NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 24, 1998

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[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Good morning, colleagues. I'd like to call to order this November 24 meeting of the Standing Committee on Natural Resources and Government Operations.

Before we go to the main business of the day, clause-by-clause, we'll just do a little bit of committee housekeeping. You've all received a notice of motion from Dave Chatters.

May I read this on your behalf, Dave? It says:

That the Minister of Natural Resources, Ralph Goodale, be requested to appear before the Committee at the earliest opportunity, but not later than December 2, 1998, to address Supplementary Estimates and the Performance Reviews of the Department for the fiscal year of 1998-99.

Dave, did you want to speak to that? You might want to get this on record, although you did hear Gerry Byrne say he was working on getting a date for the minister.

Mr. David Chatters (Athabasca, Ref.): I don't think there's anything to add, except that the deadline now has been changed.

The Chairman: You want to change the deadline?

Mr. David Chatters: No, this reflects the change in the deadline. I believe it was later, December 3 or 5. It's been moved up to December 2, which tightened our schedule, our timeline, certainly. Other than that, it speaks for itself.

The Chairman: Is there any discussion of Dave's motion?

Gerry Byrne had indicated, on behalf of the minister, that he was going to work on getting a date to have him appear.

A voice: What about the date? As soon as possible?

The Chairman: Well, if it ended up being December 3, it would be up to the committee to censure the minister, which I don't think would happen.

Mr. David Chatters: Yes.

The Chairman: We'll leave it as it stands and deal with it if it's after December 2 for any reason.

(Motion agreed to)

The Chairman: There's another item of business. Werner raised the question of franchisees, and the parliamentary secretary, Carolyn Parrish, undertook to provide us....

Carolyn, do you want to take a minute now and give a quick update on that?

Ms. Carolyn Parrish (Parliamentary Secretary to the Minister of Public Works and Government Services): Okay. Thank you, Mr. Chairman.

The Chairman: This is the postal franchisee issue.

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Ms. Carolyn Parrish: First of all I want to apologize to the committee. We just got our material pulled together this morning, and it's rather extensive, including the dates of all the negotiations, which Mr. Schmidt asked for. It's very extensive and very detailed. We don't have it in French, so we can't hand it out yet, but we will give it to the committee chair, and Mr. Schmidt is free to peruse it when I give it in today.

It's rather extensive. It begins with 27 August 1990 and goes right up to October 1998. All the meetings and all the discussions are noted there. As I say, the translation is being done, so we'll have it ready for the next meeting.

As for the “Retail Renewal Consultation and Progress Report”, as you know, some of this is history. On October 29, Canada Post appeared before the committee to discuss changes to the corporation's retail program. At that time it agreed to meet with the dealers prior to the implementation of December 1, 1998.

As you heard Mr. Gagliano answer in the House yesterday, nothing has been done to alter that December 1 date yet, but it also hasn't been fixed in concrete, because there are still ongoing negotiations. About 5% of the dealers are left to have discussions with. So that December date won't be firmed up until those discussions are finished, as Mr. Gagliano mentioned in the House.

As a priority, Canada Post identified dealers who would experience an impact of more than $5,000 on their dealership. As of November 20, the corporation met with 511 of these dealers, or 95% of them. The remaining dealers will be visited this week, and then Mr. Gagliano will make a decision at the end of the week with Canada Post as to whether there's going to be a further postponement or the implementation.

In general, the dealers found the meetings satisfactory and explanations beneficial. Canada Post has also made a couple of changes you might be interested in.

I reiterate that there is no impact on dealers in rural areas. Rural dealers will receive a 5% commission on stamps, but they will also receive additional payments to offset the changing commission. So if you have a dealer in a rural town in Manitoba who's going to get his 5% on stamps, and he's previously cleared $10,000 or $15,000 but with the new commission will be dropping down, he will be given the difference to bring him back up to his former level. So there is absolutely no impact on rural guys. They still only get a 5% commission, but there will be a lump sum payment to bring them up to their previous level so that there will be no impact.

The second one that's been changed because of the negotiations—and this one I think will please the Liberal members as much as the opposition—is if necessary, the corporation will guarantee the supply of stamps at discount to convenience stores and authorized stamp stores. What we have right now is that franchisees have subbed out stamps to a card shop in a hospital or a card shop in a local mall, and they've been able to do this because they get the 17% commission.

If a hospital is getting so many thousand stamps a year to sell with their cards in the gift shop, Canada Post will guarantee to provide them with those stamps directly, if the franchisee doesn't want to be involved any more. The franchisee will still only get 5%. It's probably not worth his trouble to go through the hassle of delivering them to the hospital. We will do it.

A letter is going out to the stamp shops to tell them the process of ordering and what they have to do.

The Chairman: Just a second, Carolyn. Just give me a moment here.

Ghislain, you have a question of privilege.

[Translation]

Mr. Ghislain Lebel (Chambly, BQ): Yes, Mr. Chairman. Although the presentation given by the Parliamentary secretary is very interesting, I believe she should do it as a witness appearing before our committee and that we should thus be able to put questions to her. She seems to be presenting a policy statement and clarifying things for us not as a member of the committee, but rather as a representative of the Minister. She should appear before the committee.

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[English]

The Chairman: No, no. Excuse me, Ghislain. At the end of the last meeting, while we were still sitting in committee—I believe you had left, but that's immaterial—it was agreed by those members present that Ms. Parrish would provide a briefing for all members today, and that's what I've asked her to do. She's doing it in her capacity as parliamentary secretary, as agreed at the committee last week.

[Translation]

Mr. Ghislain Lebel: Yes, but we weren't even given the translated version of the documents. Unfortunately, I feel aggrieved.

[English]

The Chairman: That's a good point.

[Translation]

Mr. Ghislain Lebel: I'm not an auditory person, I'm more visual. So I would have liked to get a copy of the translated documents.

[English]

The Chairman: Carolyn, did you hand out documents?

Ms. Carolyn Parrish: No. Can I explain that to Mr. Lebel? I also am visual, and I have a lot of difficulty.

By not presenting today because the translation wasn't done, it would look like we were dragging our heels. And Mr. Schmidt, because it's being implemented December 1, wanted an update today.

The documents will be at the Thursday meeting, all translated, and we can then ask more questions and do it again. I just hesitated to wait until Thursday, because I didn't want my colleague opposite to think I was dragging my heels—only my translation machine.

I'm doing a quick update now, Mr. Lebel, and then we will have detailed documents for every member of the committee in both languages, and I'm free to answer questions on Thursday.

The Chairman: Is that a fair compromise?

[Translation]

Mr. Ghislain Lebel: To whom shall I put my questions? To you?

[English]

Ms. Carolyn Parrish: You may ask me questions, yes.

[Translation]

Mr. Ghislain Lebel: Wouldn't it be simpler for her to appear Thursday?

[English]

The Chairman: Okay, I'll tell you what. It was just a request for information from Mr. Schmidt for following up a previous meeting of the committee. Ms. Parrish offered to bring information today.

Maybe as a compromise, we'll ask Carolyn to wind up her presentation, and then if there are questions.... Mr. Schmidt had asked just for a briefing. It wasn't a major meeting of the committee, just a briefing. In the interest of getting our work done, it seemed to me that this compromise allowed us to move the file forward without a lot of formality and so on.

Carolyn, will you just wind up your presentation? I want to remind members that on Thursday we have a delegation from British Columbia, so be sure you're all here, please. Then we will take a few minutes, maybe when they're done, to allow time for some informal questions to Carolyn, so that opposition members will know at least where we stand with this issue.

Okay, Carolyn—maybe about a minute or two.

Ms. Carolyn Parrish: I only have one more change. It's important to note that because of the work of this committee, this group in here, and also our caucuses, fairly dramatic changes have been made and we've addressed many of the problems. One was the rural post offices; two was the small stamp shops, which has been addressed; and the third is a more detailed way of making the lump sum annual payments.

Small outlets—those with revenues between $50,000 and $150,000—will get 2.5% payment based on their sales. Dealers with revenues between $150,000 and $300,000 will receive a payment equivalent to 2.5% of their sales plus $3,000. Dealers with revenue in excess of $300,000 will receive an annual fixed fee of $25,000.

Again, this is a very quick run-over, giving you an update. Because of the ongoing negotiations with each of the individual dealers, Canada Post is being very responsive, both to this committee and to the dealers.

I'll give all this material to the chairman, and it will all be here in translation on Thursday.

The Chairman: Okay, Ghislain?

Mr. Ghislain Lebel: I have a question for Mrs. Parrish.

The Chairman: Can you leave it until—?

[Translation]

Mr. Ghislain Lebel: Will the $25,000 payments be retroactive? Will they also be granted to those who have already signed a franchise contract?

[English]

Ms. Carolyn Parrish: That I will have to check. That's a good question. I'll have to check and see if it's effective December 1 or if it's effective from the day they sign their contracts. I'll check that.

Thank you.

The Chairman: Carolyn, thank you for that.

Werner, is that okay for now, and then Thursday we can go over it? Can we go to clause-by-clause now?

Mr. Werner Schmidt (Kelowna, Ref.): I think so, but I just have a technical question on the 2.5% of sales. Is that paid on a monthly basis?

Ms. Carolyn Parrish: Yes, in monthly instalments. That I'm sure of.

Mr. Werner Schmidt: And it's 2.5% of gross sales?

Ms. Carolyn Parrish: Whatever that sheet said.

Yes, it's based on gross sales.

Mr. Werner Schmidt: Thank you.

Ms. Carolyn Parrish: But it won't be less than $6,000 and it won't be more than $25,000.

Mr. Werner Schmidt: No, I understand.

Ms. Carolyn Parrish: Okay.

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The Chairman: Ms. Parrish, thank you very much for that. We will entertain further discussion of that on Thursday. We just wanted to make everybody feel comfortable with the progress that's been made.

We're going to now move to the business of the day, which is a clause-by-clause consideration of Bill C-41, an act to amend the Royal Canadian Mint Act and the Currency Act.

We have with us today Beverly Ann Lepine, vice-president, administration and finance; Danielle Wetherup, Master of the Mint; and Marguerite Nadeau, senior counsel and corporate secretary, legal services. They're not here necessarily to make a presentation; they're here to help us with any questions that may come up as we go through clause-by-clause. Unless....

Ms. Wetherup, do you want to make a very brief comment at the beginning, or just leave it that you're here for advice to the committee if they need it?

Ms. Danielle Wetherup (Master of the Royal Canadian Mint): I'm here at your pleasure.

The Chairman: With that then, this is the first time for me, so please be patient with me. We will just go through it, clause by clause, and then I will invite those of you who have offered amendments to have your say at the appropriate time.

(Clause 1 agreed to)

(On clause 2)

The Chairman: We have an amendment from the Reform Party. I understand that it is out of order for this reason: the amendment wishes to introduce by way of amendment what already exists in the current act. Therefore, the proper thing for those who support the amendment to do is to simply vote against the clause.

Mr. Epp.

Mr. Ken Epp (Elk Island, Ref.): The amendment is in fact not entirely identical to what's currently in the act.

The Chairman: Mr. Epp, we have received the advice of those who are very familiar with this, and in its substance, it's the same. Maybe some minor wording is different, but in its substance, it is the same.

Mr. Ken Epp: So that means you can just say this amendment is out of order, end of show?

The Chairman: Yes, but you can record your dissatisfaction with clause 2 and indirectly support the amendment by simply voting against clause 2, because the act as it now stands contains essentially the elements in what I call R-1, which is the Reform amendment.

We'll let Ken finish, Ghislain.

Mr. Ken Epp: I just feel the amendment here is slightly different. Yes, it does to a large degree go back to the way the act is written now, but not in its entirety. The amendment should be given some consideration.

The Chairman: The only difference between the current act and what is proposed by the Reform amendment is the short phrase, “as ancillary and incidental to its objects”. That's my understanding.

Mr. Ken Epp: Which is pretty significant.

Mr. Werner Schmidt: Mr. Chairman, I'd like to make exactly the same point.

The Chairman: Ghislain was next, and then Werner.

[Translation]

Mr. Ghislain Lebel: Mr. Chairman, I don't quite get your point of view. For example, we're not planning to discuss clause 3(2) of the Act because it's not part of the provisions in Bill C-41. If I understand things correctly, I'll have to vote against clause 2 or against clause 4 of the bill while I'm actually opposed to clause 3 of the Act. With all due respect—and I'm saying that with very much deference, as they say in law—I can't vote against clause 2 when I'm actually opposed to clause 3. In my opinion, the committee should be ready to hear proposals from those who want to discuss a specific clause of the Act that is not affected by the amendments proposed in Bill C-41.

[English]

The Chairman: Okay, Ghislain.

Werner.

Mr. Werner Schmidt: We're not talking about Ghislain's point now.

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The Chairman: No, we're talking about the Reform amendment on clause 2.

Mr. Werner Schmidt: Yes.

I would really question—challenge, actually—the interpretation that has been placed upon the amendment, I don't know by whom, that it does not change substantially the existing provisions in the bill.

I submit to the members of the committee that the words “as ancillary and incidental to its objects” suggest that not only may it do these things as part of its objects, which the current proposal in the bill is....

The current wording, as it is being proposed to the committee under the new amendment to the act, says this: “In carrying out its objects, the Mint has the rights, powers...”. The amendment takes out the earlier suggestion of “ancillary and incidental to”. It says the objects of the Mint are as stated in the earlier part of the act, and those objects stand.

We would not like to have the provisions as ancillary and incidental. Those two words are rather significant. These are not activities that are incidental or ancillary. Rather we want to carry them out specifically with regard to those objects. These are not arbitrary kinds of things that can be moved back and forth, which “ancillary and incidental” would suggest. These now become integral to the carrying out of the objects.

Therefore I submit that the amendment we have proposed is in fact a substantial amendment that ought to be considered at the same level as the proposed amendments to the bill.

The Chairman: Werner, before actually making a final decision, I will ask Ms. Nadeau, senior counsel, to comment on the nature of that phrase, “ancillary and incidental to”, as being significant or not. Then I'll make a final ruling, and if you wish to challenge my ruling, we'll ask for support on that. Thank you.

Ms. Nadeau.

Ms. Marguerite Nadeau (Senior Counsel and Corporate Secretary, Legal Services, Royal Canadian Mint): I would make two points on that, Mr. Schmidt.

The wording that exists currently—“The Mint may, as ancillary and incidental to its objects”—is very similar to the wording we have: “In carrying out its objects”. It relates to any of the powers that are to be exercised by the Mint and that would be exercised in carrying out its objects.

Paragraph 4(1)(c), which is something you have kept in your amendment, also repeats that the Mint would be able, as part of its powers, to do all other things that are incidental or conducive to the attainment of its objects. So the legislative drafters, as they read that, felt it was more appropriate to refer to the wording, “In carrying out its objects”.

The Chairman: Thank you, Ms. Nadeau.

We can go on around the mulberry bush for—

Mr. Ken Epp: I have a point of order.

The Chairman: Mr. Epp.

Mr. Ken Epp: It's just another part of the debate here. The other thing that's of significance is that, whereas the present act says they may “do all other things”, the amendment doesn't say that. It says “generally do all things”. So the word “other” is put into the proposed amendment by the government, which says basically that the Mint can do anything it wants to, plus anything else that's other than what's mentioned here. That's significant, Mr. Chair.

The Chairman: Ms. Nadeau, do you have any comment on that?

Ms. Marguerite Nadeau: Any of the powers that are to be exercised by the Mint must be exercised in support of its object, which is to mint coins in anticipation of a profit.

Mr. Ken Epp: Okay, then I would ask the question, is buying a fleet of trucks in order to ship your shipments around included?

Ms. Marguerite Nadeau: That would not be included, in my view.

Mr. Ken Epp: Why not? It's part of production and shipping and fulfilling your objectives of distributing coins.

Ms. Marguerite Nadeau: Yes, but it doesn't relate to the minting of coins, so I would not view that as included.

The Chairman: Thank you, Ms. Nadeau.

Mr. Ken Epp: When you say “other”, that really opens it up.

The Chairman: Colleagues, my initial ruling, which still stands, is that the Reform amendment is out of order.

Werner, if you wish me to ask for a vote of confidence on my ruling, or support from the committee on my ruling, I'll ask for that.

Mr. Ken Epp: Does this bring down the government?

Voices: Oh, oh!

The Chairman: No.

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A voice: We wouldn't want it to, either.

The Chairman: So I'm going to make the ruling that the Reform amendment is out of order, but I leave it to you to ask for a challenge of that.

Mr. Werner Schmidt: I would challenge that, Mr. Chairman.

The Chairman: Okay, so those who are in favour of the chair's ruling on that amendment, please?

Mr. Ken Epp: Remember, this isn't a whipped vote. That's why I asked that question.

The Chairman: I see eight in favour. And against the chair? Okay, thank you very much.

An hon. member: You didn't even vote against!

The Chairman: The chair's ruling is upheld.

Now I'm going to put the question on clause 2, colleagues.

(Clause 2 agreed to: yeas 9; nays 3; abstentions 1)

(On clause 3)

The Chairman: We have been given notice of an amendment by Mr. Bernier.

Is that a point of order, Mr. Epp?

Mr. Ken Epp: Have you voted on whether or not clause 2 stands then as amended?

The Chairman: Clause 2 carries.

Mr. Ken Epp: Well, you didn't ask.

The Chairman: That's what the vote was all about.

Mr. Ken Epp: No, the vote was on whether or not we sustained the chair on moving our amendment out of order.

The Chairman: No, that vote was already taken on a show of hands. The roll call vote was on clause 2.

So on clause 3, we've received an amendment from Mr. Bernier. I'll give him a moment to speak on that first, and then I believe the parliamentary secretary also wishes to comment.

So Gilles, please speak on your amendment to clause 3.

Mr. Gilles Bernier (Tobique—Mactaquac, PC): Thank you, Mr. Chairman. It's an easy one.

Right now, as it stands, if the Royal Canadian Mint wants to take any coin or a special coin out of circulation, they need the approval of Parliament. Under this new bill, if the Mint wanted to take a coin out of circulation, they would only require cabinet approval, which takes some powers away from members of Parliament.

We're here to do a job. We're here to represent all Canadians. I feel it should stay as it is right now, that it should be up to Parliament to decide if the Mint should take this coin out of circulation, not just the cabinet.

The Chairman: Thank you, Mr. Bernier.

Ms. Parrish.

Ms. Carolyn Parrish: My understanding of the amendment is that it still gives the officials of the Mint the ability to change characteristics on a coin without going to Parliament, but in fact taking a coin out of circulation must come to Parliament. On that basis, the government agrees, and the executives of the Mint have advised us that this isn't a problem. So we will agree with this amendment.

The Chairman: So I'll first call for a vote on Mr. Bernier's amendment, which the parliamentary secretary has indicated is acceptable to the government.

(Amendment agreed to) [See Minutes of Proceedings]

(Clause 3 as amended agreed to)

(On clause 4)

The Chairman: I believe we have received an amendment to clause 4 as well, which on my list is R-2.

I will nonetheless give the Reform members a chance to say a few words about it, but this amendment will be ruled out of order for the same reason that the first amendment to clause 2 was ruled out of order, in that the current act provides for the matters raised by the Reform amendment.

Werner, did you want to say anything about that? Do you want to go through the same process as we did before?

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Mr. Werner Schmidt: Mr. Chairman, you've ruled once. I know when I'm beaten.

The Chairman: Okay, so having ruled the Reform Party amendment out of order, we shall go straight to clause 4.

(Clause 4 agreed to on division)

(On clause 5)

The Chairman: Coming to clause 5, we have a Reform motion, which you'll be happy to hear is not out of order.

Mr. Werner Schmidt: The others weren't out of order either.

The Chairman: Werner, did you want to speak to to your amendment to clause 5, please?

Mr. Werner Schmidt: Yes, Mr. Chairman, I would.

Getting a range in here from nine to eleven directors is a very decent provision, but the rationale was that the flexibility should be there to decrease costs. If you're going to decrease costs, why not just put it at nine? That's going to reduce the costs. Therefore, I was going to make the job of the board of directors easy and say we'll just have nine members, including the director, the Master of the Mint, and the chairman.

The Chairman: Ms. Parrish.

Ms. Carolyn Parrish: My understanding is that the Mint would like to retain some flexibility. They're aiming towards nine, but they'd like to be able to move in that direction gradually. So the government will not support the amendment, although the spirit of it is excellent. We're hoping the Mint officials take it into consideration that they work towards nine, but we'd like to leave them that flexibility.

The Chairman: On that same question, we'll go to Gilles, then Ken.

Mr. Gilles Bernier: My understanding, Mr. Chairman, is that there are already eleven.

A voice: That's right.

Mr. Gilles Bernier: That's not going to change. Right now they have ten directors, plus the chairman and the Master of the Mint. Is that the way it is?

Ms. Danielle Wetherup: Nine.

Mr. Gilles Bernier: Yes, it's nine plus two. So what's changing? That's the part I'm mixed up about, because to me, it's still going to be eleven at the end.

The Chairman: We'll ask the Master of the Mint to make a comment on that and then we'll go to you, Ken.

Ms. Danielle Wetherup: Although the board of directors number at this particular time is eleven, we only have nine board members, including the chairman and the CEO.

The reason we want to have the flexibility is this. From analyzing what is happening throughout the boards, we've seen that the trend is to have between eight and fifteen. We feel that for the purpose of quorum, if we have a director who has health or personal problems or whatever, at times we might need the flexibility to increase to eleven. But it is not something we would recommend to the minister on a normal basis.

We have recommended to the minister, for instance, that if this amendment is passed, we maintain the number nine. We're quite comfortable at this stage, with the board we have and with the competence they have, that it can operate in a judicious and thorough fashion. It is just to give the flexibility, in case of circumstances that we cannot anticipate right now.

The Chairman: Thank you, Ms. Wetherup.

Ken.

Mr. Ken Epp: Before I enter into debate, may I ask a question? When you say you presently have nine, is that nine including the master?

Ms. Danielle Wetherup: Yes.

Mr. Ken Epp: So you're really in breach of the present act right now, then.

Ms. Danielle Wetherup: Well, you can appoint. The government is searching for replacements.

Mr. Ken Epp: Yes, I shouldn't say breach. You're short of what this says.

Ms. Danielle Wetherup: We're short, yes.

Mr. Ken Epp: I would like to use my persuasive arguments to change at least two of the people over on the other side there to think about this. If the object is really to reduce the numbers, then to have an amendment that says there shall be nine members, including.... That makes a lot of sense.

Secondly, there is a potential here for manipulation of decisions, which rather troubles me. This is the greater argument. You know how we were all offended, including everybody in this room, I'm sure—perhaps minus one—when Brian Mulroney wasn't happy with what was going to happen in the Senate and decided to suddenly appoint eight more, whose only qualifications were that they could raise their hands and stand in favour of a vote on the GST.

• 1135

Some hon. members: Oh, oh.

Mr. Ken Epp: Of course the Liberals at that time were incensed that this was happening, and so were Canadians across the country. I venture to say that was one of the reasons the Conservatives didn't do that well in the next election.

Mr. Tony Ianno (Trinity—Spadina, Lib.): Is this a history lesson?

Mr. Ken Epp: No, this is a principle. In order to achieve a desired outcome, a person stacked the Senate.

The same thing can happen here in this board. If a member of the board—if the Master of the Mint, for example—becomes aware that on a certain upcoming decision, there is not consensus for the decision to be taken, then there could be a rapid move to try to get one or two other board members on quickly, because the range permits it, and thereby achieve a desired result, not necessarily then democratically achieved. That's my argument, and it's a very strong argument.

Especially because of, as you said, the history lesson and how the Liberals were incensed when this happened before, you should take proper measures to prevent that from happening now.

The Chairman: We're going to test your powers of persuasion.

Mr. Ken Epp: Yes, do that.

The Chairman: We're going to first call the question on the Reform amendment.

Mr. Benoît Serré (Timiskaming—Cochrane, Lib.): I would like to say a word.

The Chairman: Oh, I'm sorry. Go ahead, Benoît.

Mr. Benoît Serré: Very short and sweet, with all due respect, the Master of the Mint is not Brian Mulroney.

Mr. Ken Epp: No, that's true.

The Chairman: Thank you for that, Mr. Serré.

(Amendment negatived) [See Minutes of Proceedings]

(Clause 5 agreed to on division)

(Clause 6 agreed to)

(On clause 7)

The Chairman: We have a Reform amendment. I'll again ask Werner to lead the charge on that one.

Mr. Werner Schmidt: The argument for this kind of flexibility is a strong one, so I want to commend the Master of the Mint for bringing this forward. On the other hand, in consultation with a number of people and also in reference to the comments made by the Master of the Mint at the briefing session, I believe it was last week, it became very clear to me that the need at the moment for the additional money was not there, or it wasn't convincing enough.

Therefore I suggest that we not increase the borrowing power and that we keep the borrowing power where it is now, because it is well within the parameters of what the Mint needs now. It has shown over and over again that it has not gone to the $50 million, and that's good. It's good management that they didn't have to borrow up to $50 million. I don't think we want to extend that beyond the $50 million, because they have not demonstrated that they'll need it. They didn't need it in the past, and they have not demonstrated that they'll need it in the future either.

The Chairman: Thank you, Mr. Schmidt.

The parliamentary secretary and then back to Ken.

Ms. Carolyn Parrish: Just because they haven't needed it in the past doesn't mean they're not poised on the brink of getting into bigger competition with other countries. Remember, our competitors are the mints of other large countries.

With the capital needed for technology, that's a long-term borrowing, and we want to give them the ability to do that without taking away their short-term borrowing.

With the short-term borrowing, if they really are poised on the brink of being heavy-duty competitors with some of the other large minting operations from other countries, we're going to have to give them that flexibility, or else they're going to be stopped at the level they're at right now.

I don't think they're asking without consulting with experts. The experts have told them that if they're ready to go big, they need a little bit more borrowing ability. Particularly since the accountability hasn't changed.... They're not able to just go off on their own, three or four of them or the board of directors, and do this.

Mr. Werner Schmidt: They have that ability in clause 2.

Ms. Carolyn Parrish: No—

Mr. Werner Schmidt: Oh, yes, they do. That's the problem.

Ms. Carolyn Parrish: They still have to be subject to the Minister of Finance and the Governor in Council. They're not on their own.

Mr. Werner Schmidt:

[Inaudible—Editor].

Ms. Carolyn Parrish: You're interrupting me, Werner. I'm going to stop being so nice to you.

Mr. Werner Schmidt: My apologies.

• 1140

Ms. Carolyn Parrish: Anyway, we are very much in favour of this, because it's the dawn of a new era of competition, and they're going to put Canada even more on the map.

The Chairman: Mr. Epp, please.

Mr. Ken Epp: I certainly commend the Mint for being forward-looking and wanting to have flexibility, financially and otherwise, in order to achieve its goals. But its goals and its objects are what I have a big problem with, and of course all of you here are aware of specifically what my problem is.

Inasmuch as the Mint is involved in working toward the minting of coins, the production of coins, both circulation and non-circulation, inside and outside our country, that's fantastic. But we know that right now the Mint is getting into direct competition with an industrial plant, which happens to be in my riding, but I would have the same argument if it were anywhere, including in a Liberal riding.

This particular initiative of the Mint is offensive to taxpayers. A number of people—a large number—have expressed to me that they find it very offensive that the Mint can actually borrow from the consolidated revenue fund, which really is money that, among other things, the corporation that we're now in competition with has paid into in the form of taxes. So the corporation has to pay money in taxes, and then the competitor—we're talking about competition here—can reach into that money in order to provide capital for growth and thereby directly compete.

We've had all these arguments about whether or not they're competing. Well, frankly, those arguments do not hold water, because one, they're ambivalent. They say in words, “We're not competing”, and yet everybody knows they have intentions of supplying coins—and coin blanks specifically are what I'm talking about—not only to the Canadian market, which is a loss to the Westaim Corporation I'm talking about, but also internationally.

For them to actually have access to taxpayer dollars to further those goals is offensive. We would do well to say, “Okay, you had up to $50 million. We're not going to give you any more than that. You have to arrange your affairs to work within that $50 million.”

Meanwhile, I would still say an overriding consideration is that it's just a wrong-headed decision, when government is so greatly going into privatization, for them to be taking over an industrial process, as they are.

The Chairman: Thank you, Mr. Epp.

Marlene Jennings, then Gilles Bernier.

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I just want to correct a statement you made. Under this proposed legislation, the Mint may borrow up to $75 million from consolidated revenue, on approval from the Minister of Finance or Governor in Council, or from other sources. That means that money does not necessarily come from the consolidated revenue. That's just a little correction.

Mr. Ken Epp: Okay, if I may—

The Chairman: No, no, no.

Mr. Ken Epp: Can't I rebut that?

The Chairman: No, but I can come back to you.

Gilles, then Roy.

Mr. Gilles Bernier: Thank you, Mr. Chairman.

As a former president of a corporation, I understand that you need working capital to be able to work. As a member of Parliament, I know we're all here to represent our constituencies. And as critic for the portfolio of public works and government operations, I'd say we want to make sure the money is put in the right place and the waste of taxpayers' money is stopped.

I've said all along, and I've spoken in the House of Commons against this bill, but if you have a crown corporation.... The Royal Canadian Mint has been successful. Now we have Canada Post where we're seeing that, but it was not always like that.

In any business today, their aim is to make money. We have the perfect example that quite a few years back, if I remember right—and you talked about this when you came in front of our committee—you were approached to buy a business in Germany. By the time you had to do all of your things and had asked permission from Parliament or cabinet or whatever, they had already sold that business to somebody else, and you missed out on that business.

If the crown corporations, which are part of taxpayers in Canada, are in business to make money, we can't lose those opportunities. I always believed that in business, when an opportunity knocks, grab it. So it's not that they need it at the time, but my point is that if in future dealings....

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Let's say it comes across that there is another company somewhere in the world, and it would be up to the Royal Canadian Mint to make the acquisition of that company. By the time they got all our approvals and all of that, they might sell to somebody else. We'll miss the boat again.

As a businessman, I know we don't have that much money. This was not my point, but I don't have anything against the borrowing authority going from $50 million to $75 million. I don't see it as a big thing, as long as the money is put in a good place and as long as the Mint keeps profiting as it's profiting now. It's doing good business, and as long as it's going the way it is....

I'm not saying they're going to use it now, and they said that. Right now it's not needed. It's to make sure that in future business, they don't miss out on deals, as happened before. I would agree to that.

The Chairman: Thank you, Gilles.

Roy, then Ghislain, then Ken for just a short final comment.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman.

I'd like to come back to a comment Mr. Epp made about the Mint competing against Canadian private sector companies. When I put that very question to the Mint officials at our last meeting, Ms. Wetherup categorically stated that the Mint will not be competing with private sector companies in Canada. In fact the more business the Mint gets, the better it will be for Canadian suppliers.

Mr. Epp, in your comments, you said the Mint will be competing against a company in your riding. I wonder if you could state very clearly in what areas and how, and then perhaps Ms. Wetherup would respond to that.

Is that possible, Mr. Chair?

The Chairman: Here or in a separate undertaking?

Mr. Roy Cullen: No, Mr. Epp is going to be speaking next.

The Chairman: Okay, we can ask him.

Mr. Roy Cullen: If you put it back to me, then I'll ask Ms. Wetherup to respond.

The Chairman: Maybe Mr. Epp will raise that when his turn comes shortly. Thank you, Mr. Cullen.

Ghislain.

[Translation]

Mr. Ghislain Lebel: Yes, I was in perfect agreement with Ms. Jennings, which was a surprise for me, but I am not anymore. Things are back to normal.

An hon. member: That's less of a surprise.

Mr. Ghislain Lebel: I think I understood that Ms. Jennings was saying that money would not be loaned to the Mint from the Consolidated Revenue Fund. Nevertheless, clause 21(1) does state that the Royal Canadian Mint may borrow money from the Consolidated Revenue Fund. The Consolidated Revenue Fund is the government. It is not impossible for the money to be borrowed from the Consolidated Revenue Fund. But, I won't make a federal case out of it.

[English]

The Chairman: Mr. Epp, we'll go to you. We're trying to wrap it up, but will you take into consideration Mr. Cullen's suggestion to you? Then we'll ask Ms. Wetherup to finalize.

Mr. Ken Epp: It's a good one, and I really appreciate that question.

I'd like to first of all respond to the statement that they “may”. Indeed they may, and we had that witness here. We know they don't generally use this. Right now, or at least as of last meeting, they owe the consolidated revenue fund nothing. That was the statement, and that's great. But the fact is they may. If we're going to have a competition with private enterprise, then that makes it very unfair. So that was my statement. I'm totally aware of the mechanism of how this borrowing works.

Now, to Mr. Cullen's statement with respect to competition, I don't know whether he has followed this story a great deal or not, but there are two main steps in the production of coins. Well, I guess there are some others beforehand—there's the design and all that stuff—but I'm talking about the actual manufacturing.

The first part is the production of the coin blanks, which really is just an industrial process, very similar, actually, to pressing out washers or making bolts for construction. It is an industrial process, except of course it's very precise. The dimensions are stated very precisely. The weight and the uniformity of the blanks are closely controlled. Then those blanks are taken and pressed with another industrial process in order to emboss them, to give them their monetary value.

Westaim, in my riding, has over 100 people working in their coin-plating plant. When they produce a coin, it's worth probably 5¢, or I don't know what. I've never checked out exactly what they get per coin, but it's really inexpensive.

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But when the Mint gets it, they run it through their machinery—and properly so; it's a Mint operation—to stamp the embossing on that coin and give it its value. Now suddenly that coin is worth $2, or $1 if it's a loonie.

By building the new coin-plating plant in Winnipeg, the Mint is directly competing with the industrial process of producing the coin blanks, and that is unequivocal. If it weren't so, then I would have not a thing to say. As a matter of fact, if the Mint had not been building this plant in Winnipeg to directly compete with the plant in Fort Saskatchewan, I would have probably had no objection to increasing this $75 million limit as a strength for the Mint, recognizing that they probably won't use it unless they really, absolutely need it. Then I would have been in favour of it.

But because of the fact that they've now taken under their operation a direct competition, not only in the domestic market.... You can count on it that the Westaim Corporation will lose pretty well all of the blank productions for Canadian coins, and I would expect that. They are now producing their own. I really doubt that they'll have their own plant bid on a job and ask Westaim to bid on the same job and then take Westaim's over their own plant and have their plant in Winnipeg sitting empty. I really would doubt that.

Mr. Roy Cullen: My question was on international sales.

Mr. Ken Epp: International sales are a big factor, especially in African countries and those in the Far East. They like to deal with other governments. You know that, because you've been to these international trade fairs, these trade missions. They love to have the authenticity of a government.

Even though they may have a different price structure, they are going to be competing, in both circulation and non-circulation coins, on the international market, which is directly a function of this corporation that is in my riding. Very frankly, to me, it's a move to take 100 jobs out of my riding and move them to Winnipeg, and I just object to that. That's not a proper function of the Mint.

Thank you.

The Chairman: Ken, thank you.

We'll have the Master of the Mint comment on the change from $50 million to $75 million, and maybe briefly comment—because I know we've run through this matter before—on Mr. Epp's point.

Ms. Danielle Wetherup: I want to reiterate that this decision was made after consulting financial institutions and also looking at Rothschild's company to give us advice on what would be a reasonable, conservative, and wise borrowing capacity for a company with the equity that we have. We were told that $75 million was reasonable, wise, and conservative, and therefore, as we come here about once every 20 years, I don't think it would be unreasonable to give us the tools we will need for the next two decades.

With regard to Mr. Epp's comment, I want to re-emphasize that Westaim is a supplier. Westaim is one of many suppliers. This year I have bought $98 million worth of coins. Westaim supplied only $13 million worth of those coins. The rest—$85 million—I have bought either in the United States, in Europe, or around the world. Therefore, we are not talking about removing business from a company. We have a demand that exceeds the capacity of the plants in Canada by leaps and bounds.

Also, we have historically produced 700 million to 1 billion coins for foreign circulation. This year we have produced 2.4 billion coins. We went from 700 million to 2.4 billion coins. Our target is 6 billion coins. The capacity of the Mint for foreign circulation will not exceed 2 billion coins, and the capacity of Westaim does not exceed 3 billion coins. We still will be short of blanks.

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So we are not competing. We are just ensuring that there is a secure base for Canadian taxpayers, who will be paying for blanks at a lower cost when they are produced by the Mint.

Thank you.

Mr. Tony Ianno: I have a point of information.

The Chairman: Yes, Mr. Ianno.

Mr. Tony Ianno: Did you say that Westaim has a $13 million capacity?

Ms. Danielle Wetherup: No, we bought from them $13 million.

Mr. Tony Ianno: And what is their capacity? You said $3 billion?

Ms. Danielle Wetherup: That's $13 million that we purchased from them. Their capacity is 3 billion.

Mr. Tony Ianno: Were they not competitive when you had to go abroad to buy?

Ms. Danielle Wetherup: They either were not competitive or could not deliver on time or could not meet the standards required.

Mr. Tony Ianno: And are they doing anything to improve that?

Ms. Danielle Wetherup: I hope they are.

Mr. Tony Ianno: Thanks.

The Chairman: Thank you, Ms. Wetherup, and thank you, Mr. Ianno. I'm going to call the question on the Reform amendment to clause 7.

(Amendment negatived) [See Minutes of Proceedings]

(Clause 7 agreed to on division)

(Clauses 8 to 15 inclusive agreed to)

(Schedule 1 agreed to)

The Chairman: Shall the title carry?

Some hon. members: Agreed.

The Chairman: Shall the bill as amended—and I remind you of Mr. Bernier's amendment—carry?

Some hon. members: Agreed.

The Chairman: Shall I report the bill as amended to the House?

Some hon. members: Agreed.

An hon. member: Great idea.

Some hon. members: Oh, oh!

The Chairman: With that, colleagues, we're done with Bill C-41. I thank you for your attention; it was a great debate. I want to remind you that on Thursday we will have a delegation from the coastal forestry sector. I ask all members to be here to show them a good show of support.

Benoît.

Mr. Benoît Serré: Mr. Chairman, there's a mining lobby day today. There's a reception tonight at 5.30, and I'm sure a lot of you have appointments with members of the mining community. I hope you take time to discuss their issues. It's very important for this country.

The Chairman: Good point.

We're adjourned until Thursday at 11 o'clock.