel is the only fish in the ocean that I know of that sinks if it stops swimming because it does not have an air bag, unlike some people in the government that I know. They are given herring. They are given fish that are restricted.
The other day, the minister of fisheries gave seven licences to Japan under this provision in the act to fish tuna. What did he do? He gave them a bigger quota in Canadian waters for bluefin than he gave to the fishermen of Canada. He even issued them an unlimited quota of albacore, big-eye, yellow-fin. Imagine, that is what you buy in the store in tins, the big-eye and the

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yellow-fin. We say to the minister of fisheries: "Forget your yellow fin, open your big eye and kick them out".
Some are licensed under this section that I think should be pursued that we do not pursue. Tkke, for example, the ones that are licensed to go down around the riding for the hon. member from Cape Breton, our House leader, to catch sharks.
When you go to a restaurant and you pick up shark fin soup, that comes from a foreign vessel licensed by Canada from the Faeroes Islands. In fact, the name of the boat is Baker, not to be confused with Baker. They make a lot money as they fish for shark.
But all of those other licences granted by the Government of Canada, given permission to do so by regulation, change the licence by regulation, change the fees by regulation for giving France half a million dollars on their boat licences.
Now, under this bill the minister can do it by himself. Without going through any regulatory change, he can change the licences. He can issue the licences. He can give remission orders for non-payment.
Speaking of non-payment, do you know that today there are dozens of factory freezer trawlers from foreign nations that have not paid there fees for the last two years? Do you know what happens to Canadians if they do that? They do not get their licence.
This is a double standard. As our House leader pointed out one day back in December in the House of Commons, it is a system that has led to the destruction of our Canadian fishing resource.
Instead of passing a bill here today that allows the minister to further erode our resources behind the scenes, in his office on the weekends, to further erode in the secrecy of his office instead of going with orders, with cabinet decisions, with regulations, is a further destruction of our fishing resource.
I move:
That the question be now put.


David Charles Dingwall: Mr. Speaker, I congratulate my colleague from Gander-Grand Falls on such a superb intervention here this
afternoon. It brings to the attention of many members of Parliament some of the real serious issues that are affecting the fishing industry in Canada.
The seriousness with which this issue is put forward today also underlines, if you will, what I would deem the gross negligence of the Department of Fisheries and Oceans and in particular the minister responsible for that department who unfortunately is not here.
The minister is grossly negligent in responding to the concerns that Canadians have raised time and time again with regard to this particular provision that my colleague has so rightly pointed out.
The entire thrust of Bill C-35 and all of the amendments which are tied into this particular bill need further clarification, further debate, further examination by all members of this House.
In December of 19911 raised on the floor of the House the question as to why the government was proceeding to change the Atlantic Canada Opportunities Agency in sections 9 and 10 of Bill C-35.
This amendment would substitute the heading "Reports" for the heading "Annual Reports". It would better reflect that fact. Section 21 deals with more than annual reports.
It would mean in essence, instead of every year having a comprehensive report on the activities of the Atlantic Canada Opportunities Agency, that they would only be coming forward every fifth year. I wonder why, and I think of the word sneaky. That is the word that I use.
I guess I was somewhat reflective over the holidays. I said to myself: "Perhaps that word was too strong, sneaky". I reflected and I went for a walk in the snow. I came back and I reflected again. I said to myself: "Is it sneaky, or is it not sneaky?"
Then my colleagues, unbeknownst to me, on December 24 gave me information that relieved me of some of the doubts I had with regard to words I used in this Chamber. I felt vindicated because I had used the word sneaky on several occasions.
What was given to me on December 24 was a series of documents outlining very clearly all the expenditures of the Atlantic Canada Opportunities Agency during and just preceding the federal election of 1988. I was astounded.
February 7, 1992

Then I was given a second document only to find that three years later most, if not all, of the programs and projects for Enterprise Cape Breton for the year 1991 were reduced by over 80 per cent.
I use the word sneaky. I said the government was sneaky. I did not say the minister was sneaky because that would not be parliamentary. But sneaky is sneaky.
I think this government opposite has been exceptionally sneaky with the Canadian people and in particular those of us who reside in Atlantic Canada.
I would have hoped that on this particular day ministers of the Crown would avail themselves of the opportunity to participate in this important debate. I want to add I only see one minister of the Crown.


An hon. member:: There are two.


David Charles Dingwall: Somebody says: "There are two". There are two, but I want to say that I only see one minister of the Crown who is responsible for transport. I know that minister would want to avail herself of the opportunity to talk about the excessive user fees which this particular minister and the government are imposing on airports and flight users in this country, particularly in Atlantic Canada.
We were sold a bill of goods back some years ago. We were told by the incumbent government that the Atlantic Canada Opportunities Agency would be the panacea for resolving all of the ills in Atlantic Canada. Now we have found repeatedly, time after time, other agencies of the Government of Canada such as Transport Canada, for which the minister is responsible, that have introduced user fees in an excessive amount. This will only hamper our very weakening economy in Atlantic Canada.
But now I understand why Bill C-35 is before the House. It is a sneaky bill. What do they want to do? They do not want us to review the comprehensive report. I am not referring to the annual report, because under the legislation of the House and under the statute itself, as I am sure the Solicitor General would attest, they must file an annual report. The comprehensive report will not be given until when? Every fifth year. We will not be able to find out about how damaging the activities of Transport Canada are for Atlantic Canadians.
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I would not say that the Minister of Transport or the Minister of State for Transport is sneaky. That would be inappropriate, but I suggest to the Chair that this bill and this government are sneaky. I feel very vindicated and I want to thank my colleagues-the hon. member for Cape Breton Highlands-Canso, the hon. member for Cape Breton-The Sydneys, the hon. member for Gander-Grand Falls and all my other colleagues in Atlantic Canada-for providing me with what I guess we could call somewhat of a Christmas present on December 24. They presented me with those documents which reaffirmed my suspicions about the activities of the government opposite as it relates to Atlantic Canada Opportunities Agency.
Mr. Speaker, I am sure you would probably get unanimous consent for me to speak on. I am sure members opposite would want to hear me and would not want me to lose the opportunity to reveal more information as it pertains to ACOA. The fact is that this government has left an agency trumped up prior to election year as the panacea for economic development in Atlantic Canada. Recently it has been cut adrift by its political masters in Ottawa, namely the minister responsible for ACOA, the Prime Minister and the Minister of Finance.
All over Atlantic Canada we have example after example of Canadians without work, Canadians who have a desire to be at work, and a generation of young Canadians who have a great cause, the cause to participate in a Canadian economy so that they can make their contribution as individuals and perhaps subsequently, in later years, as spouses and family members.
This government precludes that opportunity. Time and time again it has put up road-blocks. It has not built roads. It has put up road-blocks.
Today 92,000 young people, more so than in January 1991, are without work as a result of the government opposite. All we get from the minister from Atlantic Canada, as we heard in Question Period today, is that he cannot do anything. He does not know what to do. He has no ideas. He has no principles with which to base any sort of sound public policy. All he does is sit and wait, fold his hands, cross his fingers and hope that the market forces will produce the necessaiy jobs for the young people across this country, including those in Atlantic Canada.

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I say to members of the government opposite: "That is not good enough". For those of us who have entered public life to serve this country and try to assist individuals both young and old to improve their lot in Canadian society, I say to the government: "If you don't have the ideas, if you lack the political will to exercise whatever those thoughts may be, you ought to do the most prudent thing and that is to resign. If you can't resign, you should do the next best thing and that is call a general election and allow the people of Canada to decide".
Let me now talk about the Atlantic Canada Opportunities Agency and how it interfaces with other agencies of the Government of Canada. I have made references to Transport Canada. Let me make references, if I may, to Employment and Immigration.
Just last month in Halifax I was extended an invitation to attend a meeting of all the managers and senior staff of the CEIC offices in that province. I told each and every one in attendance that job development moneys, which have been put on hold by this government, were an absolute necessity in order to get people back to work. I have written to the minister on that. First I thanked him for extending an invitation for me to attend those deliberations. Then I told him that there were communities throughout this country with exceptionally high unemployment and very few prospects that the economic picture may change in coming weeks and months. I told him that he had a responsibility, whether it be in Lockeport, Glace Bay, Gander, the city of Montreal or the city of Ottawa, wherever those situations are, to try to assist.
Hundreds and hundreds and hundreds of my constituents in such municipalities as Glace Bay, New Waterford, Dominion, Cape Breton County and Richmond County have no hope of any foreseeable employment within the next 12 months.
The government says: "Where are we going to get the money?" I will throw out a little figure. In 1989 the advertising budget of this particular government was well over $75 million. That was so ministers of the Crown could get the seal of the Government of Canada, their pictures, their names, with PC, MP, or QC, whatever, on documents to distribute throughout the country.
When the Minister of Employment and Immigration stands weaving and bobbing that he does not know what he can do to assist the people of Canada, I suggest to him that he ought to do an examination of expenditures in house. Seventy-five million dollars would do wonders in constituencies like mine and Gander-Grand Falls. No, it would not be the panacea. It would not resolve the real turmoil these individuals are confronted with, but it certainly would be of some assistance. It could also help countless numbers of Canadians who are going to the food banks.
I have been a member of this House for almost 12 years. I have never seen it like it is today when I walk the streets here in Ottawa and I meet the great numbers of homeless people on the Sparks Street Mall, where stores are closing one after another.
This government has the unmitigated gall to say: "We do not have any money". It takes $75 million dollars to see the picture of the Solicitor General or the Minister of Labour, whose looks are surprisingly better than mine. At best you could hire them for a haunted house and make millions of dollars with them. I say to my colleagues opposite: Do not pour out your heart to us on the floor of the House of Commons that there is no money in the kitty. There is some money in the kitty, and it is your obligation to find those dollars and to spend them wisely and prudently for those individuals who need the assistance of the Crown at a very difficult time in Canadian history.
In the time I have remaining I want to say to members opposite that the situation is grave. The time for action is now. There is a call which has gone out across this country asking members of Parliament, and in particular members on the government side, to assess, to listen and, above all, to act.
The refusal to act is the equivalent of saying-I know the Minister of Labour is listening very attentively- that you do not care. I would ask, I would urge and I would implore that members of the government seriously reflect on how they can put money in appropriate agencies across this country to facilitate economic growth in order to provide Canadians, wherever they may be, with an opportunity for a decent living, and to provide assistance to the ones they live with.
February 7, 1992


Peter L. McCreath: Mr. Speaker, I would have to say in all honesty that my hon. friend should recall the reality of the situation in this country which is that if the government, of which he was a supporter, had not been such a profligate spender as it was in the period from 1974 to 1984, it would not have left this country in the financial mess it did and burden the Canadian taxpayer and the Canadian people with the debt that this government, to its credit, has been trying to clean up and attend to in the last seven years.
I have another comment and this is really why I rose. My hon. friend was to some extent caught up in the rhetoric of the hon. member for Gander-Grand Falls and the mythological speech that he shared with us about the Atlantic fishery. He made suggestions and implications with respect to the Minister of Fisheries and Oceans.
Then my hon. friend from Cape Breton-East Richmond got up and used the word negligence with respect to the Minister of Fisheries and Oceans. My hon. friend does no credit to himself and no credit to his party when he uses that word with reference to that minister.
I would like to say here that no minister of the Crown in this country has ever served his province of Newfoundland and Labrador, Atlantic Canada and this country with the devotion and the effectiveness as the Minister of Fisheries and Oceans.
My question to the hon. member is: Will he rise in his place and apologize for the suggestion that any action of this minister could be associated with the word negligent?


David Charles Dingwall: I thank the hon. member for his kind intervention. I assure him that his views will be reflected upon most sincerely by me. I accept his observation that my reference to the minister as being negligent may have been a harsh and untimely chosen word for the Minister of Fisheries and Oceans.
I am not certain I said that.


An hon. member:: You should have if you did not.


David Charles Dingwall: So the hon. member is crystal clear, I do not think I used the word negligent. I think I used the words grossly negligent, which is a much stronger term.
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If there ever ought to be an individual castigated on the floor of the House of Commons, it is not only the minister responsible for the Atlantic Canada Opportunities Agency, but everyone who sits on the front bench. If there has ever been a group of Keystone Kops, it is that group. They remind you of the monkeys that used to advertise for Red Rose tea; the only thing is they can never get their song together for the same verse, as we have seen here today.
Yesterday the Minister for International Trade said there was no draft free trade agreement with Mexico. Only today he admits there is one. He does not do an impact study with regard to the issues affecting GAIT, but at the same time he does an impact study with regard to the free trade agreement and does not wish to share the information with all Canadians.
The hon. member is well respected in the province of Nova Scotia, not only in the constituency that he represents but by the people across the province. I say to him that perhaps the best way that we should settle this particular dispute on the definition, on the etymology of the word negligent and gross negligence, is let us go to the people. I will put my seat on the line if that hon. member opposite will put his seat on the line and winner take all; winner take cabinet post, winner take all. That is the offer that I make to my distinguished colleague across the way. Perhaps he will no longer be a distinguished colleague. He may become an extinguished colleague of the Conservative Party.


Hon. Roger C. Simmons (Burin-St. George's):: Mr. Speaker, before this bill gets rammed through by the impressive majority I see over there, I would like to say a few words on certain aspects of it. I cannot undertake for the House to give the kind of gut speech and at the same time cerebral speech that my friend from Gander-Grand Falls has given; nor the kind of speech that my good friend from Cape Breton-East Richmond has treated us to.
There are, nevertheless, a couple of things I want to say. Perhaps not a bad starting point is right where my friend from Cape Breton-East Richmond finished. He was responding to a concern that had been expressed by my good friend from South Shore. The gentleman from South Shore had taken exception to some remarks by my colleague from Cape Breton-East Richmond to the

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effect that the minister of fisheries, my distinguished friend from St. John's West, was negligent.
To set the record straight, as the usual impartial observer I can be from time to time, maybe I should say to my friend from South Shore that instead of getting into a shouting match between himself and the gentleman from Cape Breton over whether he did or did not do it, maybe there is a more dispassionate way to decide whether this minister is even capable of negligence, this great friend of mine from St. John's West.
Let me give an example which is very much on the public record, an example that affects my own riding of Burin-St. George's more so than any other riding, an example which also has national implications. In so far as fishing treaties are concerned, two particular agreements were arrived at in recent years to which I would like to refer. First of all, I refer to the agreement setting up NAFO, the Northwest Atlantic Fisheries Organization which flowed from the Law of the Sea Conference that established the 200-mile limit in 1977. That agreement provided that the 12 signatories, which we members of NAFO, to use the acronym, Northwest Atlantic Fisheries Organization for the fellows from Toronto, including Canada, including the European Community, in September of each year were to be assigned with respect to the following fishing season a certain quota, a certain allocation, a certain number of metric tons of fish which they could take, having due respect for conservation concerns of the fish stocks in the northwest Atlantic. A very simple and commendable process.
From 1977, as the member for South Shore will know, through 1978, 1979 and 1980 and through 1981, 1982, 1983,1984, every signatory, every one of the 12 members of NAFO without exception, therefore including the European Community which will become important later, honoured the agreement and stayed within the quota and there was no overfishing whatsoever, none.
Beginning in 1985 the system was the same but the results were different. Beginning in 1985, 11 of the 12 signatories continued to honour the agreement and one began to massively overfish. That one was the European Community and specifically two members of that community, Spain and Portugal.
Beginning in 1985 that member of the European Community whose quota was 23,200 metric tons actually take 23,200 metric tons. In 1985 it took 172,000 metric tons. It took eight times its quota.
In 1986 it took 12 times its quota, 12 times as much fish as it was supposed to take under an agreement which it had signed. And so it went on. In 1985 and 1986 there was massive abuse, massive destruction, massive pillaging of the fish stocks that my people in Burin-St. George's and people elsewhere in Newfoundland depend on for their livelihood, either as workers in fish plants or as fishermen and fisherwomen on the boats.
That massive, unconscionable pillaging went on through 1985, 1986, 1987, 1988. It went on through 1989 and 1990 and has gone on through 1991. I predict it will go on through 1992. That is one-half of the example. Let me give you the other half. That is the NAFO issue and I have told how there was massive abuse of the fishing in respect to that agreement.
There was another agreement signed between Canada and France, a bilateral agreement just between those two countries, addressing fisheries issues and the fishing rights of those two countries in so far as the Gulf of St. Lawrence and an area known as 3PS, an area basically south of the island of Newfoundland and around the islands of St. Pierre and Miquelon. There were agreements signed there that allowed, among other things, for France to take certain quotas. That agreement was signed in 1972 and it said that, depending on the advice of scientists and marine biologists, France would be allowed to take a certain tonnage each year. That agreement was signed in 1972. Would you believe that beginning with that agreement, for 1973 and 1974 and 1975 and each year thereafter, France stayed within the quota. Whatever the quota was for that year, it took. Whatever it was for 1975, it took; for 1976, it took. It never exceeded the quota. Right up until and including 1984 France honoured that agreement and stayed within the quota of fish it was allowed to catch off the coast of Newfoundland and Nova Scotia.
Beginning in 1985 things changed dramatically. Instead of catching its 1985 quota of 9,500 tonnes France took 25,800 tonnes. In 1986, instead of staying within its quota of 9,500 tonnes, France took 26,000 tonnes. In short, beginning in 1985 France began to take approximately

three times its quota under its bilateral agreement between Canada and France.
France has continued to do that essentially until this day or, to be more correct, until a year or so ago when this government entered into an agreement, and the purpose of this latter agreement of 1990 or 1991 was right. The purpose was right. The methodology was a bit naive but the purpose was right. It was to get France to the table, which it did.
However, the way it did it was to say: "France, you have been stealing from us. Instead of taking 9,500 tonnes which you are allowed under the agreement, you are taking 26,000. Let's make a deal. Instead of stealing
26,000,	will you agree just to steal 17,000? How is that for a deal? We will let you steal fish but only steal twice as much as you are supposed to, instead of three times as much". That is an aside.
The real point I want to make is that in 1977 NAFO signed an agreement and until 1984 that agreement was honoured. Beginning in 1985 the European Community abused it terribly.
On the other hand France signed an agreement with Canada which it continued to honour until 1985, at which time it began to abuse it terribly. I have given the figures.
In both cases there was agreement and both sides worked within the agreement until and including 1984. There was abuse of the agreement beginning in 1985 and has been ever since. Why did massive overfishing begin in both cases in 1985? The short answer must concern the fact that there was a change of government and with it a very definite change of approach as to how to treat France, Portugal and Spain.
As of 1985 the message went out to Portugal, Spain and France that a new crowd was in charge over here, a crowd that did not care how much they pillaged the fish stocks, how many Newfoundlanders in fish plants they put out of work, how many fishermen from Nova Scotia and Newfoundland they put out of work in the fishing boats. "Pillage the stock if that is the way you feel", was the net message that went out.
What does this have to do with what my friend from South Shore asked a minute ago when he was a little concerned about the suggestion that the minister from
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St. John's West could be characterized as negligent? He is a minister, bless his cotton-picking soul, the only minister we have had in the cabinet from Newfoundland since September 1984. There has been no other, just him, just that one man from September 1984 until the present. The overfishing began in 1985, within six months of his becoming the minister.
The French, Spanish and Portuguese walked off with literally tens of thousands of tonnes. They wiped out thousands and thousands of Newfoundlanders' jobs, those of the minister's fellow countrymen and some of his fellow constituents. They caused a shutdown at the plant at Trepassey in his riding because of fish stocks. They caused a shutdown of the plant in St. John's in his riding as a result of the fish stocks issue. What was he doing?
Mr. Speaker, do you believe, and if you do not just check Hansard, that from 1984 through 1985 when overfishing by those three countries began it continued through 1986, 1987 and 1988?
How many times was the overfishing by foreigners issue raised publicly in this House? It was raised once in four years. In 1985-86, 1987-88, it was raised once. In December of 1988, four years after the overfishing began, it was raised in this Chamber for the first time. I know because I am the one who raised it after I was elected here in November 1988. That is the first time it was raised in this Chamber by anybody.
What more graphic example of gross disgusting negligence could you have than that? A minister lets thousands of his fellow countrymen, thousands of his constituents, plant workers and fishermen go down the economic drain because he is tied to a policy that says "Do not rock the boat, fellows. If the Portuguese and the Spaniards, the French and the Europeans want a few tonnes of fish, let them take the fish, all the fish they want, but do not rock the boat because our Prime Minister, our boy from Baie Comeau, is trying to be a statesman out there. He wants to be buddies with Mitterrand. What do a few fishermen's lives have to do with this? What do a few plant workers' livelihoods have to do with it all? Do not rock the boat, Crosbie. Do not rock the boat, minister from St. John's West".

February 7, 1992
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The accusation against that minister is not negligence. That is too good a term for what he did. The accusation is much worse than that. In graphically simple terms, he abandoned thousands of people in his riding, plant workers and fishermen, and thousands more in my riding, tens of thousands in total, rather than break with a policy that was absolutely unconscionable and that was designed to be the death-knell for the Atlantic fishery.
Luckily and to his credit, and he needs some credit because he committed such an atrocious sin in respect to the other in allowing this to go on silently for four years, the minister has lately decided that enough is enough and now he is out there, belatedly albeit, being the champion on the overfishing issue. It is almost certainly a case of closing the bam after the horse is gone.
His voice is now vibrant in 1992 on overfishing as he trips around the citadels and the capitals of the world. If we had only had it in 1985 in cabinet. If we had only had it speaking up about the jobs in Trepassey and St. John's and those other places I could mention, places in my riding. I mentioned a couple in the minister's riding. That is what he has to answer for. He is playing one awfully big game of catch-up these days, trying to undo some of the misery he inflicted on those people by his silence. I say to the member for South Shore, who I understand has to come in here and toe the line and keep an eye on that crowd, those boys, watch the fellows from Gander-Grand Falls and Burin-St. George's and Cape Breton eastward.
Watch what they say and then get up and try to poke a few holes in it and, if they say a nasty word like negligence, get up and look intelligent and show the people across the country that we take them on. If they want to know, if they want to challenge my colleague's use of negligence, I have just given them an example. If they want some more examples, I can give them more. I cannot give one that is any more graphic than the one I have just given. Literally thousands of jobs of fishermen and plant workers in my riding and in the minister's riding of St. John's West have gone down the drain because of the negligence, the failure to act by that minister.
That will be part of his legacy. He can undo it somewhat if he would do what we have been saying he
should do: say to the Europeans they have have had enough time. We in Canada are going to unilaterally extend the continental shelf to take in the nose and tail of the Grand Banks and the Flemish Cap, those three little outgrowths where the fish spend some of their time when they are not inside the Canadian line. It is when they are outside that line of course that they become vulnerable to the pillaging I talked about a little while ago.
I am sure in time my good friend the minister from St. John's West, the Minister of Fisheries and Oceans, will want to-hopefully before this debate is over-stand and give his side of the story, why it was he was absolutely silent, muzzled, for four entire years, never made one peep in this House, outside this House, not one living peep. Nothing. Zilch. For four years he watched jobs being wiped out and industry being absolutely pulverized by his neglect, his negligence, his failure to go to the Prime Minister, be a man about it, and say he could not stand by and let this be done to his fellow Newfoundlanders, to his fellow Canadians. That is what he should have done. That is what he did not do and I say to my friends on South Shore that is what I call negligence. Maybe he has a nicer word for it.


The Acting Speaker (Mr. Paproski):: Is the House ready for the question?


Some hon. members:: Question.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


Some hon. members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour of the motion will please say yea.


Some hon. members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some hon. members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion the yeas have it. I declare the motion carried.
Motion (Mr. Baker) agreed to.
February 7, 1992


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the third time and passed.
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The Acting Speaker (Mr. Paproski):: It being four o'clock this House stands adjourned until Monday next at eleven o'clock pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 2.47 p.m.
[Stage Direction]
Monday, February 10,1992