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CONTENTS

Wednesday, April 17, 1996

STATEMENTS BY MEMBERS

TEENAGE SUICIDE

ACADÉMIE DES GRANDS MONTÉRÉGIENS

1996 CENSUS

GASOLINE PRICES

EXPRO OF VALLEYFIELD

WORLD CURLING CHAMPIONSHIPS

ENTREPRENEURSHIP

COUNCIL OF CANADIANS

THE LATE JUSTICE DAVID MCDONALD

SIR WILFRID LAURIER

MIKE HENRY

INTERNATIONAL CHILD ABDUCTION

    Mr. Tremblay (Rosemont) 1583

CLIFFORD OLSON

GOODS AND SERVICES TAX

STANLEY KNOWLES VISITING PROFESSORSHIP

ROYAL VISIT

QUEBEC REFERENDUM ACT

    Mr. Bernier (Mégantic-Compton-Stanstead) 1584

ORAL QUESTION PERIOD

DISTINCT SOCIETY

SOMALIA INQUIRY

DEPARTMENT OF NATIONAL DEFENCE

SOMALIA INQUIRY

DEPARTMENT OF NATIONAL DEFENCE

SOMALIA INQUIRY

    Mr. Mills (Red Deer) 1589
    Mr. Axworthy (Winnipeg South Centre) 1589
    Mr. Mills (Red Deer) 1589
    Mr. Axworthy (Winnipeg South Centre) 1589

TRAN TRIEU QUAN

    Mr. Axworthy (Winnipeg South Centre) 1590
    Mr. Axworthy (Winnipeg South Centre) 1590

LEBANON

    Mr. Axworthy (Winnipeg South Centre) 1590

FISHERIES

COAST GUARD

    Mr. Bernier (Gaspé) 1591
    Mr. Bernier (Gaspé) 1591

CANADA PENSION PLAN

STRATEGIS

1996 CENSUS

PRESENCE IN GALLERY

    The Acting Speaker (Mr. Kilger) 1593

ROUTINE PROCEEDINGS

GOVERNMENT RESPONSE TO PETITIONS

COMMITTEES OF THE HOUSE

PROCEDURE AND HOUSE AFFAIRS

OCEANS ACT

    Bill C-26. Motions for introduction and first readingdeemed adopted 1593
    Bill deemed read the second time, considered by committeeand reported with amendments 1593

COMMITTEES OF THE HOUSE

PROCEDURE AND HOUSE AFFAIRS

    Motion for concurrence in 13th report agreed to 1593

PETITIONS

TAXATION

ALCOHOLIC BEVERAGES

CHILD LABOUR

TAIWAN

QUESTIONS ON THE ORDER PAPER

GOVERNMENT ORDERS

BANK ACT

    Bill C-15. Motion for third reading 1594
    Mr. Mills (Red Deer) 1609
    Mr. Mills (Red Deer) 1610

PRIVATE MEMBERS' BUSINESS

AGRICULTURE

ADJOURNMENT PROCEEDINGS

CANADIAN ARMED FORCES

    Mr. Leroux (Shefford) 1622

IMMIGRATION

APPENDIX


1581


HOUSE OF COMMONS

Wednesday, April 17, 1996


The House met at 2 p.m.

_______________

Prayers

_______________

The Acting Speaker (Mr. Kilger): As is our custom, we will now sing O Canada, which will be led by the hon. member for Saanich-Gulf Islands.

[Editor's Note: Whereupon members sang the national anthem.]

_____________________________________________

STATEMENTS BY MEMBERS

[English]

TEENAGE SUICIDE

Mr. Sarkis Assadourian (Don Valley North, Lib.): Mr. Speaker, Canada's teenage suicide rate is alarmingly high compared with other industrialized countries. From 1979 to 1991 suicide by young people from 15 to 19 doubled to 13.5 per 100,000, making Canada third behind New Zealand and Finland. When this occurs in a nation that is constantly rated as the world's best, we must ask ourselves what has gone wrong.

I urge my fellow members of Parliament to become more aware of this problem and to support the efforts of this government to turn this tragic statistic around. Our efforts must reflect the need to communicate a message of hope to Canada's youth. We must not fail in our commitment to create jobs and to create a society where hope for a better tomorrow is the trademark of our efforts.

* * *

[Translation]

ACADéMIE DES GRANDS MONTéRéGIENS

Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr. Speaker, on April 26, the Académie des grands Montérégiens will pay tribute to five personalities of our great region, including someone who is well known in Saint-Hyacinthe, Claude Marchesseault.

In the last three decades, Mr. Marchesseault has been involved in areas as diversified as economic development, recreation, exceptional children, the agri-food industry, the arts, philanthropy and municipal affairs, while at the same time holding an important position at the Fédération des caisses populaires Desjardins.

Since its founding, the Académie des grands Montérégiens has honoured a number of outstanding people from our region, including Raymond Lévesque, Arlette Cousture, Juliette Huot, François-Albert Angers, Yves Beauchemin and Louis Laberge.

I salute the invaluable contribution made to our community's development by the indefatigable Claude Marchesseault, who cannot be ignored and who has now joined the ranks of the great men and women honoured by the Académie.

* * *

[English]

1996 CENSUS

Mr. Chuck Strahl (Fraser Valley East, Ref.): Mr. Speaker, one month from now Canadians will be asked to identify themselves by race in the 1996 census. We have the option of classing ourselves as white, Chinese, Asian, black, Arab, Filipino, Latin American, Japanese, Korean, or other. We do not have the option of skipping the question.

If an employer or a landlord demanded to know a Canadian's race, they would bear the full weight of the human rights law which prohibits racial discrimination and so they should. Yet incredibly the federal government requires the very same racial identification by law.

I would urge all Canadians to send a message to the federal government that in Canada we believe in the equality of all Canadians regardless of the country of their birth or the colour of their skin. Identifying our ethnic origin as Canadian on question 19 of the census will tell this Liberal government that Canadians want to be known as Canadians, nothing more and nothing less.

Census by race, what a disgrace.

* * *

GASOLINE PRICES

Mr. Gurbax Singh Malhi (Bramalea-Gore-Malton, Lib.): Mr. Speaker, gasoline prices in the region recently soared to their highest level since the gulf war. The average price in Ontario last


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Friday was over 58 cents per litre. That amounts to an increase in just one week of as much as three cents a litre.

No doubt an unusually cold winter and low inventory at refineries are contributing to the price hike. Yet most of the price fluctuation at the pumps seems to have little to do with the wholesale price of gasoline.

Even though there was no increase in gas taxes in last month's budget, the price of gas is rising out of control. We must do something to stop it.

* * *

[Translation]

EXPRO OF VALLEYFIELD

Mr. Bernard Patry (Pierrefonds-Dollard, Lib.): Mr. Speaker, earlier this week, Expro Chemical Products of Valleyfield signed a major contract with the U.S. firm OEA Inc. The value of this contract lies not only in the amount of money Expro will receive but mainly in its new mandate.

This company, which used to specialize in the manufacturing of explosives used mostly for defence purposes, has just been awarded its first contract for a civilian application. Expro is now responsible for supplying a propellent used in the air bag release mechanism for 1997 American car models.

This is a great example of the sense of innovation and initiative that drives Canadian businesses. Expro's example shows it is possible to convert defence industries to civilian and peaceful uses.

* * *

[English]

WORLD CURLING CHAMPIONSHIPS

Mr. Walt Lastewka (St. Catharines, Lib.): Mr. Speaker, Canadian curlers are the best in the world. They proved this in Hamilton last month.

(1405 )

On March 30 the Canadian women's team won the women's World Curling Championships. The high powered and charismatic women's team skipped by Marilyn Bodogh from the St. Catharines Curling Club with vice Kim Gellard, second Corie Beveridge and lead Jane Hooper Perroud did Canada proud.

On March 31 the Canadian men's team won the men's World Curling Championships.

Friends, family and Canadian curling fans cheered our teams on and shared in the joy of winning the worlds for Canada.

I know my colleagues in this House join me in congratulating these outstanding Canadian athletes. Their talent and determination are exemplary and we are proud of them as proud Canadians.

[Translation]

ENTREPRENEURSHIP

Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, last fall, two Saint-Hubert residents decided to do something on their own and start a business without asking for any government assistance.

Ginette Piché et Colette Gagné took advantage of the change from hospital care to ambulatory care to launch a company called ``Beau ménage, bons soins''.

Their company provides personal care and housecleaning services to seniors and those who are convalescing or incapacitated, according to their needs and their means.

The range of services offered helps people with health problems to remain in their homes. In the current context, such a resource is indispensable. The business is about providing good and diversified services, which is a great way to improve the quality of life of the elderly.

Initiatives such as this one are always welcomed. This is why I want to congratulate Ginette Piché and Colette Gagné and urge them to persevere in their endeavour.

* * *

[English]

COUNCIL OF CANADIANS

Mrs. Daphne Jennings (Mission-Coquitlam, Ref.): Mr. Speaker, yesterday a senior citizen in my riding came into my office very concerned and anxious about a letter he had received from the Council of Canadians. Basically this letter was nothing short of a scam and fear mongering against one of our most vulnerable groups in society, our seniors.

By distorting and misrepresenting the true facts, this Council of Canadians plays on the fears of our seniors and attempts to extort money from them. This group wants the seniors of Canada to pay for what they are entitled to get for nothing: a petition presented to the government on behalf of seniors. Every member of Parliament provides that service free of charge. I know from the past three years in this House that we all present all constituents' petitions on a regular basis.

This group, which professes to care about seniors' lack of money, asks for money 10 times throughout its letter. And if they cannot commit to paying monthly contributions to this group, then $35, $50 or $75 now will protect their hard earned pensions.

The confidence men of old were pikers compared with this group.


1583

THE LATE JUSTICE DAVID MCDONALD

Mr. John Loney (Edmonton North, Lib.): Mr. Speaker, I rise today to pay tribute to the Hon. Justice David McDonald, a great Canadian from Alberta who died on April 8 in Edmonton.

Justice McDonald's life was committed to the highest ideals of public service. He served in the courts as a practising lawyer from 1957 to 1973. He was appointed to the Court of Queen's Bench of Alberta in 1974 where he served until his appointment to the Court of Appeal of Alberta in November 1995.

He was chairman of the Commission of Inquiry into Certain Activities of the RCMP from 1977 to 1981. He also served as president of the Canadian Institute for the Administration of Justice from 1974 to 1977.

A Rhodes scholar and a jurist of uncommon intellect, Justice McDonald was a humanist who influenced all those who had the privilege to work with him.

We extend our sympathies to his wife Dorothy, his children Jacqueline, Jonathan and Catherine.

Please join with me in honouring a great Canadian, the Hon. Justice David McDonald.

* * *

[Translation]

SIR WILFRID LAURIER

Mr. Denis Paradis (Brome-Missisquoi, Lib.): Mr. Speaker, on April 16, at 2.30 a.m., in this House of Commons, the government of the day yielded to pressure from the Liberal Party. The date was April 16, 1896. That was 100 years ago yesterday.

Nine days later, a general election was called for June 23. Today, it is important to remember that, for Canada, the 1896 election marked the beginning of a new era.

Wilfrid Laurier, who was born in Saint-Lin-des-Laurentides, spent all his life in Arthabaska. He was the Leader of the Opposition at the time. Two months later, he became Prime Minister of Canada, the first of many Quebecers to do so.

At the time, Laurier said that Canada could accommodate more than one race. He was referring to French and English Canadians. Nowadays, would we talk about peoples instead of races?

However, Laurier also added-

(1410)

[English]

MIKE HENRY

Mrs. Brenda Chamberlain (Guelph-Wellington, Lib.): Mr. Speaker, after 20 years of service to the people of Guelph-Wellington, Mike Henry is retiring as general manager of the Guelph Chamber of Commerce.

To say that we will all miss Mike is an understatement. As the Guelph Tribune recently said: ``He was a dedicated and sociable ambassador for Guelph, who was also a diplomat in co-ordinating the efforts of volunteers toward the chamber's many goals''.

Mike Henry has served our community well. His retirement is well earned but I know his work throughout Guelph-Wellington will be missed.

Mike, you have earned our respect, appreciation and gratitude. May your retirement be as fulfilling and wonderful as was your work for all of us in Guelph-Wellington.

* * *

[Translation]

INTERNATIONAL CHILD ABDUCTION

Mr. Benoît Tremblay (Rosemont, BQ): Mr. Speaker, on January 17, 1993, Mrs. Micheline Tremblay, who resides in the riding of Rosemont, learnt that her son Karim, then three and a half years old, had been abducted by his father and illegally taken to Egypt, his father's country of origin.

In spite of three years of relentless efforts, Mrs. Tremblay never saw her son again. Every legal recourse undertaken proved virtually ineffective, because Egypt has not signed any international convention or bilateral agreement with Canada on international child abduction.

But Egypt could enter into such an agreement with Canada, as it did with France. What is missing is Ottawa's political will to act on this fundamental civil rights issue. I call upon the support of all members of this House to demand that the Canadian government remedy this situation and make sure that Karim is reunited with his mother as soon as possible.

* * *

[English]

CLIFFORD OLSON

Mr. Art Hanger (Calgary Northeast, Ref.): Mr. Speaker, last week Clifford Olson sent several members of this House, myself included, a sneering note which detailed the child killer's intent to seek early release under section 745 of the Criminal Code.


1584

Olson's note to my office reads as follows: ``I'm coming back Art. Quick, get section 745 repealed. Smile, sucker''. This note was signed in type, Clifford Robert Olson, the beast of British Columbia.

Section 745 allows criminals sentenced to life imprisonment the eligibility for early release. Olson will make formal application for his judicial parole review this August. In addition, police killer Roy Glaremin will apply a second time this May for early release.

Fifty of the 60 murderers applying for early parole thus far have had their eligibility period reduced, at least 18 of whom have had their parole eligibility reduced to 15 years.

I call on the Minister of Justice to wipe the smirk off Olson's face. End this insanity, repeal section 745 without delay.

* * *

GOODS AND SERVICES TAX

Mrs. Elsie Wayne (Saint John, PC): Mr. Speaker, we were told by the Prime Minister in August 1993 that he would honour all of his promises within two years. We were also told by the new heritage minister that if the GST were not abolished she would resign.

The GST remains in place and we are still waiting for both to keep their promises. Now the government says that harmonization will honour an election vow to scrap the GST, but a few years ago at least one member of the current cabinet saw harmonization as a barrier to replacing the GST.

The exact words of the finance minister when he was running for the Liberal leadership were:

There is some possibility that when we take power in 1992, the provinces will have entrenched the GST in their sales tax regimes. It would be extremely difficult to undo in that instance, but-I am committed to scrapping the GST-
This is from De Novo, a publication that was circulated at the Liberal leadership convention.

The Acting Speaker (Mr. Kilger): The hon. member for Winnipeg North.

* * *

STANLEY KNOWLES VISITING PROFESSORSHIP

Mr. Rey D. Pagtakhan (Winnipeg North, Lib.): Mr. Speaker, The University of Waterloo deserves congratulations for establishing the Stanley Knowles Visiting Professorship in Canadian Studies at St. Paul's college, a program that highlights the link between social justice issues and government policies.

This professorship is most appropriate because the life work of Stanley Knowles has been the epitome of individual freedom, democracy, justice and a sense of community and internationalism. It is timely because these issues continue to challenge the world community, including our diverse Canadian society.

Indeed I am honoured to be serving as the member of Parliament for Winnipeg North which includes part of his former riding. Mastering parliamentary procedures and placing people before partisanship, Mr. Knowles was a very strong voice of social justice in this House for decades. He is a living model for all parliamentarians.

(1415)

Alone, it would be difficult to reach his heights. Together, we can succeed in advancing the cause.

* * *

ROYAL VISIT

Ms. Judy Bethel (Edmonton East, Lib.): Mr. Speaker, I quote: ``It would be worth the money if it was for Princess Di, but it is not worth a dime for Prince Charles. Let's give him a chocolate bar and tell him to stay home''.

That crude remark from the member for Edmonton Southwest is about the time honoured tradition of covering the cost of a royal visit when a member of the Royal Family accepts Canada's invitation.

That crude remark speaks volumes about Reform's commitment to cleaning up its extremist image, to equality for all people, to respect for Canada's monarchy and to restoring civility to politics in Canada.

I challenge the leader of the third party to tell Canadians if Reform's respect for women goes beyond the physical. Tell us if these kinds of public attacks on Canada's monarchy are a reflection of Reform policy.

* * *

[Translation]

QUEBEC REFERENDUM ACT

Mr. Maurice Bernier (Mégantic-Compton-Stanstead, BQ): Mr. Speaker, the Quebec Referendum Act is one of the most forward-looking public consultation legislation in the democratic world, and there is no equivalent legislation at the federal level.

Several Liberal members knew full well that, when federalist forces from outside Quebec showed up for their illegal rally in Montreal on October 27, they were breaking the law. Instead of condemning this legislation, the government whip should use it as a model to enhance the democratic process at the federal level.

Liberal members seem to think they can do anything they please in the name of national unity. They break the law, act like martyrs, play holier than thou or complain of harassment when Quebec's director general of elections calls them to account for their rally activities in Montreal.

1585

The whip and his accomplices should be reminded that, on October 27, their illegal tactics gave millions of Quebecers the feeling of being besieged.

_____________________________________________


1585

ORAL QUESTION PERIOD

[Translation]

DISTINCT SOCIETY

Mr. Michel Gauthier (Leader of the Opposition, BQ): Mr. Speaker, on Monday in this House, the new Minister of Intergovernmental Affairs said, and I quote:

-bilingual or trilingual democracies have measures to ensure that their language communities will live together in harmony. It is what we have in Canada. We are very proud of it.
In the flurry of attempts to come up with a vocabulary more suited to Canada's constitutional reality, are we to understand that he thinks the concept of a Quebec people to be nothing more now than a language community?

Hon. Stéphane Dion (President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, the official opposition seems to want to play dictionary games. What counts, and I have been saying this since I arrived in this House, is substance. Substance is what counts.

And the substance that Quebecers want to keep for the most part is a Quebec identity and a Canadian identity; a Quebec pride and a Canadian pride; a Quebec solidarity and a Canadian solidarity.

Mr. Michel Gauthier (Leader of the Opposition, BQ): Mr. Speaker, if the minister wants to play, I am going to talk scrabble. There is a six letter word in scrabble, spelled ``verity''. This is what we in the opposition are after.

The Minister of Intergovernmental Affairs said himself that there is a reality beyond words. Would he tell us whether, in reality, he thinks, as the Minister of Intergovernmental Affairs, that Quebecers constitute a people?

Hon. Stéphane Dion (President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, the Leader of the Opposition, whom I thank for his questions, seems, surprisingly enough, not to understand one thing.

It is an extraordinary opportunity in today's world to be born a Quebecer and a Canadian. I am a Quebecer and a Canadian and I would fight with every means democracy puts at my disposal anyone who tried to take away my Canadian identity.

(1420)

Mr. Michel Gauthier (Leader of the Opposition, BQ): Mr. Speaker, you will understand that, through my dealings with the minister, I will certainly pass politics 101, but I am not so sure about him.

Shifting from the reality of a Quebec people to the concept of a distinct society-Mr. Speaker, the Minister of Transport would learn something too if he listened. Would you ask him to be silent?

Some hon. members: Oh, oh.

An hon. member: It is the Minister of Human Resources Development.

The Acting Speaker (Mr. Kilger): I am sure all members would like to hear both the question and the answer.

Mr. Gauthier: Mr. Speaker, I apologize to the Minister of Transport. It is the Minister of Human Resources Development who never listens and never understands anything in this House.

Let me get back to the Minister of Intergovernmental Affairs, who, while he does not answer, at least listens. I would ask the Minister of Intergovernmental Affairs if he would acknowledge, after switching from the reality of the Quebec people to the idea of a distinct society, to that of the homeland of the French language and culture and finally to that of linguistic community, whether the Liberal Party of Canada's search for new terminology continues to be with the intent of diminishing the status and the role of the people of Quebec within Canada?

Hon. Stéphane Dion (President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, I am delighted to finally be able to express the truth about the status and the role of the people of Quebec, because it is not being expressed by the opposition and never will be.

The people of Quebec enjoy the greatest possible autonomy within Canada as regards their own institutions. Of all the federations in the world, it would be difficult to find one more decentralized than Canada. Canada's provinces have a higher status than American states, Swiss cantons or German l«nder. This is what Quebecers enjoy. They also enjoy Canada.

We are not saying that everything is perfect. Things have to be improved. The reality of Quebec in Canada and in North America must be recognized, but to move from that fact to endlessly describing Quebec as suffering to the point where only such an extreme solution as secession will suffice is stretching the truth to the breaking point.

The Acting Speaker (Mr. Kilger): There seems to be a lot of energy on both sides of the House. This is fine, but, I would ask for everyone's co-operation in making questions and answers a little shorter.


1586

Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): Mr. Speaker, first of all, I am sick and tired of hearing the minister tell us that we Quebecers are lucky to enjoy our institutions within Canada. That is appalling.

The Minister of Intergovernmental Affairs can go ahead and try, as he has yesterday and today, to dissociate himself from the Liberal Party of Canada's resolution adopted this past weekend, but the fact remains that he voted in favour of this demeaning concept.

Will the minister admit that it is a cause for alarm that a concept as important as the one adopted by the Liberal Party for its new orientation has been endorsed by the Prime Minister, without the minister responsible for this having any opportunity to say anything about its content beforehand?

Hon. Stéphane Dion (President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, first of all, in his preamble, the hon. member spoke of ``we Quebecers''. I would remind him that I am as much a Quebecer as he is, and that no one here has the right to speak as if he were the one and only spokesperson for Quebecers. I feel obliged to remind him that Quebec is a pluralistic society.

(1425)

Second, concerning the motion on which I voted, I would repeat, for what I believe is the third time in this House, that what it says is that the Liberal Party of Canada supports the enshrinement in the Constitution of the principles recognized in the Parliamentary resolution defining the distinct society, which was adopted in December, 1995. That is precisely why I voted in favour of the resolution.

Third, the Liberal Party of Canada is a highly democratic party. Sometimes democracy has such surprises in store for us, and we shall always be most pleased to acknowledge and accept, for what they are worth-I repeat, for what they are worth-the lessons on democracy offered us by a party whose leader was elected by the astronomical number of 150 members, and one of whose leading members was quoted as saying that the choice of a leader did not concern the public.

Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): Mr. Speaker, it is not my fault that the minister felt excluded from the ``we'' in my reference to Quebecers.

What credibility can be given to a new minister of intergovernmental affairs, when it took the unanimous denunciation of the National Assembly to reveal to us the full extent of his feelings on this proposition which, just hours before, he was trying to sell us on right here?

Hon. Stéphane Dion (President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs, Lib.): Mr. Speaker, first of all, I am delighted with the hon. member's commitment to never again identify himself and his party as the sole Quebecers. That in itself is very good news.

Second, and I have always said the same thing about this, there may be disagreements on the choice of words, but what counts is the substance. I would advise the hon. member to go easy on ridiculing the people of Quebec, who have always acted from the heart, sometimes less than successfully but always admirably, in seeking paths toward reconciliation, so that they might preserve Canada.

* * *

[English]

SOMALIA INQUIRY

Mr. Preston Manning (Calgary Southwest, Ref.): Mr. Speaker, yesterday I asked the Minister of National Defence to explain to the House exactly what is his understanding of ministerial accountability, particularly in relation to events surrounding the Somalia inquiry.

We received the weakest answer that any minister has given to a question in this House since the 35th Parliament began, so we want to try again.

According to the doctrine of ministerial accountability, as articulated by a former Liberal Speaker of this House, ministerial responsibility extends to situations where there is a serious dereliction of duty by an official of the minister.

Does the Minister of National Defence accept that the attempted cover-up of data relevant to the Somalia inquiry constitutes a serious dereliction of duty by somebody in his department?

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, I am sorry the leader of the Reform Party thought the answer was weak. Perhaps that reflected the weakness of the question.

The question cannot be answered because all of the assumptions in the question are totally false.

I have to reiterate that a commission of inquiry is looking into all the matters that concern the hon. member so much. That commission of inquiry should be allowed to do its work. We should not be playing a political game in the House of Commons that could injure the process of justice, that could further injure the reputation of the men and women who serve in the armed forces and perhaps even injure the reputation of Parliament.

(1430 )

I would ask the hon. member to confine his questions to what is relevant. The relevant questions to be asked are those that will be faced by the inquiry and to appreciate that the inquiry should do its job to the fullest extent possible.


1587

Mr. Preston Manning (Calgary Southwest, Ref.): Mr. Speaker, I was asking about dereliction of duty. I was not referring to the events that specifically gave rise to the Somalia inquiry. That occurred under another government and led to the establishment of this inquiry. That is not the dereliction of duty I am talking about.

I am referring to the attempted cover-up of data relevant to the Somalia inquiry, a cover-up that occurred under this government and under this minister. I am referring particularly to the alleged scheme by the public affairs branch of DND under General Boyle to rename, hide and even destroy important Somalia documents.

I ask the minister again. Does he accept that this attempted cover-up constitutes a serious dereliction of duty by officials responsible to him in the department?

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, once again the hon. member is so concerned about the public affairs issue. Last week the commission chief, Justice Létourneau, said that he would set aside two or three weeks to look at this specific question. He starts those hearings on Monday. That is where all the questions should be answered. That is where all the evidence should be placed, not in the House of Commons.

The hon. member talks about dereliction of duty. If he wants to talk about dereliction of duty I will, but of the dereliction of duty of him and his colleagues.

Yesterday the hon. member made a grave allegation on the floor of the House and went outside where parliamentary immunity was no longer present and that allegation evaporated. His defence critic has had so many positions on the inquiry that his credibility has evaporated.

The hon. member for Surrey-White Rock-South Langley attacked and made allegations about CSIS some weeks ago and that evaporated. The trend is clear, the Reform Party will evaporate in the next election.

Mr. Preston Manning (Calgary Southwest, Ref.): Mr. Speaker, if these remarks constitute the minister's understanding of ministerial accountability, no wonder his department is in a mess and no wonder he is failing.

This minister was the Minister of National Defence when the military hierarchy initially tried to whitewash this whole Somalia affair. He was the Minister of National Defence when these vital documents were tampered with. He was the Minister of National Defence when his officials deliberately tried to block inquiries to the Somalia inquiry.

Whether the minister likes it or not, the buck stops with him. I ask him one more time: Does he accept responsibility for any wrongdoing that the Somalia inquiry determines took place while he was Minister of National Defence?

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, it has become patently obvious that the hon. leader of the Reform Party has never read the terms of reference of the Somalia inquiry. The inquiry is to look into cover-up. The inquiry is to look into the destruction of documents. The inquiry is to determine if there is wrongdoing. That is the forum, a neutral place with three independent observers, not a partisan inquisition on the floor of the House of Commons.

* * *

[Translation]

DEPARTMENT OF NATIONAL DEFENCE

Mr. Jean-Marc Jacob (Charlesbourg, BQ): Mr. Speaker, my question is for the Minister of National Defence.

In 1993, Corporal David Gunther from Quebec died in Bosnia. Once again, the department of defence found a way to come up with two conflicting stories to explain to his family how he had died.

In the first statement dated June 18, 1993, DND said Corporal Gunther had been killed by fragments from a mortar shell that blew up near his vehicle, while a second statement dated the same day listed the cause of death as an anti-tank missile that made a direct hit on his vehicle.

How does the minister explain once again his department's habit of coming up with two different stories?

(1435 )

[English]

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, I cannot discuss individual cases publicly because that would contravene the Privacy Act. However, if the hon. member is giving me notice of a question that really should be put down on the Order Paper I will get him an answer in due course.

[Translation]

Mr. Jean-Marc Jacob (Charlesbourg, BQ): Mr. Speaker, I do not appreciate the minister's answer at all. But, as long as a search is on, can the minister tell us why, once again, important documents have mysteriously disappeared from the armed forces' filing cabinets, as in the Somalia affair?

[English]

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, as I just said, I will take the question as notice and give the hon. member an answer.


1588

SOMALIA INQUIRY

Mr. Jim Hart (Okanagan-Similkameen-Merritt, Ref.): Mr. Speaker, my question is for the Minister of National Defence.

On October 24, 1995 at 8.40 a.m., Nancy Fournier, a clerk of DND's public affairs branch, was interviewed by the military police about her refusal to destroy documents related to the Somalia affair. Let me quote: ``She can recall on numerous occasions being told to destroy files but specifically recalls a senior officer saying to her `had you got rid of this stuff like I told you this wouldn't be happening now'''.

According to the commission counsel on Monday they said: ``the minister and the department did not deem it necessary to go any further''. Why not?

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, what the hon. member and the Reform Party is doing is absolutely reprehensible and it is contemptuous-

Some hon. members: Oh, oh.

Mr. Collenette: Mr. Speaker, it is contemptuous of the three people who are charged with heading this inquiry.

Justice Létourneau has set aside two or three weeks on this specific case. Everybody concerned, including the chief of defence staff, will have an opportunity to make their views known and to give their points of view. Then people can judge accordingly.

For the hon. member to read selective quotes from certain documents into the record, some of which may be germane to that investigation, to create a certain impression is absolutely and totally unacceptable. I would say it is unparliamentary and it is even un-Canadian.

Mr. Jim Hart (Okanagan-Similkameen-Merritt, Ref.): Mr. Speaker, the minister is trying to twist this, as the Liberals do so well, and is shirking his responsibility as a minister of the crown.

Canadians and armed forces personnel are tired of this minister's lacklustre performance.

I will state again, ``he did not deem it necessary to go further''. The minister had to know that senior officials at DND were defying the minister's own order of a year ago to turn over documents to the Somalia commission.

How can the minister continue in his job knowing that the officials at DND defied his orders?

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, the hon. member is becoming so incoherent he is choking on his rhetoric. By and large I answered that question in the first response.

The hon. member talks about morale in the armed forces. Let me tell him and his colleagues-I am sure that his colleagues have had the same calls-that members of the armed forces and their families have been outraged by the conduct of the opposition on this matter.

It is the opposition that is trying to discredit the armed forces and undermine the morale of the armed forces.

This matter should be dealt with in a calm and rational manner before the inquiry that members in the Reform Party sometimes support. They support it one week, they support it another week and in between they are not so sure, they want it wound down. They have no credibility on this issue whatsoever.

* * *

[Translation]

DEPARTMENT OF NATIONAL DEFENCE

Mr. Michel Gauthier (Leader of the Opposition, BQ): Mr. Speaker, as we can see, the minister of defence is easily offended when we ask him questions on what goes on in his department.

Earlier, in response to my colleague from Charlesbourg, he took offence at being asked about events that call into question our armed forces' credibility and, above all, his own credibility and leadership. He has just done the same thing.

(1440)

When the minister of defence mentions families that, in his opinion, are outraged by the opposition's attitude, he should perhaps consider the members of Corporal Daniel Gunther's family, who were told by the Information Commissioner of Canada that documents were missing from the corporal's file and that he could not explain why these documents were still missing. This is strangely reminiscent of the Somalia affair and it would be in the minister's interest to give this some serious consideration.

[English]

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, if the hon. member has evidence germane to the inquiry he should submit it to the inquiry, not read it into the record here.

It is quite obvious by the bluster we have just heard that the Bloc Quebecois has joined the inquisition of the hon. member for Calgary West. Perhaps if the shoe fits they should wear it.

[Translation]

Mr. Michel Gauthier (Leader of the Opposition, BQ): Mr. Speaker, it is all the members of this House and all Canadians who may soon be outraged by the minister's unacceptable attitude.


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My question is a very simple one. The Information Commissioner of Canada can give the minister all the answers he wants. But would it not be normal for the minister of defence, who is supposedly responsible for the Canadian Forces, to know what goes on in his department and why some people routinely destroy and hide documents? He should know this, if he were truly responsible.

Hon. David M. Collenette (Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, it is interesting to listen to the hon. member when he claims to be speaking on behalf of all Canadians. This is interesting coming from a separatist.

[English]

It is interesting that the leader of the Bloc Quebecois has joined in a common front with Reform, a front to undermine the inquiry and the judicial process to look into this very serious matter.

Canadians want answers. The government wants answers. We will not get the answers from this line of questioning. We will get the answers from an impartial commission which is doing its job and doing it well.

* * *

SOMALIA INQUIRY

Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, yesterday the foreign affairs minister feigned outrage that Reform would ask questions about UN Ambassador Bob Fowler.

However, I remind him there have been clouds over Mr. Fowler for over two years. I remind him Mr. Fowler was deputy minister to the present defence minister, deputy minister during the Somalia affair. He was hustled out of town on December 23, 1994. He is a well connected Liberal.

Will the minister not agree that the allegations raised by the media, by former Prime Minister Kim Campbell and by Colonel Geof Haswell constitute a serious cloud of controversy that must be dealt with immediately?

Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr. Speaker, let me first clarify that I was not feigning indignation; I really was upset by the hon. member's remarks.

To suggest that being a deputy minister of defence, while it is a very difficult job, is somehow the reason why someone should be asked to be pulled back from a diplomatic post simply does not stand up to much credibility.

As we have repeated many times, the reality is there have been allegations made. I have not yet had the pleasure of reading Ms. Campbell's book. I may never have the pleasure of reading her book; in fact, I am almost sure I will not have the pleasure of reading her book. However, it is an allegation.

As the Minister of National Defence has explained many times, we have set up an inquiry to look into all allegations, to ensure that all information is given, to make sure all testimony is heard and that we will not prejudge any of the results of that inquiry.

Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, we are not talking about some clerk here. We are talking about Canada's representative to the world at the UN. This guy was around as a DND deputy minister for seven years. He is a Liberal friend. It is not enough to say that Mr. Fowler has not been proven guilty.

To do his job and to be sure Canada is not undermined at the UN-

The Acting Speaker (Mr. Kilger): Order. It is 2.45 p.m. and I still have indications from many members who would like to ask questions. I ask that we shorten the preambles and get to the question.

Mr. Mills (Red Deer): Mr. Speaker, why will the minister not do the right thing and put Canada's interests higher on his priority list than defending a well connected Liberal appointee and recall Mr. Fowler until these allegations are cleared up?

Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr. Speaker, as is so often the case, the Reform Party tries to intrude its own somewhat undercover form of politics in the debate of the House.

Mr. Fowler is a long time public servant. He has had no affiliation with any party as far as I know. He has worked in a number of posts with great distinction. He is continuing to play that role at the United Nations where he was fundamentally responsible in helping put together a Haitian rescue force which has helped the island. He has represented us effectively in the reform of the United Nations. He is responsible for providing a new budgetary formula for the United Nations. He is doing his job well.

The hon. member should not be so quick to dismiss the fundamental principle this country stands for, that one is innocent until proven guilty.

* * *

[Translation]

TRAN TRIEU QUAN

Mr. Philippe Paré (Louis-Hébert, BQ): Mr. Speaker, my question is for the Minister of Foreign Affairs.

The government's carelessness in the Tran Trieu Quan matter has gone on for too long. The day before last, in an about-face designed to give the impression it is acting on this matter, the government asked Vietnamese authorities to demand that Paul Morgan be extradited. Just last week however, they claimed the matter was in the hands of Mr. Quan's counsel.

Given that the government is dragging its feet in this matter and failed to act until a reporter tracked down Paul Morgan, could the


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minister tell us what the government and the RCMP were doing during all that time?

Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr. Speaker, first of all, I would like to say that we share the member's concern about the serious situation Mr. Quan is in. But it is incorrect to say that the government did not act on this matter. We did take several steps.

The Prime Minister took the matter up with the prime minister of Vietnam. The former Minister of Foreign Affairs also raised the question. I myself discussed the matter with the ambassador.

This week, the Minister of Finance, who was in Vietnam, expressed our government's concerns to the deputy prime minister of Vietnam and asked that Mr. Quan be released. Meanwhile, I wrote Mr. Christopher requesting co-operation on the part of Vietnamese authorities in sharing information. At that time, We spoke with Mr. Morgan's lawyers with a view to getting the information and sharing it with the minister.

Mr. Philippe Paré (Louis-Hébert, BQ): Mr. Speaker, around noon today, one of the foreign affairs minister's own colleagues stated that the government would not act.

Now that it has been revealed that CIDA recently granted $7.5 million in assistance to Vietnam through the good offices of lobbyist Marc Lalonde, does this not prove that trade relations clearly take precedence over human rights in the eyes of the Government of Canada, even when the rights in question are those of a Canadian citizen?

[English]

Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr. Speaker, the position of the Canadian government has been to ensure that the assistance it gives goes to help the people of Vietnam in their development.

(1450)

I do not think the hon. member or the members of the Bloc Quebecois would want to deny the kind of assistance that helps the health, safety and security of people who are coming out of a serious war situation and who are trying to rebuild their country.

It is important we dispel many of the myths the hon. member and others have been trying to perpetrate that action has not been taken on behalf of Mr. Quan. There has been a wide variety of representations. We have been working with Vietnamese authorities and American authorities to get the information.

We have made every effort possible to ensure that his rights within prison are demanded. We made the representations as recently as this week. We will continue to work on behalf of all Canadians abroad to ensure their rights are protected wherever they may be.

[Translation]

LEBANON

Mr. Mark Assad (Gatineau-La Lièvre, Lib.): Mr. Speaker, my question is for the Minister of Foreign Affairs.

Given the tragic situation and the human suffering caused to the Lebanese people by an occupation force, will the minister reaffirm Canada's position regarding UN resolution 425, which provides that Lebanon's territorial integrity and sovereignty must be ensured?

Hon. Lloyd Axworthy (Minister of Foreign Affairs, Lib.): Mr. Speaker, I thank the hon. member for his question.

The situation in Lebanon is indeed extremely serious. We support Lebanon's territorial integrity and we are asking that resolution 425 of the UN security council be implemented, in the context of peace negotiations.

We have also asked for a ceasefire in that region. In light of the current terrorist acts and conflict, next Monday, I will present Canada's positions at the Luxembourg meeting, asking for a reduction in the conflict, as well as for the protection of human rights in the Middle East.

* * *

[English]

FISHERIES

Mr. Mike Scott (Skeena, Ref.): Mr. Speaker, the Minister of Fisheries and Oceans is holding a gun to the heads of commercial fishermen in British Columbia. He has told them they must make a decision on license buy back before June but he will not set allocations until the fall at the earliest.

How can fishermen in British Columbia make rational decisions about their future in the fishery unless they know beforehand the rules of the game? Will the minister extend the buy back offer until after the allocations are set, as fishermen have demanded?

Hon. Fred Mifflin (Minister of Fisheries and Oceans, Lib.): Mr. Speaker, I thank the hon. member for his question. The program is a voluntary program recommended by the industry, which is in great difficulty. I do not think he would dispute that.

The proposals were made by the industry as a result of a report, 70 stakeholders and a report of 27 recommendations.

In an industry going through so much difficulty, incurring such a loss of money, a potential loss of $10 million this year, we have to start somewhere. We started here. Many people are in support of this program. In response to the hon. member's question, regrettably not.


1591

Mr. Mike Scott (Skeena, Ref.): Mr. Speaker, at least we got a straight answer.

The federal government is currently reallocating the salmon resource in British Columbia through native land claim agreements, as seen in the Nisga'a agreement in principle. The overwhelming majority of British Columbians object to a racially based, separate commercial fishery. The native only fishery is not supported by either the Constitution or the decision of Canada's courts.

Will the minister not admit he is reallocating the resource at a time when he is asking the commercial fishing industry to downsize by 50 per cent? Will he abandon this bizarre policy of two commercial fisheries in British Columbia separated by race?

Hon. Fred Mifflin (Minister of Fisheries and Oceans, Lib.): Mr. Speaker, I have to refresh the hon. member's memory on what really took place.

In the consideration of the Nisga'a agreement in co-operation with all the partners in the resolution of an issue ongoing for 100 years, it was agreed the food fishery would stay in the Nisga'a agreement in principle and that the commercial harvest for the Nisga'a nations would give the Nisga'a less than they would have if they had ratcheted it up in succeeding years. It was put in the agreement in principle not specifically as commercial fishing but to be included in a harvest agreement to be looked at specifically.

(1455)

There are not separate fisheries based on racial considerations. I think it improper that the hon. member would even suggest that.

* * *

[Translation]

COAST GUARD

Mr. Yvan Bernier (Gaspé, BQ): Mr. Speaker, intereted parties from the St. Lawrence and the Great Lakes regions continue to appear before the standing committee on fisheries and oceans to oppose the new fee structure for coast guard services which the Minister of Fisheries wants to impose. Since his appointment, the minister has always refused to meet those affected by the new fees.

How can the minister explain his systematic refusal to meet these interested parties, given that formal requests were made to him, among others by the Government of Quebec and by five presidents of aluminum producers in Canada, which have sales totalling $4 billion and which provide over 45,000 direct and indirect jobs? How can the minister justify his refusal to meet these people?

[English]

Hon. Fred Mifflin (Minister of Fisheries and Oceans, Lib.): Mr. Speaker, this matter is before the committee, but I will answer the question.

In consideration of this matter the coast guard and the consultations, of which there were more than 350, looked at four different systems: port specific, national, east-west, and east-west and Laurentian. There have been many iterations but each iteration results in a refinement process.

The process now in place is the best process to address a fair and equitable balance among all those who will pay the marine service fee in response to the services provided by the Government of Canada.

[Translation]

Mr. Yvan Bernier (Gaspé, BQ): Mr. Speaker, this does not answer the question, but since the minister wants to talk about the four different systems which he intends to create, I will give him a chance to explain what is going on in his neck of the woods. Why does the minister give preferential treatment to his province by granting substantial rebates for navigation aids to ships that will dock in Newfoundland, at the expense of the other regions, including the St. Lawrence and the Great Lakes, which already absorb half of the costs related to navigation aids?

How does the minister explain that? He creates three or four different systems and subsidizes his province in the process.

[English]

Hon. Fred Mifflin (Minister of Fisheries and Oceans, Lib.): Mr. Speaker, that is absolute tommy-rot and the hon. member knows it.

* * *

CANADA PENSION PLAN

Mr. John Williams (St. Albert, Ref.): Mr. Speaker, yesterday the Deputy Prime Minister said: ``It is the policy of the Liberal government to protect the Canada pension plan for seniors and its viability in the long term''.

What right does she have to say she can protect the Canada pension plan and maintain seniors' incomes before she has the approval from the taxpayers to increase CPP premiums from 5 per cent of their income to 15 per cent of their income?

Hon. Douglas Young (Minister of Human Resources Development, Lib.): Mr. Speaker, there is one thing that nearly everyone who has looked at the Canada pension plan agrees on: it has to be reorganized to ensure it is sustainable.


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The process put in place to evaluate the future of the CPP is one that we look forward to the hon. member and his party participating in. Canadians have a right to know what the government believes should be done with the Canada pension plan. However, it would be very important to know what the third party feels should be done in order to protect future income for senior citizens.

Mr. John Williams (St. Albert, Ref.): Mr. Speaker, we wanted an answer from the Liberal government as to what it will do to protect the seniors and their incomes while the Canada pension plan continues to be underfunded and requires support.

When the Deputy Prime Minister was standing here yesterday saying she would protect seniors until such time as the Canada pension plan premiums have been increased dramatically, how can she guarantee these seniors' incomes will be protected?

(1500 )

Hon. Douglas Young (Minister of Human Resources Development, Lib.): Mr. Speaker, I think every member of the government understands the importance of protecting the Canada pension plan. Every member of the government understands the dangers of any plan that is subject to the kind of changing demographics that are involved in Canadian society.

The process that has been initiated of which I am sure the hon. member is aware is one that will provide an opportunity for Canadians who have an interest in the matter to express their views.

As much as the hon. member would like to know the views of the government, which this process will allow to come forward, I know we are all waiting with bated breath to know not only the views of the hon. member as to the future of the Canada pension plan, but also the views of his party on how it should be financed.

* * *

STRATEGIS

Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, my question is for the Minister of Industry.

Our government is committed to fostering a new partnership with small and medium size businesses which will create even more jobs. How has the recent launch of Strategis and other initiatives which give businesses access to the information highway created a new business environment in Canada?

Hon. John Manley (Minister of Industry, Minister for the Atlantic Canada Opportunities Agency, Minister of Western Economic Diversification and Minister responsible for the Federal Office of Regional Development-Quebec, Lib.): Mr. Speaker, Strategis is an information age tool to help particularly

small and medium size enterprises in Canada engage in a process of developing technology, engaging in international trade and creating jobs and economic opportunity for Canadians.

The hon. member and members from both sides of the House will want to encourage small businesses in their areas to connect to the Strategis web site which is the largest business information web site on the Internet. It is where they can find everything from 33,000 licensable technologies to 50,000 company profiles, companies they can trade with, suppliers, partners, joint ventures, and sources of trade opportunities elsewhere in the world.

The hon. members in the Reform Party are concerned about time. This is a real time saver for small business.

* * *

1996 CENSUS

Mrs. Elsie Wayne (Saint John, PC): Mr. Speaker, my question is for the Minister of Industry.

It was brought to my attention a couple of weeks ago that the Minister of Industry contacted the MP from an abutting riding in my area and asked him to submit a list of names for the census taking. When I called the minister's office and questioned this, he stated: ``Send your names in. Send them to Halifax. You do not send them to my office''.

There are two lists, a and b. I was told my list could not be used until list a was used up at the minister's office.

How can the Minister of Industry justify such a political patronage system when he and his government ran on jobs, jobs, jobs for all Canadians?

Hon. John Manley (Minister of Industry, Minister for the Atlantic Canada Opportunities Agency, Minister of Western Economic Diversification and Minister responsible for the Federal Office of Regional Development-Quebec, Lib.): Mr. Speaker, I am glad I did not leave at three o'clock.

I remind the hon. member that it was the Mulroney government in 1984 that ran on jobs, jobs, jobs and it only got two of them in the last election. Had the member been in the House in the weeks before the Easter break she would have heard my assurance that if she had names which she wished to submit to Statistics Canada for census representatives, we would ensure they were submitted.

If she has some problem with that she should certainly follow it up with me. I will be glad to investigate this because I did give her that assurance.

1593

[Translation]

PRESENCE IN GALLERY

The Acting Speaker (Mr. Kilger): For some time now, the House has been paying tribute to people who have greatly contributed to Canadian life. It is our way to celebrate Canadian excellence and success.

[English]

Today we are honoured to receive some of this country's most distinguished women athletes. These women have represented us in national and international competitions. They have broken records and have won Olympic medals for Canada. They are symbols of excellence and sources of inspiration for Canadians.

(1505 )

They are seated in the gallery now. While I introduce them I ask you to please hold your applause until they stand together: Cross-country skiers Shirley and Sharon Firth; gymnast Lori Fung; figure skater Karen Magnussen; curlers Marcia Gudereit, Jan Betker and Sandra Peterson; speed skater Sylvia Burka; skier Lucille Wheeler-Vaughan; swimmer Joanne Mucz-Hainey; judoist Tina Takahashi; skier Anne Heggtveit-Hamilton; shooter Linda Thom; cross country skier and kayaker Sue Holloway; skier Betsy Clifford-Higgins; track and fielder Diane Jones-Konihowski; synchronized swimmer Michelle Cameron-Coulter; and marathon swimmer Vicki Keith-Munro.

Please join me in welcoming these remarkable women who have made outstanding contributions to Canadian sport and who have honoured our country by their achievements.

Some hon. members: Hear, hear.

The Acting Speaker (Mr. Kilger): On behalf of our Speaker, I am only too pleased to invite all the members to room 216-N, the Speaker's salon, for a reception with our guests.

_____________________________________________


1593

ROUTINE PROCEEDINGS

[English]

GOVERNMENT RESPONSE TO PETITIONS

Mr. Paul Zed (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table in both official languages the government's responses to 48 petitions.

COMMITTEES OF THE HOUSE

PROCEDURE AND HOUSE AFFAIRS

Mr. Paul Zed (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Mr. Speaker, I have the honour to present the 13th report of the Standing Committee on Procedure and House Affairs regarding the membership of the Standing Committee on Fisheries and Oceans and the Standing Committee on Health and the associate membership of various committees.

If the House gives its consent, I intend to move concurrence in this 13th report later this day.

* * *

OCEANS ACT

Hon. Fred Mifflin (Minister of Fisheries and Oceans, Lib.) moved for leave to introduce Bill C-26, an act respecting the oceans of Canada.

(1510 )

The Acting Speaker (Mr. Kilger): Could the minister possibly indicate if in fact the bill is in the same form as it was at the time of prorogation?

Mr. Mifflin: Mr. Speaker, I do wish to state that this bill is indeed in the same form as Bill C-98 of the first session of the 35th Parliament at the time of prorogation. I therefore request that it be reinstated as provided in the special order adopted on March 4, 1996.

(Motions deemed adopted, bill read the first time and printed.)

The Acting Speaker (Mr. Kilger): The Chair is satisfied that this bill is in the same form as Bill C-98 was at the time of prorogation of the first session of the 35th Parliament.

Accordingly, pursuant to order made Monday, March 4, 1996, the bill is deemed to have been read the second time, considered by the Standing Committee on Fisheries and Oceans and reported with amendments.

* * *

COMMITTEES OF THE HOUSE

PROCEDURE AND HOUSE AFFAIRS

Mr. Paul Zed (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Mr. Speaker, if the House gives its consent, I move that the 13th report of the Standing Committee on Procedure and House Affairs presented earlier this day be concurred in.

(Motion agreed to.)

1594

PETITIONS

TAXATION

Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, pursuant to Standing Order 36, I wish to present two petitions to the House.

The first petition comes from Edmonton, Alberta. The petitioners would like to draw to the attention of the House that managing the family home and caring for preschool children is an honourable profession which has not been recognized for its value to our society.

The petitioners therefore pray and call upon Parliament to pursue initiatives to eliminate tax discrimination against families who decide to provide care in the home for preschool children, the disabled, the chronically ill or the aged.

ALCOHOLIC BEVERAGES

Mr. Paul Szabo (Mississauga South, Lib.): The second petition, Mr. Speaker, comes from Sarnia, Ontario.

The petitioners would like to bring to the attention of the House that consumption of alcoholic beverages may cause health problems or impair one's ability. Specifically, fetal alcohol syndrome and other alcohol related birth defects are 100 per cent preventable by avoiding alcohol consumption during pregnancy.

The petitioners therefore pray and call upon Parliament to enact legislation to require health warning labels to be placed on the containers of all alcoholic beverages to caution expectant mothers and others of the risk associated with alcohol consumption.

CHILD LABOUR

Mrs. Carolyn Parrish (Mississauga West, Lib.): Mr. Speaker, pursuant to Standing Order 36, it is my pleasure to present and support a petition on behalf of two dedicated constituents, Virginia Uhran and Dianne Acri, concerning the child labour situation in Pakistan.

The petitioners call upon Parliament to enact sanctions against Pakistan by banning the importation into Canada of carpets and other products produced by child labour.

TAIWAN

Mr. Jesse Flis (Parkdale-High Park, Lib.): Mr. Speaker, it is also my privilege and duty pursuant to Standing Order 36, to place a petition in this House signed by constituents from across the greater Toronto area.

The petitioners claim that whereas Taiwan has dramatically improved its record on human rights and has held free elections in a multi-party system and has conducted its first direct presidential election on March 23, 1996, the petitioners urge and if necessary facilitate the Government of China to enter into meaningful dialogue with the Government of Taiwan at the highest levels such as through their respective foreign ministries with an eye toward decreasing tensions and resolving the issue of the future of Taiwan.

* * *

QUESTIONS ON THE ORDER PAPER

Mr. Paul Zed (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Mr. Speaker, I ask that all questions be allowed to stand.

The Acting Speaker (Mr. Kilger): Is it agreed?

Some hon. members: Agreed.

_____________________________________________


1594

GOVERNMENT ORDERS

(1515)

[English]

BANK ACT

Hon. Anne McLellan (for the Minister of Finance, Lib.) moved that Bill C-15, an act to amend, enact and repeal certain laws relating to financial institutions be read the third time and passed.

Mr. Barry Campbell (Parliamentary Secretary to Minister of Finance, Lib.): Mr. Speaker, I am pleased to speak on Bill C-15 at third and final reading in the House. This is the sort of workaday legislation that may lack drama but remains vitally important to Canada because it will enhance the safety and soundness of the country's world class financial system.

May I begin by reminding hon. colleagues that this legislation is the product of extensive consultation. I would like to take this opportunity to again extend the government's thanks to the many industry participants and other stakeholders that provided such constructive and insightful advice.

[Translation]

I would also like to thank the Standing Committee on Finance for having decided to hold hearings on the bill during the summer recess. The comments gathered by the committee constituted invaluable preliminary work prior to the clause by clause study of this major piece of legislation. We can rest assured that the bill we are going to pass will serve the best interests of consumers, financial institutions, our constituents, and the Canadian economy as a whole.

[English]

There is no question that sound, secure financial institutions are a fundamental requirement for national well-being. As I said at the start, Canada is blessed with a world class system. The financial sector is very much a part of a world of dynamic and dramatic accelerating change driven by new technology, globalization and new customer demands. All these factors culminate in heightened


1595

competition. That is why we are moving ahead with the measures contained in Bill C-15.

This legislation is timely not because the system suffers from any critical weakness. It does not. But to make sure we maintain a dynamic, competitive financial sector and regulatory system we must respond to market trends and recent experiences without unnecessary delay. Bill C-15 will do this.

Let me emphasize that these are not patchwork, band-aid measures. They flow from a series of basic principles outlined in the white paper the government issued over a year ago. These principles include the following: first, that ownership of financial institutions is a privilege, not a right. Second, early intervention in and resolution of institutions experiencing difficulty should occur. Third, that financial institutions must operate with sufficient incentives to solve their problems in a timely manner. Fourth, there must be appropriate transparency and accountability in the system.

We have discussed the details of this legislation at some length in committee and the House. Today I simply want to remind us all of some of the more important changes that the House should approve.

First, the bill establishes an enhanced system of early intervention on behalf of troubled institutions. The legislation will allow the office of the Superintendent of Financial Institutions to take control of a troubled institution earlier than at present. It also provides greater transparency in the supervisory process by establishing guides to supervisory intervention. The intent here is clear, concrete and constructive.

Early resolution of an institution's difficulties is the best way to prevent substantial losses to depositors, policyholders or creditors and potentially to shareholders.

This legislation states clearly that if an institution is facing difficulties, owners do not have the right to continue in business until they hit the brick wall and cannot pay liabilities as they come due. Institutions will now understand that OSFI will take action if its concerns are not dealt with promptly. That is a major improvement.

This is not a punitive step. By increasing OSFI's scope for early intervention, the legislation provides a new incentive for managers and directors of troubled institutions to undertake early problem solving for themselves.

The second element I would highlight in Bill C-15 is the expanded role for the superintendent in the governance of troubled financial institutions. In this case, the superintendent will have the power to designate certain directors as affiliated and also veto the appointment of directors and senior officers in troubled financial institutions.

(1520 )

These additional powers reflect our appreciation of the importance of effective, independent corporate governance. They also stress that it is the boards of directors that represent the ultimate frontline for problem resolution and good management.

Before concluding I should address a criticism of the legislation levied by the official opposition related to jurisdictional issues.

The clear and certain benefits of this bill notwithstanding, the official opposition has chosen so far not to support its passage. The main criticism relates to the claim that the powers proposed for the Bank of Canada, to mitigate systemic risk in clearing and settlement systems, infringe on provincial powers over regulating security matters. This is not the case.

The opposition's problem and misunderstanding of the goal of this legislation begins with its failure to understand the nature of systemic risk itself. This is the risk that one institution's inability to settle a large value transaction could have a domino effect among other participants.

In the proposed legislation the government is acting to provide a formal oversight role for the Bank of Canada and to enhance its powers to require appropriate risk control in payment, clearing and settlement systems.

The bill provides the Governor of the Bank of Canada with the powers necessary to control systemic risk. This can be achieved by issuing directives to clearing houses, or where necessary, participants in a clearing house, requiring them to cease a particular course of conduct that results in systemic risk being inadequately controlled.

I want to emphasis that dealing with systemic risk issues is traditionally a matter for central banks, not just in Canada, but in other developed countries. If there is ever a day when the failure of a large financial institution at home or abroad threatens the stability of the financial system, it will be the central banks of industrialized countries, including the Bank of Canada, that will be called on to deal with the fallout.

I also want to note that in committee the government moved amendments to further clarify that the powers of the Bank of Canada with respect to systemic risk do not infringe on traditional areas of concern to provincial regulators about the health of individual securities firms.

Specifically, the bill now provides greater certainty that the governor may not issue directives in respect of matters directly related to the participation of securities firms or other individual participants in the clearing and settlement system. This includes the corporate governance of the participant, its relations with its customers, capital adequacy or the management of its investments.


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We fully understand that these aspects of business fall under the purview of the principal regulator of the institution such as the provincial securities commissions. We have made it clear that these are not matters for the central bank. For these reasons I reject the notion that this legislation infringes on provincial jurisdiction. It does not.

In closing, I want to say that Canadians have come to expect a sound and stable financial system. This is one of our most enduring and sustaining economic strengths. That is why we must ensure that we sustain and evolve the appropriate mechanisms needed to manage and minimize risks. Bill C-15 honours that obligation with positive, forward looking measures.

I have no hesitation in calling on my colleagues to pass this important legislation. I hope that all members of the House will join with the members on this side of the House in doing so.

[Translation]

Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr. Speaker, I am pleased to rise today at third reading to speak to Bill C-15, an act which concerns several acts regarding financial institutions and the banking sector.

This bill concerns the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act, the Cooperative Credit Association Act, the Winding-up and Restructuring Act, the Office of the Superintendent of Financial Institutions Act, the Canada Deposit Insurance Corporations Act, the Canadian Payments Association Act, and the Canadian Investment Companies Act.

This is a wide-ranging piece of legislation. This is a preview of the major changes the Liberal government is getting ready to make to the Bank Act before March 31, 1997.

(1525)

It is also, first and foremost, a bill that gave us a general idea, as early as June, as my colleague from the finance committee already said, so that when we began the clause by clause study of the bill in August, we had some indication as to the government's intentions. And these indications were confirmed, a few weeks ago, when the government made its intentions known in the throne speech and the budget speech.

With this bill, the government is intruding, roughly and high-handedly, in an area which comes exclusively under the jurisdiction of Quebec, Ontario, and all other provincial governments. The area I am talking about is that of securities.

With the single clause extending the regulatory mechanisms to the securities sector and implementing a Canadian clearing system controlled by the Bank of Canada, the government is betraying the 1982 Constitution. Not only did the government patriate the Constitution against Quebec's will, but now it does not even abide by the provisions of that Constitution any more.

Quebec's jurisdiction over securities is based on section 92(13) of the Constitution Act, 1982, which grants provinces jurisdiction over property and civil law. What complements these provisions? It is the case law of the Supreme Court of Canada, which has attached the securities market to this initial area of jurisdiction, through the provinces.

So, when we look at what is presented to us, when we look at the clearly defined intentions set out a few weeks ago in the throne speech and in the budget speech regarding the total and complete intrusion of the federal government in the securities sector, we can only confirm our opposition to this provision of the bill.

It is not that the bill's objectives are bad. The bill is aimed at, among other things, reducing what are known as systemic risks in the Canadian financial system, to avoid the so-called domino effect in the financial sector that would occur, for instance, when one institution is unable to meet its commitments towards another institution. There would be a domino effect on the financial sector as a whole. Everyone, sovereignists as well as federalists, Quebecers as well as Ontarians, people from the maritimes or from western Canada, agree on that: we must put in place a system that is efficient and that reduces the likelihood of a financial crisis and of systemic risks in the financial sector.

But we must totally reject the means taken by the government. When the government, under the pretext of reducing systemic risk, creates new and costly overlap for taxpayers as a whole-new overlap that Quebecers as well as Canadians will have to pay for-because it intrudes in a sector that is already very well served by provincial institutions, there is a problem.

The Commission des valeurs mobilières du Québec and the Ontario Securities Commission are completely disregarded and, through this bill, the federal government is allowed to interfere more and more in this area under the provisions of a bill enabling the Governor of the Bank of Canada to seriously interfere in this area. At the same time, there is talk of creating a Canadian securities commission, as mentioned in the speech from the throne but not in the bill. This will not do.

How can you justify having provincial and federal institutions that overlap like that? How do you expect to give a clear signal to the financial community?

(1530)

Which policy directives should financial institutions in Quebec and Canada follow? Those coming from a federal entity, as set out in Bill C-15, or those coming from organizations and institutions already well-established in the securities industry, such as the securities commission, the Quebec inspecteur général des institu-


1597

tions financières, the Quebec government or even the Montreal stock exchange?

How do you hope to create stability in this area when, by interfering this way, although such interference is allowed under Bill C-15, you are sending out potentially conflicting signals to the same institutions? That does not make sense.

What justifies the federal government in telling the Government of Quebec and the Government of Ontario: ``We have decided to cast aside the institutions you are involved in, even though you have successfully controlled the securities industry for many years. In the future, we will be in charge''. The federal government has no expertise in the area of securities since, under the very terms of the Constitution Act of 1982, this is an area that falls under provincial jurisdiction.

The second aspect of Bill C-15 that we cannot support has to do with using this bill to amend the prerogatives of the Superintendent of Financial Institutions and the Winding-up Act. Bill C-15 gives more powers to the Canadian Superintendent of Financial Institutions, who, in the future, will be able to interfere directly in the business of provincially chartered institutions.

Such an extension of the prerogatives of the federal superintendent of financial institutions will result once again in costly duplication and inefficiencies in the system. On the one hand, according to the legislation and the remarks made by the minister and the parliamentary secretary, they want to introduce efficiency and reduce duplication, but on the other hand, they create duplication and inefficiencies with such a provision. Why? Because, once again, the Quebec inspector general of financial institutions as well as his Ontario counterpart are doing exactly the same work and have exactly the same responsibilities as the ones the government wants to give to the superintendent of financial institutions of Canada.

Why this duplication? Why create new structures when we should instead eliminate duplicating structures? When we ask the government to study and review duplication and overlap, we are not asking it to create some more but to eliminate what there is. Yet, with this legislation, it is creating more, with all the resulting additional costs to taxpayers and all the resulting problems in terms of signals on the securities market.

I believe Bill C-15, through this provision as well as the first one, will inevitably create instability and uncertainty on the financial markets. Contrary to what the government representatives say, I do not believe that stakeholders in the securities industry all across Canada generally want the federal government to get involved in that area, that they want it to set up a securities control commission or that they want that the federal superintendent of financial institutions to push aside the provincial officials working in this area of exclusive provincial jurisdiction in favour of federal authorities.

That is not the message I am getting from the financial sector, and more particularly from Quebecers and some Canadians in these institutions.

In the last fifteen years, I would say, provincial participantsin the securities sector have developed a great deal of expertiseand knowledge in this field. But most importantly, they have introduced a harmonizing mechanism in order to reduce systemic risks, and bring about efficiency gains in the securities sector. With the new SEDAR system, they will soon be able to reduce from eight or ten to only one the number of prospectuses required. That will make for a better allocation of funds available on this market, and a better use of financial resources on the securities market.

(1535)

So why has the federal government chosen this time to introduce such a piece of legislation? Under the pretext of reducing the systemic risks that have already been reduced thanks to measures taken 10 or 15 years ago in this area, the federal government does not hesitate a minute to say: ``From now on, I will oversee the securities industry and ensure that resource allocation is efficient''. That is unacceptable.

You either believe in a constitution, as the Liberals tell us, or you do not. You either believe in the stability of our financial industry or you do not. You either believe in a better allocation of all the risks involved, and especially of systemic risks, or you do not care at all. And that is the impression we get from the actions of the current government.

When the only thing you do is increase the tension, the insecurity and the instability on the market, instead of reducing them, you either do not understand what is going on, and that shows how incompetent you are, or you want more powers or more visibility for the federal government. You are ready to give up efficiency in order to be more visible and that is not good. That is not what you need to do if you want to be up to the challenges awaiting you in the securities industry and the financial sector during the nineties and the year 2000.

The third reason why we cannot support Bill C-15 introduced by the government concerns the amendments to the Canada Deposit Insurance Corporation Act. Bill C-15 proposes to change the current deposit insurance system. Right now, financial institutions pay deposit insurance premiums based on the volume of deposits, but under Bill C-15, premiums will be based on the risk that a financial institution represents.

Since first seeing the provisions of Bill C-100, which is now Bill C-15, last June, we have been questioning the secretary of state responsible and the finance minister who, ultimately, is also responsible for this legislation, about the impact of this new provision. Up until now, that is almost nine months after the first bill was introduced, our questions have yet to be answered.


1598

For example, we do not know what criteria will be used to assess the risk that a financial institution represents. These criteria will be defined in the forthcoming regulations, and the government refuses to make these regulations public. One can wonder if these criteria will respect the specific character of Quebec's financial institutions. We have questioned the secretary of state responsible and the finance minister many times on this subject, but we still have no answer. We have no answer either to a question such as what impact will a federal risk assessment as proposed in Bill C-15 have on the financial community and how will this risk assessment be interpreted by the financial markets.

On the one hand, there is talk of interference, inefficiency, waste, duplication, overlap, all costly to Canadian taxpayers, and on the other hand, when a clause is unclear and we ask for clarifications, we get no reply. What kind of government are we dealing with here?

In short, this bill is another illustration, first and foremost, of the centralist dynamic inherent in the constitutional status quo. Bill C-15, particularly in its creation of Canada-wide clearing and settlement systems, encroaches on areas already covered by the Commission québécoise des valeurs mobilières and the Inspecteur général des institutions financières du Québec. This leads not only to an overlap that is costly to the taxpayer, but also to administrative inefficiencies, because financial institutions in Quebec, as in Ontario and the other provinces, will be subject to dual controls.

Second, Bill C-15 constitutes unacceptable interference in the securities area. The various governments of Quebec have always vigorously defended the prerogatives of Quebec concerning securities.

(1540)

If I may, I would like to quote from a letter dated February 16, 1994, and addressed to the then President of Queen's Privy Council for Canada, Minister of Intergovernmental Affairs and Minister responsible for Public Service Renewal by former Quebec premier Daniel Johnson. Its subject is securities, for even that long ago the federal government had indicated its great interest in securities.

The letter starts as follows: ``Mr. Minister, as I indicated in my letter of February 15 on the entire process of improving the efficiency of the Canadian federation, this letter more specifically concerns your proposal regarding the regulation of securities''.

Mr. Johnson goes on to say: ``Allow me first to remind you that the Quebec government never advocated-never advocated-an increased federal role in the securities sector, which is a matter of exclusive provincial jurisdiction. On the contrary, it has consistently expressed its opposition to federal initiatives in this regard''.

These are not the words of the current premier of Quebec, of either Mr. Bouchard or Mr. Parizeau. They are the words of Daniel Johnson, written from one federalist to another.

He goes on: ``In her five-year report to the National Assembly last December, the Quebec Minister of Finance, reiterated the concerns about the federal regulation of securities that would result from this legislation expressed by a number of other provinces at the time of the recent reform of federal legislation on financial institutions. She said-and we are talking about a current federal minister-that federal regulation would be inappropriate in constitutional terms and from the standpoint of efficiency. It would lead to duplication of rules of supervision and inevitably to a heavier administrative and financial burden for issuers, investors and intermediaries''. End of the letter from Daniel Johnson to the current President of the Queen's Privy Council for Canada.

When you are reduced to quoting letters from federalists- It seems to me that the analysis presented by a federalist to another federalist should be understood. It seems just an excuse to say: ``We know, you are a sovereignist. You want Quebec to be sovereign. You refuse all interference. You fight against all interference''. Yes, it is our job to do so, and I think Quebecers are proud of that. But when one comes out with implacable arguments, the same as those used by great federalists such as Daniel Johnson, it seems to me that somehow the Liberal government should realize that there is a certain consensus in Quebec. Moreover, I think they are starting to get the picture as far as the homeland and the linguistic community are concerned. They should also understand that there is also a strong consensus to jealously protect Quebec's prerogatives concerning securities.

I also think that it should be easy to understand, when the president of the Montreal exchange himself tells us he does not agree either with the idea of federal interference in securities. As well, when we questioned the Minister of Finance, after the speech from the throne, and all the more so after the budget speech, in which he mentioned the federal government's intention, now openly admitted, to interfere in matters of securities, he told us the Quebec business community, major stakeholders in Quebec were unanimous on the need for federal interference in the securities market. After hearing several stakeholders, and the Montreal exchange's president for one, we have to conclude that the Minister of Finance has no idea what he is saying in this regard.

Let me quote Mr. Lacoste, the Montreal exchange's president, when he appeared, on February 20, before the Senate Standing Committee on Banking and Commerce.


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Concerning a better harmonization among provinces and greater efficiency in the stock exchange, Mr. Lacoste said, and I quote:

[English]

``Yes, there must be better co-ordination, but better co-ordination must still allow for regional disparities. I always use the example that if we had a national or a single commission in Canada in the 1980s, there would not have been a QSSP type of program. There would not have been labour sponsored funds in Quebec. Now they exist, so there is a need to preserve that. However, I agree there must be better co-ordination''.

(1545)

[Translation]

Clearly, with such significant arguments, Mr. Lacoste, the president of the Montreal exchange, has just told the federal government in polite but firm terms to stay home. He has just told the federal government to mind its own business, not to interfere with the securities business.

I believe that when the president of the Montreal exchange says such a thing, adding that if it were not for the fact that the 1982 Constitution gave the Quebec government exclusive jurisdiction with regard to securities, we would not have had workers' funds such as the Fonds de solidarité des travailleurs et travailleuses de la FTQ, because there would have been a coast to coast policy, and major lobbies and decisions would have been increasingly concentrated in the Toronto area, he is contradicting in a big way what the finance minister has been saying so far.

There is definitely no consensus in Quebec to the effect that the federal government must interfere in this area. Indeed, there is a consensus in Quebec that the federal government should stay where it is, deal with its own affairs, and not create costly inefficiencies, overlaps and duplications for the taxpayers of Quebec and Canada.

This being said, and considering that the government did not respond in any way to our expectations, since it refused to accept any of the amendments we proposed, to avoid three of the negative aspects of the bill, I have to ask my colleagues from the official opposition to vote against this bill. We will do so with energy and conviction, and then start working against it, given that the federal government has firmly decided, first in June last year and then with the speech from the throne and the budget provisions, to interfere in a very cavalier and cynical way in the area of securities.

I am convinced that, over the next few weeks, the main stakeholders in Quebec, just like the official opposition, will oppose vigorously this interference by the federal government.

[English]

Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, Bill C-15, an act to amend, enact and repeal certain laws relating to financial institutions, is a continuation of the old Bill C-100 before Parliament prorogued. The government is bringing it back substantially in the same form as Bill C-100. That is why we are at third reading now.

The purpose of the bill is to make many amendments and changes to financial institutions and to do a lot of fine tuning. This act is a result of a review of the safety of financial institutions.

It comes about as a response to the failures of a number of financial institutions and is essentially the government's response to concerns regarding these same institutions. The bill is also a prelude to the Bank Act review due in 1997. That review promises to be much wider in scope.

I will go through some highlights, some objections and some deeper facts on some of the aspects of the bill. It is very complicated and complex. It covers a lot of areas. I will not touch on all of them, but I will try to hit on some of the points I feel the Canadian public should be aware of. I will also try to enlighten people interested in this debate.

(1550 )

The bill rejects deposit co-insurance, and we do not know why. Since the introduction in 1967 of 100 per cent deposit insurance up to a maximum dollar value which is currently $60,000, 30 financial institutions have failed, with 20 failures in the last 10 years. This has cost the CDIC, the Canadian Deposit Insurance Corporation, about $5 billion as of March 1994.

Interestingly, in the period proceeding 1967 there were no bank failures. Governments over the years have exhibited reluctance to institute market based measures of reform such as co-insurance, instead opting for more regulation and oversight. The use of the market through the implementation of co-insurance and market based criteria as early warning signals would alleviate the problems in the financial system in a less costly yet more effective manner than proposing further regulatory change.

Regulatory attempts to mimic the efficient results achievable only by the free market will always be more costly for all parties involved and will rarely if ever achieve the same quality of results.

Under the proposed system depositors are only encouraged to seek out the best rates regardless of the risk profile of the institution in question since they know they will be fully compensated by the CDIC in the event of a failure. This facilitates the entrance, growth and eventual failure of risky and recklessly managed institutions. It also discriminates against healthy, strong


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financial sector players who minimize risk by conservative lending and borrowing policies.

I sure have a tough time making a loan. They are always tough on me.

The act does set the stage for risk based CDIC premiums. However, premium levels for different institutions will not be made public. Again this gives the appearance designed to protect weak institutions. As mentioned earlier, it also keeps the regulation of financial institutions under too large a veil of secrecy. A willingness to provide more information to the public would be a positive move.

The Reform Party does not support the bill because the government could have done much more in conjunction with financial institutions to make it an open system, an accountable system, a system that would work. Then Canadians would know what is happening and would have some faith in it.

The bill proposes rated premiums for the CDIC and the premiums will be according to the risk. As I mentioned, the bad thing is that the CDIC intends not to make the Canadian public aware of the particular potential risk involved in any particular financial institution. This is a veil of secrecy and the taxpayers will be left with the bill when large institutions collapse, as we have seen in Barings' $1 billion loss and in Alberta's Principal Savings and Trust Company.

That is why it is important for the government to consider what it has unfortunately rejected, co-insurance as a partial solution. By perhaps insuring up to only 90 per cent rather than 100 per cent of deposits, investors having a 10 per cent stake in what they are investing in, a 10 per cent stake in what is going on, would know they have a potential exposure.

The advantages of this exposure would make the public more interested in its money and it would do a little more research on the financial institution. The competition and knowledge that this would bring out would bring out the best in business among those institutions. Just to have a monopoly, big is not necessarily better.

Also recent claims, as I have pointed out, have cost. When they go into receivership these losses cost the taxpayers money, which gives this guarantee by the government and CDIC which is really backed by the taxpayers, and the big banks love it.

I will continue in this vein and discuss some facts on co-insurance basically for future consideration, to lay it on the record. There are some strong advantages in considering co-insurance.

One hundred per cent coverage creates an incentive to place funds with high risk institutions. With 100 per cent insurance risky institutions can attract deposits by offering slightly higher rates.

(1555 )

Depositors are willing to use these institutions because they know the CDIC safety net up of to $60,000 will be there if anything goes wrong. This has enabled risky and uncompetitive institutions to enter the marketplace, grow and ultimately fail and distort the marketplace.

The consumers who bear the cost of deposit insurance. Depositors of stable institutions suffer the most. They do not get the higher interest rates and yet they still have to pay for the damage caused by risky institution failures.

Therefore, as recognized in the just published study by the Public Interest Advocacy Centre, the irony is that it is the very group that co-insurance is intended to benefit, the average consumer, that subsidizes the risky activities of the more sophisticated who know how to take advantage of the inefficiencies embedded in the system as a result of 100 per cent deposit insurance.

There is almost universal consensus and support for co-insurance. Talk about having committee meetings, listening to witnesses and acting in conjunction with what you hear, despite diverse interests from the banks, the insurance industry, both present and past superintendents, the chairman of the CDIC, the Canadian Institute of Actuaries, academics including most recently PIAC which studied the issue from the consumers point of view, and the Senate banking committee, all supporting co-insurance, this bill and these changes do not include it.

Consumers can judge risk. Consumers do not use the vast amounts of disclosed information because without co-insurance there is no incentive to do so. Why worry? Why bother? Why read? Why care? Just put in your money, it is guaranteed anyway. Look for the best advertisement, the highest rate of return and away you go.

The extremely high percentage of insurance deposits in failed institutions illustrates that consumers are making accurate judgments. For example, a recent failed institution, Income Trust, had 99 per cent of deposits insured versus the 50 per cent industry average.

Countries such as the United Kingdom and Ireland have forms of co-insurance with no evidence of widespread demand for 100 per cent coverage.

The secretary of state argued on August 15, when this bill was still Bill C-100: ``The measures included in Bill C-100 flow from a series of basic principles as outlined in the white paper issued last February. Our subsequent consultations have left me more convinced than ever that these principles and the fundamental shift in the philosophy that some of them represent make this legislation a vital and valid turning point in our approach to regulation''.

The secretary of state went on to point out there are are four key principles underlined in this bill: ownership of financial institutions is a privilege, not a right; early intervention in and resolution


1601

of institutions experiencing difficulty should occur; financial institutions must operate with sufficient incentives to solve their problems in a timely manner; there must be appropriate accountability and transparency in the system.

Those are tremendous underlying key principles. How could one in the financial sector argue with those principles? I support satisfying those principles, but this bill falls far short of the accountability and transparency in the system. It is still veiled in secrecy and by not considering co-insurance it denies the consumer the opportunity to make some rational judgments for himself.

There has to be a greater review. Financial institutions of all types, the four pillars, must come under a serious review, not separately but collectively. We must do a massive evaluation. It is time to stop and take a good look at the financial sector.

(1600 )

My colleague, the hon. member for Okanagan Centre, who is the Reform Party's industry critic, wrote this brief paper. I would like to read it into the record to give him credit for it because if we truly wish to satisfy the four principles which the secretary of state has stated in terms of evaluating financial institutions, then I feel that my colleague's recommendations are worthy of consideration.

The paper states:

Finance Minister Paul Martin surprised many in his 1996 budget speech by assuring Canadians that banks would not be allowed to sell insurance through their branch networks this year. This softball so deftly tossed our way neither eased our concerns nor addressed the issue.
The real issue is not whether the banks should be allowed to sell insurance or enter into the car leasing business, but whether true competition exists within the financial sector and, thus, whether the consumer and the economy will benefit if banks are allowed to enter other markets.
The banks assure us that their own industry is competitive and not the oligopoly that Canadians suspect. This is difficult to believe when the six largest banks in Canada move en masse to raise or lower interest rates every time the bank rate so much as twitches. The only competition in this case is who will move first.
Yet none of them have moved very quickly to change interest rates down on the personal credit cards that everybody has through Visa and MasterCard, et cetera. One would think someone would drop the rate to get more business.

The four pillars of the financial sector, banking, insurance, trust companies and security dealers, have crumbled as deregulation and technological progress has blurred the lines of distinction. The banks have been applying pressure ever since to sell insurance in their branch networks, enter into auto leasing and increase their interest in the securities market. Further deregulation and the subsequent increase in the size of banks, however, could reduce competition in the financial sector and hurt consumers. These are perennial issues in the Parliament of Canada, particularly when a review of the Bank Act is scheduled. Major reviews are conducted every ten years, interspersed with minor reviews every five years.
1997 brings a minor review, but it is a major review that is required. We need to know a good many things. How do our financial institutions interact? How do they operate in relation to other sectors of the economy? What are the strengths and weaknesses of the current regulatory structure? Not only will the answers reveal whether or not true competition exists within the banking sector and, thus, whether or not they should be allowed to expand into other financial services, the answers will determine the veritable strength of our financial sector as it heads into the 21st century. Until such a review is completed, a moratorium should be placed on making any further decisions about financial institutions.
Furthermore, Parliament must be the venue, perhaps in the form of a joint committee of the finance and industry committees. It is the only way we can assure that all interests will be recognized and the process will be both accessible and transparent. Canadians must be able to see the process in order to put their faith in it.
As lobbyists from all sides pressure members of Parliament to take sides and others try to frame the issue within the overtly political constraints of a war between big and small business, the challenge will be to keep our eye on the ball. That is, to ensure true competition exists and is free to function within the marketplace, that stability is maintained in the respective financial sectors and a prudent regulatory structure is in place to protect the consumer. If the bottom line is met, Canadians and the economy will indeed emerge as the winners.
Before I conclude, I have one thing to say about financial institutions and, more specifically, the banks.

There is concern among a lot of people, especially people who are left wing political animals, who feel that the banking institutions are taking advantage of them. I have some good things to say about big banks and some criticisms as well. Since we are dealing with financial institutions, I would like to take the opportunity to touch on two points.

(1605)

A lot of people are criticizing the banks for not paying their fair share or they are saying they should be embarrassed by their huge profits. I know that the banks, although some may make a billion dollars in profits, also pay a billion dollars in taxes. Profit is not a dirty word. Profit means jobs. Losses mean lack of jobs. Losses means subsidies; grants from governments; subsidization by taxpayers; losses mean rewarding failure.

Let us reward and encourage profit and stop criticizing companies that make a profit. That is no business of the politicians. It is the business of businesses. Businesses should be encouraged to grow, prosper and expand the economy. They should be given compliments when they do so and government should stay off their backs and out of their pockets so that they can create jobs.


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How many pages does this bill contain? All these regulations have to be read and interpreted by somebody. This is a cost. It is an expense to business. This is not an inducement to improve business or hire more people and increase employment. We need fewer regulations. Good regulations, yes, but fewer. We need to get the government out of the business of being in business.

There are many financial institutions. I am looking for a document that lists the number of institutions and their assets. I was shocked to see how much these institutions control. But it looks like I will not be able to find it at the moment so I will not be able to quote from it.

One criticism I have of the banks is that they are quick to fiddle with certain prime rates but have not looked at the rates of interest on consumer loans or credit cards. I feel that sometimes they encourage indebtedness by sending letters to university students giving instant credit of $1,000. I know that happened to my daughter when she graduated a couple of years ago. A bank sent her a credit card and guess what? Within 30 days she was in debt to the tune of $1,000. I do not feel that is a practice I would like to see. As a parent I know I did not like it but it is done. There is nothing illegal about it, but I feel that some people get themselves into financial difficulties when that happens.

The problem with government tinkering with regulations and trying to establish a level playing field among the four pillars of financial institutions is that it keeps attempting to amend the definition of a bank. In the Bank Act the definition of a bank is something like ``a bank is what a bank does in Canada''. Governments keep changing what a bank does. Therefore, other financial institutions have a hard time competing because they are at a disadvantage.

The thorough and proper review which is scheduled for 1997 should lead to some positive results. I sincerely believe that once again this is an example of a Liberal government which uses all the right words even when it describes the budget. It has the rhetoric down, but the reality and what it is doing does not match the words. The words are greater than the actions it takes.

As I have pointed out, the four key principles which the secretary of state believes he is accomplishing with these new regulations for financial institutions is honourable. But he is ignoring completely and avoiding the issue of co-insurance which would clean up a lot of the failures in these institutions and introduce responsibility to investors. It has so many advantages. With so much support from all the institutions and groups, at the very least this could have been done. I believe we introduced it either in the standing committee or in the House at an earlier stage as an amendment which was defeated. I know we talked about it as a party.

(1610)

This measure would eliminate the burden on taxpayers. It would reduce the risk for high risk institutions. We must have high risk investments. We must have somebody to take them. We must encourage them. The best person to take that risk is a person who can afford to take the risk. We should not be putting all the taxpayers' money at risk.

The Acting Speaker (Mr. Kilger): This concludes the first round of 40-minute speeches. We now enter the next stage of debate which has 20-minute speeches subject to 10 minutes of questions or comments.

[Translation]

Mr. Richard Bélisle (La Prairie, BQ): Mr. Speaker, Bill C-15 amending and enacting certain laws relating to financial institutions is, in our estimation, a new attempt by the federal government to control the provinces, and especially Quebec, which, for the last 30 years, has developed several original tools of economic and financial development.

On the economic and financial side, the federal government's control is increasing daily. On the constitutional side, the Quebec wing of the Liberal Party of Canada proposed last weekend that Quebec now be recognized as ``the principal homeland of French language, culture and legal tradition in North America''.

The distinct society concept, which was part of the political landscape since the Meech Lake accord and was the subject matter of a motion in this House last December, and which the government seemed to want to enshrine in the Constitution, is suddenly put off indefinitely following some prevarication by certain premiers.

After the second world war, women were sent back home. Some right wing groups still regularly send women back home. Optometrists will often tell us whether bifocals will improve our sight. But what does this vague concept of homeland have to do with the constitutional issue and the recognition of a people?

Today, no longer sure about what to do with it, the federal Liberals are sending the Quebec issue back home. Even the leader of the official opposition in Quebec City tells us this has no legal meaning; it is like saying that Newfoundland is an island and that the Rocky Mountains are in the west. There are no intellectual giants in this government.

This whole farce of a principal homeland in America shows once again the true face of the federal Liberals and how little they know and understand modern Quebec. Less than six months after the Quebec referendum, the Prime Minister is once again going back on his word.

What are we discussing these days in the House? Homeland rather than distinct society, the importation of cheese made from raw milk, our soldiers' lack of discipline, the Somalia affair, the lightning search for missing documents ordered by the defence minister. Once again, our play soldiers, who still cost Canadian taxpayers $11 billion a year, are once again making fools of themselves. It is a good thing that ridicule does not kill. Is this why


1603

Canada still has armed forces, to protect the country from ridicule? If so, they are not doing a very good job.

After nearly three years in power, the Liberal government has gone back on its promises to Quebec. They are making fools of themselves in the rest of Canada, in terms of both imports and defence matters. The Prime Minister has lost control of the situation. There is no leadership left in this government. Worse, there is no vision as to the future of this country.

This government, which is unable to renew the Canadian Constitution, to manage its armed forces in a modern and professional manner, to set credible import policies in a globalization context, is putting forward Bill C-15, which shows its inability to manage the federation at the economic and financial levels.

(1615)

This bill contains a number of scattered, apparently unrelated measures whose only purpose is to strengthen the monitoring and regulation of financial services in Canada. Once again, the federal government is trying to take control, to increase its powers.

The Bloc Quebecois is not opposed to the principle itself of Bill C-15, but rather to some of the proposed measures, which encroach on major areas of provincial jurisdiction.

The most important measure in this bill would extend the Bank of Canada's payment settlement mechanism to the area of securities.

In fact, this initiative duplicates the clearing systems already regulated by the Quebec securities commission and allows the federal government to interfere in the regulation of securities, which is an exclusive provincial jurisdiction.

Under this bill, the Canada Deposit Insurance Corporation will be setting the participation premiums according to the risk a financial institution represents. This includes Quebec chartered institutions already regulated by the Régie de l'assurance-dépôts du Québec, where the deposit volume is the criterion. Thus, there will be two standards of evaluation, and the one based on risk could put Quebec institutions at a disadvantage.

The powers of the superintendent of financial institutions will be increased so that he may request the winding-up of Quebec chartered institutions. This duplication of services could lead to numerous disputes between the different bodies.

As we mentioned during the debate at second reading, this bill amends nine acts: the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act, the Cooperative Credit Associations Act, the Winding-up and Restructuring Act, the Office of the Superintendent of Financial Institutions Act, the Canada Deposit Insurance Corporation Act, the Canadian Payments Association Act, and the Investment Companies Act, which is being repealed.

This bill is a new indication of Ottawa's centralizing attitude. By establishing Canada-wide compensation and payment systems, Bill C-15 infringes on the authority of the Commission québécoise des valeurs mobilières and of Quebec's Inspecteur général des institutions financières. This results in costly overlap and structures. Quebec's financial institutions will be subject to two monitoring systems.

Therefore, Bill C-15 is an unacceptable intrusion into the securities industry, which comes under provincial jurisdiction. In Quebec, the various governments have always strongly defended Quebec's jurisdiction over the securities industry. Even Daniel Johnson reaffirmed that position in a letter to the federal government on February 16, 1994, when he was Quebec's premier.

The authority given to the Governor of the Bank of Canada to issue directives or orders to financial institutions goes squarely against that traditional Quebec position.

This bill will result in even more unacceptable overlap. Beyond the issue of jurisdiction, the fact is that Quebec's financial institutions and individual savers will suffer from the duplication Ottawa is seeking to impose. This will result in additional costs and in a lack of consistency in government policies.

Let us now take a look at the clauses of Bill C-15 I feel will create the most serious problems.

The Bank Act will be significantly affected. Clause 12 of Bill C-15 provides that banks will have to disclose additional information. The various provincial securities commissions already request this type of information to banks and to other companies listed on the stock exchange. Therefore, this is a new type of duplication.

(1620)

The Canada Deposit Insurance Corporation Act is also being amended. Clause 21 of this bill defines the notion of ``affairs'' and of the affiliates of the member institution. For example, if even one of the institutions affiliated to Desjardins is a member of the Canada Deposit Insurance Corporation, the federal government is entitled to give direction to all of Desjardins' affiliates.

Clause 22 will give the Canada Deposit Insurance Corporation the opportunity to be instrumental in the promotion of standards of sound business and financial practices for members institutions. This is a good thing in itself, but it is also a kind of duplication in the case of provincially chartered financial institutions that are part


1604

of the Canada Deposit Insurance Corporation, since the province of Quebec already has regulatory control over these institutions.

Clause 27 will allow the board of the Canada Deposit Insurance Corporation to establish a system of classifying member institutions according to the risk each of the institutions represents. Hence, the federal government will have no other choice but to set up a supervisory and monitoring system for these members institutions. Again, this will mean some duplication for the provincially chartered institutions, since Quebec already has a control and examination process in place for these institutions. Besides, such a classification system will put the smaller institutions at a disadvantage. We will have to see how the Mouvement Desjardins is reviewed. Will it be branch by branch or as a whole?

The purpose of clause 34 of the bill is to determine the parameters of the examination mentioned in clause 27. For the provincially chartered institutions, this is already done by the provincial authorities. Why the duplication?

Clause 60 of Bill C-15 specifies the circumstances under which the superintendent may take control of an institution in difficulty. Moreover, the superintendent has the obligation to notify the provincial minister responsible of the takeover of a central of a co-operative credit association which is incorporated under provincial legislation. Thus, the provincial authorities are completely pushed aside and the regulatory control a province has over its co-operative credit associations becomes practically irrelevant and even null and void.

The Insurance Companies Act is also affected by this bill. Once again, the bill gives more power to the superintendent to step in if an institution is in financial difficulty. Provincially registered insurance companies are not beyond the superintendent's increased powers of intervention.

According to section 66 of the same bill, the definition of businesses to which the law applies is also amended to include fraternal societies and provincial companies. The bill encroaches upon the powers of Quebec, which already regulates provincially registered institutions. Consequently, we are opposed to the bill's measures which apply to companies registered in Quebec and we are also opposed to all the sections relating to monitoring of provincially registered companies by the superintendent.

Section 93 will also allow the superintendent to make public the information gathered pursuant to the new law. It will force provincially chartered insurance companies to publicly disclose information concerning the compensation of their executives, as well as their business and internal affairs. Since provincial securities commissions already require that information, there will be more duplication. Furthermore, the federal government has no legal right to regulate provincially chartered companies.

Moreover, clause 95 provides that the superintendent will have his say on the composition of the board of directors of provincially chartered insurance companies in financial difficulty. There is already such a control system in Quebec. What then is the usefulness of clause 95?

The main objective of clause 103 is to allow the superintendent to impose standards of sound business and financial practices to provincially chartered insurance companies. Another unjustified encroachment on provincial jurisdiction.

(1625)

The Office of the Superintendent of Financial Institutions Act is also amended. Clause 105 clarifies the new objectives of the superintendent, stating in black and white that the purpose of the act is to ensure that financial institutions in all provinces are regulated by an office of the Government of Canada. This could not be clearer; the federal government has decided to gain the upper hand over the provinces.

As for clause 106, it gives more detail on the federal superintendent's objectives. No distinction is made between institutions with federal charters and institutions with provincial charters. Only federally chartered institutions ought to be covered by this clause.

Finally, clause 62 indicates that a totally new act, the Payment Clearing and Settlement Act, is being created here to allow the federal government to gain control over this area of provincial jurisdiction. The Canadian Payments Association Act is therefore done away with.

These amendments and creations of new acts, all of this legislative process is put into place in order to once again hem in the provinces. The government's throne speech could not have been clearer on this. It intends to create a national securities commission, one which will directly invade the area of jurisdiction and the activities of the securities commissions in the Canadian provinces. In this context, Bill C-15 lays the ground work for the arrival of this national securities commission which the federal government intends to create.

Once again, the government's firm intent is to establish wall-to-wall national standards, and financial institutions cannot escape from this unwavering trend. With Bill C-15, the government is expanding this principle of national standards to the financial institutions. It has now come full circle. The federal government has extended its grasp to the financial institutions, while on the constitutional level there are making a mockery of the historical demands of Quebec, by reducing it to the homeland of cultural survival in America.


1605

[English]

Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, it is a pleasure to speak to Bill C-15 and to talk about financial institutions.

This may seem like a fairly dry debate to many people but I think it is an important piece of legislation and it is important to talk about it. Perhaps it is important to talk about it in the context of what Canadians want with respect to financial institutions.

There is a lot of talk today about financial institutions. When the banks announce their profits we hear a lot about it when we go on our tours throughout our constituencies.

There are two things Canadians want with respect to their financial institutions. First is stability. They want to know their money is secure in those institutions whether they be banks, trust companies and so on. Second, they want to know those institutions are accountable, that they are open through the process of competition. There are a number of reasons for that.

People want to know that service fees for instance are as low as they possibly can be. They want to know they are getting the best possible return on their money. They want to know on the other hand that they are being charged the lowest possible interest rates when they borrow from the banks.

The idea is to balance the two as best we can so that we do not end up with the situation which occurred in the United States. There was the savings and loan debacle where a lot of people potentially could have lost billions of dollars until the United States government stepped in. On the other hand we want enough competition to hold all these various financial institutions accountable.

(1630)

The one area where Bill C-15 really falls down in my estimation is that it simply does not offer co-insurance. Co-insurance is simply an insurance scheme which would replace CDIC insurance as it presently is now. It would on the one hand still provide insurance for possibly up to 90 per cent of people's money through the government but it would leave a certain amount that would have to be covered by the banks or the financial institutions themselves. In my judgment this would be very good. It would hold those financial institutions accountable.

It is interesting to note that before 1967 when CDIC insurance was put into place this country did not have a single bank failure. After 1967 when CDIC insurance came in, 30 financial institutions ended up failing in this country.

What CDIC insurance unwittingly did is it gave people a false sense of security in those institutions. Consequently, they were not held accountable. People did not really know what kind of inherent risk there was in putting their money into them. As a result they folded. The government was on the hook for them through CDIC insurance. The result was something like $5 billion being paid out. In fact at this very point something like $1.7 billion is still owed to the federal treasury from CDIC insurance. It is a very serious situation. In the past we have had many failures and it has cost taxpayers a lot of money.

The really important issue here is that this bill does not provide co-insurance. There is wide support for the idea of co-insurance. Several different groups have come out in favour of co-insurance, not the least of which are the banks themselves. People as diverse as those from insurance companies, the superintendents of financial institutions, the chairman of CDIC, the Canadian Institute of Actuaries and all kinds of academics have come out in favour of co-insurance, as has the Senate banking committee. There is widespread support for the idea of co-insurance. That is why it is very disappointing that Bill C-15 does not have any mention of co-insurance.

It is important when we are talking about something which is a new idea or concept that we be able to look either in Canada or elsewhere in the world for examples of whether or not this will work. There are some examples right now in the U.K. and Ireland where there is co-insurance and it works extremely well. We should use that as an example to guide us. Unfortunately, that is not available in Bill C-15.

One very positive thing in Bill C-15 is the fact that premiums are going to be charged on the basis of risk for CDIC insurance. The negative side of that is the public is not allowed to know which institutions are being charged higher premiums because of the degree of risk. If they have a riskier loan portfolio and people's money is more at risk, unfortunately, for reasons that are not very apparent to me, the premiums are not made available to the public. Therefore the public cannot take the proper steps to protect themselves, particularly if they have an investment of over $60,000 in one of those institutions.

What Canadians really want are institutions that on the one hand are safe and provide that security and on the other hand are competitive enough to ensure that all those service fees and interest rates on charge cards are as low as they possibly can be. People want to know they are being charged the lowest possible interest rates on all the various personal loans. This is a hot issue in the country today and it is an important issue for the government to deal with.

(1635)

One thing we have been talking about lately is the issue of auto leasing and insurance and whether or not the banks should be allowed to move into those areas. The answer has to be no until such time as we see some real competition in the banking industry. We have to see some competition in terms of deregulating the banks and allowing some foreign competition so that there can be


1606

real competition to hold those banks and financial institutions accountable. This is critical.

When the government looks at this again I do encourage it to seriously consider the issue of co-insurance. It would bring some real accountability to financial institutions and hopefully, would give the public confidence in those institutions.

Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, I have heard Reform members one after the other talking about co-insurance. The reality is that depositors are not interested in co-insurance, just the financial institutions. The reason is that co-insurance would require depositors to have knowledge of the credit worthiness of the institutions in which they are depositing their money.

That sounds fair and reasonable. But the reality is that the ability to understand a balance sheet, et cetera, is not well understood by some members of the public. I know this because my wife runs a financial company which sells GICs and uses a deposit insurance corporation for that reason. The average investor or depositor simply does not have that skill. If we brought in co-insurance, the reality is that those people would simply make their deposits with larger institutions and we would end competition in the financial sector.

Co-insurance is not something that is specifically desired by the average person, only by the large financial institutions. I would suggest that is who the member is speaking for. He is not speaking for the average Canadian who would not understand the concept of co-insurance and which would probably prevent them from making deposits.

The member also went on to say how co-insurance exists in a number of other countries and in Europe. He failed to mention that in United States the insurance is $100,000 per deposit, not $60,000. I only say this because the Reform Party is constantly saying how we should be like the United States, yet in this case the member decided not to use that example.

I would simply ask the member, can he not see that co-insurance is not something which is supported by the average Canadian?

Mr. Solberg: Mr. Speaker, I think the hon. member sells the public short on this issue. People buy all kinds of insurance for all kinds of reasons every day. I do not think the hon. member is saying that the public is too dumb to figure out insurance on their automobile or their homes or anything else. At least I hope he is not saying that.

The fact is that people make very sophisticated investments every day ranging from investing in the stock market where they certainly have to judge risk to investing in mutual funds. We have seen a tremendous growth in the investments in mutual funds. People are very well acquainted with the risk of investing in those things.

The member is selling the public short on this whole issue. The public has a very good idea of exactly what they would be getting into and are quite capable of understanding co-insurance. The Public Interest Advocacy Centre is a supporter of co-insurance. The public is very well acquainted with insurance and with putting money into investments that carry an element of risk. The member is way off base by making that judgment about the ability of the public to understand.

(1640)

[Translation]

Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies, BQ): Mr. Speaker, Bill C-15 is now at third reading stage. This legislation is practically a jumble of disparate measures aimed only at increasing surveillance and regulation of the financial services sector in Canada. This bill amends several acts relating to financial services and repeals the Investment Companies Act.

Though we do not oppose the principle of this bill, we have several concerns regarding the federal government's true intent. In fact, this legislation brings us one step closer to a control of the securities sector in Canada. This control will eventually be exercised by the Bank of Canada.

Bill C-15 uses the excuse of controlling systemic risk to allow Ottawa to impede on a purely provincial jurisdiction. We have discussed this point last year when Bill C-15 was Bill C-100. These are examples reported by the hon. member for Saint-Hyacinthe-Bagot. This bill impedes directly on an area of jurisdiction which is exclusively provincial, namely the securities sector under which come all liquid assets, shares, certificates and also bonds, to name but a few.

Yet, two sections of the Canadian Constitution empower provinces to regulate securities. The first one, section 92.13, deals with property and civil rights in the provinces. In Quebec, securities are regulated under the Civil Code. The second one is section 92.16, which states that all matters of a merely local or private nature fall under provincial jurisdiction.

Quebec is already involved in the area of securities, through the Commission des valeurs mobilières du Québec and the Inspecteur général des institutions financières. Bill C-15 will create useless and costly new overlap-goodness knows how many instances we have reported already-by subjecting Quebec financial institutions to orders and directives from the Bank of Canada.

In addition, by implementing a Canadian clearing system, the Governor of the Bank of Canada retains the right to issue directives not only to clearing houses, but also to participating financial institutions, regardless of their charter. The bill will therefore enable the governor to issue orders and directives to institutions


1607

such as the Fiducie Desjardins, and to some extent, this is a strange twist of fate.

It will be remembered that, if I am not mistaken, before founding the caisses populaires in Quebec in the early 1900s, Alphonse Desjardins had served as clerk in this House and later at the national assembly in Quebec. Alphonse Desjardins decided to start this co-operative system because there was a problem with the banking system in Quebec. The banks, which were predominantly English at the time, refused to make loans to French speaking Quebecers. Also, there were no banks in rural areas. All banks were concentrated in major financial centers. That is why Quebecers did not deposit their money in banks that refused to loan them money, and how the Quebec tradition of stashing one's savings in a wool sock came about.

In response to this situation, Alphonse Desjardins decided to establish a financial institution to provide Quebecers with those services not provided to them by banks. He came to Ottawa to apply for a charter, which he was denied, because the banks were afraid such an institution would be in competition with them. His application for a federal charter was therefore rejected. That is why Alphonse Desjardins finally established his caisses populaires under provincial charter. Banks resisted this idea for years.

I remember that, up until the early 1960s, banks refused to cash cheques drawn on caisse populaire accounts. It was a long battle before Quebec got a first-rate economic tool: credits unions, called caisses populaires in Quebec. We accomplished this all on our own. I recall that this was achieved with people getting fully involved, and working out of church basements.

(1645)

A lot of people worked on a volunteer basis for many years to develop this economic tool. We did it on our own despite early opposition. Now that this tool is in place, the Government of Canada wants to regulate this tool we developed ourselves. This, of course, is unacceptable.

The bust of Alphonse Desjardins is now on display in the CN Tower in Toronto, since he is recognized as one of 10 great Canadians. The fact that visitors to the CN Tower can see it has not prevented the government from trying to regulate this institution, even though it was almost opposed to its founding.

May I remind you that the bust of Joseph-Armand Bombardier is also displayed in the CN Tower in Toronto, which did not prevent the federal government from taking over all his patents in 1945.

Another thing that bothers me in this bill is the concentration of power in the hands of a few individuals. This is what this bill does. It amends certain laws, including the Winding-up Act, to give the Superintendent of Financial Institutions even more powers. This bill and all the federal bills that have been tabled since this government came to office are aimed at concentrating even more power in the hands of those who already have it, be it a minister or the Superintendent of Financial Institutions.

In any case, broadening the powers of the federal Superintendent of Financial Institutions will only lead to costly duplication, for which taxpayers will have to pay once again. Considering how long we have been talking about it, the government should have understood that federal intrusion in a sector which comes under provincial jurisdiction only generates inefficiency and useless costs. Not to mention the debates that will follow between the federal and provincial governments, at a time when constitutional talks are scheduled to take place in the months to come, at least according to the 1982 Constitution. The Prime Minister assures us that, under these conditions, the federal government is prepared to withdraw from those fields which come under the exclusive jurisdiction of the provinces. Is it not true that the Prime Minister takes with one hand what he is willing to give us with the other? This situation is unacceptable.

What this government does is to stimulate competition between levels of government. But let us not forget that such competition between governments is never beneficial to ordinary citizens. Just think of manpower training, to which we refer daily because Quebecers notice it more and more. In Quebec, there is an obvious consensus regarding the need to patriate manpower training. This consensus among all the stakeholders goes back several years, but the issue remains unsettled. Meanwhile, this overlapping of jurisdictions costs over $250 million every year.

The expanded authority delegated to the superintendent provides boundless power to a single person and could well trigger a legal battle between Ottawa and Quebec. Should this be the case, it would adversely affect financial institutions that are in difficulty as well as individual investors.

I cannot understand what motivates the federal government. Why does it want to control a sector which has been very well monitored in Quebec for a long time now? I conclude that the federal government wants to find a way to interfere in the administration of the various provincial institutions, particularly in Quebec, for it clearly senses that federalism as it currently exists is about to become uncontrollable.

It is also preparing for the next round of constitutional talks, which will come along eventually, by seeking out powers it can later return to the provinces, saying: ``Look how generous we are, giving you what you want''. They are withdrawing from certain areas of provincial jurisdiction, while on the other side of the coin they will in fact have lost almost nothing, because they will have


1608

acquired other means of control, other levers of power, taxation in particular. Such is the case with the bill we are looking at today.

We can, therefore, predict that there will, in fact, be nothing but cosmetic changes. The Bloc will never agree to give up an area of jurisdiction that is, and always has been, exclusively provincial. As my colleague has already pointed out, even Daniel Johnson, when he was premier of Quebec in 1994, said there was no question of the Liberal government in Quebec's accepting encroachment by the federal government in securities matters.

(1650)

He added that the Government of Quebec would refuse and would jealously guard its prerogatives in this area. As we saw very recently, Mr. Johnson is opposed to what is happening in the House. Today he is dissociating himself from the idea being promoted in recent days of Quebec's being a homeland.

The government in Ottawa appears to stuck in an impasse where it cares little about contradicting its allies in Quebec, who, are increasingly in agreement-and are forced to be-with the claims of the sovereignists, regardless of what the Prime Minister and his ministers may say.

But, worse yet, the government is mocking the basic provisions of the Constitution, the very Constitution it so often preaches and talks about. The cost of Bill C-15 goes even beyond areas of jurisdiction. As I said earlier, the financial institutions of Quebec and investors will be the victims of the duplication of roles Ottawa wants to impose, because securities officials need coherent and stable legislation, as in the case of other sectors involved in financial markets.

Instead of maintaining stability and consistency, two attributes highly prized by global financial markets, the federal government tells us, through Bill C-15, that it wants to establish its own institutions and allow the Bank of Canada and the federal Superintendent of Financial Institutions to intervene in the area of securities. The government's attitude is unacceptable.

When the secretary of state responsible for Canadian financial institutions testified before the finance committee last August, he failed to answer the Bloc Quebecois' questions about the federal government's encroachment on the area of securities, which, according to the Constitution, comes under the exclusive jurisdiction of Quebec, as we pointed out earlier. He tried to evade the issue, as can be seen from the minutes of the committee proceedings. It seemed to us that the secretary of state did not even know what was in his bill.

The secretary of state denied at the time that his government intended to encroach on the area of securities. We were sold a bill of goods, as the recent throne speech clearly referred to the establishment of a Canadian securities commission.

We opposed the government's amendments, because they did not meet expectations in any way, just as Bill C-15 does not meet Quebec's expectations. This bill is written in a very technical language, of course, because it deals with technical matters, and it is very thick. This leads us to believe that the government is trying to confuse the opposition and the public, since the amendments in this bill, which are supposedly minor in nature, in fact have very serious consequences.

We can only lament the fact that, almost every time a government bill is introduced, we in the Bloc are always led to condemn the same things. The government is using every means available in an attempt to centralize ever more. There is always a good excuse: market globalization, international competitiveness, systemic risks or what not. It is a real shame to see that, at a time when the government claims publicly that agreements can be reached with the provinces, it is doing exactly the opposite in legislation. They are not entering into any agreements with the provinces, they are centralizing.

Four times already since the last federal budget was tabled, Ottawa has introduced a bill affecting federal-provincial relations, without even consulting the provinces. I am referring here to Bill C-76, implementing the budget and imposing national standards; Bill C-88, to implement the agreement on internal trade, which gives retaliatory powers to the federal government; Bill C-91 on regional development, which enables Ottawa to sign agreements with local authorities directly, without regard for provincial governments; and of course the bill before us today, Bill C-15.

It is incredible. The government says agreements can be reached with the provinces and it talks about decentralizing, while its actions are to the contrary, and history has taught us these past 30 years or so that actions speak louder than words.

(1655)

We will recall the commitments made by Mr. Trudeau in 1980. There is no need for me elaborate on this, since we are all quite familiar with these promises. ``We are putting our seats on the line to ensure changes take place'', they said. It is now 1996. In the meantime, the Constitution was patriated in 1982, but nothing changed for Quebec. These were all empty words and meaningless commitments. Today, they are talking about decentralizing, but every bill they introduce in this House contradicts the commitments they had made.

We all remember the commitments made by the current Prime Minister in the final days of the referendum campaign, when he said: ``We will see to it that Quebec is recognized as a distinct society''. Already this promise has been forgotten. Through all this, we realize that commitments are meaningless, because there is never a real will to honour them.


1609

The only things that are decentralized are of course the cuts. I want to talk about one of them, in the energy sector, since it was mentioned yesterday and today. Over the last 20 years, the federal government has invested $12 billion in Ontario for atomic energy research. It is also investing, of course, a few billions in the Hibernia project, in Newfoundland. However, in Quebec, the government cut the Tokamak nuclear fusion research project, in Varennes, in which $7 billion was invested annually until now.

So, the government invests billions elsewhere, but any cut made affects Quebec of course. The government uses words which are meaningless or which say the opposite of what it intends to do.

Remember, in 1980, we were told: ``If Quebec becomes sovereign, you will end up with a huge debt, high taxation and high unemployment. You, little Quebecers, cannot achieve sovereignty''. And what did we get since 1980? That year, the federal debt stood at $80 billion. Today, it is close to $600 billion, in spite of the fact that taxes and unemployment have never been so high. In other words, what we feared we would lose in 1980 by becoming a nation we lost by remaining in the Canadian confederation.

Recently, before the last referendum, we were told: ``If you become sovereign, you will lose all your dairy subsidies''. Yet, we were just told in the last budget that all dairy subsidies in Quebec would be eliminated over the next five years.

So, these are meaningless commitments. The government uses the pretext of a systemic risk to introduce Bill C-15 and get involved in the securities industry, even though the Governor of the Bank of Canada himself stated last summer that such risk could be controlled through increased monitoring of the major payment transfer system.

Obviously, this bill is totally unacceptable to us, since it merely seeks to allow federal intrusion in areas which come under Quebec's jurisdiction.

The Acting Speaker (Mr. Kilger): Before moving to questions and comments, it is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Shefford-Canadian armed forces; the hon. member for Bourassa-immigration.

[English]

Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, I would like to ask the member about his understanding of the whole area of international trade, exactly what is the reality of our joining the WTO and what that means to us in the world for the future. Obviously our future will be as a trading nation in dealings around the world.

Whenever I hear somebody talk about the need for supply management and actually believe that will be something we could

ever hold on to in the future and still be a world trader, I am very surprised. Does the member not feel the dairy industry in Quebec would not be able to modernize and become a competitive producer in the world market without depending on government subsidy?

I would like him to address that in the context of the World Trade Organization and what that will mean to us as Canadians, particularly if we have 30 million Canadians dealing in an international global market.

(1700)

[Translation]

Mr. Pomerleau: Mr. Speaker, I am somewhat taken aback by the question of my colleague from the Reform Party. Basically, he is asking me whether Quebec could survive without the dairy subsidy. We all know the Canadian government announced in its last budget the elimination of this subsidy. In the last two years, it has already been reduced by 15 per cent, and it will be completely eliminated within three to four years.

In the meantime, billions of dollars have been invested in western Canada, where the elimination of the grain transportation subsidy has been compensated by other payments.

The hon. member spoke about international relations. When Quebec becomes a country, it will have to make international commitments just like any other country, just like Canada, Singapore, France or Italy. It will then need the necessary tools to do so.

For the time being, Quebec is under the Canadian Constitution and is a part of Canada, and it has to abide by federal regulations. Ever since Confederation, the federal government has felt the need for a complete centralization of economic and political powers in Ontario. It may be a fundamental need for Canadians, and a matter of survival for them. But this centralization is effectively depriving Quebec of its economic infrastructure and political power.

Surely, my colleague realizes that a country can have, on international markets, facilities a province cannot have.

[English]

Mr. Mills (Red Deer): Mr. Speaker, I come back to this concept that Quebec is paying out so much more. In Alberta, for example, we have paid $145 billion more than we have ever received as a province.

Talking about the Crow rate being a subsidy, the Crow rate is an agreement made with the agricultural sector and the farmers now will not receive any transportation subsidy.

The $1.6 billion was a pay-out of this contract negotiated to be worth somewhere in the neighbourhood of $18 billion. Therefore $1.6 billion is simply a one time pay-out. It is gone. They will now


1610

have to compete in the international marketplace in the World Trade Organization.

[Translation]

Mr. Pomerleau: Mr. Speaker, of course, this amount of money, $1.6 billion according to the hon. member, is to replace a subsidy previously granted to the farmers, but the milk subsidies will be completely eliminated in the province of Quebec. They will completely disappear.

An hon. member: Without any compensation.

Mr. Pomerleau: Without any compensation, as one of my colleagues puts it. So, 25 per cent of the $1.6 billion paid to western Canada comes from Quebec. We provide money to pay compensation elsewhere in Canada, while cuts are being made in our province, as was the case with the Tokamak project. We paid $3 billion or $4 billion out of the $12 billion granted to the province of Ontario. We paid 25 per cent of the $3 billion spent on Hibernia. In the meantime, cuts are made to the Tokamak project. The province of Quebec is a net loser under the Canadian Confederation.

[English]

A lot of people in Canada believe in those three assumptions, some for good reasons. If we are a bunch of trouble makers politically speaking, which is absolutely true, if we receive in Quebec much more money than we put in, then support the sovereignty of Quebec because the day we leave will solve the problem and you will make money from it. That is the reason.

Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, this debate could very quickly leave Bill C-15 and get on to areas of national unity. I will refrain from doing that and I will get back to the topic at hand, recommendations in terms of changes to financial institutions.

More specifically, I am interested in the CDIC aspect of the bill and where the bill proposes rate premiums for the CDIC. The premiums will be according to risk. We, the public, will not be able to know what the risk rating is at the various institutions. It is covered by a veil of secrecy. I want to know if this member believes that is a just action.

(1705)

Also, if it is the objective of the government to make financial institutions more transparent and hold them more accountable, how does he feel about the speech I gave earlier this afternoon on co-insurance? Perhaps there is a need to look at co-insurance. Rather than having 100 per cent deposit insurance, perhaps there should be a 90 per cent guaranteed share along with a 10 per cent share by the investor.

There is a perverse sense of fairness in the current system where lower risk or more successful institutions that do not go into receivership, that do not go broke, that do not cost the taxpayers money actually have to help pay for the ones that do and ultimately taxpayers end up paying.

[Translation]

Mr. Pomerleau: Mr. Speaker, first, on the issue of co-insurance, I must say that I am not sure I understand what my hon. colleague meant to say. Unfortunately, I did not listen to the speech he made earlier this afternoon and I do not feel I have all the information needed to answer his question.

However, as regards the government's transparency, we have noticed not only in this document but also in the debate surrounding the upcoming tax reform, scheduled for the end of the year, that there is no transparency. For example, tax reform will be considered behind closed doors by a committee made up of the biggest users of tax havens in the world, who have institutions in all of these tax havens.

The hon. member is right to remind us that, where transparency is concerned, the government has not seen the light so far, if I can put it this way. It is kind of opaque. You only have to remember the recommendations made on the Pearson airport, where everything was to be resolved in the minister's office behind closed doors. These last few years, we have criticized the government for its lack of transparency, and I think my hon. colleague has every right to do the same.

As for co-insurance, I am sure my colleague and I will probably have the opportunity to meet in the future to review this technical issue in detail and in private.

[English]

Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, the subject of Bill C-15 certainly is not the area of my expertise. I want to approach this from the standpoint of the lay person, talking about the banking system, the insurance system and what they mean to Canadians.

We all recognize the value of a stable banking and insurance system. That is necessary in our society. If we look at the disruption the United States has in its fiscal system, none of us would want to ascribe to it.

When we look at this bill we find that there are a number of key problem areas. The key to monitoring our financial institutions and ensuring their financial health is the question we should be addressing.

Ensuring Canadians do not get conned into putting their money into shaky financial institutions which go on to collapse is of extreme importance to us. Every time one of these financial or insurance institutions goes under we all feel the repercussions. It costs millions of dollars to insure this does not happen, and over the years there have been a great many problems.

The CDIC has often had to step in to cover the $60,000 insured limit on deposited moneys.


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(1710 )

I think back to my experience in Alberta. When the Principal Group went under the grandmothers, the farmers and the general public that had put their money into that institution were left not knowing if they would get 10 cents on the dollar or 50 cents on the dollar or what would happen to them.

Many people at that time said that was greed, that those people invested in the Principal Group because it paid one per cent more or one-half per cent more. I would not call that greed, I would call that human nature. People will look at institutions with a view to putting money into them based on what kind of return they can get. Seniors are most affected, as they were in my community by the collapse of the Principal Group. That is what we have to address. We must ask how much information the general public should have on all our financial institutions.

Let us examine Bill C-15. It seeks to improve the rules regarding financial institutions. Unfortunately it does not deliver on this very well. Like so many of the bills we have had before us in the House, it goes part of the way in doing the job but does not go far enough. That is either because of political reasons or because of lack of information. Perhaps there is too much reliance on the bureaucracy and not enough on the hard work of committees and of the minister.

Anyone leafing through the bill will notice it is quite complex. It runs 136 pages. When we take this amount of legal jargon and add it to the existing legislation we get an almost indecipherable collection of material nobody except a few lawyers really understand.

Over the three years I have been here I have noticed that when we do this to bills, we leave things open to interpretation, we leave things open to confusion. Many people will look at it differently. The government has to return to communicating with people in people's language. Lawyers, accountants and bankers have created an industry out of complexity.

Whether our tax system, our banking system or any of these systems, we are looking at getting legislation back to the people so the people can understand it and can deal with it. We should not have to hire experts. When we do that we leave ourselves open to the abuse we so often hear about from our constituents.

The bill is very complex. It is an opaque bill and does not address the fundamental problems surrounding financial institutions. That is why my colleagues and I are not supporting the bill. We do not think Bill C-15 is evil or malicious, but we do not think the government has taken the right approach of putting it in language people can understand. I do not believe it could be that difficult to express the bill in a legalese we could understand and approach.

What is this simple approach we are talking about? It is very important the system be understandable, open and accountable to Canadians. This is the exact opposite of what I see when I try to read Bill C-15.

The current system is so arcane that no ordinary person can make head or tail of it. Even if some brave soul wanted to find the various ins and outs, the information simply is not available. It is confidential, it is off limits, it is out of bounds and it is something individuals should not have. In other words, there is no transparency and no accountability. It is no wonder Canadians do not have much faith in the way things are going and are currently being done.

(1715)

I come back to the tax laws as an example: 2,100 pages of gobbledegook. I look at our Constitution and see more gobbledegook. We have to relate to clause this and clause that as of this date and that date and so on. Businesses and individuals cannot understand it. Accountants have to take courses every month just to understand the changes that are being made.

Let me relate one of the proposals in Bill C-15 that has some potential. It suggests that risk should be a determining factor in assessing premiums for the CDIC. That seems to be a really good idea. Everyone in this House understands that a high risk company should pay higher premiums. The inverse of this is true as well. The more secure the institution, the less the premium should be. This is common practice when it comes to insurance.

Unfortunately though, the CDIC would not make these risk assessments available to the public. If this were open, transparent and made available, then people could plan their investments accordingly. They would know the level of risk they were taking and it would be totally up front. They would have no one to blame but themselves if they decided to make that riskier investment with the higher premium rates.

There is no transparency. The way it is now is secretive which makes it impossible for Canadians to make informed decisions. I think we hear that no matter what area we talk about. Canadians need things to be transparent and open.

I know many of the hon. members on the government side have a fair amount of money. We have heard that mentioned on occasion. Many of them are even what we might call wealthy. I would like to ask those people, if they were putting their hard earned dollars into a particular bank or trust company and they knew the CDIC had done a risk assessment on that institution, would they not want to know what the assessment said? Does it not make common sense that it would be public information that one institution was riskier than another?

That sort of thing should be public information. That is why the public loses confidence and trust in politicians and in politics itself. We do not seem to open up this information to assessment. The


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public has a right to have that assessment and to have it made public. We need to know who is reliable and who is not.

When there is one of these big financial collapses and the taxpayer is left holding the bag, would those people who have made that decision not be angry if they realized that CDIC had known all along the company was a risky bet? Would people not wonder why the CDIC had kept that secret?

I think back to what I talked about earlier, the example in Alberta where the grandmothers, the farmers and so many other people lost their savings. We heard that the experts knew it was risky, but that little grandmother out there sure did not know it was risky. How could she know since that information is confidential? It is secret information. As I pointed out at the start, if nothing else, just to get this into the layman's language so the layman understands it we have to open it up and make it transparent.

I would like to go back to what I earlier called a simple approach to this. It involves a transparent and accountable system. One of the best ways to build accountability into a system is through co-insurance. This has been introduced but has not been followed up on. It is not part of the bill and was rejected.

(1720)

How can this be? It would seem everyone agrees that we need transparency, accountability and a right to know when a company is a risk and when it is not. What is wrong with co-insurance? Why is it not there? Again it comes back to the fact that we are not going far enough. We are just touching the edges.

Many of the things we do are little political decisions where we said we would do a little bit, so we do a little bit. There is no vision, no long term plan. There is nothing there.

Mr. Silye: Where are they on the GST?

Mr. Mills (Red Deer): A member mentions the GST. Obviously we had a promise on the GST. A major change was promised, but what is going to happen? The name is going to be changed. It will be called the ABC tax and will be 15 per cent. That certainly sounds like a major change to me. It certainly destroys the accountability we are all talking about. Again I come back to mistrust of politicians and the political system.

Canadians are responsible people and they would make sure they knew about the risks of particular financial institutions if some of their savings and retirement money was on the line. Under the current system though the first $60,000 is 100 per cent covered if a financial institution fails. What incentive is there to find out about these institutions? We must look at the whole area of co-insurance.

With a 100 per cent guarantee it only makes sense for Canadians to put their money where they get the best deal and where they will receive the highest interest rate regardless of the financial health of the institution. It would only be human nature that when most of the members on the other side get their MP pensions they will put them into any kind of institution because of this 100 per cent guarantee. Believe me, we on this side will have to be much more careful because we are not getting the MP pension. We are not at the trough, as are so many others.

With co-insurance we would have a shared risk and it would encourage accountability. It would force people to choose between the higher interest rate or the security. Those of us who have been in business have had to make those choices. We are saying that the bill should reflect this.

It is not greed that causes people to go for the highest interest rate. Much of it is a lack of understanding of the system. Many people risk their life savings. They are not greedy; they are simply following human nature.

Choice is good. Personal responsibility is also a good thing. I know some of my colleagues opposite would disagree but I feel strongly about this. I know the tradition of this place is to legislate away all choice to protect Canadians who were arrogantly assumed to be incapable of looking after themselves.

Many of us came here because we got angry. We would send good people here and they would come back in six months and say: ``We know better than you because the party told us that this is how we should think''. There is a member opposite who after yesterday I am sure will go back and say: ``Well, I voted against my party because I was honourable, because I did what I knew I had to do''.

We often hear this message coming from on high, here in Ottawa. It is called Ottawa fever. That is where the party runs the show, not the people; the people do not bring the message this way, it goes in reverse. We are sick and tired of that.

(1725 )

Canadians say: ``Be accountable. Put in some legislation. Do some of the real changes we have been demanding''. The people are ahead of the politicians. They are way ahead of the politicians. They understand risk. They understand the banking system. They are where it is at.

Let us get back to the bill. Much of what we have been talking about is wound up in complexity, the banking industry, the legal industry, the bureaucracy. We are saying instead of the 136 pages, we can solve the problems much more easily. Bill C-15 should be scrapped and the whole issue should be looked at in a totally new light. The underlying principle for any future legislation should be openness, accountability and choice.

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Some members across the floor will say that I am saying competition is not good. I am saying that competition is where it is at but there has to be a level playing field. The problem with banks is they do not have a level playing field. There is no openness. There is no accountability. That is why we have the present problems. That is why the people have such doubts about banks, about insurance companies and about politicians. They have those questions because of the lack of accountability.

It is good to go home and realize the support we have is from the grassroots. It has grown dramatically in terms of membership and in all kinds of ways. It makes us feel really good because we know we have taken the message the right way. The message has come from the people to this place. They are demanding that we put it into a much simpler, understandable way.

In closing, Bill C-15 is too complex. It does not deal with the issues of accountability and transparency which people demand. We are voting against this bill.

Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, first I want to stand in defence of grandmothers. It seems to me that the members have been castigating grandmothers. I have met many grandmothers in my life who are very astute investors.

Beyond that, it is getting back to the whole question of CDIC and the purpose for CDIC insurance. CDIC is not a bond rating company. Reformers want the CDIC to divulge this information to the general public. That is not its purpose. If a bond rating is wanted, they would go to Dunn and Bradstreet.

Finally, I want to quickly say that the whole concept of co-insurance in the member's argument is in defence of the large financial institutions that allow them. The junior financial institutions will not be able to compete if the concept of co-insurance is brought in.

Mr. Mills (Red Deer): Mr. Speaker, that was a fairly confused question but I will try to deal with it. First, we are all for grandmothers. We all agree with that so let us clear that away.

With respect to CDIC, we do not expect it to be a bond rating agency. However when problems are found in a financial institution, we do expect that to be transparent. We do not expect to have a situation which occurred in our province with the Principal group. The company went under and the information was known but was not made public. It is not fair to the very grandmothers we are trying to protect. That is what we are talking about. We could have bond rating agencies. We do not expect CDIC to do that. CDIC is an insurance company. It is important to get this back to a transparent and accountable situation.

Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I would like to compliment the member for Red Deer on his speech. He said that this was a topic about which he really did not know much. However, after listening to him I find that his comments and opinions even improved on the speech which I gave on this topic. He did an outstanding job. It just shows the quality of the members over here in the Reform Party.

I would like to ask the hon. member for Red Deer-

The Deputy Speaker: The hon. member for Calgary Centre will be sorry to know that his time is up.

It being 5.30 p.m., the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

_____________________________________________


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PRIVATE MEMBERS' BUSINESS

[English]

AGRICULTURE

Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.) moved:

That this House support the creation of an environment in which agricultural producers make their own decisions on how their products are marketed.
He said: Mr. Speaker, it is good to be in the House when everyone is in such a good mood. I hope that mood continues as we discuss agricultural issues.

Mr. Speaker, you read the motion but I want to put it on the record again:

That this House support the creation of an environment in which agricultural producers make their own decisions on how their products are marketed.
This is a motion, because it deals with a principle rather than with specific legislation, in which case it would have been a bill.

I want to quote from Reform's agricultural broadsheet which was printed prior to the 1993 election and which also supports this principle. It states: ``The Reform Party believes that producer organizations, including marketing boards, commissions and co-operatives, should receive their direction from producers who should structure their organizations in any manner in which they believe will best serve their interests. In consultation with producers, Reformers will seek to provide for a viable, self-reliant market driven industry to create an environment in which producers make their own decisions on how products are marketed''.

This was the policy our party membership approved in 1992 prior to the 1993 election. It was these principles and others like them on which we campaigned and on which we were very successful in many rural ridings.

This is an issue today with regard to the Canadian Wheat Board. It is an issue in supply managed industries. It is an issue pervading much of agriculture.


1614

This principle was one Reform took before there were any plebiscites of producers such as the one in Alberta, before some of the data that is more scientific was done by polling organizations. It proves that Reformers have their ear open to the public, have their ear open to businesses and in this case, have their ear open to what those in the agricultural sector are saying. We have been proved to be correct by recent developments in the industry. Therefore I would hope that the speakers that follow me will endorse the principle I have put forward in the motion.

The industry sectors which producers are debating are about having more input and influence over the marketing of grain and also in the supply managed sector. This includes the matter of pork marketing. It has become an issue in Manitoba whether producers should have new marketing options and who actually calls the shots when it comes to marketing pork in that province.

Far too often the operations of marketing boards and commissions become removed from the individuals they are meant to serve. As a result the decision making process is left in the hands of individuals who do not necessary have the best interests of the producer at hand or share the need for good timely decisions on marketing that are required. Many producers feel that they need more options for their marketing. I want to focus my comments primarily on the Canadian Wheat Board. One of my colleagues will follow and spend a bit more time dealing with the supply managed area.

(1735)

There has been controversy regarding the Canadian Wheat Board during the past few months even though the controversy in general has raged on for as long as I can remember. It seems to be increasing in intensity and often even makes the news today.

A plebiscite was held in the province of Alberta last year. The results of that plebiscite on the marketing of wheat and barley clearly indicates a growing trend toward a system in which producers will have the opportunity to decide how their products will be marketed.

In the Alberta plebiscite 66 per cent of barley growers voted in favour of having the right to sell barley to any buyer. That is two-thirds of the barley producers in Alberta. Sixty-two per cent of wheat growers voted in favour of having the option to sell wheat to any buyer. That is a substantial majority and must be taken heed of and not cast aside. It is an important factor.

The producers were asked: Are you in favour of having the freedom to sell your barley to any buyer, including the Canadian Wheat Board, into domestic and export markets? Are you in favour of having the freedom to sell your wheat to any buyer, including the Canadian Wheat Board, into domestic and export markets? The answer was a resounding yes. Participation in the plebiscite was extremely high with thousands of voters taking the time to cast their ballots because they felt the issue was important.

That is Alberta and Alberta may not represent the views of all of Canada. I know that Albertans' views are important but I happen to represent a riding in Saskatchewan and so the province of Saskatchewan is important to me. My colleague from Lisgar-Marquette has to have his ear open to what producers in Manitoba are saying.

The Government of Saskatchewan did a scientific poll of its producers, asking their opinions on the Canadian Wheat Board. From this survey some interesting statistics are available to us.

Approximately 80 per cent of Saskatchewan producers indicated some level of support for the board. This does not surprise me because there has always been strong support for the Canadian Wheat Board in the province of Saskatchewan. I happen to be one of those 80 per cent. My party is part of that 80 per cent that supports the Canadian Wheat Board. Some people have indicated otherwise but that is simply not true, and we have not said that in this House. We did not say it in our campaign material and we are not about to change our minds unless our members tell us we are on the wrong ground and our constituents tell us we are not moving in the right direction.

On further study of the survey some very interesting opinions are expressed by Saskatchewan's producers. For example, while a majority of producers believe that the monopoly powers of the Canadian Wheat Board give it market power internationally, producers are divided on whether or not the Canadian Wheat Board gets the highest price. There is a saw-off on that one.

More significantly, 58 per cent of Saskatchewan producers believe that participation in the Canadian Wheat Board should be made voluntary. This is not some cooked up poll. This poll was done by the Government of Saskatchewan, probably the provincial government in Canada that most strongly supports the Canadian Wheat Board. Its survey which it commissioned and paid for suggests that 58 per cent of producers in Saskatchewan want to see selling to the Canadian Wheat Board be more voluntary.

A major of producers were in favour of selling grain to the domestic food markets without having to go through the Canadian Wheat Board. They were about equally divided but a small majority in favour of being allowed to make direct sales into the United States.

A majority of Saskatchewan producers were in favour of the federal government having less control and influence over the Canadian Wheat Board.

There was a breakdown of the demographics with regard to this survey. It indicated that younger producers were more open and in fact even requesting change than were older producers. It tells us


1615

that those who will be farming in the future are in the majority in wanting to see changes to the Canadian Wheat Board.

It is interesting that they want to see structural changes to the board. They talked of discussing a dual market, domestic versus export and how that would be handled. The primary focus during the last election campaign was that the Canadian Wheat Board needs to be made more accountable and it needs to be more responsive to the producers it is supposed to serve. There is overwhelming support in this survey for the Canadian Wheat Board to be made more accountable to the producers that it is supposed to serve.

(1740)

Currently the Canadian Wheat Board is controlled solely by the federal government. It is answerable to the minister of agriculture and, by extension, to the Privy Council. The commissioners are appointed by the Privy Council. Their term lasts until they reach the age of 70. Their benefits are extremely luxurious and in their jobs there is little for which they can be held accountable. It is not what the producers are calling for.

Two-thirds of the respondents to the survey said that the federal government should have less control and influence over the Canadian Wheat Board. That aligns perfectly with the motion I brought today. The producers should be able to make their own decisions on how their products are marketed.

Farmers may recommend that certain alterations be made to the Canadian Wheat Board, but the decision to implement those changes is still solely at the discretion of the federal government. Farmers are powerless. The wheat board advisory board is powerless to make changes to the board, even though it is supposed to be the elected body which has influence over the board.

The board is a crown corporation and the government retains the power to direct the board with respect to the manner in which any of its operations, powers and duties are performed.

More recently, a number of occurrences involving the Canadian Wheat Board have called into question the ability of the board to represent the interests of all producers. I could talk about its mishandling of the fusarium disease in southern Manitoba, its mishandling of frozen durum in southern Saskatchewan and its mishandling of the export of barley in the last crop year, just to mention a few.

This has created a lot of unhappiness in the farming community. A few farmers want out from under the jurisdiction of the Canadian Wheat Board. However, the way the wheat board act is written they are not allowed any freedom whatsoever.

A group of farmers called ``The Farmers for Justice'' has been formed. I am not in the House to condone some of the things which that group has done. However, I would say that the reason we have a group of farmers in the prairies that goes under the banner of ``The Farmers for Justice'' is because they feel they would like to have the ability to market their produce outside the board. Currently, the way the wheat board act is written, they are restricted. They cannot export their wheat into the United States without a Canadian Wheat Board export permit even though they might not have a wheat board permit or a contract with the board.

I am not suggesting that farmers should break contracts. If a farmer contracts with the Canadian Wheat Board, they should live up to that contract. Farmers across the country accept that. When farmers make a deal, for the most part, they stick with it. However, these farmers have no choice in this matter. If they choose not to contract with the Canadian Wheat Board, their wheat is not their own. They have no choice in the matter but to apply to the board for the right to market their wheat.

These farmers are asking that this be changed but they are not getting any co-operation from the government. They are taking steps that are beyond what we would like to see. They are doing things I cannot condone. However, they are frustrated, simply because there has not been any movement either within the board or within the Liberal government to correct the situation.

I belong to a political party. Many Canadians support my party. If they want to get involved they can buy a $10 membership and they will have a voice in the way my party functions. They can have an equal vote on the policies which my party espouses and they can have a choice in the selection of candidates. If they are not happy with the Reform Party and they want to join another political movement of lesser quality, such as the Liberal Party, they have the right to buy a membership in that party. If they are not happy with my party I would rather they were in the Liberal Party because I would like to see them involved in a way in which they are comfortable.

The farmers in western Canada do not have that choice. They are bound by the Canadian Wheat Board Act to market through a board in which they have no voice. They have no ability to assist in the formulation of the board's policies. They have no ability to select the commissioners who sit on the board. There is no democracy in the board. It has become a very political institution.

(1745)

There have been some reports and studies done on the Canadian Wheat Board in recent months. One was recently commissioned by the board, the Kraft report. This report is called the performance evaluation of the Canadian Wheat Board. It was commissioned by the board and paid for with the farmers' money. It was apparently given confidential information to determine whether the Canadian


1616

Wheat Board was doing a good job. That is fine. The board should be looking at itself internally and evaluating itself. I do not find fault with that.

However, the problem is there was another study commissioned by the board, the Deloitte & Touche evaluation, which was kept under raps and never revealed to farmers until a copy was made available through Reform a few weeks ago. This was a 1992 study which found many serious deficiencies in the Canadian Wheat Board.

I hear the member for Kingston and the Islands agrees with me. He is also concerned about these deficiencies in the board because he seems to be very interested in the matter.

As a result of the hiding of this study, we have no idea whatsoever whether the board has acted on the recommendations made by its own auditors.

We had another study commissioned by the Government of Alberta, pushing for dual marketing in wheat. It is the government which launched the plebiscite and did a study called the Carter study. It comes to an opposing position to the Kraft report. The Carter report suggests the wheat board is a more costly institution than it has been letting on and it costs more to market through the wheat board than we have been led to believe.

Because producers do not have any direct say in the board it is hard for them to determine whether the board is being run efficiently. Because it is not transparent, they cannot tell how good a job the Canadian Wheat Board is doing. They also have no option to market outside the board.

It is good to do these studies but it is much more important to give this board to the producers it is supposed to serve.

The Ontario Wheat Producers Board serves much the same function as the Canadian Wheat Board expect that it is controlled democratically by Ontario farmers. Ontario farmers elect the directors of the board. They divide Ontario up into districts. They have an organization and the wheat producers in Ontario choose the directors who serve on the board.

They do not have to go to the Government of Ontario or come to Ottawa because they can choose those directors themselves. Prairie producers do not have that opportunity. They have no voice whatsoever in selecting the commissioners.

Mr. Milliken: They have a wonderful minister of agriculture.

Mr. Hermanson: I can tell the member for Kingston and the Islands does not understand prairie agriculture one iota. He probably would not even know what a sheaf of wheat looked like or which end of a combine the grain entered.

However, these are issues of vital concern to prairie producers.

There was the experiment with the continental barley market that was taken at the end of the Conservative term. A very interesting thing happened. The Canadian Wheat Board members said they can function under this scenario, a form of a dual market. They said they were happy because they knew the regulations had been changed. They were not about to fold up their tents and go home. They were prepared to compete. That opened a lot of farmers' eyes to the fact that perhaps the Canadian Wheat Board would not disappear under a dual marketing system. That again increased their discontent with not having a voice in how their products are marketed.

We could argue for quite some time whether a single desk seller is better than an option or a dual market system. I do not think members on the Liberal side should be making that decision. To be quite honest, I do not think members on the Reform side or the Bloc side should be making that decision. The producers should be making that decision.

It is very interesting that prior to the last election and prior to the reversal on the continental barley market the Prime Minister and his key agriculture people said the producers should make that decision. The Prime Minister said there should be a plebiscite. Suddenly the tables are reversed and a plebiscite is out of the question. ``Well, the farmers may not be able to understand the question''. Imagine the insult of the Liberals saying farmers would not understand the question. I would like members opposite to know farmers are very intelligent and would not have survived this long in Canada under some of the burdens they have faced had they not been extremely intelligent. Give them a chance a the tools to do the job and they will do extremely well.

(1750)

The western grain marketing panel is the tool the minister of agriculture has set up to review all the marketing of western grains. The panel members are supposed to look under every rock and find out what course of actions to recommend to the minister of agriculture.

Much of the work has already been done and measured through the plebiscite, the polls and the surveys done by the province of Saskatchewan.

The member for Lisgar-Marquette did a survey of his constituents and found the majority of them wanted a plebiscite, no matter which side of the issue they were on. In the riding of Kindersley-Lloydminister over 70 per cent of respondents wanted a plebiscite. That coincides with the scientifically accurate poll done by the province of Saskatchewan which lends credibility to the survey we are doing of our constituents.

That survey really bothers the member for Kingston and the Islands. He does not like to deal with the facts.


1617

I ask the House to seriously look at the motion. I would be extremely disappointed if any member of the House would not agree we should support the creation of an environment in which agriculture producers make their own decisions about how their products are market.

I appreciate the time to speak on behalf of Canadian farmers.

Mr. Jerry Pickard (Parliamentary Secretary to Minister of Agriculture and Agri-Food, Lib.): Mr. Speaker, I am pleased to have the opportunity to respond to Motion No. 176 on behalf of the government.

The hon. member for Kindersley-Lloydminister moved:

That this House support the creation of an environment in which agricultural producers make their own decisions as to how their products are marketed.
It is not clear from the wording of the motion exactly which commodities or marketing systems he is referring to. However, through his comments now and through his statements in the past we can assume it is wheat and barley he is targeting in western Canada.

The debate over the Canadian Wheat Board and current grain marketing systems has been going on for many years, with a wide range of opinions from status quo to the abolition of the board. Some are saying farmers are better off dealing with the single desk of the Canadian Wheat Board while others say farmers would benefit from being able to market their grain when and where they want.

The assumption that dual market and Canadian Wheat Board could co-exist has not been proven. The board says dual marketing cannot work because it must make an initial payment. If initial payments are too low compared with spot price, it will not get any wheat or barley. If the payments are too high, farmers will try to deliver all of their product to the board.

Furthermore, the free trade agreement and NAFTA both rule out re-establishing single desk marketing after an experiment with dual marketing unless United States interests are not hurt.

As the Minister of Agriculture and Agri-Food has said, you cannot put Humpty-Dumpty back together again. If we move off on an experiment the Reform Party is suggesting, we may endanger the marketing system throughout the rest of history in Canada.

Those who favour dual marketing want the wheat board to behave like a grain company. The Canadian Wheat Board cannot be a grain company like any other. It is a marketing agency. It does not buy grain from farmers, it sells grain on their behalf. It does not make a profit. All the revenues from sales are returned to the producers. If markets fall, the board does not take the loss, farmers do.

There have also been public demonstrations against both options. In general, the demonstrators have been shouting at each other, not trying to persuade each other of the rightness of their views.

(1755 )

What has been missing from the discussion is a thoughtful, face to face, factual examination of the issues. There has been a lot more heat than light spread on the issue. There have been calls for the federal government to hold a plebiscite. The problem with that option is that complex questions on marketing structures or compatibility of different systems is difficult to address with a simple yes or no that a plebiscite would only allow them to say.

For example, while an Alberta plebiscite produced a vote in favour of dual marketing, many producers said they would have voted differently if it meant the end of the Canadian Wheat Board.

It must be recognized that making significant changes to a marketing system to accommodate the wishes of one group of individuals may damage the financial returns and continued operation of a preferred marketing choice of the majority of farmers.

To help focus this debate, last July the minister put a grain marketing panel in place to look at all facets of grain marketing in Canada. That panel has now completed its town hall meetings and formal hearings and is now preparing its written report. One of my colleagues will have more to say on this subject later in the debate. This process is providing grain farmers, industry and other stakeholders an opportunity to participate in a number of grassroots discussions. I believe this is far more productive than passing a vaguely worded motion on this decision.

In a previous debate in the House the hon. member complained that producers had no say. He also made that complaint today, that producers have no say in how solutions would be reached in this problem. The grain marketing panel has given them that input. It has also allowed other interested parties to be heard.

He appeared before the panel on March 18. I was at the panel the day he appeared. Usually people take part in a process only if they believe it is valid. I congratulate the hon. member for recognizing the minister has the right to appoint a panel and explain his viewpoints at the table.

I wonder why the member is not prepared to wait for the panel presentation when it makes its report. To pass this motion would be to repudiate the grain marketing panel before it is finished its work.

I urge my fellow colleagues and members of the House not to support this motion. Instead they should allow the grain marketing panel to complete its hearings and produce its report. Then the Minister of Agriculture and Agri-Food will be able to make a decision on the future of grain marketing. Then we can all be


1618

confident in the knowledge that producers have spoken and have been heard.

[Translation]

Mr. Réjean Lefebvre (Champlain, BQ): Mr. Speaker, it is a pleasure to speak today on Motion No. 176 put forward by my colleague for Kindersley-Lloydminster, who is urging this House to support the creation of an environment in which agricultural producers make their own decisions as to how their products are marketed.

First, let me point out the vagueness of the motion. Its purpose is not easy to identify but I will nonetheless try to bring out what, to me, are its most important features.

First, I am very proud to quote the example of Quebec where farmers are largely responsible for the marketing of their products. Obviously, this is possible because they are well organized and well represented.

That is why there are, in Quebec alone, 34,600 agricultural producers who are members of agricultural co-operatives. I think we, Quebecers, get a great sense of pride from this. The Coopérative fédérée and Agropur, to name but a few, have a turnover that is more than 50 per cent of that of all non-financial co-operatives put together, that is, more than $3 billion. The mandate of the Union des producteurs agricoles or UPA is to organize and represent all Quebec agricultural producers, whatever the size and structure of their farms, the nature of their production and the place they live.

(1800)

Obviously there is no problem as far as representation is concerned and members of these cooperatives seem satisfied with the mandates of their organizations. We could mention as an example the dairy producers of Canada and Quebec who, after evaluating changes in international trade, felt compelled to put in place a market sharing quota for exports in order to take advantage of new opportunities. This is a good example of producers making their own marketing decisions. This was made possible by the fact that the marketing board gave these producers a powerful marketing instrument: supply management.

Another advantage that marketing boards give the producers is that not only do they control marketing decisions, they also control the cost of inputs since prices negotiated for the marketing of their products are based on production costs.

The motion certainly has the merit of recognizing that producers must have a say in the marketing of their products but, as I have demonstrated, it is already the case in Quebec. Therefore, I wonder if, by bringing forward this motion, my colleague from Kindersley-Lloydminster wants western producers to be given the same environment that dairy, egg and poultry producers enjoy for the marketing of their products. If so, I have to congratulate the member for recognizing that the Quebec model could be applied to agricultural products in western Canada.

In this context, it is easy to understand the criticism expressed in western Canada with regard to the Canadian Wheat Board, for example. Members of the board are appointed by the government without producers having anything to say about it.

It has often been proposed that the advisory committee be composed mainly of producers, and that applies to both elected and appointed members. Maybe it would be interesting to propose that the appointments be submitted to the standing agriculture committee. It would certainly give some independence to the appointment process.

Western producers feel uncomfortable with the Canadian Wheat Board. Indeed, some argue that the commission does not advocate farmers' interests anymore because it refuses to change an obsolete management system that is more than 60 years old. Moreover, the recent plebiscite in Alberta has shown that more than 60 per cent of farmers think their ideas are not taken into consideration or are bluntly disregarded by the commission. That could easily be explained.

The farmers' concern is easy to understand, considering that the commission controls or greatly influences all aspects of grain marketing, transportation and handling, that it controls the price and sale of wheat and barley, the allocation of cars, the decisions on storage and shipments by grain companies, the value added processing and resource allocation. I believe we have reason to be concerned because the commission, which is not accountable, could make an improper use of its power. The risk is that an organization which exercises so much regulating control could be accused of patronage.

Do not get me wrong, we are not accusing the Canadian wheat board of incompetence and of misuse of power; rather, we are trying to show that the risk of abuse exists and that it might be preferable to review the process of appointing commissioners, who are designated by the gouvernement, and of members of the advisory board, who are designated by western farmers, in order to ensure a more equitable representation of the interests of western farmers.

Unfortunately, the interests of farmers and producers are often neglected, and not only in the west. We need only to look at the consultation process of the government to realize that, more often than not, the government consults only for show. Take for instance the recent cuts in dairy subsidies. Of course, the government consulted dairy producers in Quebec and Canada, but they were nevertheless faced with a done deal. No more subsidies, period.


1619

Now, what arrangement would be the least painful to you? Decision: spread the cuts over five years. Conclusion: the government consults, fine, but does what it wants anyway.

(1805)

Another more recent example is the issue of raw milk cheese. I cannot resist this little aside, given my background. The government is preparing to propose that the food and drug regulations be modified to improve the protection of public health. The proposed change involves unpasteurized cheese made from raw milk.

This would involve requiring all cheeses intended for sale to be pasteurized. This would mean that the specialty cheeses would no longer be available in our stores. Do you see how absurd this is? Just from the health point of view, if raw milk cheese were as dangerous as that, why would we have authorized its sale since 1991? The only case of poisoning linked to a dairy product in Canada dates back 61 years.

Alcohol and tobacco are hazardous consumer products, yet they are not banned from our store shelves. Go ahead and smoke two packs a day, knowing that you are likely to eventually get lung cancer, but under no circumstances eat raw milk cheese. There is no sense to this whatsoever, particularly since it hurts a fledgling industry in Quebec capable of developing products that would make our European friends green with envy.

In fact, the bulk of the raw milk industry is located in Quebec, as are most of those who eat raw milk cheeses. We have discovered that there is more to life than Kraft cheese, so this is not the time to take the pleasures of the table away from us.

One wonders if, as the hon. member for Frontenac said recently, some sort of excessive fear of food poisoning, or rather pressures from large dairy producers afraid to lose their share of the market, did not motivate the government to act on this issue. It remains to be seen what results the consultation process will bring.

Who knows, maybe the government will come to its senses and not go forward with its attack against raw milk chees. Today it is cheese, but tomorrow it could be chicken salad or tuna which will be banned. As a matter of fact, there have been in recent years cases of epidemics caused by the same bacteria as the one found in some raw milk cheeses.

[English]

Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, the purpose of this motion is to give Canadians farmers the right which has been given to others in Canada and around the world to market their products in the way they choose. We would expect the government would not have to be asked by farmers for this right, but that is exactly what is happening.

I will talk briefly before I get into my presentation about one farmer who is in the third week of a hunger strike to get what we would expect would be given willingly in this country. Tom Jackson, a farmer from Fort Saskatchewan, is continuing to try to force the government to change the Canadian Wheat Board Act through a hunger strike.

This is drastic action, but he feels this is important enough that he is willing to take this drastic action to force the government into the change that he and the majority of Albertan farmers and probably the majority of farmers across the country want for the Canadian Wheat Board.

The subject I will deal with in relation to the topic the hon. member for Kindersley-Lloydminster brought forth today is the supply managed sectors of the agricultural industry.

Supply managed sectors must be talked about separately because unlike all other sectors of the agriculture industry many farmers, probably the majority, do not want to have the supply managed aspect removed. They are not as willing to have their industry opened up to competition and to have that freedom to market in any way they want.

I would concede that probably the majority feel like that. They have done very well under the supply managed system. The reality is most likely this will happen anyway. That is, supply managed sectors will be opened up to competition from outside the country. It is very likely that will happen.

(1810 )

It is true there are some discrepancies between some Reform ideas and supply management. Reform members have been saying for some time that they want what is best for the farmers in the supply managed sectors of agriculture.

It is important, at least for me, to have those involved understand what Reform has been saying and what we do want for farmers and others in these industries. It is important to give this message unfiltered by the media and by some leaders in the supply managed sector. So often what Reform MPs actually say and what the media portrays can be quite different, interesting but quite different.

To relieve stress and anxiety, on Sunday mornings a neighbour of mine, a farmer who lives down the road from me, takes his little 5-speed and works through the gears, gets it up to 120 kilometres per hour and accelerates around the curve so he is going out of that curve at 140 kilometres per hour. That makes him feel good and helps relieve his anxiety.

One Sunday morning my neighbour drove out to the end of his driveway and started working through the gears, heading down the road and saw a car on his road. Then he saw the car swerve. He said: ``Oh my gosh, a drunk driver on my road on a Sunday morning''.


1620

As the car came closer it slowed down, and so he slowed down but did not stop. It was a lady driver. He said: ``Oh my gosh, a lady driver on my road on a Sunday morning''. The lady stops the car and opens the window. As he goes by he hears the driver say ``pig''. He was mad. He said ``sow'' and went speeding down the road into the curb at 140 kilometres and hits the pig.

This farmer because of his attitude problem refused to notice the signals that would have allowed him to miss the obstacles, to miss the pig.

I will talk about some of the signals I sincerely hope farmers in the supply managed sectors of agriculture will not miss. I am talking about the warnings of change which would lead to an end to supply management as we know it, change which will lead to more access to our markets by other countries, especially the United States.

There is the possibility of Canada's losing the NAFTA chapter 20 dispute settlement initiated by the United States. If Canada loses the U.S. challenge our current system of supply management will undergo radical change. Although many farmers and others in the industry are confident we will win the dispute, others are less convinced. In any case they are concerned about their future regardless of the outcome of the panel hearing.

Another threat to the supply managed industry is the Chilean accession into NAFTA and the opening up of this agreement. The Government of Canada has told Canadian farmers again and again they do not have to worry about that. It will not open NAFTA up to negotiation even if it wants to let Chile in.

The government said during the election campaign it would not sign NAFTA unless certain criteria were put into the deal. They were not put in and it signed it anyway. The government cannot be trusted when it comes to promises made about these trade deals. We do not know what will happen.

Looking ahead a little further, what will happen to our current system of tariffication after the next round of negotiations starting in 1999? Will the GATT countries continue to allow Europe, Canada, the United States and others to keep high tariffs on imported dairy, egg and poultry products? I believe this round of negotiations will be much shorter than in the past. We are not looking at a 5 year to 10 year negotiation period, as happened last time.

The world and particularly the United States will have more access to Canadian markets in the supply managed sector than they have now as a result of the negotiations. I believe they will have much more access.

(1815 )

Another signal that I hope farmers are thinking about, which might allow them to avoid the pig, is the possibility of bilateral trade negotiations with the United States. This is a very real possibility.

There are several different factors that could spark these bilateral negotiations. It could be the result of a panel hearing. It could be the result of negotiations with Chile getting into NAFTA. It could be that the Americans finally are willing to reduce protection in some of the protected areas, like peanuts, sugar and coffee.

If the U.S. agrees to make changes in its export enhancement program, will the government agree to lower our protective tariffs? Who knows? I can honestly say I have more questions than answers. In the more open trade environment which is building around the world, I can be quite sure that the change will come sooner than many would predict.

When I mentioned these possibilities at a meeting in Richmond, Quebec, the first question was what about another possibility? What about the possibility of Quebec leaving the country? That would lead to the end of the supply managed sector overnight.

In closing, I ask the question, what have I left farmers with here today? Nothing really very positive but that is because I have made the same mistake that most people make when they talk about the possible end of supply management. I focused on the threats resulting from the change. What about the new possibilities and the new opportunities that farmers in the industry will have? They will have more competition in products coming from the United States. However, on the other side they will have the huge American market open to them. I know Canadian farmers in the supply managed sector can compete very well with their American neighbours. They will do well.

Mr. Bernie Collins (Souris-Moose Mountain, Lib.): Mr. Speaker, it is a pleasure to speak on the private member's motion of the member for Kindersley-Lloydminster. It is a pleasure because I know my counterparts from Saskatchewan and Alberta have farming backgrounds. I am here to represent the point of view of farming communities.

I come from a rural area in southeast Saskatchewan. The concerns they raise are valid. That is why the minister of agriculture set up a mechanism to review that forum. Where are we going? How will we move into the 21st century if we do not understand what are the problems that confront us today?

I set up a panel. That panel was allowed to hold hearings in Manitoba, Saskatchewan and Alberta. The panel is going to come back and report to the agriculture minister.


1621

Let me say to my friends opposite that as I travel throughout southeast Saskatchewan, there are those on both sides of the issue. There are those who would like to see the sale of grains and other commodities put through dual marketing. But there are also those who are saying that they want the Canadian Wheat Board to stay in its present form.

The Canadian Wheat Board has to make some changes. Those changes have to be done through the proper mechanism, that is, through the panel set up to review that.

Let us take a look at some of the proposals that the panel is going to review. They have merit. What are the nature and the requirements of existent potential markets? What do we have? Let us review the commodities and products that could be sold into these markets. Then let us review the marketing systems that are now available or could be available to exploit such markets to the maximum possible benefit of western producers.

We had stakeholders. Who did we select as the chairman? We selected a lawyer from Saskatoon who is well known and well respected. Along with that where did we go? We took people on both sides of the issue. The agriculture minister said: ``We want both points of view''. Those people are going to come forward with honest opinions. They may not be the opinion which my friends opposite want, but it will be one which is focused, one which is right for the time and one which will lead us into the 21st century.

(1820)

There was the suggestion that not every member of Parliament takes polls. Every time I go home to my riding I take a poll. I take the opinions of those people who are my farming counterparts and I listen to them.

The folks from Inland terminal have one point of view on how we should handle this. The people in southeast Saskatchewan from the Redvers area look at dual marketing and are concerned. Other groups of farmers are saying: ``I am old, I am established and I think the Canadian Wheat Board is doing a reputable job''. It is fine to criticize if one does not understand.

However, the Canadian Wheat Board is due for some criticism if it does not change. Does change mean that the whole system should be thrown out? I do not think so. When all is said and done, we will find that the support of the people from across the west will be for the Canadian Wheat Board as the single desk selling agency that performs very well.

Let us not fool ourselves. If we get rid of it and we go to a marketing system where everybody goes on their own, I would venture to say that within five years or less the farmers who wanted to get rid of the system will be marching back to the door of the agriculture minister saying: ``What have we done? Let us bring that agency back''.

A friend of mine recently visited China. He talked to the agriculture people over there. He said that our producers are to be commended. They produce the best quality grains in the world. They have the quantities which China wants and they are delivered on time. The Chinese people are going to be the largest buyers of our good quality wheat. However, he said: ``If you move away from that single desk selling agency, I am telling you now that we will have to take a second look at whether we will buy from you''.

That is what is happening in the trading world. There are people who are concerned that we will move away from that single desk selling agency.

I would like to commend my hon. friend from Kindersley-Lloydminster for bringing forward this motion. This is the area in which we want to be able to sit down to discuss openly, in a wise manner, what are the options and where we are going.

I also commend the parliamentary secretary. He brought up a very good point, that is, the vote in Alberta was not really reflective of the question which was asked.

People were asked if they wanted a dual marketing system. They said yes. If it means the end of the Canadian Wheat Board they may very well say no. It is a very serious argument.

I want to say in closing that the results will be reviewed by the minister of agriculture. He will take a look at both sides of the issue and I am sure he will recommend those things that need to be done in the best interests of the farming community right across Canada.

Mr. Allan Kerpan (Moose Jaw-Lake Centre, Ref.): Mr. Speaker, I appreciate the opportunity, in the limited time we have left, to say a few words about this motion.

I have been listening for the last 50 minutes or thereabouts to what members opposite have been saying. I guess they did not understand the motion because we have been talking about two separate issues. Members opposite are talking about the merits of single desk selling versus the merits of dual marketing in the Canadian Wheat Board or some such thing. The hon. member for Kindersley-Lloydminster simply states in his motion that the farmers, the producers, should have the right to make the decision on how they will market. We are not here to decide how it is to happen.

(1825)

The member for Essex-Kent a few minutes ago questioned the ability of farmers to deal with such a complex question. As a farmer I am shocked and appalled that a member of Parliament would imply that farmers are too stupid to make a decision this important.

1622

He says ``I will make the decision for you. I know what is best for you''. Farmers have been living under that system for far too long and they will no longer accept it.

Let us talk about democracy. Let us look at the history of the Canadian Wheat Board. It was established without a vote. The wheat board commissioners are appointed by government without a vote. The wheat board took barley out of the wheat board and brought it back in solely without a vote. Producers could only market their canola and other special crops outside the wheat board, without a vote.

In the 1993 election campaign the government claimed it would uphold the high principles of democracy. The minister of agriculture promised a plebiscite on barley. It is now two and a half years later and nothing has changed-without a vote.

There is no democracy in the Canadian Wheat Board. I believe there is a strong place for the Canadian Wheat Board, but by doing nothing, this producer funded board may well self-destruct from within without pressures from outside.

I support my colleague from Kindersley-Lloydminister on his motion. My only disappointment is that the government has deemed it should not be a votable motion. It has seen fit to stifle even further democracy by not allowing the House to vote on the motion, let alone allowing farmers to vote on an issue that has a tremendous impact on their destiny.

When will the government wake up and realize producers will no longer accept this kind of dictatorial attitude toward their industry?

A few weeks ago I was travelling to Moose Jaw and I heard a talk show on the radio featuring Nettie Wiebe, the president of the National Farmers Union, a strong supporter of single desk, orderly marketing. I have no problem with that.

She said this is a democracy and the majority of people should rule in a democracy. I fully support that. When has the majority had the opportunity to make a decision on these types of things?

I could go on and on about the importance. Let us keep in mind we are not talking about the value of single desk marketing versus dual marketing. We are talking only about the issue of producers having the opportunity.

The Deputy Speaker: Shall we call it 6.30 p.m.?

_____________________________________________


1622

ADJOURNMENT PROCEEDINGS

[Translation]

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

CANADIAN ARMED FORCES

Mr. Jean H. Leroux (Shefford, BQ): Mr. Speaker, on March 21, I put a question in the House to the Prime Minister regarding events which had taken place in Gagetown, New Brunswick, and which included distasteful hazing rituals. These events showed once again that Canadian forces commanders have lost control over military ethics: the series of events that occurred in Somalia, in Petawawa, and at the Citadel in Quebec City clearly demonstrate that high ranking officers always manage to get away with things and wash their hands of anything that could prevent them from being promoted. Being promoted is what matters, often to the detriment of the truth, even.

Today, in light of all these events, we are wondering who leads the forces. Why, when there are unfortunate events such as those of late, is no one responsible at the top of the chain of command? If this is the case, is there not cause for concern about the success of armed forces' undertakings at home and abroad?

As you know, before the sad and unfortunate events in Somalia-I remind you that people died-Canada enjoyed a spotless reputation in the area of peacekeeping. In a peace mission, our soldiers represent us. They are our ambassadors and should behave in a dignified and professional manner. Their behaviour must be exemplary. They are not allowed to let us down.

Another event that surfaced was the Quebec Citadel manoeuvres, which were authorized by military leaders and which could have turned into a blood bath. As elected representatives, what should we think of such improvised manoeuvres?

At this point, Canadians are increasingly losing confidence in the integrity of the chain of command of the armed forces. I would remind you that $10.7 billion will be spent in fiscal 1996-97. That is an awful lot of money.

I invite the minister to assume his responsibilities. He must do everything in his power to restore the credibility of the Canadian armed forces. He must do everything possible to shed light on the unacceptable behaviour of certain members of the forces and cure the ills plaguing the army. He must have the courage to go right to the top of the chain of command. If he fails to fully restore the forces' reputation, he will have no choice but to leave.

Nothing, as I speak, indicates to me that the minister is going to succeed.

[English]

Mr. John Richardson (Parliamentary Secretary to Minister of National Defence and Minister of Veterans Affairs, Lib.): Mr. Speaker, the hon. member opposite has demanded accountability in the Canadian forces. This is one of the cornerstones of the Canadian forces.

1623

The Canadian forces have a policy of zero tolerance for hazings and other related activities which cannot in any way be considered soldierly. The policy exists and has been disseminated and Canadian forces members are to act accordingly. Like all Canadians, they are responsible and accountable for their actions.

If a Canadian forces member chooses to ignore the very clear direction provided, actions appropriate to the transgression in the question will be taken. I assure the hon. member that violations of Canadian forces policy are dealt with firmly and effectively.

As a result of this incident a number of Canadian forces members face administrative and disciplinary measures. Those who witnessed the incident will be dealt with administratively, receiving formal warnings that they should never again be found to be involved in any activity of this nature and severe career action will be taken.

The remaining Canadian forces members who are found to be participants in varying forms and degrees in the events at Camp Gagetown will be charged under section 129 of the National Defence Act for conduct to the prejudice of good order and discipline. A number of punishments are available to the officer responsible for trying the accused.

The trials of soldiers who were charged will likely be finished in the very near future and any actions taken as a result will be made public immediately thereafter. I will not comment any further on the cases in question, as it is imperative that due process be allowed to take place.

On numerous occasions opposition members seemingly want to taunt the government into bypassing due process in the name of political expediency. While the member opposite has stated in the House who he believes to be responsible for the incident in question at Camp Gagetown, justice will be better served by allowing due process to run its course.

* * *

(1835)

[Translation]

IMMIGRATION

Mr. Osvaldo Nunez (Bourassa, BQ): Mr. Speaker, on March 11, I asked the Minister of Citizenship and Immigration a question concerning the alleged payment of what the investigator, Roger Tassé, calls ``accommodation fees'' and what I call bribes by removal officers of her department to foreign officials so that they would let their own nationals back in. The minister never took action on these very serious allegations, despite our call for a special inquiry.

The minister should clearly commit herself to following the recommendations of the Tassé report. The reprehensible methods used by immigration officers for the deportation of foreign nationals must not be allowed to continue. It is inadmissible, and even illegal, for civil servants to alter or forge documents in order to deport asylum seekers or speed up the process.

Moreover, certain removal officers administer tranquillizers to deportees. Yesterday, I was made aware of the case of an Algerian man, Mr. Bedj, who was told he would be given drugs if he made any trouble when it came time to go. The officer opened his travel bag and showed him a brand new syringe and some drugs.

I also condemn the police attitude of certain removal officers. They often use force or unnecessary equipment, without any reason, handcuffing the persons in their custody, for example. They sometimes violate their civil rights and liberties. A lot of these actions are never brought to the public's attention. The CIC should make available all information concerning removal matters.

As for detention and release of persons in custody, the situation is totally arbitrary. Nowhere can we find any precise criteria for detention and release. Sometimes, foreign nationals stay months and months in detention centres without any justification and very often in very poor conditions; men, women, adults and children together. In the Mississauga detention centre for immigrants I met a Kurdish girl, still a minor, who had been there for more than eight months, without any charge being brought against her.

I would like to take this opportunity to criticize the people responsible for the detention centre situated on Saint-Jacques street, in Montreal for their attitude towards me. Despite a pre-arranged appointment, my assistant, a representative from the refugee assistance committee and myself were kept waiting for a quarter of an hour outside, last December, before we were let in. We had to wait outside in very cold weather. I have requested an investigation into that incident. I am not at all satisfied with the explanations of the minister and of the CIC director for Quebec.

Furthermore, I ask the minister to reconsider her decision to move the detention centre to Laval because that site is too far for lawyers, officials and inmates' families.

I would also suggest that the minister review the whole procedure for escorting deported people out of the country, which is costly for the public purse. Why must two or three officers escort an individual who is not a criminal?

For a few years now, the Canadian and American governments have been preparing an agreement in order to control and reduce the number of claimants and discourage people from claiming refugee status. In November 1995, they signed a draft agreement and the final text was to be signed in February, and then in April.

The Standing Committee on Citizenship and Immigration held public consultations on that text. Almost all the organizations and individuals, both from Canada and the United States, who appeared before this committee were against this draft agreement.

1624

Now, Canadian and American governments have decided to postpone negotiations on this agreement until next summer, once the United States has passed new and even more stringent legislation against refugees.

I am strongly opposed to this agreement that will keep thousands of persecuted people from coming to Canada, through the United States, to file a refugee status claim.

It must be pointed out that a third of the 20,000 or so refugee claimants go through the United States. The level of refugee protection offered by our neighbours to the South is considerably lower than in Canada.

This about-face by the Liberals is incomprehensible and unjustified. The minister's predecessor, now the environment minister, said in November 1993, just after being appointed to the cabinet:

[English]

``But any agreement for me would have to pass the test that the agreement is on a level playing field that respects our standards''.

[Translation]

As the first member of Latin American origin elected to this House, I am very concerned about the impact this agreement could have. In practical terms, persecuted people in Central and South America will not be able to come here and ask for Canada's protection. There are hardly any direct flights between Latin America and Canada.

I ask the government to give up and to purely and simply forget this draft agreement.

Finally, I ask the minister to grant permanent residency in Canada to Victor Regalado, a Salvadorian refugee who has been living here for 13 years now without any status, who works here and who, with his spouse, a Canadian citizen, has had two children, born in Quebec.

The minister should settle this case as quickly as possible.

[English]

Ms. Maria Minna (Parliamentary Secretary to Minister of Citizenship and Immigration Lib.): Mr. Speaker, the hon. member put his question as an extension of a question to the minister with respect to the Tassé report and the issue of why it refers to them.

However, the member spent most of his time talking about all kinds of allegations and suggestions of irregularities, in addition to talking about business that is in front of the committee, as the hon. member very well knows since he is a member of that committee. He knows full well that the report is not yet finished and has not been tabled in this House. Therefore, it is rather difficult to be debating something that is not here nor part of this House's agenda. He then brings up individual cases which again are not things one should get into.

I am going to discuss for a few minutes the hon. member's question to the minister in the House which is for what I believe this period is intended. It goes back to the hon. member's concerns, allegations and suggestions about bribes.

The fact is that where there has been sufficient information to identify a case we have initiated an investigation. We cannot do those kinds of things based on general allegations.

The government agrees that the immigration enforcement program must be carried out with a high standard of professionalism, respect for the person and within the law. That is something this government is very committed to. This is why the recommendations contained in Mr. Tassé's report are being given very serious consideration as we renew and revitalize the enforcement function.

As I said the last time we dealt with this issue, any instance of substantial illegal or improper behaviour is investigated and acted on by a departmental official. However, one cannot do an investigation just on the basis of allegations. One has to have some proof. This is why when the Tassé report was released, the deputy minister invited anyone with documented allegations of misconduct to come forward. CIC regional directors general will investigate and appropriately deal with any matter which does come forward, as we have said before.

As I have said before, nowhere in the Tassé report is there mention of bribes of officials or of anyone else. As a matter of fact, the Tassé report mentions a great many things but not those kinds of things.

I would like to talk about some of the very good things which are in the report.

[Translation]

The Deputy Speaker: I am sorry, but the parliamentary secretary's time has now expired.

The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until 10 a.m. tomorrow.

(The House adjourned at 6.44 p.m.)