TABLE OF CONTENTS
Thursday, May 5, 1994
Bill C-27. Motion for first reading deemed adopted 3916
Mr. Speaker (Lethbridge) 3916
Mr. Mills (Broadview-Greenwood) 3919
Mr. Leroux (Shefford) 3920
Mr. Leroux (Shefford) 3928
Mr. Mills (Broadview-Greenwood) 3931
Mr. Lavigne (Beauharnois-Salaberry) 3933
Mrs. Brown (Calgary Southeast) 3937
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine) 3938
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine) 3939
Mr. Leroux (Shefford) 3939
Mr. Leroux (Shefford) 3941
Mr. Tremblay (Rosemont) 3945
Mrs. Dalphond-Guiral 3948
Mr. Harper (Simcoe Centre) 3948
Mr. Gauthier (Roberval) 3953
Mr. Gauthier (Roberval) 3953
Mr. White (Fraser Valley West) 3953
Mr. White (Fraser Valley West) 3953
Mrs. Tremblay (Rimouski-Témiscouata) 3954
Mrs. Tremblay (Rimouski-Témiscouata) 3954
Mr. Gauthier (Roberval) 3958
Consideration resumed of motion 3959
Mr. LeBlanc (Cape Breton Highlands-Canso) 3964
Mr. LeBlanc (Cape Breton Highlands-Canso) 3969
Mr. Leroux (Shefford) 3973
Mr. Leroux (Shefford) 3976
Mr. LeBlanc (Cape Breton Highlands-Canso) 3976
(The sitting of the House was suspended at 5.25 p.m.) 3978
The House resumed at 5.32 p.m. 3978
3915
HOUSE OF COMMONS
Thursday, May 5, 1994
The House met at 10 a.m.
_______________
Prayers
_______________
ROUTINE PROCEEDINGS
[
English]
Hon. Lawrence MacAulay (Secretary of State (Veterans)):
Mr. Speaker, later today I will have the honour of leading a
delegation of veterans to Italy. This pilgrimage will mark the
50th anniversary of the Italian campaign of the second world
war.
Veterans from across the country representing all of the
regiments and units which participated in the campaign will
travel with me to sites throughout Italy. Together we will retrace
the steps of Canadians who fought for democracy in Italy
between 1943 and 1945 and pay tribute to those who gave their
lives for freedom.
The story of the Canadians in Italy is a special chapter in our
history. The first Canadians stepped on to the beaches on July
10, 1943. Well planned and decisive, the successful allied
landings in Sicily marked an important turning point in the
cause of freedom.
Then came 20 long gruelling months of fighting in which our
troops proved themselves time and time again-Ortona, Monte
Cassino, the Liri Valley and the push to the Lombardy plains and
the industrial north of Italy. These fierce battles tested our
Canadians fully and in every case our troops showed their
exceptional ability and determination. Their proud record
brought them respect from friend and foe alike.
All three of our services saw action in the Italian campaign.
The flotillas of the Royal Canadian Navy successfully brought
our troops ashore and, together with the merchant navy, kept
them well supplied. The Royal Canadian Air Force provided
vital air support, bombing strategic enemy positions. The
infantry and armoured divisions of the Canadian Army renewed
our country's reputation as the home of courageous and
accomplished soldiers. The ``red patches'' of our Canadian
Infantry Corps were some of the toughest troops in Italy.
Our troops left Italy and went on to northwestern Europe
where they gained further honours in liberating Holland. But in
Italy the important role they played in driving back the German
army contributed to the downfall of the Third Reich.
I ask all members of the House to pay a very special tribute to
the Canadian veterans of Italy who 50 years ago helped return
freedom to Europe and brought such great honour to our country.
[Translation]
Mr. Maurice Godin (Châteauguay): Mr. Speaker, I would
like first of all to thank the Secretary of State for Veterans for
taking the trouble to pass on to me, within a reasonable time, the
text of his statement.
As the Official Opposition critic, I will be privileged to be
part of that pilgrimage which will take us to Italy, in order to
commemorate the 50th anniversary of the campaign to free
Europe from Nazi control, a campaign in which Canada
participated.
Certainly Canada must remember the incalculable price that
the world had to pay in order to protect rights and freedoms. It
must remember those efforts that were made in that terrible war,
even at the cost of our innocent citizens' life. Veterans are still
here to remind us of the courage that they showed in those
events. So I agree with the Secretary of State that it is important
to make sure that those events are never forgotten.
(1010)
Canada also has other duties toward its veterans. It must never
forget the situation that they are living in today. It seems to me
that their living conditions should be of prime importance, since
that is the best way for us to show our gratitude to those who
fought for the preservation of these values and these collective
interests. If it is essential to commemorate our veterans'
achievements, it is even more essential to guarantee them decent
living conditions.
The Bloc Quebecois is proud to salute all these people who
made sure, 50 years ago, that Italy found the road to freedom.
[English]
Mr. Jack Frazer (Saanich-Gulf Islands): Mr. Speaker, I
want to congratulate the secretary of state for veterans affairs
for taking the lead in organizing this, if I may, pilgrimage to
Italy to recognize the contribution of the Canadian forces who
participated in the Italian campaign.
3916
As has been mentioned, the Canadians landed in Sicily at
Pachino Beach on July 10, 1943. After having assisted in the
conquering of Sicily, they moved up the Italian peninsula. They
were involved in the downfall of the famous Gustav line. On
May 11 they commenced the attack on the Gustav line and four
days later it collapsed.
They moved on to the Hitler line and on May 23 they breached
the line with the loss of 1,000 casualties. This enabled the allied
forces to combine with the American forces who had landed at
Anzio, just south of Rome prior to that. This campaign for the
first time saw a Canadian corps in the field commanded by a
Canadian general, in this case, General E.L.M. Burns who later
became famous as the commander of the first peacekeeping
force recommended by Prime Minister Lester B. Pearson.
Moving up the Italian peninsula, the Canadians fought with
great determination and great capability. At the Guthic line just
south of Rimini on August 25, it took them five days to break
through this last foothold before they moved into the plains of
Lombardy.
By 1945 the Italian campaign had pinned down 27 German
divisions and unquestionably had a great impact on the outcome
of the war with D-Day. During the Italian campaign, some
92,757 Canadians served in the Italian campaign. Of those
5,500-plus were killed, 20,000 were wounded and 1,000 were
taken prisoner.
Canada won three VCs, Victoria Crosses, the highest
commendation during that campaign: Captain Paul Triquet of
the Royal 22nd Regiment, Major Mahony of the Westminster
Regiment and Private E.A. Smokey Smith of the Seaforth
Highlanders.
It is not only appropriate that this return to honour and
commemorate the Canadians who participated in the Italian
campaign should be done, but it is appropriate that all parties
should be represented in it. This is non-political. It is a
Canadian venture and I commend the secretary and the members
of the party who are going to Italy. It is not only right but fitting
that Canadians remember the Italian campaign.
* * *
(1015)
Hon. David Anderson (for the Minister of Finance) moved
that Bill C-27, an act to amend the Income Tax Act, the Income
Tax Application Rules, the Canada Pension Plan, the Canada
Business Corporations Act, the Excise Tax Act, the
Unemployment Insurance Act and certain related acts, be read
the first time and printed.
(Motion deemed adopted, bill read the first time and printed.)
Mr. Ray Speaker (Lethbridge): Mr. Speaker, I wish to
present a petition on behalf of 187 constituents from Lethbridge.
They present the petition requesting that Parliament not
amend the Canadian Human Rights Act or the Charter of Rights
and Freedoms to include the undefined phrase sexual
orientation.
I so present the petition to Parliament.
* * *
[
Translation]
Mr. Peter Milliken (Parliamentary Secretary to Leader of
the Government in the House of Commons): Mr. Speaker, I
ask that all questions be allowed to stand.
The Deputy Speaker: Are the questions allowed to stand?
Some hon. members: Agreed.
[English]
The Acting Speaker (Mr. Kilger): I wish to inform the
House that pursuant to Standing Order 33(2)(b) because of the
ministerial statement Government Orders will be extended by
nine minutes.
_____________________________________________
3916
GOVERNMENT ORDERS
[
Translation]
Mr. Réal Ménard (Hochelaga-Maisonneuve) moved:
That this House condemn the government for its unacceptable delays in
developing and implementing a genuine strategy for the conversion of the
defence industries to civilian production, which would save and create new jobs
in high technology sectors.
At the outset, Mr. Speaker, I would like to remind the House that
if the Official Opposition has felt necessary to use its allotted
day to deal with industrial conversion mechanisms and propose
solutions, as the government will see, it is because we believe
there really is a feeling of urgency. The reason why I raise this
feeling of urgency is that we remember that 10,000 jobs have
been lost in Quebec in the sole sector of defence material
production and in the sector of arms production and that as many
and even more have disappeared in the rest of Canada, where it
is said that 47,000 jobs have been lost since 1987.
Despite the stagnation of markets, despite the urgency of the
situation, the government is making no progress. This
government, in spite of its commitments, and we will come back
to that, has given no real indication of its will to go ahead in that
3917
sector. There was no indication whatsoever in the Speech from
the Throne, nor was there anything in the Budget brought down
recently.
Of course, the difficulties that the defence material and arms
industries are facing encompass much more than the national
market. We of the Official Opposition are well aware, because
we are responsible members, that the difficulties result from
changes which have taken place in the international order. What
kind of reality are we talking about when we deal with arms
production? We are talking here about an international market
worth $450 billion. Evidently, the streamlining, the adjustments
made in these markets affect not only Canada but also Europe
and the United States. I think it would be useful to point out that
since 1987, Europe has lost 600,000 jobs in that sector and the
United States 700,000. If you add that to the Canadian reality, it
is easy to understand that the change is world-wide.
(1020)
This is even more of a concern because jobs lost in the area of
armament or defence production are high technology jobs; many
studies show that jobs found in the area of defence equipment
and military weapon production generally are better-paying for
the employees. It is even said that these jobs pay 36 per cent
more than comparable jobs in civilian industry.
Mr. Speaker, the causes of that streamlining are well-known.
It began with the fall of the Berlin wall, which had been the
symbol of the cold war for two generations. Because of the cold
war various nation-states, including Canada, ratified a number
of treaties providing for a limitation of the production of both
nuclear arsenals and conventional weaponry. It is easy to
understand that limitation treaties mean less contracts for
producers.
Let us take as an example our neighbour to the south. Five or
six years ago, when George Bush was President, the Pentagon
was told to prepare for a significant reduction of its purchasing
power. Even though it was the main source of defence contracts,
the Pentagon will nevertheless have its purchasing power
reduced by 27 per cent between 1993 and 1997. Of course, the
whole thing will impact on Canada and Quebec since we are
closely linked to the American defence market.
We must note also that arms deliveries to Third World
countries dropped by more than 61 per cent between 1988 and
1992. Up to now, rationalization efforts have mainly focused on
ground-based systems. Contracts for such systems dropped by
about 77 per cent. Also, naval contracts, for which Quebec had
some expertise, were reduced by 26 per cent. Thirdly, the
aviation industry, with an important production centre based in
Montreal, registered a 23 per cent drop in its contracts.
This is why the government should urgently propose a real
conversion strategy. We should not forget-and we will keep
reminding the government and the people listening to us-that
while I speak, jobs are being lost and, despite the disappearance
of tens of thousands of them, the government has not offered the
slightest help, it did not propose anything to companies willing
and even anxious to undergo conversion.
Mr. Speaker, it might seem strange, but Canada, a medium
power, a peace-loving country, which never was the main
belligerent in any war, was nevertheless an important producer
of arms and auxiliary equipment. In fact, Canada ranks eighth in
the world when it comes to arms production.
As for arms exports, we are ranked fourteenth in the world. I
mentioned the difficulties experienced by the American market,
and this is very relevant for Canada and Quebec since 70 per cent
of the Canadian production of arms and military equipment is
sold on international markets, and 80 per cent of that on the
American market.
(1025)
Therefore, the situation is worrisome, it is here to stay and it
is structural. We cannot pretend that Canadian and Quebec
defence industries are going through a temporary crisis. All
indications point to a structural crisis caused both by the
international situation and problems more specific to North
America.
If the Official Opposition chose to have this debate, it is not
only because the stakes are very high for English Canada, but
mostly because the streamlining process is of the utmost
importance for Quebec.
It concerns Quebec to the highest degree since there are some
650 companies, either prime contractors or subcontractors,
which are directly involved in contracts awarded by the
Department of National Defence. Quebec firms had gained
expertise in four specific areas, namely communications
electronics, aerospace, shipbuilding, and ammunition.
In spite of this expertise-which had been developed mainly
through DIPP as we will see later-and Quebec's know-how in
the four sectors I just mentioned, 10,000 jobs have been lost in
Quebec since 1987, due partly to the international situation. As
you can appreciate, the loss of 10,000 jobs in a market like
Quebec is, to all intents and purposes, absolutely catastrophic. I
say catastrophic, because these jobs, as was mentioned earlier,
are in the high-tech field and if the conversion program is not
implemented, there is no indication that Quebec will ever get
them back.
As a member from Montreal, one of, if not the nicest city and
region in all of Quebec and Canada, I must point out that the
Island of Montreal is the centre of defence arms and materiel
production.
3918
Mr. Speaker, I want to back up my statements and focus on
specifics, so that the government cannot accuse us of being
vague and of not basing our demands on concrete facts. As you
know, I have always made it my duty when speaking in this
House to deal in specifics. Therefore, the following facts are
for the benefit of the Minister of Industry who is honouring us
with his presence today and who, I am told, will be taking part
later in the debate. I would like to remind him that Montreal
is affected most of all by the current crisis since 60 per cent
of all contracts awarded either go to or are carried out in the
Montreal area.
For example, between 1987 and 1992, a total of 15,000
sole-source contracts were awarded annually to the Montreal
region. For those who are familiar with this issue, and I could
name names because there are people in Quebec who have
studied the conversion question, Montreal is considered the
leading centre of military production in Canada, accounting for
26 per cent of all contracts awarded in the country.
We are shocked, saddened, worried to see the Montreal
region, a region which has had its share of hardship these past
few years-Montreal was said in the committee on social
programs reform to have become the capital of poverty-suffer
a 40 per cent overall decrease in economic activity from the
defence industry over the past six years, while for the whole of
Quebec, the decrease was 25 per cent.
So, there is a sense of urgency, an urgency that makes all the
more unacceptable the attitude and inaction of a government the
intentions of which in that respect are yet to be known.
(1030)
But, in the past, back in the days when they were in
opposition, the Liberals, the big guns of this government, had
made firm commitments in terms of reconversion. They were
aware of the need and supported this necessary transition. This
transition stage is required because the good old days when
governments could award lavish defence equipment contracts
are gone, for ever.
If I may, I would like to quote three former members of Her
Majesty's loyal opposition who had endorsed wholeheartedly
the conversion process, but now seem conspicuously silent. I am
referring to the current Minister of Human Resources
Development, Mr. Axworthy, the current Defence Committee
Chairman, Mr. Rompkey, who was the opposition's Defence
critic at the time, and Mr. Jim Peterson, who was their Industry
critic.
The Acting Speaker (Mr. Kilger): Order! I would simply
like to remind all members that whenever they refer to other
members, the proper practice is to call them by their official
titles, for example parliamentary secretary, or member for
such-and-such a riding.
Mr. Ménard: Mr. Speaker, I apologize for this breach of
order. But you will still allow me to quote these three members
whose constituencies I do not remember.
These people were saying, ``We must expand the mandate of
Industry, Science and Technology Canada's $200 million DIPP
from developing defence technology to helping the industry
convert and diversify into areas such as environmental
technologies and high-tech peacekeeping technologies''.
That is smart thinking, Mr. Speaker. And that is what we in the
Official Opposition are demanding. We are telling the
government that there is an urgent need to act on defence
conversion and that this could be done by adjusting a program
not currently used for conversion. However, if the government's
intentions are serious, there is a program that would allow us to
make conversion budgets available to businesses. It is the DIPP
or Defence Industry Productivity Program.
We must never forget that this program, which in fact has
promoted research and development, has been in place for over
20 years. It enabled businesses to conduct market studies and
refine technologies mostly aimed at the defence industry. We
think that the program which kept Canadian industries
somewhat dependent on defence markets should now help them
to pull through.
We say to the government that DIPP, which already had large
budgets, $300 million in good years, but today it is more like
$225 million, we say to the government that this is the vehicle to
use. We will not accept an argument that DIPP is already being
used for conversion. Because if they tell us that, we say to the
government, ``If this vehicle is really being used for conversion,
come with us and meet various companies in the Montreal area
that are having these problems. You will see that with these
funds, they cannot really convert.''
We say to the government that any conversion solution must
involve regionalization, given the obvious fact that Canada's
military industries vary enormously from one region to another.
Each region has developed its own military specializations, so
that each regional specialization has its own needs.
Obviously, an industry that makes munitions will not have the
same needs, the same process, the same expectations for
conversion as one that makes telecommunication satellites, for
example. The Canadian reality is that each region has developed
a very specific type of defence equipment production.
We must keep in mind that this debate is about the future and
shows how forward-looking the Official Opposition is. I see my
colleague opposite nodding and I am pleased to see that he
agrees that we see things right.
(1035)
One must never forget that conversion is a medium-term
process, lasting five, six, or seven years. Now is the time to lay
the groundwork for conversion. We must recognize that certain
regions are further ahead than others in their reflection process,
3919
because they know, and this is a basic point to keep in mind, that
no conversion is possible without hard and constant
co-operative work. In Quebec, we have come quite a long way in
this regard.
We have come a long way with this co-operative work
because, immediately following the recession of 1981, this
approach to economic recovery was taken into consideration by
the major players in Quebec, including the labour unions,
starting with the CNTU, which just this last year organized a
seminar on the subject. Even the Conseil du patronat, which can
hardly be suspected of having any sympathy for sovereignty,
apparently has easy access to ministers. There is also the current
Quebec government; we are not talking here about some obscure
future separatist government, but rather about a conventional
federalist government ready for commitment, and which is
asking the federal government to give its businesses access to
available funds for conversion.
The government will have no choice because of the direct
relationship that exists. That is precisely what the Official
Opposition is attempting to show today, namely that there is a
direct connection between the dependency of Quebec businesses
on defence industries and the lay-offs now taking place.
I will give you six very real examples which should prompt
the government to act much more speedily than it has up until
now. I could have given about 50 examples, but I will only
mention six, because of the limited time at my disposal.
Between 1990 and 1994, Bendix Avelex, an avionics company
which depends on the military market for 70 per cent of its
production, laid off 35 employees. As you will see, the more
dependent companies are on the military market, the more
massive are the lay offs.
Expro, which you will soon hear about in great detail, since
the hon. member representing the region concerned will later
make a presentation, makes ammunition. That company is also
dependent on the military market for 70 per cent of its
production and laid off 300 employees.
Héroux, an aeronautics firm, is dependent on the military
market for 80 per cent of its production and had to lay off 131
people.
MIL Davie, which is well-known and which we talked about
several times in this House, depends on the military market for
91 per cent of its production and laid off 2,740 employees-yes,
Mr. Speaker, 2,740. This is unacceptable! It is a shame and a
social disaster!
Oerlikon, which is well known, builds ground-based and
missile systems. It is 100 per cent dependent on the military and
had to let go 410 employees. As for Paramax, it is 100 per cent
dependent and it laid off 1,000 people.
I do not know if the Minister of Industry is as shaken as I am,
but I can hear him. I share his feeling of helplessness and I offer
him my co-operation and that of the Official Opposition. We are
telling this government that action is urgently needed. Stop
procrastinating and let us work together; we, the Official
Opposition, are willing to co-operate.
In the past, government members have said that we were only
concerned by issues affecting Quebec, that we did not have a
national vision and that we did not truly assumed our role. Now,
this is an issue which concerns all regions of Canada, and
particularly Quebec. And what we are saying is that, if the
government is really serious about this, it should recognize that
it does have that instrument, which, if improved, could help us
to truly support businesses that really want to proceed with a
conversion process. And let me remind those who are listening
to this debate that this instrument is the Defence Industry
Production Program or DIPP. We will see how serious the
government is, since important budgets are involved in this
program; we are speaking of $225 million.
For the program to be efficient, this budget must take into
account local factors as well as local stakeholders, the main
people concerned, who must work together and cooperate to
achieve conversion.
You indicate to me that my time is up, Mr. Speaker. I simply
want to tell the government that we want nothing more than to
co-operate on this issue because we truly and honestly believe
that time is of the essence.
(1040)
[English]
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry): Mr. Speaker, I begin by saying through you to the
member for Hochelaga-Maisonneuve that we welcome this
debate today and we welcome the spirit and tone that he has put
forward in his remarks. We too are going to be constructive and
specific in responding.
By the way, I do share the hon. member's view that his riding
in Montreal is one of the most beautiful parts of our country.
One day when he comes to Toronto he will share the view that I
have of my city.
The conversion of military technology to peacetime use is
something to which we in this government are committed. The
member cited many examples of how people through layoffs, et
cetera, were in a disastrous state, unemployed, highly skilled
people. We are aware of that. We are moving.
We have to expand our thinking and maybe look at new types
of instruments to help in this conversion. I want to give a
specific example. Amortek is a company in Stratford, Ontario,
that made military fire trucks. About a year and a half ago the
need for military fire trucks was really not there. It converted to
3920
making an environmental garbage truck that handles wet, dry,
and recyclable garbage all in one unit.
It used its skilled labour to do the conversion. It did not get
any grant money from the Government of Canada. What it did
was enhance its marketing team by one or two people and
participated in a few more trade shows in South America and the
United States. It used the resources of the Export Development
Corporation for credit lines and guarantees and a combination of
those instruments, plus its banks are becoming a little bit more
receptive to this type of environmental technology that is
exportable. Right now the company has so many orders it cannot
fill them.
I think it important that we communicate to those people who
are in this conversion mode that they cannot just rely on the old
system of funding because we are in a very difficult fiscal
framework and we have all acknowledged that. I know the
member acknowledges that.
Could the member not see that we could use the existing
instruments like the Export Development Corporation, the
chartered banks and some of the new creative funds they have
and the enhanced marketing services of the export marketing
development unit of the department of the minister of trade.
Maybe through a little bit more creative thinking we could
bridge that transition and that could help us get people back to
work a little more quickly without adding further to the deficit
and debt.
Could he consider that as a possible option?
[Translation]
Mr. Ménard: Mr. Speaker, as you know, it is always a
pleasure to debate with the member opposite, probably the most
faithful listener I have, but I think the hon. member is mistaken
on several counts. First of all, I specifically stated, at the
beginning of my speech, that the tightening of the market is
closely linked to international conditions. Now, I feel the
question put by the hon. member is somewhat partisan, since it
implies that the businesses I talked about are a little passive, that
they depend on the government and are not really unhappy about
the whole situation.
(1045)
I found that a bit strange, Mr. Speaker. Do you not think that a
business which has been operating on a specific market and
which has to lay off 600, 700, 800, 900, or 1,000 workers would
have, all by itself, considered developing a strategy plan to find
some new niches and some new markets?
In fact, in some cases, businesses have, on their own,
presented the government with a conversion plan. In a number
of cases, the government was provided with conversion plans,
and there is supporting material to prove it. However, according
to professor Bélanger, whom I hope the hon. member will have
the privilege to meet some day, there are structural obstacles to
conversion.
First, in many cases, these firms do not know the new markets
as well as the ones they used to operate on. Very often, in order
to proceed with the conversion process, they need to change
their production technology, which requires significant capital
expenditures, something they cannot always afford.
But should this whole debate not rather deal with the fact that
the DIPP, for historical reasons which cannot be denied, tried to
maintain in a state of dependency a number of businesses
involved in research and development in the military sector? Is
it not socially responsible for the Official Opposition to
argue-notwithstanding trade fairs, which I know the hon.
member likes a lot-that there will be no conversion without a
comprehensive approach, without the government's support?
Nobody says that that conversion process has to be the
exclusive responsibility of business; no company says that
either. Professor Bélanger interviewed people from over 80
companies. They are ready to play their part, they are aware that
there is an element of strategic planning involved, and they also
know that it is incumbent upon them to take the first step. No
company denies that.
But we have to recognize that the government has a
responsibility. It must take a comprehensive approach to this
issue, provide a tool that will give impetus to the process and
make funds available because of the studies that often have to be
conducted. I am not talking here about annual funding. I am
talking about funding a process over five to seven years.
I partly agree with my hon. colleague, and I will conclude my
remarks by saying that, yes, businesses must take the initiative
of looking for new markets, but they have the right to expect the
government to provide them with a tool, and we are telling the
government that the tool they need is the DIPP.
Mr. Jean H. Leroux (Shefford): Mr. Speaker, first, I would
like to congratulate the hon. member for
Hochelaga-Maisonneuve for the soundness of his remarks.
We, in the Bloc Quebecois, consider the conversion of
defence industries to be of great importance and we think that
government members too, when sitting in the opposition,
believed that to be important. It seems that changing sides in the
House also means suddenly changing argument.
So I have a question for my hon. colleague. I would like him to
explain the position of the Bloc Quebecois and also the different
stages it would be important to go through. Government
members opposite keep saying they want to listen; so I hope that
at some point, after we have explained to them one last time
what it is they should do, they will stop listening and finally take
action.
3921
The Acting Speaker (Mr. Kilger): The hon. member for
Hochelaga-Maisonneuve has only a few minutes left. He
should keep his answer short.
Mr. Ménard: Mr. Speaker, in school I was always told I had
an exceptional talent to sum things up. My colleague is quite
right when he says we should remind the government that three
main steps should be taken.
Mr. Speaker, is the hon. member across the way trying to
interfere systematically so I have less time to give my answer?
So, there are three main steps.
First of all, the government should make tools available to
businesses which, in many cases, have specific conversion plans
in mind.
Mr. Speaker, I do not understand what the minister is saying.
(1050)
The Acting Speaker (Mr. Kilger): I regret to interrupt the
member, but the period reserved for questions and comments is
now over. The Hon. Minister of Industry has the floor on debate.
[English]
Hon. John Manley (Minister of Industry): Mr. Speaker,
when the hon. member suggests that we make tools available to
these companies, what he really means is a cheque book. That
perhaps is where I should begin.
I would like to make a few general remarks about what the
hon. member for Hochelaga-Maisonneuve has said this
morning. I do welcome this debate. It is an opportunity for us to
talk about an important aspect of industrial policy, that being
defence conversion, but I want to put it in the broader context.
I have a few comments though arising from the hon.
member's remarks. First of all, let me say how pleased I am that
the Bloc Quebecois members are interested in talking about
defence conversion. Realizing that their political objective is to
create a new country, one which would have no army, navy or air
force, one would have expected they would be anticipating
massive expenditures on defence itself. If they succeed in their
objective they may as well anticipate that. Therefore defence
conversion is not what they should be concerned about, but in
fact the creation of a defence industry.
Second, it occurs to me from listening to his remarks that he
described the loss of jobs in this sector as a social catastrophe. I
agree with him, if he means that any unemployment is
catastrophic to the persons involved.
We have experienced over the last number of years many job
losses in Canada in many sectors. We have seen it most recently
in the fisheries in Atlantic Canada. We have seen it, although it
is recovering well right now, in the automotive sector in
Ontario. We have seen it in industries in western Canada. As we
live at the moment with 11.5 per cent unemployment, 1.5
million Canadians out of work, for those people it is a
catastrophe.
I suggest however it is no greater catastrophe for those in the
defence industry than for those in any other industry. What we
really are talking about-
Some hon. members: Oh, oh.
The Acting Speaker (Mr. Kilger): Order. I know that
members feel very strongly about these issues. Of course this is
the place for that debate to take place, but I think we all want to
do it in such a fashion that we maintain the respect of all our
constituents.
In all fairness to members on either side of the House, given
the strong views, I would ask members to allow one another to
debate and I will do my utmost to maintain that debate in the
most respectful fashion.
Mr. Manley: Mr. Speaker, I have three children at home. I am
used to talking when others are talking, so it is not really a
problem for me and there are children here too.
The other comment I make arising out of the remarks of the
member for Hochelaga-Maisonneuve is the notion which
appears to underlie his basic thesis which is that we should give
money to individual firms in order to assist them in converting.
He mentions DIPP and that is an important tool of industrial
development. In fact it has historically given money to firms. As
we revise DIPP, and I will say more about this in a few moments,
what we have been doing is essentially making DIPP a
refundable, repayable contribution to assist firms in developing
products for markets.
There is quite a distinction between a strategic approach to an
industrial sector and one which focuses on bailing out particular
firms by writing cheques for taxpayers' money.
As we talk about defence conversion most members will agree
that what we have here is a very complex process. I do not think
there are simple answers or formulas. Furthermore Canada's
position with respect to defence conversion is unique among
industrialized nations. The hon. member for
Hochelaga-Maisonneuve and many of his colleagues need to
be informed about exactly what it is we are attempting to do. Let
me try to provide some perspective on just where we are coming
from in Canada in this area of industrial conversion.
(1055)
In the red book we stated that many opportunities are
available for industries which recognize and exploit the trends
in global markets. We knew that the time had come to help
defence industries to make the transition from high tech military
production to high tech civilian production.
3922
[Translation]
We are determined to achieve this objective. For that matter,
we have made great progress in developing an effective strategy.
[English]
Our defence conversion program has three major
components: first, redefining Canada's defence policy; second,
rationalizing the military infrastructure in Canada; and third,
rationalizing the defence industrial base. Really what we are
talking about here is the third of these points, rationalizing the
defence industrial base.
[Translation]
Our defence industry is largely composed of fully diversified
businesses, most of which depend only moderately on military
markets. For these businesses, the rationalization of our defence
sector does not pose major problems. Sales of military material
will be maintained at a relatively high level, but companies like
CAE Electronics, Canadair and Spar will be able to make gains
on both commercial and military markets.
[English]
We have a second group of companies capable of further
diversification. These companies have the technology, skills
and the manufacturing base to achieve long term growth in
non-military markets. However, they may need assistance in
analysing the most advantageous areas for diversification. This
is where a broadening of the criteria for the defence industry
productivity program, DIPP, will be particularly applicable.
We have a third group of companies. They are the strong niche
players in the global military market. They fully expect to
continue to grow and prosper in this market and nothing will be
gained from attempting to discourage this growth. While they
may remain primarily defence oriented they nonetheless are
innovative and contribute to the advancement of technology
which often leads to substantial commercial applications.
Finally, we have a fourth group of companies whose futures
are very much in doubt. These are companies that are heavily
dependent upon the domestic defence market, companies with
little or no readily commercialized technologies. They have
little export potential and may not be able to compete in the
international marketplace. Conversion for these companies
would likely be cost prohibitive and their futures must be
managed on a case by case basis.
While we can make predictions about each of these groups of
companies and their future prospects for growth and
diversification, there are very few certainties. What it really
boils down to is the fact that the future of defence companies in
Canada will hinge on the defence market itself and the ability of
companies to diversify into other product lines.
The future demands of the domestic defence market will not
really become clear until we have completed a defence review.
That is not something which is done overnight or even over a
couple of months.
[Translation]
It is clear that we cannot wait for the completion of the
defence sector review. Canadian businesses cannot wait. We are
all very well aware of the fact that competition is intensifying on
international markets; no one can afford to wait for the results of
a review to be published. Therefore, the government must go
ahead, resolutely.
[English]
Our main objective is to reduce the dependence of Canadian
firms on defence sales. We want to encourage a greater focus on
research and development, on dual use technologies to support
product development and on improving market access.
(1100)
In pursuit of these objectives there are a number of principles
that I believe will guide us toward success.
First, the process must be industry led. It only makes sense
that industry is in the best position to determine how it will meet
the challenges and recognize the opportunities presented by
defence conversion. There is a role for government in all of this,
and it is a very important role. The government can facilitate
that conversion by providing some assistance in identifying
market opportunities and removing barriers to growth.
Second, defence conversion should not imply massive
subsidies. There is no room for bailouts, for attempting to rescue
companies that have suffered through market disruptions.
Simply put, such an approach would be fiscally irresponsible
and in the long term would do no one any good. What resources
the government does have at its disposal-and I do not think I
need remind anyone in the House that those resources are
limited-should be focused on support for entering new
promising markets. They should be focused on innovative
projects and initiatives that will continue to contribute to
economic growth and the creation of high value employment.
[Translation]
The government is aware that its primary responsibility is to
the citizens of this country, the taxpayers of Canada. They would
not accept massive financial help programs because it would go
against the present thrust which is to try and reduce our huge
deficit. But, they need not worry about that, the government will
not launch such programs.
[English]
To that end we will be utilizing to the extent possible existing
programs. That does not mean they will be infused with a flood
of new funding. We are looking at what works, what does not
work, and what can work better. We are asking industry to be
innovative, and we intend to be equally innovative in the design
of policy and program initiatives.
3923
[Translation]
If we ask the Canadian industry to diversify its activities, if
we exert pressure to achieve conversion, we must help
companies respond to the needs of the military as well as the
requirements of the commercial markets.
[English]
In order to do this we will work to introduce early into the
procurement process industry views that can shape
specifications to meet military requirements and diversify into
production for commercial requirements.
Simply put, there is no room for the one-off, one of a kind
military products of the past. No one can afford them. They do
not fit into any logical equation for promoting competitiveness,
innovation and economic growth.
It is no secret that governments, any governments, are always
ripe for a little simplification of procedures and administration.
This is an area we are looking at very closely. It is an area where
changes will have to be made. The system as it exists now in
Canada makes it difficult, if not impossible, for companies to
support efforts in both military and commercial markets.
In fact the U.S. is already moving in this area and we will be
following in the same direction.
I have a couple of final points to make, if I may. In no way do
we intend to pursue a course that is defence conversion merely
for the sake of defence conversion. By that I mean that the
government has no intention of subsidizing the conversion of
defence industries into commercial activities and commercial
sectors that are already effectively serviced by existing firms.
This is one of the dangers in the argument that was being made
by my friend from Hochelaga.
[Translation]
I will not go any further into that, but I will just point out that
when people try and criticize the government for not doing
enough to help defence industries switch to civilian production,
their arguments only underline the fact that this is a complex
question, that many did not take the time to research fully.
(1105)
[English]
No one gains when the end result of conversion is oversupply
in another commercial sector. In fact the results would likely be
more damaging than they would have been had there been no
conversion effort at all.
[Translation]
Finally, job creation is still an absolute priority of the
government and yes, certainly, the process of conversion of
defence industries could result in the creation of new and very
interesting jobs. However, we should not forget that this will
lead to disruptions within the labour force. The market will take
care of some of the affected workers and many of the highly
qualified defence industry workers will find jobs in other
sectors.
There is no doubt, however, that there will be some problems
with less qualified workers. In those cases, to help the workers
involved, the government will use, as much as possible, its
industrial and community adjustment programs as well as
programs geared to human resources.
[English]
I only mention this because it is an element of the whole
question of defence conversion that is often ignored by those
who wish to give advice or criticize. There are some knowledge
gaps out there. There may be some knowledge gaps in the
House. Over the course of the debate I hope we can perhaps fill
some in.
For my part I am eager to hear the recommendations and
suggestions of opposition members on this matter, especially
those who have within their constituencies companies or sectors
that have been affected by the changes in the international
environment, particularly with respect to defence acquisition.
[Translation]
I should add that when we talk about the private sector we
should remember that the shareholders and the managers of the
companies also have obligations.
[English]
Shareholders and managers of companies have an obligation
to invest in their own strategic development, to invest in
marketing and to foresee changes that are coming.
We stand here today in 1994, almost five years after the Berlin
wall fell. The fact that companies in the defence sector face
significant challenges should not come as a surprise this year or
last year to those companies. Government is prepared to work
with companies that are trying to make conversions, trying to
develop products that have dual use, or trying to find new
markets for their goods.
Let us never lose sight of the fact that governments do not
solve problems for firms. Firms, individual enterprises and
individual shareholders have a big responsibility to help solve
their own problems.
[Translation]
Mr. Réal Ménard (Hochelaga-Maisonneuve): Mr.
Speaker, I will try to keep my cool, but it will not be easy. I will
do it out of respect for the Chair.
3924
I feel I have been watching excerpts from a movie which got
rave reviews in Quebec. It was called ``The Unbearable
Lightness of Being''. With all due respect to the minister, I
cannot understand his discourse. No later than March 26, 1993
A.D., Mr. Speaker, the Liberals, who were then getting ready
to assume power, were calling for the solution we are offering
in part today.
Because the Official Opposition claims that the government
must play an important part in the conversion process, the
minister began his remarks as follows: ``The hon. member for
Hochelaga-Maisonneuve-yours truly-suggests that the
government make its cheque book available to these
companies''. In part, Mr. Speaker, in part. We do not see
anything wrong in doing so; as a matter of fact, we believe it is
acting responsibly. Why do we think that the government should
give them money? Because, through DIPP, these companies
have become dependent on government funding.
(1110)
Does the minister not agree that most companies facing the
difficult task of converting, have adopted or presented the
government with their own conversion program? Today, the
minister follows a laissez faire approach and tells us that it is up
to the private sector to adapt. Yet, the Liberals were even more
interventionist than we were, because in addition to
recommending adjustments to the DIPP, they demanded the
following in the second part of their press release entitled
Liberals Announce Defence Conversion Policy issued on March
26 of 1993: ``The establishment of an Economic Conversion
Commission, with the participation of industry and labour, to
facilitate and coordinate the process of conversion in the
100,000-job defence industry''.
One would think from this press release that the Liberals
agreed with our position that state intervention was essential to
the conversion process. Therefore, I cannot understand the
government's lack of commitment or why it has backed off and
flip-flopped on this issue. We do, however, agree with the
minister about one thing, and that is that unemployment affects
everyone. Happiness, they say, may be the absence of misery.
This is the kind of sophistry that is served up to us here today.
I will agree with the minister that unemployment is
catastrophic for everyone, but will he agree with me that the
money spent by the government on the conversion process will
spare some people their jobs and allow them to continue
investing in the economy? I fail to understand why no
connection is being drawn between implementing a strong,
immediate and urgent conversion strategy and the benefits that
would accrue from it, in terms of national production and
unemployment. I hope that the minister will review his position,
that he will take a much more interventionist approach and that
he will show some leadership. I have been told that he can count
on the co-operation of his colleague, the Minister of Finance,
and I know that the two ministers are prepared to work closely
together. Their co-operation and the will of the opposition will
ensure that we work together on this issue.
Mr. Manley: Mr. Speaker, the hon. member is trying to
misrepresent what I said. In my remarks, I tried to explain that in
a strategy for the conversion of defence industries, we need to
have, first of all, in the private sector, the sort of initiative that
can provide direction to every company affected.
Take for example Paramax, now Unisys GSG, the prime
contractor for the helicopter contract the government cancelled
on November 4.
[English]
I am quoting from a Canadian Press article published in the
Gazette of April 19, 1994:
Paul Manson, president of Unisys GSG-says the company may end up better
off than it might have had it carried the multibillion dollar helicopter contract
through to its conclusion.
``We've gone through the worst of the setback from the helicopter'', he said.
The articile goes on:
He said Unisys is using the expertise gained in military work for commercial
contracts, especially in the field of total systems integration. ``Once you would
sell a mainframe or a mini-computer or a PC and then walk away'', he said.
``Now we're involved in the whole package-maintenance, software,
systems and integration.
The article goes on:
The cancellation cloud may have had a silver lining in that it forced Unisys
into diversification at a time of ``intense downward pressure on defence
budgets''.
My point is simply that I hope this indicates a success for the
particular company. It has a highly motivated very professional
manager as president, Mr. Manson. He has done a good job
trying to anticipate where his company can find new successes.
He spent a fair bit of time discussing strategy with Industry
Canada. We have tried to be helpful to him as a government
should be in identifying opportunities and in looking for
possibilities.
(1115)
Indeed the DIPP fund may prove useful in this exercise again
as a repayable contribution to research which will lead to the
production of new products to sell into new markets.
This is a very clear strategy. It is not a do-nothing strategy as
the hon. member has attempted to characterize it. It is a practical
pragmatic strategy that reflects two things, first of all the
important contribution that these firms make to Canada's base
of highly skilled, highly educated technical people. Second, it
reflects the reality of the fiscal situation of the Government of
Canada.
3925
With all due respect to the hon. member who makes
quotations from press releases at a time when the government
in office was projecting $30 billion deficits, times have
changed. Any government is forced to see how it can make most
effective use of the resources that it has available.
If he has practical suggestions on that or if he would like to
come forward and say that he thinks the DIPP fund should be
increased by another $250 million and here is where we take the
money from then let him suggest that. So far, other than his
ranting and raving I have not heard any specific suggestions
from him as to what it is exactly he wants us to do.
Mr. Jack Frazer (Saanich-Gulf Islands): Mr. Speaker,
mine is a very brief intervention because I know the time is
short. I would ask the minister if he could provide us with the
figures on the DIPP program as to how much was invested and
what the payback was in the most recent figures he has
available.
Mr. Manley: Mr. Speaker, I am afraid I could not answer that
question off the top of my head but I will certainly undertake to
get that information to the hon. member as quickly as possible.
The Acting Speaker (Mr. Kilger): Resuming debate. I will
take the occasion to remind all members on both sides of the
House that for a member to be given the floor he must seek the
floor and of course that means to rise at your chair. We speak
about or refer to these unofficial lists that we have, which are
somewhat helpful at times, but in the end members seeking the
floor of course are those who will be recognized by the Chair.
[Translation]
Mr. Bob Ringma (Nanaimo-Cowichan): Mr. Speaker, after
reading the Bloc Quebecois motion, I have more questions than
anything else. The motion reads as follows:
That this House condemn the government for its unacceptable delays in
developing and implementing a genuine strategy for the conversion of defence
industries-
This certainly raises questions. I am pleased to say first of all
that some of my questions were answered by the first speaker,
the Bloc critic, and also by the Minister of Industry.
Before listening to this morning's speech, I had decided that I
should speak for the motion for one part and against it for
another, based largely on the interpretation of certain key words
in the motion.
[English]
In listening to the first speaker, the member for
Hochelaga-Maisonneuve, some of the answers came clear to
me. One was that first of all he was making a very Bloc
Quebecois statement, one that is enshrouded a little in mystery.
In fact, it was partly brought out by the Minister of Industry
saying: ``Why are they talking about this defence industry when
their long term motivation is to withdraw and perhaps have no
armed forces at all''. That part of it is still a bit of a mystery to
me.
(1120)
I noted also that the speaker talked really only about Quebec.
He did mention regionalism. I think regionalism is a very great
consideration to all Canadians partly because we do not see
sufficient consideration on the part of the government about
regionalization or the necessity for developing different
regions. We see a total concentration, it seems to me, on one at a
time and giving way to political considerations rather than
human or industrial ones.
The main question I had in listening to the Bloc spokesman
was what is the motivation behind the motion. I think that came
very clear that the motivation was to get money for industry in
Montreal. I do not think that is sufficient. Perhaps it needs
money. Perhaps it needs help. Perhaps it needs government
leadership. However, to just say: ``Let's have more money for
Montreal or for Quebec'' is not acceptable. It should be put in
the context of what is needed in the rest of the country.
I heard the statement by the Minister of Industry in response. I
have to say that the thrust of his statement was good. I did agree
with a good part of what he said. He said there should be no
question of just giving cheques to industry, that industry must
take the initiative itself.
I would put a little caveat in here in saying that the
government must show some leadership for industry, but the
minister said it correctly in saying that the defence market has to
take care of its own. It has to be market driven and, he said very
clearly, there must be no major subsidies or bailouts. I could not
agree more with what the minister says in that regard. He wound
up in effect saying the whole process must be industry led. I
agree with that also.
Having in a cursory manner described what I heard from both
of these presentations on the part of the Bloc and on the part of
the government, I have to admit that my own thought processes
on this process were much more objective. I am looking at the
context of the world situation, of Canada's foreign policy,
Canada's defence policy and what industry has to do within that
whole milieu.
Let us see how objective I am.
[Translation]
The motion introduced by the Bloc Quebecois refers to
unacceptable delays in developing a genuine strategy.
3926
[English]
My comment on that is that some delay is inevitable in that it
must await the evolution of foreign policy and defence policy.
That review is under way now. We will not see anything until the
end of September. There is an inevitable delay there.
Having said that I have to criticize the government for some
of its dealings with defence policy. For example, that it did a
whole base closure program before the defence review was
done.
(1125 )
That does not make good sense to me. I know the government
was under the gun to save money. I agree with the government
and compliment it in the sense that it has allowed the
Department of National Defence to rationalize its own
infrastructure. The government did well in that regard, but there
is a certain backwardness to putting the closures ahead of the
defence review.
Coming back to the motion, let us talk about the development
of policy. Here the point to be underlined I would think is that
government leadership is required. The government should be
talking very seriously with industry, not but bailing it out but
saying here is what we foresee, here is what is falling out so far
from the defence review, which incidentally I understand is
being done in a pretty non-partisan way by the special joint
committee on that and good for them.
The government nevertheless can take some leadership here.
It should be talking with industry, perhaps it is but we do not
know about it, saying here is what we see in the medium term
and the long term. Let us look ahead 5 years, 10 years, 15 years
and let us build on the strengths of Canadian industry today as
demonstrated in the field of electronics, communications,
extrasensory perception-not ESP, sorry-but the remote
sensing as practised by and developed by firms like MacDonald
Dettwiler of Richmond. These are the areas where Canada is a
leader. Government I think should be sitting down with industry
and saying, fine, how can we exploit the advantages that we have
in this country in these industries to give us a long term benefit
of employment.
While at it the government should make a firm resolve to have
no political patronage or interference once the policy has been
decided. If you look back over a number of governments, Mr.
Speaker, that is precisely what you will find. When the Bloc
talks about contracts for Quebec, what I have seen from a
western point of view is the scandalous putting aside the
contract of Bristol Aircraft of Winnipeg on the F-18
maintenance and giving it through pure political patronage to
Canadair in Montreal.
That sort of thing has to stop. I hope the government will take
a lesson from the past and say yes, it is resolved to do that.
In the development of policy I would urge the government to
do a continuous strategic review of our defence policy, update it
from year to year. The government should not leave it hanging in
the balance for five years at a time and then say, now we must do
a review. It should do a continuous, ongoing strategic policy
reassessment year by year so that we do not have to make these
sudden shifts, some of which of course affect industry. If
industry cannot see what the long term prospect is and be able to
adjust year by year to smooth things out, it does not know where
it is.
The final point in the development of policy is that I would
encourage the government to please get more public input. The
public of Canada is very supportive of defence and the armed
forces in time of war, but it is not that supportive as it is
uninformed during most of peace time. Therefore I would
encourage the government please to get the public more
involved in the review of policy.
We have been talking about developing policy. In
implementing this policy the emphasis must be on industry
rather than government. Again I take the words of the Minister
of Industry and emphasize them.
(1130)
Government must emphasize research and development. It
has a role to play. We have a fairly sizeable research and
development expense year by year in national defence. I suggest
that it should be more tightly attuned to what is going on in
industry to give us more bang for the buck.
I agree with the motion when it calls for more jobs in high
tech. That is the direction in which we must be going. Look at
what has happened in the past because of government policy.
Look at the Avro Arrow. The Avro Arrow has been talked to
death over the years but I would like to bring it back as a
reminder. It had wonderful potential for Canadian industry but it
was chopped and thousands of jobs were lost because of a
political decision. That sort of thing should not happen.
Closer to our time, perhaps not as severe but nevertheless of
high impact is the EH-101 helicopter decision. I understand
clearly that the government of the day, the Liberal Party, as part
of its election campaign, said that it would cancel the contract. It
stuck to its promise. By sticking to its promise, it hurt the
country and it hurt industry. I am not sage enough to say how the
government could have got around breaking its promise but if it
had had an all party review of that project, perhaps that would
have given them the answer.
The predicament the government got itself into by cancelling
the EH-101 contract is that it says: ``Fine, we are probably
liable to $250 million in cancellation charges'' but the word is
that perhaps those cancellation charges will be as high as $1
billion. Whatever the figure is, we have nothing for our money
3927
and yet we still are going to have to pay out hundreds of millions
if not billions of dollars to acquire a replacement helicopter.
The Bloc is talking about good paying jobs and high
technology and they were there with the EH-101 contract. Ten
per cent of the manufacturing of every helicopter produced
worldwide would have been done in Canada. That would have
meant a lot of jobs and a lot of money.
People will say that we are at peace. We are not at peace and I
will come to that later. I remind members that some of the
applications of this helicopter are peaceful as well as warlike. It
had a naval version, a transport version and a passenger version
and I think we are going to see more of this helicopter in the
future.
I have heard estimates there is a market for 800 such
helicopters. More recently I heard that the U.S. marine corps is
thinking of buying 500. Think of the market that Canada has
lost. Think of the jobs. Think of the high tech job creation we
have lost by putting that behind us.
(1135 )
Let us talk generally about the defence industry. When anyone
says defence industry it sparks emotion. It sparks emotion on the
part of the general public which says it does not want a military
industrial complex. I agree with the public that we do not want a
military industrial complex that drives the government, such as
we saw in the former United States model. We do not need that in
Canada.
At the same time, however, we must be realistic and recognize
that there is a defence industry. It will continue, we can be a
contributor, and government should take its leadership role in
asking industry what it can do best and how can government best
encourage it without necessarily giving them dollops of money.
The idealism that gets involved, the exaggeration that is
involved when one says defence industry, should really be
moderated in Canada. It is too much of an extreme view when we
hear people saying: ``Oh, you can't even say the word defence
industry because it is bad''. The fact is there is a positive role for
the defence industry, not just in employment but in creating new
products for the good of all people. The government's role
vis-à-vis the defence industry must be one of preserving a
minimum base for that industry throughout the years ahead.
In this connection there is an organization called the Canadian
Defence Preparedness Association, which I understand gave
testimony to the joint committee in the last day or two. It has a
real role to play with the government. Its objectives, if I may
read it, are ``to foster an industrial framework to achieve both
the sustainment of forces in being and a modest mobilization
capacity in times of conflict.'' I think that is a worthy objective.
What government can do in conjunction with a group like the
Defence Preparedness Association and other defence minded
groups is to look ahead and ask how they may co-operate. Can
we have the production of aircraft, for example, that are stressed
so as to land on rough terrain but have an application, a use, in
time of peace but are available to the government, to the
Canadian forces in time of emergency?
The answer, if the government looks long term, is yes we can
have things like that. Can we have, for example, roll on roll off
ferries that are in day to day use, let us say with B.C. Ferry
Corporation in British Columbia, subsidized to a degree by the
Canadian government? If we can have these used in peacetime
but also available in time of emergency, we have something that
is a good combination for peace and war, if you will.
There are other things that the government can do in its
leadership role vis-à-vis organizations such as the Defence
Preparedness Association. One such is legislation. It should be
listening to these organizations and asking how we can best
support the militia or members of the militia by ensuring that
they have a job once they come back from either peacekeeping
operations or militia training. Things of that order can be done.
Implicit in the Bloc motion, or at least my interpretation of it,
is that we are now in a time of peace. If that is so, I have to say
we are not there yet. You simply have to look at Rwanda, the
situation in Somalia and the situation in the former Yugoslavia.
You can look anywhere in the world and if there is no trouble
there right now, you can see it coming in the future.
(1140)
In summary, there is good and bad to be said about this
motion. I was cheered by the reply of the Minister of Industry. I
think the government is going in the right direction. However,
government can do much more in the planning sphere to create
jobs and to make better life for us all.
[Translation]
Mr. Yves Rocheleau (Trois-Rivières): Mr. Speaker, I would
like to comment on what the hon. member for
Nanaimo-Cowichan said about the F-18.
I think it would be a good idea to remind the hon. member for
Nanaimo-Cowichan of the historical facts on the F-18. We
need to place the F-18 events in their historical context. In this
regard, we must remember that during the referendum debate,
after our friends opposite got involved, in particular the hon.
member for Saint-Maurice, who was already a minister in Mr.
Trudeau's Cabinet, Quebecers were promised a carrot: ``If you
vote against the Parti Quebecois' proposal to give them the
mandate to negotiate eventual sovereignty with all related
commitments, we promise you, first of all, that the
superspecialized F-18 will be built in Quebec''. That was the
carrot.
3928
And I remember in the 1980s seeing follow-up analyses
saying that, according to the experts, the promises were never
kept. Either I misunderstood the member from the Reform Party
or he does not know-that is his right-but I hope we will no
longer hear such remarks, as though Quebecers' concerns were
whims, to use once again the words of the hon. member for
Saint-Maurice.
I would like to suggest to my dear colleague from
Nanaimo-Cowichan, who is responsible for recruiting Reform
Party members in Quebec, that such comments will not help him
in his task.
Mr. Ringma: Mr. Speaker, I obviously did not express myself
clearly in English because the hon. member misunderstood me
or he does not understand the F-18 situation.
First of all, there were no promises to build the F-18 in
Quebec; it was to be built in the United States but a few parts
would be built here in Canada. The contract I mentioned was
only for the maintenance of this plane and it was awarded to
Winnipeg-based Bristol Aerospace, which had it in the bag but,
as the hon. member said, the government decided that it should
still give Quebec something even if it lost votes in the West or
upset Westerners. It did not matter; they had to give it to
Quebec.
The contract was awarded for political reasons, and that must
stop in Canada.
Mr. Jean H. Leroux (Shefford): Mr. Speaker, first I want to
tell the hon. member that indeed, and Quebecers are aware of it,
there are frustrations in Western Canada, where people may
have the impression that Quebec gets more than its fair share.
However, I want to remind the hon. member that, among large
provinces, both in terms of population and size, Quebec is
undoubtedly the province with the highest unemployment rate
and the largest number of poor in cities. It is a state, or at least a
province, where there are numerous problems. And I personally
do not think that Quebec is asking for more than its fair share,
far from it.
(1145)
I want to point out to the hon. member one thing which was
overlooked. If we proposed to discuss today the conversion of
defence industries, and if Bloc Quebecois members talk more
specifically about Quebec, it is because a consensus already
exists in our province between the City of Montreal, the Quebec
Liberal government, the unions and the Conseil du patronat.
Mr. Speaker, the situation in Quebec is such that we must
absolutely find a way to ensure the conversion of this industry.
As my colleague from Hochelaga-Maisonneuve mentioned
earlier, out of 57,000 jobs, 11,000 have disappeared since 1988.
The situation is disastrous and even catastrophic. The Reform
Party member did not say that we are in times of war, but he
seemed to imply that there are conflicts everywhere. We must be
serious and believe that it is possible to have peace. I think it is
reasonable to say that we are less in danger than we were 20
years ago, and that the need for arms is also less than it was 20
years ago.
I find it somewhat unfortunate to think that we must continue
to arm ourselves. In conclusion, I want to tell the hon. member
that there are frustrations in the West. However, the Bloc
Quebecois is well aware of those frustrations and we have a plan
for the future of Canada which will eliminate those frustrations
once and for all. Our plan will ultimately put an end to the
constant bickering between us by creating parallel systems, in
harmony. This is what Quebecers hope.
[English]
Mr. Ringma: Mr. Speaker, I would agree with my hon.
colleague that indeed we want to work side by side in peace not
just with Quebec and all of Canada but elsewhere in the world.
Absolutely there is no one who likes peace more than a
professional military person. Having put in my 35 years, having
seen the terrible results of war, I could not agree more. Let us go
for peace.
Having said that, I look around the world. I look at the two
Koreas. I look at the situation in Vietnam and Cambodia. I look
at Sri Lanka, the Tamils vis-à-vis the rest of India. I look at the
Kashmir situation, Afghanistan, on and on. You cannot look at
any part of the globe and say there is peace around the world
because peace is not there. Therefore the assurance of peace is
certainly being threatened. Anyway, that is getting far too much
into philosophy.
[Translation]
We are aware of the unemployment problem in Quebec, but I
wonder why the problem is more acute in that province. I believe
Quebec has all the necessary tools: intelligent people, hard
workers, industries, the river, transportation, everything.
So, if unemployment is more severe in that province, I wonder
if it is not partly a matter of policy.
Mr. Yves Rocheleau (Trois-Rivières): Mr. Speaker, as
industry critic for the opposition, I am very pleased to take part
in this debate on a motion put forward by my colleague, the hon.
member for Hochelaga-Maisonneuve, for which I want to
congratulate him. His motion concerning industrial conversion
reads as follows:
That this House condemn the government for its unacceptable delays in
developing and implementing a genuine strategy for the conversion of defence
industries to civilian production, which would save and create new jobs in
high-technology sectors.
(1150)
This motion shows how concerned we, in the opposition and
in the Bloc Quebecois, are about this whole issue of industrial
conversion, given the current situation.
3929
You have to realize that the problem is very acute and the
situation is very serious. During the last few years, defence
expenditures have decreased. In fact, in only seven years, from
1987 to 1994, they have dropped by 10 per cent. According to
some experts, defence expenditures are expected to fall by
another 25 per cent in the next few years. This 10 per cent drop
in activities has had devastating effects throughout the West. In
Europe, for example, 600,000 jobs have already been lost. In the
United States, 700,000 jobs disappeared in five years. By the
year 2000, about 1.6 million jobs will have been lost because of
the reduction in military production. Here, in Quebec, as was
mentioned earlier, 10,000 workers in the defence industries
have already lost their jobs.
According to some analysts, in Quebec, there are about 650
businesses directly or indirectly involved in military
production.
Around forty of those are mainly and fundamentally involved
in military production, a high-tech sector where much emphasis
is put on research and development. So, we are talking about
highly-qualified workers, who are highly paid, and, as you
know, for every job in this high-tech industry, there are five
indirect jobs.
Faced with this very serious problem, there is only one
conclusion to be drawn. We urgently need a strategy for the
conversion of defence industries to civilian production. The
nature of manufacturing must be changed.
Here is Canada's position in the world market: in 1992,
Canada was the eighth arms producer in the world, with a
production value ranging from $3 to $7 billion, depending on the
products. We should know that 70 per cent of these products are
exported and that 80 per cent of our exports go to the United
States.
In view of the reduction of military activity that was talked
about earlier and that has caused the loss of 700,000 jobs in the
United States, we can already see how the situation is
threatening for Canada and Quebec, since the market is
constantly shrinking.
Once again, that is another way of seeing the urgency of the
situation and the need to redirect all military production effort at
the present time.
We should also know that the federal government's
intervention in military production has been specifically a type
of intervention called the Defence Industry Productivity
Program, better known as the DIPP. The DIPP is defined as
follows:
The main mission of this program is to support businesses in the defence
industry, mostly in aeronautics and avionics, to facilitate and consolidate
research and development activities, to establish suppliers networks in
by-products and components for these sectors, and to promote investments and
exports in these high-value added manufacturing sectors. The objectives of the
program are to assist defence businesses in remaining competitive in the world
markets and the Canadian market.
In 1989-90, three years ago, the DIPP had a budget totalling
$300 million.
(1155)
In 1992-93, the budget was only $226 million, a reduction of
a little over 25 p. 100. This means that Quebec received $168
million dollars in 1989-90, and only $80 million in 1992-93, a
reduction of 52 p. 100, whereas the total budget has been
reduced only by 25 p. 100. Given this, the Opposition now feels
that this program must be revisited and that the DIPP mandate of
military equipment promoting agent must be changed, so that
part of this budget will be allocated to the conversion of defence
industries into civilian production.
The Opposition is not saying anything new when making such
remarks. For once that we agree with the Liberal Party, let us
capitalize on that. I believe we agree with them more than they
agree among themselves. This may be the difference between
this side and that side. On this side, one can make remarks, on
the other side, one must implement them. This is not always
easy. Power is painful and difficult to assume. We understand it.
The press release of March 26, 1993 says a lot about the
intentions of this government. This press release was cosigned
by the leader of the Opposition, now prime minister, the present
minister of Human Resources Development, the present
member for Labrador and his colleague for Willowdale, who
was then the critic for industrial affairs. It states three major
commitments. ``Expand the mandate of the Defence Industry
Productivity Program (DIPP) of the Department of Industry,
Science and Technology, which has a budget of $200 million, in
order to add to it a support element that would facilitate the
conversion and diversification to areas such as environment
technology and advanced technology for peacekeeping''.
Second recommendation: ``The creation of a commission of
economic conversion in co-operation with industry and labour
in order to facilitate and co-ordinate the conversion of the
military industry which today employs some 100,000 workers.
Sign conversion agreements with the United States, which
import 80 per cent of our military equipment production''. And
finally, ``the conversion of military bases'' which has already
started. We can already see the position taken by the Liberals.
There is one aspect that I would like to draw to your attention
because I think this is the source of the hesitation of the
government regarding the role of the state in that area. Yet, the
Liberal Party was very clear at the time, that is only 14 or 15
months ago which is not a whole life time.
3930
I would now like to quote the second paragraph on page 3 of
their press release: ``The Liberal Party believes-and we are
reliably informed that this is the cause of the hesitation of the
government-, believes that the mandate of the state is to take
initiatives that are in line with the evolution of the international
scene and that create jobs for Canadians. A plan must be adopted
to encourage our military equipment industries to turn away
from that type of production and export. We commend the
sub-committee of the House of Commons on arms exports
which adopted our view in its report of September 1992 and
made useful recommendations that were in good part inspired by
liberal ideas''.
Being consistent, the Liberal Party underlines this fact in its
red book, which led many Canadians to support them especially
in Ontario and in the Maritimes. The red book, on page 55, reads
as follows:
The defence industries today employ directly and indirectly over 100,000
Canadians. The end of the Cold War puts at risks tens of thousands of high-tech
jobs. A Liberal government will introduce a defence conversion program to help
industries in transition from high-tech military production to high-tech civilian
production.
Specifically, a Liberal government will expand the mandate of the Defence
Industry Productivity Program (DIPP) to assist in a conversion and
diversification.
(1200)
That is what the Liberal Party says.
DIPP is the primary grant and loan program designed to influence the
development of a defence industrial base in Canada. Administered by Industry,
Science and Technology, it aims at developing defence technology and
strengthening Canadian and North American defence industries.
So, the Liberal Party was already agreeing to fund the defence
conversion using the DIPP budget.
Oddly enough, we have not heard a single word about that
since the red book has been released, neither in the Speech from
the Throne nor in the Budget Speech.
The Bloc position is more or less the same. I will explain it
briefly. It aims at creating, in three steps, a conversion fund
flowing from the industrial diversification fund. The fund would
mainly consolidate and complement the assistance coming from
existing programs in order to provide military facilities and
businesses with adequate and long term support in their
conversion and diversification process. It would also bring
about consultative committees on conversion at local and
regional levels, when the scope of conversion and
diversification activities would warrant them. It would help in
establishing an independent committee that would review the
various existing programs that could be helpful and to put
forward amendments and other improvements that could be
required. That committee will propose a framework to ensure
coordination between the different levels of government in
order to avoid overlappings.
Besides, Mr. Speaker, I can remind you of the position taken
by the Bloc that was largely inspired by the position taken
during the campaign in the debate on the cancellation of the
helicopters contract. The Bloc Quebecois supported the position
of the Liberals, who sensed that power was within their grasp,
and said that the contract should be cancelled provided that, let
us not forget that, the money earmarked for this contract and the
know-how needed to build the helicopters was transferred to a
civilian project which would benefit a lot of people. The Bloc
had clearly indicated that a high speed train linking Quebec
City, Trois-Rivières and Windsor met both criteria.
Unfortunately, the government acted upon only one of those
two recommendations, and cancelled the helicopter deal. Since
then, Canadians and Quebecers have been left hanging, without
any compensation whatsoever.
Therefore, DIPP should be modified so that, instead of
promoting defence production as it does now, it helps military
industries to convert to civilian production.
One must realize that, in Quebec, there is a solid consensus
among all the stakeholders in this vast project, including the
Quebec government which has expressed its impatience several
times already through its Minister of Industry, Trade and
Technology, Mr. Gérald Tremblay. No matter how federalist and
Liberal he is, he did not mince his words and said, on April 11
last:
In its red book, the federal government promised to make available to DIPP,
significant sums of money for converting defence industries to commercial
production. We are presently negotiating with the federal government. We want
to know how much money will be made available, when and for which
company.
These are the very words spoken by the Quebec Minister of
Industry, Trade and Technology.
The Conseil du patronat du Québec, which-you will admit,
Mr. Speaker-is not necessarily a natural ally of the Bloc
Quebecois, is another stakeholder. A few months ago, precisely
in September 1993, it held a symposium entitled ``Rendez-vous
économique 1993'', and came up with two main
recommendations pertinent to our present debate.
Recommendation 31 said that the federal government should
provide adequate financial support for the conversion of
industries dependent on military contracts.
(1205)
This financial help would last as long as it takes to adapt,
convert and diversify defence industries.
The implementation of conversion and diversification
activities would be planned by conversion committees, made up
of representatives from industry and labour in the affected
communities and representatives from the Government of
Quebec. This is the position of the Conseil du patronat which, in
its first
3931
recommendation-and this is very relevant to the concerns of
the Official Opposition-said that the federal government
should give MIL Davie a contract for about $6.5 million to
design, and then another contract for $200 million over three
years, according to the figures of the Conseil, to build a
prototype of the ``smart ship'' we hear so much about.
This ship would fill urgent and recognized needs of some
federal departments, but it would also be the prototype of a
series of similar ships for the international market, a promising
and expanding market. This is the position of the Conseil du
patronat, but it is supported by the CNTV and the FTQ. So, the
Government of Quebec, the Conseil du patronat and the two
largest unions in Quebec all agree on that point. The CNTV said
in a press release dated October 31, 1993:
Between 1987 and 1992, Quebec lost 11,000 of its 57,000 jobs in the military
sector. Jobs are still disappearing. Since more than 60 per cent of contracts are
awarded to companies in the Montreal area, it is essential that forces stick
together to obtain a realignment of government industrial policies, especially in
the military sector which comes under federal jurisdiction.
Two days earlier, on October 29, Mr. Fernand Daoust, then
president of the FTQ, had said:
Considering that the future government wants to cancel the helicopter
contract, we want to know the projects which will be put in place to provide the
8,000 jobs for 12 years that the Prime Minister is going to abolish without
serious analysis of the issue.
As we were told a moment ago, the decision to cancel the
helicopter contract, without any compensation, demonstrated a
total lack of vision.
To show you how serious the situation really is in Quebec, I
will quickly give you the level of dependency of companies. Let
me name a few just to show how serious the situation is: Bendix
Avelex Inc. depends on military contracts for 70 per cent of its
production; Canadian Marconi, 55 per cent; Héroux, 80 per cent;
MIL Davie, 91 per cent; Oerlikon and Paramax, 100 per cent in
both cases and SNC Technologies, 95 per cent.
As far as job losses are concerned, Bendix lost 350 jobs,
Anachemia Canada Inc. 68, Marconi 1,480, MIL Davie 2,740,
Oerlikon 410, Expro Chemical Products Inc. 300, Héroux 131,
Paramax 1,000, Pratt and Whitney, 200 and I could go on and on;
Vickers lost 350 jobs.
This goes to show how much we hope the government will
abide by the promises it made to the public; when governments
shamelessly treat commitments that way, I think we have a right
to be worried about democracy. It could mean they can say
anything to the constituents but after election day, fight shy of
their commitments and I think this is very serious. When we
speak like this, the figures do not seem like much but we must
remember that when we talk about unemployed people, we are
also talking about human lives, families, careers, educated
people leaving the country, brain drain or the outflow of
know-how.
Somebody told me this morning we can even use the term
hemorrhage. In my view neither the economy of Quebec nor that
of Canada can afford such a hemorrhage.
In conclusion, if, as we wish, the government takes action to
help the DIPP and point it in a new direction, I hope it will do so
according to generally accepted practices and will respect
conventions. The minister mentioned it before, it is not enough
to talk about manpower adjustment committees; I know these
committees, I worked with them for eleven years; they give
good results in traditional circumstances.
The money given must be administered by committees where
the employer and the union concerned will be duly represented,
along with representatives of the region. The context must be
considered and the government of Quebec has to be consulted,
since it is very sensitive to that issue and very interested. These
committees must study the situation on a case by case basis,
according to the type of activities carried out until now. Indeed
we must realize that manufacturing ammunition and making
satellite telecommunication devices are two operations that are
very different.
These committees should examine the situation, ensure that a
dialogue is initiated and reach a consensus about the new
orientations and the changes that need to be made to everyday
management practices. This is a proven formula that should
work. I really hope the government will act upon the positive
proposal put forth by the opposition today, which is to see that
the situation improves. It particularly makes sense if we recall
the government's pretensions, with its slogan ``jobs, jobs,
jobs'', and the 11,000 jobs lost in the high technology sector. We
have to demand a minimum of consistency on the part of this
government.
(1210)
[English]
Mr. Dennis J. Mills (Parliamentary Secretary to Minister
of Industry): Mr. Speaker, I begin by saying to the member that
the unemployed people of the member's community are as
important to us as people in any other community in this
country. Whether it is someone unemployed in the defence
industry or any other sector of the economy, we feel that it is our
responsibility as a government to do our very best to put
everyone back to work. That was our campaign, putting people
back to work, and we are looking at this in a comprehensive way.
I want to pick up on something that the Minister of Industry
said earlier in his speech. It had to do with the responsibility of
management of defence industries to develop a strategic
approach and to look at new markets for new opportunities for
3932
their highly skilled and highly trained staff. I think that he hit on
something that is very important for all of us to dwell on.
I go back to an experience I had when I was in the private
sector for a while after I left here in 1984. I worked for a
multinational organization called Magna International. There
are many unique qualities of the Magna Corporation. One of the
unique qualities of the management team that I noticed at that
time was it began a conversion from defence production in 1982.
In 1980 it was an organization with about $400 million to $500
million in sales. About one-third of its sales were in defence
related products, radar systems and machine guns.
I think most people would recognize that in terms of the
quality of its products it is probably ranked with anyone in the
world. In 1982 the directors of Magna said: ``We are going to do
a full conversion into the automotive parts manufacturing
sector''. It was a very tough transition period. It was tough for
management, tough for the toolmakers and tough for everyone
on the shop floor. They were entering, even though there was
some foundation experience because the company had been in
the automotive parts business for about 25 years at that time,
into a whole new field because the technology in the automotive
parts business was becoming very sophisticated with computer
aided design and computer aided manufacturing. The
management team at Magna decided that it would move into the
new economy, become highly specialized, get the latest
equipment, develop systems and components, and be the most
competitive in the world.
(1215)
This story is not based on theory. Over the next 10 or 12 years
we saw a company grow from about 3,000 employees doing
about $600 million in sales to today where it is employing
approximately 20,000 people and doing over $4 billion in sales.
The relevance of this example is that the leadership of the
corporation took the leap into the new economy, searched for
new markets and searched for new products.
I had the pleasure of working there for two years from 1984 to
1986. What impressed me aside from the conversion and the
commitment to the conversion of the highly skilled staff was the
management shift. Management moved out of the traditional
markets of North America in terms of the auto industry because
prior to the conversion from defence most of their orders were
going to General Motors, Chrysler and Ford. When they decided
to do the full conversion they knew they could not just rely on
those three manufacturers of automobiles.
The leadership of that company went to Japan, went to Toyota,
and said that it had a company that could make a quality product
at a price as competitive as Toyota. It asked for an opportunity. It
said that it had the highly skilled staff and the technology. Lo
and behold it was successful. It brought back orders from Japan
and Germany.
That is a principle or an approach many companies in the
defence industry have to look at. That was the point the minister
was trying to make today in part of his speech.
It is not a question of the government saying that it would not
help or that it would leave them alone. The minister said in his
speech that DIPP would be redesigned and would be more on a
loan basis. We are also using other instruments of government
for support like the Export Development Corporation. That is
the kind of message members of Parliament have to
communicate to industries that are having a difficult time
making the conversion.
It was interesting that as I was sitting here a couple of other
examples were brought to my attention. The story of Securiplex
Technologies of Montreal is about the successful conversion of
a company that was well established in the defence industry.
Recently it obtained a $26 million order for a control system
from Bombardier in Belgium.
(1220)
There is another example. ATS was founded on Montreal's
south shore in 1979. It originated as a small company
specializing in the testing of ammunition. Recognizing the fact
that it had limited business opportunity, the company sought to
take its considerable expertise in developing software systems
to new markets.
Today the original business is history. The future of the firm is
in an entirely new market that it could claim to have invented:
the simulation of air traffic control towers and control rooms.
There is an incredible market all over the world for this
company that reinvented itself.
We inherited a very difficult fiscal framework. The minister
said in his remarks that during the campaign we talked of some
$30 billion in deficit and now we are hitting over $40 billion.
This is a shock to the budgetary system of the country very few
of us expected.
When I say leadership I do not just mean the chief executive
officer. I mean the production manager, the lead tool maker and
the people on the shop floor. Securiplex, Magna and ATS had to
take on a leadership thought process. Companies going through
conversion should do this, along with having a redesigned DIPP
and the banks beginning to look at the new economy and
knowledge based industries. We have heard time and time in the
last two to three weeks in the industry committee that the banks
were beginning to look at small and medium sized
organizations, not at the strength of their balance sheets but at
the strength of the mind and the character of the persons
involved.
3933
When we are dealing with companies going through this very
difficult period we have to help them along the path to new hope
by showing other examples. I say to the member for
Trois-Rivières, as a former employee, as a former senior
officer of Magna, that I know the former chairman went many
times to help companies in Quebec with conversion. Today
there would be leaders in Magna who would be happy to share
their experiences with companies in the member's riding that
might be having difficulty in making the conversion.
Companies that basically were successful making the
conversion remember the pain. They remember the experience.
By and large most of them are willing to share it. That is the type
of direction we have to take.
I hope the member realizes that we cannot write grant-type
cheques for any industry in trouble. We do not have the room to
do so because of our tight fiscal framework, but the minister said
that DIPP was being redesigned to become more of a loan
situation. We will help them through it in that way, combined
with other resources. I believe that is the approach we must work
on over the next conversion period.
(1225)
[Translation]
The Acting Speaker (Mr. Kilger): Questions and comments.
I recognize the hon. member for Trois-Rivières.
Some hon. members: No, no.
Some hon. members: Yes, go ahead.
The Acting Speaker (Mr. Kilger): Order, please. The hon.
parliamentary secretary may have directed questions to other
hon. members in his remarks, but having concluded his remarks,
if the hon. member for Trois-Rivières wishes to ask a question
or make a comment on the hon. parliamentary secretary's
remarks at this time, he has the floor.
Mr. Yves Rocheleau (Trois-Rivières): Mr. Speaker, I cannot
help but disagree with what my distinguished colleague just said
because it contradicts the Liberal Party's own platform.
In view of the disastrous economic situation we are facing,
with 11,000 high-tech jobs lost in Quebec alone over the past
five years, we are being told that it concerns only the private
sector. Personally, and it was also the Liberal Party's position
last fall, I consider the public interest is at stake and that the
state-and I could quote again from the document I read
earlier-should play a leading role in promoting recovery.
What we are saying is not to spend without thinking, but
rather-that is at least how I see things personally-that the
minister should ask companies where jobs are continually lost
because they are no longer able to obtain contracts: ``Where is
your conversion plan? Show us a decent plan, a plan that is well
thought out, well structured and pragmatic, a plan with a vision
and we will help you.''
The government's present position however is more along the
lines of washing its hands of the matter, leaving it up to free
market and free competition and relying on companies that have
proven more innovative than others such as Magna International
Inc., a Montreal business mentioned earlier. Perhaps these
companies have had a keener eye, more business acumen and
more vision. Perhaps not all companies are to blame, but I think
that this government has the duty to question these people in the
public interest, because we cannot let this go on, with engineers
and skilled technicians finding themselves out of work and
possibly getting ready to put their skills to the service of foreign
economies. Our economy may never recover from that.
I think it is the role of government, not only that of the private
sector, to manage the economy sensibly, like a reasonable man
as we used to say. The Liberal Party said, and I agree: ``The
government obviously has a social responsibility in this
matter.''
[English]
Mr. Mills (Broadview-Greenwood): Mr. Speaker, I guess I
have not put enough emphasis on government participation for
the hon. member. I was not saying that the government should
walk away and not assist businesses in the process of
conversion. We never have. I was suggesting that the balance
should be one where we do not ignore other success stories in the
conversion process.
In other words, as a government we should not think we are
the only ones who have the solution. We will aid. We will
support. We must bring into the discussion people who have
already had success in the conversion exercise.
The member is not opposed to that. My point is that we have to
start. We have to make sure that we do not create a sense of false
hope. In other words we are not running away. However it must
be much more of a joint venture with government giving advice,
government giving some form of assistance where possible,
maybe not in grants but through some loan guarantees and
bringing in other experts who have achieved success. That is the
point I was trying to make to the hon. member.
(1230)
[Translation]
Mr. Yves Rocheleau (Trois-Rivières): Mr. Speaker, I agree
with the hon. member that this is a complex issue. That is why,
as I mentioned in my statement, we must approach it as tactfully
as possible, and abide by the rules. We must call upon all
existing resources of businesses that have already had the
foresight to proceed with conversion. These resources should be
used by businesses planning to convert. As I said, when a
business intends to convert with the help of the state, all
3934
stakeholders must be genuinely and completely involved, that is
the employer, labour unions and regional players because this
process can sometimes have a tremendous impact on a region.
The Quebec government must also be involved because of its
thorough knowledge of this question within the Quebec context.
Of course, this does not preclude-and this is the way the
issue is set out-seeking out all those who have some expertise
in this field to help speed matters along and ensure that case by
case, the situation improves and production is geared to new
markets. I think this is one point on which we all agree.
[English]
Mr. Mills (Broadview-Greenwood): Mr. Speaker, we are
beginning to agree. The approach that the member for
Trois-Rivières just suggested is essentially what I was trying to
communicate in my remarks.
As the minister said, we need to develop a strategic approach
and that is what we are attempting to do. We cannot just look at
these difficulties in isolation from the work that the minister of
human resources is doing. It cannot be looked at in isolation
from what the industry committee is doing or what the Minister
of the Environment is doing.
In my view we have not spent enough time today talking about
the potential in environmental technologies. We must become a
nation that measures its strength not by its armaments but by our
environmental technologies. That is an area where I think most
people would agree there is terrific potential.
There is another thing, a final point I want to make. This is
actually a plug. On May 17 a group of members of Parliament
from both sides of the house, 10 of us, are going to Beijing with
people from over 100 small and medium sized businesses, not
the big businesses that tend to go on these missions. We will be
looking for new markets, new opportunities.
We all know that the Asia-Pacific region is just exploding
with opportunity especially for small and medium sized
business. There might be all kinds of opportunity for people who
are currently in the conversion process and looking to that
region of the world for new markets and new potential.
As the Minister of Industry said earlier this morning, it has to
be a comprehensive approach. We have to get the financial
institutions on side. The Export Development Corporation has
to be working. The human resource component is helping people
get retrained for the new economy. We have to beef up our
ability to go out and sell abroad. We are not very good hustlers in
this country. We tend to be staid. We are not as aggressive as
some of our American friends to the south or the Germans or the
French. One of the things that we as parliamentarians have to do
is encourage our small and medium size business community to
hustle a little more beyond the boundaries of Canada.
(1235)
I realize I only have a minute, but that is something that we as
members of Parliament can do to support the small and medium
size business sector. We go with them.
The only problem that I have is that members of the Reform
Party do not want to come with us when we take these small and
medium size business people on these trips to try and forge new
markets because they do not think these trips are that
productive. However, I hope eventually they will see that they
are very important to the small business community and they are
not junkets.
[Translation]
Mr. Laurent Lavigne (Beauharnois-Salaberry): Mr.
Speaker, I am pleased to speak today on the motion before us.
First of all, I would like to say that last week, on an opposition
day, we had a motion with which I showed the Liberal
government's inaction on agriculture. I spoke last week to show,
with supporting figures, that this government was really not
doing enough about agriculture in Canada, especially in Quebec.
This week, we are speaking up to denounce again this
government's inertia on the whole issue of the conversion of
military industries to the manufacture of useful civilian items. I
care about this issue and that is why I chose to participate in the
proceedings of the defence committee, to look at the whole issue
of defence more closely. What interested me on the defence
committee was the whole issue of the conversion of military
factories to civilian uses.
To my great dismay, this famous committee has met at least
fifteen times, if not more. First, I must say that there was a
standing committee, which I joined, and then the government
called for the addition of a joint committee, made up of MPs and
senators, besides the standing committee on defence.
At every meeting I attended of either committee, I always
added the whole question of industrial conversion to the agenda
because it was never there. Every time I asked the question on
one committee or the other, they wondered whether the defence
committee was the one to deal with conversion and today they
again raise the question as to whether the defence committee
will discuss conversion or will pass it on to the industry
committee.
It is total confusion now. In the end, we do not know which
committee will have to deal with defence. The government has
already been in office for six months. Many military factories,
especially in Quebec, have to work with their employees every
day to try to keep those jobs, and we are still discussing which
committee, the standing committee on defence or the joint
committee on defence or the committee on industry, is to deal
with industrial conversion.
3935
I noticed that the joint committee was much more concerned
with preparing trips to Oslo, Brussels and eastern and western
Canada. Take a good look at the schedule of the joint committee
for the coming weeks and months, Mr. Speaker, and you can
see for yourself. I think that five, six or seven trips have been
planned to see how other countries in the world go about
defining a new defence policy. I have nothing against that but,
in the meantime, there are men and women working in our
defence factories and we should talk about conversion for their
sake. Meanwhile, we are discussing the trips we will have to
make to see how other countries deal with the end of the cold
war, how they will redesign their defence. This may have to be
done but not at the expense of conversion.
(1240)
Certainly, since the end of the cold war, people throughout the
world are calling for a disarmament and peacekeeping policy
rather than an armament policy. And this makes me the happiest
man in the world. If every country in the world could pursue a
disarmament and peacekeeping policy, I think that, as the
evidence shows, disarmament and not war makes people
happier. Except that it has major economic repercussions.
We know that for many years the richest countries in
particular built defence factories to arm themselves. They
armed themselves to the teeth. Until the east bloc collapsed, we
lived with the stress of the cold war between east and west. In the
meantime, of course, our defence factories were kept busy.
People were hired to make ammunition, guns and shells. They
were working but not, in my opinion, for a good cause. I prefer
disarmament to armament and so much the better if we are
already there. Except that, as I was saying earlier, one of the
economic repercussions of disarmament may be unemployment.
It has already started.
But, at that time, the government was proud of the factories
making its guns, ammunition and shells. And it was making
them work at what was called ``cost plus''. They were told,
``Make the equipment and we will pay you whatever it costs''.
Since these plants could take the time they wanted or just about,
the workers were not very efficient because they were not
competing against other countries.
The country that had built these plants bought the equipment
at cost. So if workers took one and a half instead of one month to
make a gun, they were paid for a month and a half.
Consequently, defence industries now wanting to switch to
civilian production have to improve the profitability of those
new products which will compete on the market.
I listened to the Parliamentary Secretary to the Minister of
Industry and he seemed to evade his responsibility by saying
that the issue concerns the private sector and not the
government. Yet, the government was quite pleased to have
these industries when it needed them. Now that it does not have
the same need for these companies, it lets them down. The
government has a duty to ensure that these defence industries
are able to switch to civilian production.
As you know, arms production has been experiencing difficult
times since the late eighties. This is an enormous market
estimated at over $450 billion worldwide. Indeed, it is a market
which involved billions of dollars. There has been a drop since
1987, and especially in 1994. It is expected that this $450 billion
figure will drop by 25 per cent in the next few years. As a
consequence of that pattern, 600,000 jobs have disappeared in
European defence industries since 1987.
(1245)
In the United States, the figure is 700,000, while in Quebec
the drop is proportionally the same. This sector is in a state of
collapse. It is being abandoned but the government cannot let
down all these plants, employers and employees, chemists,
engineers and qualified workers after using them for its needs
and the needs of its military forces.
Now that we no longer place orders, we do not have the right
to abandon these industries. That is why I urge the government
to take money out of the defence budget, or the environment
budget, or any other budget for that matter, since it all comes out
of our pockets anyway, and to use that money to provide these
plants not with hand-outs, but with assistance in areas like
research, development, expertise, or capabilities. I urge the
government not to let these plants down, because in the next few
days, weeks and months, these plants will need to turn around
their whole production.
The jobs in those sectors were mostly in Quebec, and
especially in the Montreal area. The impact on its economy is
significant. The cancellation of the famous helicopter deal did
hurt for sure, but we, in the Bloc Quebecois, were all for it,
except that the government forgot one thing. After cancelling
the deal, which saved Canadians $5 billion to $6 billion, the
government should have used parts of the savings to set up an
Industrial Conversion Assistance Fund, which it chose not to do.
The government let the defence industries down and pocketed
the $5 billion to $6 billion it saved by cancelling the helicopter
contract. Yesterday, I was watching televison and I saw the
prime minister who was taking stock of his first six months in
office, and bragging. He said ``one of our first achievements'' is
the cancellation of the helicopter deal, which he had promised to
do during the election campaign.
And at one point, reporters asked the Prime Minister who had
just enumerated his good deeds if he did not make mistakes. The
Prime minister scratched his head and said: ``I cannot think of
any.''
3936
If I had been next to the Prime Minister, I would have
whispered this to him: ``Mr. Prime Minister, during the election
and even before that, when you were in the opposition, you gave
us a lot of hope and made a lot of great promises concerning
industrial conversion programs and when you cancelled the
helicopter contract, you should have proposed that program, but
you did not.'' That is a mistake the Prime Minister should have
mentioned to the reporters, yesterday, when he was taking stock
of his first six months in office.
The Prime Minister and the Liberal government on the other
side have so-I am tempted to say-lied to us, if I may, although
it may be too strong a term in this House, but this is almost the
case. I could quote government members when they were in the
opposition, as well as provincial members. When it was in the
opposition, the Liberal Party was a keen advocate of conversion.
They wanted an assistance program that would help businesses
to take over other markets than the defence market.
So, they promised to develop a program to help businesses
move away from military production. The Liberals reiterated
their promise in the red book. Almost every day in Question
Period, the Prime Minister continuously refers to his red book
and the need to create jobs, jobs and more jobs.
And yet, once in office, all these good intentions went
unheeded, so much so that even the Martin budget said nothing
about a conversion program for defence businesses.
On the other hand, the Prime Minister speaks a lot of his
famous infrastructure program. If it creates jobs, that is great.
(1250)
The infrastructure program will create about 45,000 jobs. But
what good will it do to create 45,000 jobs, temporary jobs that
will last six months or a year, if the government allows 60,000
existing jobs to be lost in our military industries and allows
plants to close permanently? I think that the government could
have kept a portion of the one billion dollars it will invest in its
infrastructure program and used it to help the 60,000 workers in
the defence industries keep their jobs. What good will it do to
create one job if two are lost elsewhere? We are not moving
forward by doing that, we are going backwards.
On March 26 1993, some MPs, namely Mr. Axworthy, Mr.
Rompkey and Mr. Peterson, said-
The Acting Speaker (Mr. Kilger): Order. I simply want to
repeat once again that, in this House, people must be referred to
by their title, such as parliamentary secretary or hon. member
for such-and-such a riding, and not by their name.
Mr. Lavigne (Beauharnois-Salaberry): Mr. Speaker, I was
not sure if I should name them, but I am reading a text dated
March 1993, when these people were not in government.
Anyway, it is these three Liberal members, who were in
opposition at the time, who said that the military businesses
assistance program had to be reformed for the conversion of
these businesses to civilian production.
They said jointly: ``It is necessary to expand the mandate of
Industry, Science and Technology Canada's $200 million
Defence Industry Productivity Program (DIPP) which is aimed
at developing defence technology''. There already is a $200
million assistance program for military businesses, but as the
members said at the time, it was necessary ``to add to that
program a new component that will help the industry convert
and diversify into areas such as environmental technologies and
high-tech peacekeeping technologies''. The Liberals said that.
They were encouraging our defence industries to penetrate the
environmental sector.
Let us take as an example a business in the riding of
Beauharnois, Expro, which manufactures gunpowder and shells
and which, for the past few years, has been taking part in a soil
decontamination program. Those people are now struggling to
survive, since 70 per cent of their orders were government
defense production orders. Now that they hardly get any such
orders, they have to redirect their operations. They are now
working on a soil decontamination program, which is related to
the whole question of environment.
However, they need support, they need studies and research,
and the government could and should get involved in that area.
Otherwise, what will happen to those people who worked for
many years at making gunpowder and shells and who are hardly
making any today? We know also that the company had major
sales on the United States market; they had many orders from
the United States. But the Americans too are tightening their
arms program and have significantly reduced their orders, and
therefore the orders for Expro are going down.
Going further than what the Liberals were saying when they
formed the Opposition, the present Prime Minister did not
hesitate to say that defence industries were industries of the
past. Liberals were saying that Canadians deserved a
government that could show the way, a government that could
bring forth new ideas and new strategies, a government that
could help them adapt to change.
(1255)
The defence conversion policy is an example of how a Liberal
government intends to meet the needs of Canadians in the 1990s.
That is what the present Prime Minister constantly repeated
during the campaign and when he was Leader of the Opposition.
3937
After having said such things, it is unacceptable to abandon the
defence industries that cry out for government assistance. The
government is turning a deaf ear to their pleas.
Finally, the then opposition critic for Industry, Trade and
Commerce admitted realistically that unless we develop a
defence conversion policy for the 1990s, we could lose tens of
thousands of jobs. If the present Liberal government is aware of
all that, why does it not take action? They said so, they seem to
have all the relevant information, they are aware that we will
lose jobs, that we are already losing some-11,000 have been
lost already-and it is escalating, but they take no action.
During the last campaign, the key words for the Liberal Party to
get elected were jobs, jobs, jobs. The government should make
an effort in that area, they should give more assistance by
making funds available to help defence industries make a
conversion they are only too willing to make.
[English]
Mrs. Jan Brown (Calgary Southeast): Mr. Speaker, these
are comments of a general nature. The hon. member may wish to
comment and he may not.
It seems to me when we stand in this House and challenge the
government, there is also an obligation upon us to provide some
constructive alternatives as to how government approaches the
matters of the day, the problems and issues facing all of us.
In the hon. member's statements for example he mentioned
that the military industry is an industry of the past. That may be
true but an alternative, and one perhaps the government should
look at soon, is to redefine the role of the military in Canada.
Rather than challenging and saying the government is not
doing anything, it would be far better to say it is time that
government looked at some alternatives for using our military
personnel. It should look at how our defence industry can be
changed to meet the new environment in the global
considerations facing us today. There was not a single
constructive alternative for Canada that I heard in the hon.
member's presentation, not a single one.
The hon. member is asking questions about conversion, but
what about the root problems that face Canada today: high
taxation, a huge debt, an unstable dollar, an insecure economic
community, high unemployment. There was not a single thing I
heard that was a constructive alternative to addressing those
issues and those are the root problems facing Canada today.
We can talk about committees in this House that dither around
in deciding that maybe they will do this today, maybe they will
do that. Maybe it will be the defence committee that will look at
the issue today or maybe it will be trade and industry. However it
is our obligation and responsibility as members of this House to
start looking at some of those root problems. We must start
providing the government with some constructive alternatives
rather than standing and complaining about a particular position
Quebec is dealing with. Unemployment in Quebec is every bit
as much an issue for all of Canada.
I would like the hon. member to respond to those comments if
he so wishes. I would be interested to hear what the hon. member
has to say.
[Translation]
Mr. Lavigne (Beauharnois-Salaberry): Mr. Speaker, the
hon. member who asked this question could read everything the
Liberal Party said when it was in the opposition.
(1300)
All the alternatives are there. In my remarks, I blamed the
government for its inaction. I did not criticize it for not doing the
impossible. There are indeed ways to ease the conversion of our
defence industries. The Bloc Quebecois suggested the
establishment of an assistance fund. Incidentally, the Liberal
Party agreed that such a fund should be set up to help the
conversion of defence industries. Labour unions, the CNTU and
the FTQ, and the Quebec Liberal government are waiting for
some action on the part of the federal government, but I am sorry
to say that nothing is forthcoming.
In my riding, there is a plant that manufactures shells and
gunpowder. Purchases by the Canadian army represented 70 per
cent of its order book, but the Canadian army is buying less and
less. That firm decided to convert its operations to cleaning up
contaminated soil. It has professional engineers, architects, and
chemists. A whole group of qualified employees work on that
project, but they need government support. They do not
necessarily need money, maybe just technical help, but they do
need it. Yet, the government turns a deaf ear to their requests.
True enough, we have a $500 billion debt, and we should not let
it increase unduly. But we are letting unemployment rise. In the
manufacturing industry, we lost 11,000 jobs in the last four
years.
The government spends $1 billion without flinching to create
45,000 jobs, supposedly, through its infrastructure program. We
are not asking the government to spend $1 billion on
restructuring defence industries, but only to offer some kind of
help to the people in those plants. Waiting for the plants to close
and creating more unemployment is not going to help the
economy either.
We already have much too much unemployment, so this
government should make it its duty to help the workers whose
job is at risk before they lose it. As I was saying earlier, what
good is it for the government, with its infrastructure program, to
create jobs, on the one hand, if it does not help the defence
3938
industry workers and loses twice as many jobs, on the other?
That is not progress, it is a setback.
Mr. Patrick Gagnon (Parliamentary Secretary to Solicitor
General): Mr. Speaker, it is a pleasure to be given this
opportunity to rise on this issue which is extremely important
for many Quebecers.
I would like to thank the hon. member opposite for drawing
attention to the future of defence industries. Over the years,
these industries have been creating many jobs in our province
and will continue to do so.
The future prosperity of defence industries is essential to
Quebec's future prosperity as a part of Canada and North
America. Quebec and its industries can adapt to technological
changes and developments that are occurring in the world.
Once again, I congratulate the hon. member for the interest
that he is showing in asking this question, and I would like to
speak on that major issue for a few minutes.
In defence industries in Quebec, there are many small
businesses and less than 20 medium or large businesses. These
industries are very concentrated and the majority of sales are
made by medium and large businesses.
All these businesses, regardless of their size, have seen their
defence product sales progressively decreased over the last
years. And, in view of the shrinking of international military
markets that is projected, we can assume that this trend will
continue.
Sales of defence products on European markets have radically
decreased, causing the loss of 150,000 jobs in the last three
years. This represents 10 per cent of the labour force in the
aerospace and defence sector.
In America, the experience is similar with large reductions in
military procurement matched by significant job losses, more
than 3,000 in the last three years. Both European and American
industries have been faced with a serious industrial adjustment
problem. In various countries, the government has responded in
various ways. It is tempting to look to solutions such as those
proposed in the United States for the problems facing Quebec's
aerospace and defence industry.
(1305)
I believe we can learn from others. I am confident that some of
the lessons we might learn from others in defence industry
conversion are universally acceptable. For example, there are a
number of internal and external obstacles to defence industry
diversification and conversion. These include a narrow client
base, lack of experience in export or commercial markets,
over-engineered products and small product runs. External
obstacles include shrinking global defence markets, difficulty in
attracting capital and market protectionism among others.
The various approaches adopted worldwide by governments
to deal with their defence industry conversion problem all
address these common elements but the approaches are often
tailored to the particular circumstances unique to their defence
industries.
As a general rule, none of these programs envisage getting out
of military markets. Instead the first goal of diversification is
normally to retain a viably industrial base. Many governments
have dealt with this issue in a regional or community
perspective and have given their support accordingly.
Many of them have set up committees where all parties
concerned are represented, including governments, unions and
the industry. The so-called dual use technologies-that have
both civilian and military applications-are often a criterion on
which governmental assistance for research and development is
based.
One of the key objectives of all those programs consists in
maintaining knowledge-based industries and quality jobs
related to the high technology which is part of those industries.
The efforts we are making to help in the conversion of the
defence industry in Quebec are within the spirit of that
objective.
Even though several of the approaches that I have just
described could apply to the Quebec defence industrial base, I
think that it would be wrong to use, for example, an
American-style solution in Quebec. There are some noteworthy
differences in the conversion of the defence industrial base in
Quebec, in the United States and in other parts of the world like
Europe.
Basically, the conversion of the Canadian defence industrial
base in Quebec is different and unique. Many Canadian defence
industries in Quebec could be described more appropriately as
aerospace and defence industries because, unlike many other
countries, Quebec has diversified a lot of its production. It
produces a great variety of commercial products and, of course,
defence materiel.
The Quebec industry is different, too, in another important
area. The aerospace and the defence industries sell many of their
products and services to world markets. Therefore, in order to
succeed, it must produce first quality materiel at competitive
prices. Like other Canadian industries in the aerospace and
defence area, Quebec industries are looking for a ready market
for high-tech products. They export sub-systems and
components that are sold mainly to principal contractors in the
aerospace and defence materiel area all over the world.
This is remarkable. A country as small as Canada is sixth in
the world for the sales of the aerospace and defence materiel
sector, which exports between 70 and 80 per cent of its total
production. We should be proud of those dynamic firms and
their workers who bring a high contribution to the economy of
the province of Quebec and of Canada.
3939
As my remarks show, Quebec industries in the area of
aerospace and defence materiel are different in several regards
from similar industries in other countries. I realize that several
aerospace and defence materiel industries are facing an
uncertain future in the years to come. Nevertheless I have
reasons to believe that because of their achievements, the
aerospace and defense materiel industries in Quebec are able
and willing to meet that challenge.
(1310)
I hope I have clearly explained today the significance of
recognizing the unique character of Quebec industries in the
aerospace and defense materiel area. By building upon their
relative force compared to the majority of the industries in the
rest of the world, Quebec industries are well on the way to the
diversification of their production and the conversion of their
technology.
As was announced recently in the budget, the federal
government intends to change the Defence Industry
Productivity Program in order to support the changes that the
Quebec industry of aerospace and defense materiel is carrying
out. I am confident that support from the federal and provincial
governments for Quebec's aerospace and defence industry will
help create the proper environment for the changes to continue.
As I said before, given the very unique situation existing in
Quebec, it is probably not appropriate to think about
implementing solutions adopted in Europe and the United
States. We all recognize that production diversification in the
defence equipment industry presents many challenges. As we
said earlier today, the task is not an easy one and there are no
miracle cures. But it certainly does not mean problems are
unsolvable. There is a solution and there will always be one.
Some major efforts are being made in the private sector in
Quebec and they benefit the aerospace and defence equipment
industry. The government will continue to fully support those
efforts to make sure this industry can continue to face the
challenges and seize the opportunities which will arise in
Quebec, in Canada and all over the world.
The Acting Speaker (Mr. Kilger): I would like to know if the
Parliamentary Secretary to the Solicitor General still intends to
share his time with the Parliamentary Secretary to the Minister
of Transport.
Mr. Patrick Gagnon
(Bonaventure-Îles-de-la-Madeleine): Yes, Mr. Speaker.
The Acting Speaker (Mr. Kilger): Very well. There will be a
five minute period for questions and comments to the member
who just spoke.
Mr. Jean H. Leroux (Shefford): Mr. Speaker, I listened
carefully to the speech of my colleague, a member from Quebec.
I think he drew a good picture of the situation. He presented the
facts globally, discussing the problem that could ensue.
I have a question for him. Is it not the role of a responsible
government to stimulate, encourage and assist the
implementation of policies that could facilitate the conversion
of defence industries? In this perspective, as a member of his
caucus, is he committed to promoting such action so that
ultimately, in Quebec and elsewhere in Canada, we really get a
conversion policy that will allow regions to survive?
As you know, 11,000 jobs have been lost in Quebec since
1988. It is most important for us that the government, of which
my colleague is a member, come up with solutions. It is about
time they stop telling the House they are aware of the problem,
that they know all about it. Everybody knows the problem but
we are waiting for the government to take a firm stand. We
expect this government that was elected to govern to present us
with policies that would bring about a fast recovery in this sector
and the conversion of the defence industry. I would like to hear
his comments in this regard.
Mr. Gagnon (Bonaventure-Îles-de-la-Madeleine): Mr.
Speaker, this government has presented its job creation program
in its Budget and, these last few weeks, through the Minister of
Human Resources Development. New technologies are the order
of the day, of course. The government would like Canadians and
Quebecers to get more involved in sciences.
I believe that diversification is in the cards for the near future.
We know all about the defence industry, or rather its sorry state
brought about by the end of the cold war. Since 1989-90, we
have been living in a new world, a different world, and I believe
that the government is committed to bringing about a greater
diversification of Canadian industries to increase our
competitiveness. I think that what we have achieved in the past
six months-we have been in office six months already-for
instance, the infrastructure program, the job creation program,
the youth programs, the budget cuts, shows a certain maturity
and exemplary fiscal responsibility. I believe that we are going
to stay the course with regard not only to the military sector, but
also to the Canadian industrial sector as a whole.
(1315)
[English]
Mr. Joe Fontana (Parliamentary Secretary to Minister of
Transport): Mr. Speaker, I appreciate this opportunity to speak
on this topic which is so important to a large number of
Canadians.
I thank the hon. member opposite for focusing attention on the
future of the defence industry. It is an industry which over the
years has provided much employment across Canada and will do
so in the future.
3940
The future prosperity of the defence industry is vital to the
future prosperity of Canada. As a vibrant part of Canada and
North America, its industries can keep pace with global change
and technological advancements.
I applaud the interest of members in raising this question and I
would like to speak for a few moments on this matter.
European markets for defence sales have dropped remarkably
leading to a loss of 150,000 jobs over the last three years. That is
10 per cent of the workforce in the aerospace and defence sector.
In America the experience is similar with large reductions in
military procurement matched by significant job losses, more
than 300,000 jobs in the last three years.
Both European and American industries have been faced with
a serious industrial adjustment program. In various countries
governments have responded in various ways. It is tempting to
look at solutions such as those proposed in the United States for
the problems facing our industries.
I believe we can learn from others. I am confident that some of
the lessons which we might learn from others in
defence/industrial conversions are universally applicable.
The term defence/industrial base defies easy definition.
Companies that make military products are obviously included
but it is important to consider the broader picture. These are
many firms that market commercial and dual-use products in
addition to the military sales. Of course the military itself uses
many of these products. For example when our peacekeeping
troops needed a soft desert boot, not a normal item in the
Canadian forces supply system, we bought commercial
products.
Another reason the defence industrial base is hard to define is
that like all products military ones are composed of many
components. When you get down to basics these components are
pretty small, things like screws, nuts, bolts, washers, and rubber
gaskets. One would not normally think of these as defence
products but in fact we could not build military products without
them.
Having made these cautions I would like to provide a brief
overview of Canada's defence industries. Canada's defence
industrial base is quite small by world standards. Depending on
how widely it is defined it contributes about 1 per cent to 1.5 per
cent of Canada's GDP and about 70,000 jobs. That is about 1 per
cent of the Canadian labour force.
A large majority of the firms are small or medium in size,
having sales below $100 million per year.
The defence industry is largely foreign-owned, about 60 per
cent, especially the larger firms.
This is not to say that the defence industry is not important.
While small it nevertheless contributes to Canada's economy in
important ways. The products it produces generally fall within
the realm of high technology, many of these at the leading edge.
As a consequence it generates highly skilled, highly paid jobs
which are not only nationally important but which also make a
substantial contribution to both regional and local economies.
Another main benefit derives from the fact that these
companies are highly export oriented. These revenues help our
balance of payments. The defence industry is highly specialized
in niche markets such as subcomponents in aerospace,
electronics and communications sectors.
Our companies are well respected in specialized fields such as
major aircraft components, flight simulators, satellite
subsystems, unmanned air vehicles, armoured vehicle fire
control systems and magnetic anomaly detection systems. Their
successes in both the civilian and military markets improve the
overall competitiveness of the Canadian economy.
Along with the aerospace industry defence firms perform
more R and D than the rest of the Canadian industry although
somewhat less than their competitors in other major western
nations. One finds defence industries throughout the country
and the regional distribution has been slowly changing over
time.
The munitions sector is a small sector which produces
excellent ammunition and small arms. Companies involved in
this sector include SNC and Expro, Bristol Aerospace, and
Diemaco in Ontario. This sector is naturally highly dependent
on DND purchasing. Exports and export potential are modest.
Reduced spending in this sector by both Canada and the U.S.
presents a special challenge in this sector.
(1320)
In conclusion, Canada's defence and defence related
industries are small but a vital sector of our economy. While the
defence industry could never be considered to drive the
economy it does make an important contribution in crucial high
tech sectors.
While Canadian shipyards have historically focused on the
domestic market, St. John's Shipyards is currently exploring
other marketing opportunities. In addition to its expertise in the
commercial sector St. John's Shipyards has acquired valuable
expertise in constructing naval vessels as a result of its contract
for the Canadian patrol frigate. This expertise will assist the
company in its search for offshore sales.
The military vehicle sector is a very small, highly specialized,
subset of the Canadian automotive sector. Two companies are
currently producing vehicles for DND. Western Star located in
Kelowna, B.C. produces DND's fleet of light trucks. In the great
city of London, Ontario the diesel division of General Motors
3941
produces light armoured vehicles, the best in the world, with
huge export markets.
Efforts to market these vehicles internationally have been
very successful. They are being sold in the United States and
Saudi Arabia and further exports are likely.
On the aerospace side it is estimated that the top four
companies, Bombardier, Pratt and Whitney, Bell Helicopter and
Spar, account for some 45 per cent of production. Defence sales
represent about 25 per cent of their revenues. On the defence
electronic side it is estimated that 80 per cent of the output is
exported. There is significantly greater reliance on defence
sales for revenue.
This sector, particularly the aerospace side, is well positioned
to survive reductions in defence spending. The defence
electronic side is less well positioned and smaller companies
with limited product lines and a high dependence on defence
sales face greater challenges.
The shipbuilding repair and marine equipment sector relies
mainly on government procurement. There are few commercial
opportunities. Despite the rationalization of shipyards in
Ontario and Quebec and rationalization currently under way in
B.C. excess capacity still exists in Canada.
Historically, due to population density and patterns and the
need for concentration of manufacturing for the war effort
Canada's defence industries were highly concentrated in
Ontario and Quebec. The defence industrial base is generally
conceived as consisting of four main sectors. The largest sector
is the aerospace and defence electronic sector which produces
complete aircraft, various aircraft components and parts,
navigation and space equipment and other defence electronic
equipment. This is the most diversified sector by producing a
mix of commercial, dual use and military products.
I think it is important to note that this government's
commitment is to ensure that the high skilled, high tech jobs that
we have in the defence industry are maintained, that in fact we
work toward transition of those industries where possible. But
we must not forget that Canada needs a strong defence industry.
Where applicable and where appropriate we will continue to do
what we can to maintain that, but at the same time look at
opportunities to be able to move into transition for those defence
related industries which may find lesser and lesser markets in
the future. We must make sure that we have adjustment
programs for the workers, adjustment programs for the
industries and take advantage of the great high skills that the
workers have, as well as the high technology that the defence
industries now have.
We welcome this opportunity to debate this very important
issue.
[Translation]
Mr. Jean H. Leroux (Shefford): Mr. Speaker, I listened very
carefully to my colleague opposite and I noticed that
parliamentary secretaries speaking on this motion are fond of
talking from an historic perspective. They paint a clear picture
of the situation, which shows that they are well informed.
However, as I said earlier, the government was elected to make
decisions. Unfortunately, they are well aware of the problems.
They know what is going on. Perhaps they should be sitting on
this side of the House.
(1325)
However, since Canadians chose them to form the
government, I think it is high time for them to stop reviewing the
situation. While this government seems to have a very clear
picture of all that is wrong, Canadians and Quebecers expect it
to make decisions and to move forward.
This morning, the minister spoke to us about the deficit. He
said that he could not make any decisions at this time because of
the deficit. During the election campaign, it was the
Conservatives who focused on the deficit. The Liberals, on the
other hand, talked about the jobs, jobs, jobs that they were going
to create. But that does not seem to be happening now. The
feeling in Canada is that we have simply traded in one
government for another identical one. As far as this debate is
concerned, nothing substantive has been put on the table.
In conclusion, I have a question for my hon. colleague. Does
he not feel that it is important for a government to stimulate,
encourage and help private enterprise? In this particular area,
11,000 jobs have been lost in Quebec and I think the government
should be doing something. I would appreciate his comments on
this point.
[English]
Mr. Fontana: Mr. Speaker, I appreciate the question of the
hon. member. He should realize that we have only been in
government six months. We understand and our commitment to
jobs has not wavered at all. In fact, some of the announcements
that we have already made as a government with respect to the
infrastructure program or support for small business or support
for research and development will pay big dividends in terms of
job creation.
Our commitment to jobs is not any less today than it was
before the election. Our red book talked extensively about a
change in the economy. One of the changes in the economy is
with respect to the defence sector. I think historically we should
realize, and I tried to point this out in my speech, that in terms of
what is happening in Europe and in the United States, Canada in
fact is facing some of the same challenges.
I hope the member is not suggesting that we close down the
whole defence industry in this country because that is thousands
3942
and thousands of jobs. We realize there is a need for defence
industries and we have some of the best in the world right here
in Canada, including in London, Ontario where we have many.
In Quebec and B.C. we have great industries. They are serving
a useful purpose. Whether or not that purpose is still justified 10
or 15 years down the road no one knows. I think our red book
says, and I would point this out to the member, that defence
conversion consists really of three points: (1) redefining
Canada's defence policy and the role of the military. As he
knows there is consultation now on what that defence policy
should be; (2) the rationalization of defence infrastructure, and
that means looking at how we can assist these industries,
communities and workers. As I said, these workers are very
highly skilled, in high paying jobs. We need to look at how we
can have adjustments for these workers; (3) the conversion of
the defence industrial base to reduce the dependency on defence
sales. I think that is important. We cannot cast out those
industries and those workers just like that. We need to work with
those companies, utilize their highly skilled workers, utilize
their high technologies and be able to look for commercial
applications of those things.
The member should realize, as I tried to define in my speech,
that certain materials and certain parts produced by certain
companies are not only defence related industries. They, in fact,
serve a dual purpose. We ought to take advantage of making sure
that this country faces the new economy by relying on the high
skilled jobs that the defence industries have and also their
technology.
We are prepared to work with those members and all members
to ensure that we provide employment in this country.
Mr. Jack Frazer (Saanich-Gulf Islands): Mr. Speaker, on
behalf of the whip of the Reform Party I would like to advise the
House that pursuant to Standing Order 43(2) our speakers on this
motion will be dividing their time.
(1330)
Before I speak to the motion, I would like to address some
remarks made earlier by the member for
Beauharnois-Salaberry who evidenced some concern with the
aspect that the standing joint committee on defence was not
addressing the problem that we are dealing with in this motion
today.
I would like to go on record as saying that my concept of the
standing joint committee on defence policy is to establish what
it is that Canadians want from their defence department. He
mentioned that we are travelling across the country and this is
true. We are travelling from coast to coast. We are visiting every
capital with the view of seeing informed Canadians on the
aspect of defence and also to talk to people off the street who
want to come in and make their views known.
We are also going to Europe and to the United States to
establish with the appropriate agencies the importance of the
Canadian defence contribution to their plans and our plans for
mutual defence and obviously now in security.
The main thing I think that we want to do is establish a criteria
whereby the security of the world is enhanced and thereby
Canada's ability to operate in the world both industrially and
tradewise will be better.
As I see it, the motion submitted by the member for
Hochelaga-Maisonneuve is basically a demand for more funds
to support industrial conversion. There is in my mind a defence
aspect to this, but a very minor one. This is basically a matter of
industry.
The defence aspect of it I will discuss a little later, but right
now I would like to speak to the industrial aspect of it. The
defence industry productivity program, a program whereby the
federal government gives some $200 million-plus to various
defence industries to support research and development and
defence aspects, has been in place for some time.
In point of fact during our election campaign, the Reform
Party was against this program. The rationale for that was that if
private industry and private citizens do not see the value of
investing in such programs, why should the Canadian taxpayer.
Since my election I have been approached by a number of
people in these industries and they have pointed out that there is
a very valid reason for this. In fact there is a good repayment
program. I accept this and am willing to look at it again, but I
also know that in some cases this money has been granted to
very dubious projects and that there has been a tremendous
amount of this money that has just disappeared never to be
returned to the Canadian government.
The defence industry covers many sectors. Among them I
would mention aerospace, electronics, ship construction,
aircraft construction including many components, avionics and
communications mainly involved in the defence area in
command and control but very, very adaptable to civil industries
as well.
Many of these companies have international links which
provides them access to merging technologies and global
markets. A great deal of Canada's high tech industry in fact has
evolved from defence research and development or procurement
projects. There are some 800 companies employing over 60,000
people who are active in the defence related industries in
Canada.
The Canadian Defence Preparedness Association provided a
briefing to the standing joint committee the day before
yesterday. They represent some 60 companies and said
categorically that they have had great success at conversion.
The Aerospace Industries Association of Canada, which
represents a large number of companies in this field, is evidence
again of a very successful conversion program from defence to
civil industries. In the past their ratio of output went from 70 per
cent defence and 30 per cent civil to today, where it is exactly
reversed. Their output now is about 30 per cent defence and 70
per cent civil.
3943
This is where I am getting back to the impact of how industry
impacts on defence. Obviously there are certain industries
where Canada must retain a defence production capability and
it is in those areas that I think the government should be
involved. They may not be completely economical but they are
of overriding importance to our ability to maintain a defence
posture and government may have a place in there. It is not only
prudent but necessary that government may do this.
(1335)
However I think basically it should be left to the managers of
industry to decide how they run their businesses, what products
they get into and which avenues they should follow.
It brings a question to mind that if government directs the
conversion of industries from defence to civil, does the
government also then have to assume some responsibility for the
success of those companies? If they move them from an area
where there has only been a defence relationship into a civil one
and the company fails, does that mean the government has to
pick up the tab for that? I do not think that is the way it should
be. I think that is an industry situation which should be covered
by the industrial manager.
Indeed if the conversion is into an area where there is already
a surfeit, too much capability, it could in fact result not only in
the company that converted into that area failing but also other
companies that were in there. There is a rollover effect there.
I think it is without any question the responsibility of the
managers of industry to find and occupy the appropriate niches.
If I may use the analogy, there is not much call for chariots any
more, so a chariot manufacturer would not be a very viable
occupation or a business. But that company might very well
develop into bicycles or cars. On the other hand they have to
accept the fact that there are many other competitors and they
would have to be prepared to meet that competition.
It is the responsibility of the industry concerned to say this is
no longer viable and where are we going to go to maintain our
industry.
I think there is a place for government in industry in providing
support. That support should be in the areas of perhaps
providing a strategic analysis, to say to industry: ``This is where
we see Canada emerging, this is where we see the marketplace
going, this is an area that you might look at to exploit in future''.
I think government, as the minister said earlier, should be in
the business of, wherever possible, removing barriers to trade.
We should enhance the ability of our industries to compete on
the world market. We should not subsidize them; we should
enhance their ability to do it on their own.
I think probably the most tremendous impact the government
could have on our industry, whether it be defence, whether it be
civil or whether it be the conversion thing, is to bring the
spending habits of the government back into line to balance the
budget, to lower taxes. This in itself, in and of itself, would
create a far more vibrant industry, it would result in far greater
employment and to a large extent it would solve the problem that
we are dealing with.
In conclusion I would just like to say that I do not believe that
the government has too much place in the conversion from
defence to civil industries. Certainly as I have mentioned, there
is a road clearing process that it could do to remove the barriers,
to enhance the trade, to indulge or enter into trade agreements,
reciprocal agreements with other countries and other areas.
Other than that I think the industrial base of a country should be
run by the industrial managers who are concerned with it.
Mr. Ian McClelland (Edmonton Southwest): Mr. Speaker,
if I may have the indulgence of my hon. colleagues in the House,
I would like to read the opposition motion. For those watching
on TV who might have just joined us, it might be interesting for
them to know exactly what we are discussing.
In the affairs of this House the opposition parties from time to
time have the opportunity to bring forth subjects of debate. We
get relatively short notice. I think it is quite interesting that we
get relatively short notice, perhaps as much as a day in some
instances, and we then debate the issue brought forward by the
opposition.
Today the Bloc has brought forward this opposition motion
which is being debated in the House:
That this House condemn the government for its unacceptable delays in
developing and implementing a genuine strategy for the conversion of defence
industries to civilian production, which would save and create new jobs in high
technology sectors.
(1340 )
I do not know if I want to condemn the government for not
doing this. There are many, many things we could condemn the
government for, but I do not think this is one of them.
It is my opinion the government should keep its fingers out of
business and out of the marketplace. It should let the
marketplace decide who will be the winners, who will be the
losers, who will be successful and who will not. It is survival of
the fittest.
Why was it such a big shock to the defence industries that they
were going to have to change? Was it because it happened
overnight? Did we have this incredible industrial military
complex that drove the economy and the country? No, it did not;
and no, we have not.
3944
Canada has never had a particularly large military industrial
complex. Most of our sophisticated military equipment was
purchased offshore. Many members would know, as would
those watching, that one of the blackest days in the history of
our country, at least in my opinion, was the cancellation of the
Avro Arrow. By and large that put Canada right out of the high
tech aerospace industry. Ever since that time we have been
trying to force feed industry into areas of the country that may
or may not need it, that may or may not get the industry because
of political connections, political power, or power of the voter.
I submit that our country can no longer afford to artificially
pick winners and losers. The fact of the matter is that if our
world has changed and our country's defence posture has
changed to the extent that the defence industries in a particular
part of Canada, whether it is in Ontario or Quebec, are harmed
because things change, then so be it.
It is up to those industries to convert or to find another use for
their capital, for their people, for their industries. If they do not,
they have every right to go out of business just like anybody
else. Were this not the defence industry, if this were an industry
of garment makers in Winnipeg, would we be having a debate in
this House today that this House would condemn the
government for not supporting garment workers in Winnipeg? I
think we would not.
I want to acknowledge the help given by the Canadian
Defence Preparedness Association in preparing the background
paper I am using in my debate. It is interesting to note that
Canada's defence industry, like most industry in Canada, is
concentrated in Ontario and Quebec. For example, western
Canada and Atlantic Canada each contain about 15 per cent of
the total defence industry, whereas 70 per cent is in Ontario and
Quebec, with 40 per cent in Ontario and 30 per cent in Quebec.
It is generally a high tech industry which is research and
development intensive. That is particularly and precisely the
kind of industry we want. However research and development in
high tech industry is industry that depends upon the people who
are part of that industry to stay alive. It is a fast moving industry.
What is unique and innovative today could be tomorrow's hash
browns.
We cannot have the government deciding where the high tech
industry is going to be. The marketplace has to decide where the
high tech industry will be and who will be the winners and
losers.
It is also very interesting to note that according to this paper
70 per cent of the output of the manufacturing of the so-called
defence industry in Canada is for the commercial or the civil
market. At the same time, 70 per cent of this defence market we
have in Canada supplies 70 per cent of the requirements for the
Canadian defence department. That tells me that our defence
industries in Canada by and large are already fairly diverse.
They are not, as they are for example in many places in the
United States, entirely dependent on the manufacture of one
item, such as an aircraft. For instance, in Canada we have seen
nothing like the decimation of the aircraft industry in San Diego.
It was highly dependent on military contracts for all of the
research and development. The defence budget in the United
States as compared to ours is just absolutely enormous.
(1345)
We do not have the same critical mass in the defence industry
to start with and our defence industry, although concentrated
primarily in Ontario and Quebec, is fairly balanced between
these two provinces. It is not totally 100 per cent dependent on
military manufacturing to stay in business according to this
paper. That seems to me to be a fairly solid and a fairly good way
to run a business.
Historically as a nation there are some areas where we have
decided we were going to pay a premium in order to maintain an
industry of our own. One is ammunition manufacturing. I think
there is a place in Toronto that manufactures ammunition.
Ammunition could be purchased offshore but we buy our
ammunition at home.
I wonder whether free trade and the relationship we have
under the GATT, but particularly under NAFTA, would allow for
this kind of protectionism anyway.
I would also point out to my hon. friends that one of the
reasons that people in other parts of Canada who do not directly
benefit from the manufacturing heartland of central Canada,
being Ontario and Quebec, just go crazy is the fact that it always
seems to be necessary to protect the manufacturing base in
central Canada. We have this insane situation even as I speak
that we have to negotiate to break down interprovincial trade
barriers.
We have 11 governments at the table trying to negotiate the
decimation of these insane trade barriers. Think about it. That is
more people at the table negotiating the removal of trade
barriers within Canada than were sitting at the table to negotiate
the removal of the trade barriers between the United States,
Mexico and Canada. There were only three parties at that table
and we have 11 in Canada.
We are debating a motion on whether our government, our
taxpayers, people earning 10 bucks an hour, paying two or three
bucks an hour taxes, should come to the federal government so it
can decide who will be the winners and who will be the losers
and we find ourselves subsidizing an industry for which there is
no need.
We have to break down the trade barriers within Canada so we
can be competitive within Canada. If we cannot be competitive
within our own borders how on earth can we presume to be
competitive in the world environment?
3945
Let us put the horse before the cart. Let us get rid of internal
trade barriers. Let us get our construction, our manufacturing,
our capital resources, our people working together, and let us
let the marketplace pick the winners and then compete
world-wide. I submit that if we take that kind of approach we
will be winners the world over because we can compete without
government help, without government subsidy in any market
in the world.
[Translation]
Mr. Benoît Tremblay (Rosemont): Mr. Speaker, I hope one
day people like the hon. member for Calgary Centre will give up
their ideological vision and understand the real economic
situation in Canada and other countries.
The hon. member said that the military sector is
fundamentally a high-tech industry, and we know full well that
it will become less and less important in the years to come in
North America, and even more so in the United States than here,
in Canada. We should not forget that the American companies
are our main competitors.
For many, many years, most of the federal research and
development subsidies went to defence industries, in areas like
telecommunications, development of new products or
aeronautics. Governments used a good deal of their research and
development subsidies for military purposes, because they
wanted the armed forces to be in the vanguard of progress in
aviation and telecommunications. Also, the development of new
products was always crucial to the other two sectors. That is why
the United States have a competitive edge in these sectors,
where research and development is concerned. Now, of course,
we must seek new ways of doing things. We are indeed in favour
of the reduction in military production, but at the same time we
must ensure that all of the research and the discoveries that can
serve civilian purposes are not abandoned simply because some
of these businesses go bankrupt tomorrow morning, after the
government decides all of a sudden to cancel major contracts,
like it just did with the helicopter deal.
(1350)
For our country to be competitive at the international level,
we need more than rhetoric; we cannot only tell the government
never to interfere. We have to take into account the source of our
competitiveness. Obviously, for years, the defence industry has
been one of the main sources of our competitiveness in the
non-military sector. The Americans set up a program for the
conversion of defence industries to civilian production. They
also developed alternative national strategies in areas like R and
D, telecommunications, development of new products and
aeronautics. They now have alternative strategies to replace the
defence industry as instrument of R and D.
The Bloc Quebecois is only suggesting today that the
government give us precisely what our competitors are getting.
We can talk about being competitive at the international level
and revel in rhetoric, but 80 per cent of our business, especially
in the industrial sector, is with the United States. Thus, we need
the tools, we need a transition process to maintain our
competitiveness.
As you said it yourself, these businesses have already decided
to go for the civilian market. We just have to get things moving
toward conversion from defence to civilian production, since we
must cut substantially our military spendings to reduce the
government's budget and deficit. And this must be achieved
without ever losing our competitiveness in the high tech sector.
That sums up the precise and straightforward position of the
Bloc Quebecois.
[English]
Mr. McClelland: Mr. Speaker, I respect my hon. colleague's
opinion and I share some of the opinions he just put forward.
However there is a contradiction. I recall in my presentation
saying that if there was an epiphenomenal moment in Canada
where we said goodbye to high tech it was when we said goodbye
to the Avro Arrow 35 years or so ago. We were world leaders and
we said goodbye to it. Ever since that time we have relied on
offshore industries for our high tech aircraft or high tech
defence materiel. The nucleus, the germ of it comes from
offshore. I agree 100 per cent.
Therefore, if I agree with that and the contention that my hon.
colleague brought forward, he must also agree that if we are
getting that high tech initiative offshore we cannot also be
getting it onshore. We cannot depend on both. The defence
industry has been a high tech driver in Canada. Of that there is
no question.
We look at the satellites and Canadarm and those kinds of
things. They could be considered defence and defence oriented,
but those things are not going to come to an end. We are still
going to have satellites going up. We should all say a prayer for
Anik E2 up there somewhere. God knows what it is doing.
However, the whole high tech industry is not going to dry up and
go away.
We need the vision of the people who are the shareholders of
those companies that were in that business. That is what their
job is. The job of the directors of those companies is to
anticipate, to see where they should be putting their energies in
the future. Perhaps it is in the environment. Perhaps it is in
extracting minerals from difficult places.
(1355)
My point is that it is not the role of government to decide what
that initiative should be. It should be the role of industry and the
owners of industry. They will do a far better job than we will.
When we went through our orientation, no one said all of a
3946
sudden when we passed through these doors that we would
become venture capitalists with the ability to pick winners and
losers in the marketplace. It did not happen.
Mrs. Georgette Sheridan (Saskatoon-Humboldt): Mr.
Speaker, I appreciate the opportunity to speak on this topic
which is so important to a large number of Quebecers. I would
like to thank the hon. member opposite for focusing attention on
the future of the defence industry. It is an industry which over
the years has provided much employment in the province of
Quebec and will continue to do so.
The future prosperity of the defence industry is vital to the
future prosperity of Quebec. As a vibrant part of Canada and
North America, Quebec and its industry can keep pace with
global change and technological advancement.
I applaud the interest of the member in raising this question
and I would like to speak for a few minutes on this important
matter.
[Translation]
The Quebec defence industry is made up of many small
companies and fewer than 20 medium to large ones, the vast
majority of sales being made by the latter.
All these companies, small and large alike, have seen their
defence sales dwindle over the past few years. In light of the
falling business activity on the defence markets, it is reasonable
to assume that this trend could well persist.
[English]
European markets for defence sales have dropped remarkably,
leading to a loss of 150,000 jobs over the last three years. That is
10 per cent of the workforce in the aerospace and defence sector.
In America, the experience is similar, with large reductions in
military procurement matched by significant job losses, more
than 3,000 in the last three years. Both European and American
industries have been faced with a serious industrial adjustment
problem.
In various countries, government has responded in various
ways. It is tempting to look to solutions such as those proposed
in the United States for the problems facing Quebec's aerospace
and defence industry.
I believe we can learn from others. I am confident that some of
the lessons we might learn from others in defence industrial
conversion are universally acceptable. For example, there are a
number of internal and external obstacles to diversification and
defence conversion.
These include a narrow client base, lack of experience in
export and commercial markets, over-engineered products and
small product runs. External obstacles include shrinking global
defence markets, difficulty in attracting capital and market
protectionism among others.
The various approaches adopted world-wide by governments
to deal with their defence industrial conversion problem all
address these common elements but the approaches are often
tailored to the particular circumstances unique to their
particular defence industries.
As a general rule, none of these programs envisage getting out
of military markets. Instead the first goal of diversification is
normally to retain a viable industrial base. Many governments
have approached this question as a regional or community issue
focusing their support accordingly.
Many have formed committees involving all of the
stakeholders concerned including government, trade unions and
industry. The so-called dual use technologies, commercial and
military, are often a criterion for government R and D support.
One key objective of all these programs is to maintain
knowledge, intensive industries and the high quality, high
technology employment which is part of it.
The Speaker: The hon. member has just begun her statement
and she will have priority when we resume debate.
It being 2 p.m., pursuant to Standing Order 30(5), the House
will now proceed to Statements by Members pursuant to
Standing Order 31.
_____________________________________________
3946
STATEMENTS BY MEMBERS
[
English]
Mr. Ted McWhinney (Vancouver Quadra): Mr. Speaker,
the week of May 1 to May 7, 1994 is Spinal Health Week. The
program was established in 1985 to initiate and maintain good
spinal health habits in children.
It is sponsored annually by the Ontario Chiropractic
Association, a voluntary membership organization that
represents more than 1,350 Ontario chiropractors. Its objective
is to provide public education and promote research to improve
the quality of health care for the citizens of Ontario.
Eight out of ten Canadians suffer from back pain during their
lifetime. The incidence is increasing. A healthy lifestyle
including proper posture, exercise and good nutrition is the key
to prevention.
Please join me in wishing the Ontario Chiropractic
Association a very successful Spinal Health Week.
3947
Mr. Chuck Strahl (Fraser Valley East): Mr. Speaker, one of
the promises contained in the infamous red book pertains to
accountability. However, when key questions of importance are
asked in question period relating to federal overspending, health
care, native self-government and criminal justice, the
government consistently demonstrates an unwillingness or
inability to answer.
The only time the government answers any questions is when
one of its own members asks the Liberal question of the day.
We on this side of the House are asking legitimate questions
affecting the lives of Canadians. Where is the accountability and
when will question period become answer period? Canadians
want and deserve straight, hard answers to these questions.
Reformers will keep demanding the government fulfils its
promise to be more open and accountable.
* * *
[
Translation]
Mr. Philippe Paré (Louis-Hébert): Mr. Speaker, yesterday,
Israel and the PLO signed in Cairo an historical agreement
regarding Palestinian self-government.
Following several decades of political and military conflict,
Yitzhak Rabin and Yasser Arafat have agreed on an action plan
for the creation of a Palestinian territory in the Gaza Strip and in
Jericho.
This agreement marks the begining of the end of a long and
difficult armed occupation of Palestinian territories. Certainly
apprehensions persist on both sides, but it is now up to the
parties to show their good will and lay the foundations for
co-operation between the Israeli and Palestinian people.
We congratulate negotiators on both sides on this truly
remarkable achievement. This agreement goes a long way
toward bringing lasting peace to the Middle East, and we hope it
will be received favourably by all those who live in the region.
* * *
[
English]
Mr. John Loney (Edmonton North): Mr. Speaker, the week
of May 1 to May 7 marks this year's National Forest Week. Each
year the Canadian Forestry Association bestows on a
municipality the title of forestry capital of Canada.
I am proud to inform the House that the city of Edmonton was
chosen as the 1994 forest capital. I am delighted that the people
of Edmonton have been recognized for their commitment to
promoting the contribution of urban and rural forests to the
city's environment, economy and social development.
Edmonton is a green city, noted for having one of the largest
urban parkland areas per capita in all North America. These
forested areas are enjoyed by local residents and by numerous
visitors. Edmonton is also the gateway to the huge northern
forest lands of Alberta which are becoming increasingly
important to the diversification of Alberta's economy and to
Canada's forest sector as a whole.
Allow me to congratulate the people of Edmonton and all the
forestry workers in my region whose contribution has made
1994 a memorable year for my city.
* * *
Mr. Reg Alcock (Winnipeg South): Mr. Speaker, last week I
had an opportunity to attend an international meeting of
parliamentarians concerned about the situation in
Bosnia-Hercegovina.
I was proud as a Canadian of the work that Canada is doing
there. I wish to commend the Minister of Foreign Affairs, the
Minister of National Defence and the men and women who are
on the ground in Bosnia-Hercegovina doing important work. I
cannot help but wonder whether or not we can do more.
During World War II Canadians opened their hearts and their
homes to the children who were caught in war zones. I would
urge us to think about doing the same again to provide some
relief for those people who are in such terrific danger and to get
the children out of the way of the bullets.
* * *
Mr. Gurbax Singh Malhi (Bramalea-Gore-Malton): Mr.
Speaker, high licensing fees for taxis and limos at Pearson
airport are forcing operators on to the unemployment lines.
Each year rising insurance rates, gas prices, vehicle
maintenance and licence fees along with poor business have
made it impossible for operators and their families to survive.
It is like the tobacco smuggling problem. High licensing fees
are driving legal operators out of business and have opened a
window of opportunity for non-licensed operators to illegally
scoop fares.
I call upon the Minister of Transport to direct the airport
authority to lower its licence fees. Lower fees would ease the
financial pressures on the operators and put an end to illegal fare
scooping.
3948
(1405)
[Translation]
Mrs. Madeleine Dalphond-Guiral (Laval-Centre): Mr.
Speaker, I would like to call the attention of the House to an
intolerable reality that we have the power to alleviate. I am
talking about the plight of children in Bosnia. More than
anybody else, these children are innocent victims of an
unbearable conflict.
A great many European countries are welcoming Bosnian
children with open arms, but Canada's welcome remains
discreet, too discreet, Mr. Speaker. Canada has a reputation of
being a generous nation. Our involvement in peacekeeping
activities is ample proof of that. But we can and must do more.
We must welcome in our country these children held captive of a
blind war which turns their lives into hell on earth. We cannot
remain insensitive to their plight because by failing to act, we
would in fact be condoning this war and its inhumane
consequences.
* * *
[
English]
Mr. Ed Harper (Simcoe Centre): Mr. Speaker, for the
second time in a week the world has witnessed the peaceful
conclusion of long and sometimes frustrating negotiations
toward true democracy.
Like the South African election, the historic signing in Cairo
yesterday of an agreement to end 27 years of Israeli occupation
will bring to an end the senseless killing of so many innocent
people.
In any successful negotiation there must be flexibility and an
understanding on the part of both sides. The winners here are not
those who sat at the bargaining table. The real winners are those
millions whose lives and futures will be greatly improved.
Let us hope the actions taken here by these leaders will be an
inspiration to those involved in conflicts in other parts of the
world that there is a better way.
The world today is indeed a better and safer one as a result of
the dedication and hard work of negotiators on both sides. I ask
all members to join with me in an expression of gratitude to
those whose efforts brought this difficult situation to a peaceful
conclusion.
* * *
[
Translation]
Mr. David Berger (Saint-Henri-Westmount): Mr.
Speaker, all Canadians were no doubt moved by the scenes from
Cairo where representatives of Israel and the PLO finally signed
an agreement on self-government for the Palestinians. It is
important to mention the courage and vision of the architects of
this peace, Yitzhak Rabin and Yasser Arafat.
We know that change will not come overnight. Much
bitterness remains, but this first step is very significant. The
parties have decided to settle their disputes through negotiation.
We must continue to help the partners build mutual trust, which
we hope will lead to a broader lasting peace that will extend to
the whole region.
* * *
[
English]
Mr. Gar Knutson (Elgin-Norfolk): Mr. Speaker, I rise to
comment on the recent announcement concerning citizen court
judges.
On behalf of my riding I would like to express sincere thanks
to the minister of immigration for this step. Not only does the
minister's plan promise to save the government money and end a
cycle of patronage, but it puts more meaning into the
proceedings surrounding becoming a Canadian citizen.
Those who are concerned with the deficit or patronage should
be well pleased with the minister of immigration for a job well
done.
* * *
Mr. Sarkis Assadourian (Don Valley North): Mr. Speaker,
historical and joyous are two words which best describe the
Gaza-Jericho accord, signed on Wednesday, May 4, between the
PLO and Israel.
This unprecedented agreement offers new hope for a region
which for many years was torn apart by bloodshed and religious
differences. I wish to extend my warmest congratulations and
best wishes for a lasting and progressive peace to all
Palestinians and Israelis affected by the accord.
The true impact of the agreement can only be realized through
honest and mutual co-operation from both sides.
It is my hope that the Government of Canada will continue to
offer its support for lasting and constructive peace throughout
the entire region of the Middle East.
* * *
[
Translation]
Mrs. Pauline Picard (Drummond): Mr. Speaker, it is an
honour for me to announce in this House the official launching
of the carnation campaign for multiple sclerosis, which will take
place next weekend.
3949
Multiple sclerosis is the most common neurological disease
among young adults in Canada; it is estimated that over 50,000
Canadians and Quebecers have this disease, for which there is
no treatment so far. We must also mention that Canada has one
of the highest rates of multiple sclerosis of any country in the
world. Given the seriousness of the situation, the Multiple
Sclerosis Society of Canada hopes to raise $2 million in its
national carnation campaign.
(1410)
I am therefore pleased to join the Multiple Sclerosis Society
of Canada in asking hon. members and all Quebecers and
Canadians to support this worthy cause.
* * *
[English]
Mr. Art Hanger (Calgary Northeast): Mr. Speaker, I rise
today to bring to the attention of all Canadians the tragic plight
of children in Bosnia.
None of us has been unaffected by the misery in Bosnia that
we witness nightly. The children deserve a special degree of
compassion. Untold thousands are homeless. Thousands have
lost their parents. We do not know how many are languishing as
refugees.
I urge Canadians to remember these innocent victims. I
especially urge Canadians to support the work of Bosnian
Children's Relief. I do not need to tell you, Mr. Speaker, that in
your riding five Bosnian children are now safe and secure,
having been granted a safe haven by Bosnian Children's Relief,
but there are many more.
I call on the minister of immigration to review the guidelines
relating to the granting of temporary safe haven visas for
children.
With the help of the government, Bosnian Children's Relief
could do much more in helping to preserve the innocence of
children caught in an adult nightmare.
* * *
Mr. Simon de Jong (Regina-Qu'Appelle): Mr. Speaker,
the children of Bosnia are the greatest victims of the daily
carnage occurring in that part of the world. Thousands of
children have been deprived of their childhood. They have seen
their fathers murdered and their mothers raped. They have had
their homes burned and all too often been uprooted as their
village has been ``ethnically cleansed''.
The deliberate shelling of schools, hospitals and other
non-military targets has killed and permanently disabled many
children of Bosnia. All the children of Bosnia will carry the
psychological scars for many years to come.
Do those who have unleashed this madness in the name of
some twisted notion of a greater nation not realize that the
welfare and happiness of children is the future of their nation?
Do they not realize that inflicting the suffering they have on
children will only produce a sick nation whose citizens will have
to live with the shame and guilt for generations to come?
I join my voice with all humanity in imploring, hoping and
praying that the carnage will stop.
* * *
Mr. Julian Reed (Halton-Peel): Mr. Speaker, as a member
of the Canada-Croatia parliamentary friendship group and as a
member of the parliamentary committee on human rights, I rise
in the House today with so many of my colleagues in a joint
effort to honour the victims of the present war in
Bosnia-Hercegovina.
From the selfish pursuit of territory and the inhuman drive
known as ethnic cleansing, over 200,000 souls have lost their
lives in what is today not the only but one of the bloodiest parts
of the world.
Countless more have been physically injured,
psychologically tormented and driven from their homes as
refugees. Thousands of these deaths as well as refugees have
been children on whose shoulders lie the only hope for a more
tolerant world.
As parliamentarians, citizens and humanists, let us welcome
refugees to Canada from this area of conflict in the world as
from such other areas and let us celebrate their courage.
* * *
Mr. Bob Ringma (Nanaimo-Cowichan): Mr. Speaker,
earlier this week I watched as the Leader of the Opposition
explained on the CBC his reasons for separation. He said: ``All
we want to do is manage our own money; that's all''. Not once
did I hear the words language or culture.
If all Canada represents to the Official Opposition is dollars
and cents then I urge the government to take the same tough
stand it has taken with my own province, British Columbia, over
medicare. All provinces would like more control of their own
affairs but not at the expense of destroying our country.
If the true agenda of members of the official opposition is
simply economic sovereignty let them say so and quit confusing
the issue and their supporters with the pretence of a francophone
homeland.
On behalf of all Canadians who love this country more than
just the income they derive from it, I urge the government to
fully explain the costs and ramifications of economic freedom to
Her Majesty's Loyal Opposition.
3950
(1415)
Mrs. Jean Payne (St. John's West): Mr. Speaker, all
members know that today is Multiple Sclerosis Day and that is
why we are all wearing carnations.
It is estimated that 50,000 Canadians have MS but the number
of people affected goes far beyond those who actually have the
disease. Family and friends deal with the associated health
problems each and every day. I have seen up close the impact
MS can have on people.
Medical research is needed to find the causes of MS, effective
treatments and ultimately a cure for the disease. However
research is expensive and requires a lot of money.
I urge the people of St. John's West to support the National
Carnation Campaign for the MS Society of Canada in its efforts
to raise $2 million for medical research. This Mother's Day
please buy a carnation to help find a cure.
_____________________________________________
3950
ORAL QUESTION PERIOD
[
Translation]
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, my question is for the Deputy Prime Minister.
Violent fighting continues between the Rwandan army and the
rebels. This massacre which has already killed at least 200,000
people must stop. However, the UN assistance mission to
Rwanda, now reduced to some 449 soldiers, is completely
overwhelmed. Faced with his humanitarian responsibilities, the
UN Secretary General has asked the Security Council to send
peacekeeping reinforcements to Rwanda.
Can the Deputy Prime Minister tell us whether Canada
intends to support the request of the UN Secretary General and
make a direct contribution to the reinforcements requested by
Mr. Boutros Boutros-Ghali?
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, the Minister of Foreign
Affairs clearly stated yesterday that Canada intended to call on
the UN Secretary General to help find a solution to Rwanda's
problems.
We are very, very concerned about the thousands of people
now in refugee camps and also very, very disappointed with the
continuing massacre. We are currently talking about the
possibility of broader intervention.
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, beyond concern and disappointment, I think that
Quebecers and Canadians expect the government to indicate
clearly what it intends to do, especially with regard to a very
specific proposal from the UN Secretary General himself.
So what is Canada's position on this request: is it yes or no? In
particular, I would ask the Deputy Prime Minister whether she
admits that, without a UN intervention force, it is totally
impossible to set up any medical or humanitarian operation that
Rwandans so urgently need.
[English]
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, it is unfair of the Leader of
the Opposition to characterize Canada's response as mere
concern.
We have been on the ground. We are on the ground. We
continue to be on the ground both with a physical presence and
financial assistance. We are working very closely with the
United Nations and the Security Council to ensure that the
solution we find will meet with regional support, but more
important, will reach out to those hundreds of thousands of
people who have been left homeless as a result of this massacre.
[Translation]
Hon. Lucien Bouchard (Leader of the Opposition): Mr.
Speaker, while we are making speeches, while we are speaking
and expressing our feelings, hundreds of thousands of people are
being killed in that country, a country that is very close to
Canada because of our international policies and aid programs.
We have had a presence in that country for close to 100 years.
What are we doing to prevent this slaughter? Some rivers are
now jammed with the bodies of the people killed. We must go
beyond words.
I ask the government whether the presence of an intervention
force would prompt the rebels and the Rwandan army to
negotiate a ceasefire that would end these barbarous events
which require our intervention.
[English]
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, the
Leader of the Opposition should understand that the commander
of the UN forces in Rwanda is a Canadian and he is continuing to
work under very difficult circumstances.
(1420)
We have detailed an additional 10 personnel to take the place
of the Belgians, who had to leave the country, for logistic and
other support to keep the airport open. We have been putting in
humanitarian aid on a daily basis. It has been Canada with its
Hercules flights that has ferried out nearly 1,500 people and
ferried in thousands of pounds of relief supplies.
3951
This morning one of our planes was hit by three shots but
no damage was done. The plane is being repaired in Nairobi.
It had a BBC reporter on board.
I want to underline the fact that this is a very dangerous
theatre of conflict. Whatever we decide to do in terms of
incremental action has to be thought through very considerably.
* * *
[
Translation]
Mr. Pierre Brien (Témiscamingue): Mr. Speaker, the ruling
by the Federal Court of Appeal on the taxation of child-support
payments has reopened the debate on the inequities of the
taxation system for families. The ruling said that the Income Tax
Act was discriminatory, because it treated differently divorced
parents and other individuals in similar circumstances.
My question is for the Deputy Prime Minister. Does she agree
that we should review all the fiscal measures dealing with child
support and custody?
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, clearly we recognize the
inequities of the present taxation system. This is why, in a large
part at the request of the women's caucus of the Liberal Party,
the Minister of Finance started a discussion of this in his budget.
It is equally obvious that this court ruling will have a very
direct impact on the income of many families. We are studying
the direct implications, and the Minister of Justice as well as the
Minister of Finance indicated yesterday that we can expect a
decision on this in the very near future.
Mr. Pierre Brien (Témiscamingue): Mr. Speaker, a
supplementary to the Deputy Prime Minister. Does she not agree
that this ruling and its consequences show the need to proceed
without further delay to an in-depth reform of the whole
taxation system, a system which should be based on equity,
fairness and the absence of loopholes?
[English]
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, I repeat that the Minister of
Finance recognized and understood the inequities in the tax
system when in the budget he launched a process to review this
very provision. In fact, he was encouraged to do so not only by
the private member's bill launched by the member for Nepean,
but also by the strong presentations he received from the
membership of the women's caucus of the Liberal Party.
I can assure the hon. member that the Minister of Finance, the
Minister of Justice and all members of the government are going
to be working very hard to make sure that present inequities in
the tax system are eliminated.
Mr. Preston Manning (Calgary Southwest): Mr. Speaker,
my question is for the Minister of Indian Affairs and Northern
Development.
I am sure that the minister will agree that the establishment of
any genuine democratic government must rest on the consent of
the governed. The minister has told the House that he is
proceeding with the establishment of aboriginal
self-government in Manitoba and that he has obtained the
consent of the chiefs.
Would the minister tell the House clearly and explicitly
whether he also intends to seek the consent of the aboriginal
people of Manitoba for this new form of government?
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, I am not sure if my friend is
suggesting another referendum but I think he is.
Probably in the long run this is going to depend a lot on how
the aboriginal people govern themselves. The way they govern
themselves now is to always go back to the people. They go back
to the people much more than we do. They have more
self-government now. I see some of the hon. members nodding.
Anybody who has done aboriginal work realizes that they are
consulting all the time.
A short answer to the question is that there probably will be
referendums at the band level if they go along on the same basis
they are now.
Mr. Preston Manning (Calgary Southwest): Mr. Speaker, I
thank the minister for his reply. He knows that sometimes
leaders will agree to constitutional arrangements which the
people will not approve if they get a chance to vote, as in the
case of the Charlottetown accord.
(1425)
Will the minister tell the House what would be wrong with
seeking the democratic consent of all the aboriginal people of
Manitoba to this new form of government through a formal
referendum mechanism?
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, in answer to the leader of the
Reform Party, the way it looks like it is playing out now is that
the leadership after consultation with the membership has
decided on dismantling, to take it subject matter by subject
matter starting with capital, forestry and so on.
At some point they will take back what they think is an
appropriate self-government arrangement to their people. I am
hopeful that if the leadership is wise and does the job wisely, as
perhaps we have not done on our side in the past, that the people
will ratify the agreements.
3952
Mr. Preston Manning (Calgary Southwest): Mr. Speaker,
I think the minister is saying that there may be a referendum
on this issue in Manitoba. We would like more clarification.
The chances of securing the consent of the aboriginal people
of Manitoba to self-government would be enhanced if it were
made crystal clear that any such government would be legally
required to respect the rights and freedoms guaranteed by the
Canadian Charter of Rights and Freedoms.
Can the minister give the House an iron clad guarantee that
any aboriginal self-government arrangement established in
Manitoba will give aboriginal people full protection of their
personal rights and freedoms under the charter?
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, that is a good question. The rights
and freedoms under the charter as they are now expressed apply
to provincial and federal governments. I think we have to be
cognizant that when we make these transfers that the Charter of
Rights and Freedoms, about which I feel very strongly, should
be transposed into the negotiations.
The Leader of the Opposition will be happy-not the
opposition leader but the leader of the Reform Party, hopefully
the opposition-
Some hon. members: Soon, soon.
Mr. Irwin: Perhaps some day the government. The leader of
the Reform Party makes a valid point. The next legislation that
will be before the House dealing with aboriginal people he will
see clearly that the Charter of Rights and Freedoms will apply.
That will be some time this month.
* * *
[
Translation]
Mrs. Francine Lalonde (Mercier): Mr. Speaker, my
question is for the Deputy Prime Minister. Yesterday, in his
press conference, the Prime Minister, far from being more
sympathetic to the provinces' reluctance regarding the social
program reform, said that he would go ahead with it.
Will the Deputy Prime Minister confirm that her government
intends to proceed with the social program reform one way or
another, as the Prime Minister said, and even without the
provinces' support?
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, what the Prime Minister
said yesterday is exactly what he has been saying since the
beginning of our mandate. We are negotiating in good faith to
find a solution. Obviously, if we cannot come to a solution, we
will proceed only in those fields which are under federal
jurisdiction. This is exactly the position adopted by the
Opposition leader when he disagreed with his government
during certain negotiations, in 1989.
Mrs. Francine Lalonde (Mercier): Mr. Speaker, how can the
Deputy Prime Minister reconcile her comments with the fact
that, except for unemployment insurance, all the other areas
which would be included in the reform are under provincial
jurisdiction?
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, the Prime Minister said and
keeps saying that he wants to find good solutions. What is most
important to him, and what should be most important to all
politicians, is to have jobs for workers. Unemployed people in
Montreal, Shawinigan or Dolbeau are very interested in
government projects but less interested in federal-provincial
bickering. We are trying to use a fair and equitable approach and
we are negotiating in good faith.
* * *
(1430)
[English]
Mr. Jake E. Hoeppner (Lisgar-Marquette): Mr. Speaker,
my question is for the minister of aboriginal affairs. We seek the
assistance of the minister in responding to written
communications sent to us by our original peoples other than
chiefs.
Will the minister tell us how he has responded to the fears and
concerns expressed in these written letters about native
self-government because his answers to these letters will help
us in answering ours.
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, that is not a question.
Mr. Jake E. Hoeppner (Lisgar-Marquette): Mr. Speaker, I
am very surprised.
Does the minister tell me that he has had no letters from these
native people? I would ask him how he will respond to this. The
members on the opposite side support self-government. We
want the minister to realize that we as Reformers support the
same self-government for native people. We have had genuine
fears of concern addressed to us about this.
Would the minister explain why he refuses to open up the
process to all Canadians to alleviate the concerns of those
people not directly involved in the negotiations?
3953
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development): Mr. Speaker, in the words of Allan MacEachen,
that's better, it's a question.
* * *
[
Translation]
Mr. Michel Gauthier (Roberval): Mr. Speaker, my question
is for the Deputy Prime Minister.
Yesterday, the Prime Minister took stock of his government's
first six months. The unemployment rate remains unacceptable,
the economy is stagnant and no real government expenditure
control or economic recovery measures have been implemented.
Can the Deputy Prime Minister confirm that the turnabout
announced yesterday by the Prime Minister on the subject of his
participation in the Quebec election can be explained by the fact
he has nothing to show Quebecers except for the climate of
confrontation his government has created on various issues?
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, the only confrontation
climate created in this House is the one the member from the
other side is generating by not striving to find real economic
solutions; he just keeps ranting because he does not want Canada
to succeed.
The Speaker: Order! I would appreciate it if members would
refrain from using certain words they have been uttering during
questions and answers and also if questions were not so loaded.
Mr. Michel Gauthier (Roberval): Mr. Speaker, how can the
Deputy Prime Minister speak of government achievements
when, since January 19 this year, the government has presented
almost nothing to us and no important and significant bill on
economic recovery and job creation has been tabled to date?
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, as far as I know, a budget is
an important document for job creation in this country. It just so
happens we did present a budget. We have already approved
millions and millions in Canadian investments for projects in
Quebec which will give jobs to real workers and not to those who
refuse to work and just keep bitching.
The Speaker: Order. The members should please consider
their words before using them. As I said, some terms are slightly
loaded. I will ponder upon terms like bitching and will come
back to you on this.
(1435)
[English]
Mr. Randy White (Fraser Valley West): Mr. Speaker, my
question is for the President of the Treasury Board. I certainly
expect an answer, not like that last outrage that my colleague
got.
A recently released Treasury Board report indicated that the
federal government spent $5.2 billion last year contracting out
services. Talk about a place to cut in this budget. That report did
not indicate who received the contracts, on what basis the
contracts were issued, and how values for these contracts were
established.
To clarify this situation I would like to ask the President of the
Treasury Board to immediately table all information that his
department has currently. Also, will he indicate from 1990 on
what those contracts were?
Hon. Arthur C. Eggleton (President of the Treasury Board
and Minister responsible for Infrastructure): Mr. Speaker,
the information that the member refers to is part of the review of
efficiency of programs that we are undertaking with the public
sector employee representatives, the unions, in an effort to find
savings in government spending so, as we said in the budget, we
can help to shorten the period of the wage freeze. Information
was provided to that extent.
We are still undergoing our review of contracting and
contracting out. I might add that that $5 billion does not just
include the kind of contracting out that the unions are concerned
about but includes all contracting; everything from doctors for
aboriginal communities in the north, for example, to the
repairing of planes and ships for the Department of National
Defence.
Certainly whatever information we can provide for the
member and for other hon. members of the House we are quite
willing to provide as part of the review of contracting out which
will be dealt with not only by the Treasury Board but also by the
government operations standing committee.
Mr. Randy White (Fraser Valley West): I thank the hon.
minister for a decent answer, Mr. Speaker.
More than 36,000 of these contracts were issued in 1992-93
alone. Some suspect that the contracts were given to friends of
government rather than being issued on the basis of merit. This
report also indicates that contracts were granted without public
scrutiny and almost half were issued without a tender process.
Will the President of the Treasury Board agree that all future
government contracts must be subject to public tender process?
Hon. Arthur C. Eggleton (President of the Treasury Board
and Minister responsible for Infrastructure): Mr. Speaker,
the period of time we are referring to in the statistics is of the
last government, not this current government.
3954
This Liberal government is dedicated to cost efficiency, to
spending the taxpayers' money wisely, doing so in a fair and
open fashion, a transparent fashion, so that people can see how
their money is being spent. We intend to bring about reforms and
changes from what the last government did in terms of
contracting.
* * *
[
Translation]
Mrs. Suzanne Tremblay (Rimouski-Témiscouata): Mr.
Speaker, my question is for the Minister of Canadian Heritage.
There has been more troubling revelations regarding the
Canadian Museum of Nature. This morning, at a press
conference, representatives of the science community asked that
the questionable lay-off of several scientists be investigated in
view of the fact that it has far-reaching consequences. It gives a
bad name to the museum and jeopardizes its research activities
as a whole.
Given these new facts, is the Minister of Canadian Heritage
willing to reconsider and, without delay, ask for a public inquiry
with a view to hearing the testimony of all the people involved in
this matter?
Hon. Michel Dupuy (Minister of Canadian Heritage): Mr.
Speaker, I have already had the opportunity to speak several
times on the problems that have been brought to light regarding
this museum.
The person I rely on in this matter is the Auditor General of
Canada who has the trust not only of the government but also of
this House. He said he would perform a special in-depth audit of
the museum's operations and finances. I understand that the
museum board of directors has requested that this audit be
conducted without delay. Once we have all the facts and the
Auditor General's conclusion, we will be able to pass
judgement.
(1440)
Mrs. Suzanne Tremblay (Rimouski-Témiscouata): Mr.
Speaker, does the minister realize that this museum has a unique
responsibility in Canada to perform basic, theoretical and
applied research, and that any delay, given the time it will take
the Auditor General to conduct an audit and elected
representatives to hold a public inquiry, seriously jeopardizes
the mission of the museum and its reputation in the scientific
community?
Hon. Michel Dupuy (Minister of Canadian Heritage): Mr.
Speaker, the hon. member's remarks, which are more a comment
than a question, start from the premise that the museum is guilty
as charged, even before we have the facts and know what is
really going on. I am aware of the criticisms that have been
levelled and I take them seriously. Soon we will know the facts.
[English]
Mr. Ron MacDonald (Dartmouth): Mr. Speaker, my
question is for the Minister of National Defence.
The future of the Canadian military Sea King fleet is once
again before the public with the recent crash of a Sea King at the
cost of two lives with two other airmen seriously injured.
Although meticulously maintained many of these aircraft are
older than the pilots that fly them and there is a need for the
government to make a decision soon to replace this fleet.
I ask the Minister of National Defence if he can assure this
House of the airworthiness of the remaining Sea King fleet and
indeed will he give a commitment that this government does
intend to replace these aircraft?
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, first I
would like to acknowledge that we extend our sympathy to the
families of the two airmen killed and the other two that were
seriously injured in this particular crash.
I know it is of great concern to the hon. member because these
helicopters are based at CFB Shearwater in the hon. member's
constituency. These helicopters are well maintained, otherwise
we would not fly them.
This party in the election campaigned against the EH-101
helicopter because we felt it was too expensive a solution for the
helicopter needs of the government. We never denied that there
would have to be some replacement at some point in time for the
Sea Kings. The Sea Kings are airworthy until the year 2000.
I want to assure the hon. member and other colleagues in the
House that we intend to fly them. They will do the search and
rescue work and other naval reconnaissance and anti-submarine
patrols. They will keep flying until the year 2000 because they
will be well maintained.
I believe once the defence review is over later this year, we
will have some answers as to the kind of equipment that we will
need to discharge our future obligations.
* * *
Mr. Jim Silye (Calgary Centre): Mr. Speaker, my question is
for the Deputy Prime Minister.
Ridiculous statements from senior cabinet ministers continue
to plague the government, not only today but yesterday when the
Minister of Human Resources Development said that if people
with jobs would not work overtime there would be more jobs for
unemployed Canadians.
3955
Can the Deputy Prime Minister tell Canadians if legislation
to limit the work week is currently under consideration by this
government?
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, in the month of February the
Minister for Human Resources Development launched an
analysis of the whole issue of how we work.
In fact not only limitations on overtime, but job sharing,
flexible work hours and different ways of working are
challenges that we have to face to meet the needs of the real
workforce.
I happen to know in my own constituency at the steel company
there are many people who would like to be called back to work,
but unfortunately overtime sometimes prevents that. That is one
of the things that the minister's panel is looking at but there is
certainly no legislation proposed at this time.
Mr. Jim Silye (Calgary Centre): Mr. Speaker, the minister's
statement of yesterday implies that hard working people are the
cause of unemployment.
Using the minister's logic, if the Deputy Prime Minister
herself worked overtime she would be contributing to
unemployment.
Will the Deputy Prime Minister not agree that her minister's
logic and her own logic are flawed and do not address the real
problem in this country, that high taxes are forcing people to
work longer hours and high deficits and debt are causing
unemployment?
Hon. Sheila Copps (Deputy Prime Minister and Minister
of the Environment): Mr. Speaker, I think what the Minister of
Human Resources Development is recognizing is what many
Canadians are recognizing and that is the workforce is changing
drastically.
(1445)
In the old days we could expect to work specific hours of the
week but that does not always work in every particular
occupation. What he is suggesting is something we should all be
looking at. Is there a possibility for us to be examining flex
time? Is it possible for us to look at job sharing so that for
example women who may have home responsibilities could
comfortably combine those with paid work outside the home?
These are all creative ideas that the minister is examining. I
wish the member would open his heart and examine some of
those positive solutions with us.
[Translation]
Mr. Gilles Duceppe (Laurier-Sainte-Marie): Mr.
Speaker, my question is for the Minister of Canadian Heritage.
Despite the fact that we tried everything possible and
imaginable to bring the minister to shed some light on the
management of the Canadian Museum of Nature, he still refuses
to hold a public inquiry. Yet, some troubling points remain and
since the minister wants to know the facts, does he not think that
the internal inquiry report should be made public and will he put
pressure on the museum's board to make it release the
conclusions of the report?
Hon. Michel Dupuy (Minister of Canadian Heritage): Mr.
Speaker, this is an internal report commissioned by the
management of the museum which has an arms-length
relationship with the government. This does not mean that I do
not care about what goes on there, and I will see how we could
provide more information to our colleagues opposite.
Mr. Gilles Duceppe (Laurier-Sainte-Marie): Mr.
Speaker, should I remind this House that the present director of
financial services, who started at the beginning of 1994, was
previously employed by the company hired by the board to
prepare a report on the museum. Does the minister not think that
this is a rather strange coincidence? Why does he not suspend
immediately and without pay the director of the Canadian
Museum of Nature until we know the conclusions of the inquiry
presently conducted by the Auditor General's Office?
Hon. Michel Dupuy (Minister of Canadian Heritage): Mr.
Speaker, the doubts raised by the hon. member regarding the
management of this museum and its inquiry are precisely the
reason why I will be relying on the job being done by the Auditor
General's Office.
* * *
[
English]
Ms. Val Meredith (Surrey-White Rock-South Langley):
Mr. Speaker, my question is for the Solicitor General.
In 1972 Valmond Lebouthillier received a life sentence for
second degree murder. During 19 years of incarceration he had a
history of violence and unco-operative behaviour but he was
still given full parole in September 1991. In June 1992 he
exposed himself to women, but a suspension warrant was
cancelled. Two months later he stabbed and sexually assaulted a
woman.
Despite a number of internal inquiries critical of the board's
decision, one of the board members involved in this decision
3956
was given a job at the parole board's Ottawa headquarters
evaluating the work of other board members.
Will the minister acknowledge to this House that problems
with the National Parole Board go beyond just one or two
isolated incidents and that the entire parole system must be
re-examined?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker,
the hon. member has indicated a number of concerns that arose
before this government took office.
We are committed to working to improve and strengthen the
parole and correction system. I have already said that I, on
behalf of the government, intend to bring down legislation
before too long to achieve this purpose. I look forward to the
support and encouragement of the hon. member to achieve these
objectives.
Ms. Val Meredith (Surrey-White Rock-South Langley):
Mr. Speaker, I am encouraged by the words, but this government
has frequently congratulated itself for having the courage to
cancel multi-billion dollar helicopter deals and Pearson airport
deals to save taxpayers money.
Why does the Prime Minister find it so difficult to cancel
some $100,000 governor in council appointments that may save
taxpayers' lives?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker,
this Parliament has created the National Parole Board as an
independent semi-judicial body, akin to a court.
(1450)
I think it is a very serious matter and has to be proceeded with
due care and attention if one is considering revoking an
appointment. I do not think the hon. member would want to
create a set up where there is political interference or the
possibility of accusations of political interference in the
decisions of the parole board.
As a result, I take the hon. member's point very seriously. We
are looking into the concerns underlying her question. Certainly
we will not shrink back from taking action that is justified by a
serious consideration of all the facts.
* * *
Mr. David Iftody (Provencher): Mr. Speaker, my question is
for the minister of agriculture.
The Americans are falsely accusing Canadian wheat farmers
of dumping their product into U.S. markets and the U.S. has
mounted trade sanction attacks against us.
Can the minister advise this House where Canada stands? Will
the minister defend the legitimate rights of our Canadian grain
producers?
Hon. Ralph E. Goodale (Minister of Agriculture and
Agri-Food): Mr. Speaker, the short answer to the hon.
member's question is an unequivocal yes.
As I have said on many occasions, we will not roll over and
play dead. Canada will defend this country's vital interests,
including those of Canadian grain producers. I have made that
point on a number of occasions, as has the Prime Minister, the
Deputy Prime Minister, the Minister of Finance, the Minister for
International Trade, and the Minister of Foreign Affairs.
We want a negotiated settlement with the United States. We
are prepared to negotiate fairly and in good faith for as long as it
takes to get such an agreement. In the meantime we have made it
absolutely clear that unilateral trade action by the United States
against Canada will be met with vigorous and determined
response by Canada.
* * *
[
Translation]
Mr. Stéphane Bergeron (Verchères): Mr. Speaker, after the
question asked by my hon. colleague, this one will probably be a
little tougher.
In announcing its intention to raise its tariffs on Canadian
durum wheat and barley, the United States apparently wants to
import less Canadian grain and, in turn, to challenge under the
NAFTA provisions the maintenance of the GATT-defined tariffs
that Canada intends to impose on products subject to quotas
such as poultry, eggs and milk, where Quebec accounts for over
40 per cent of Canadian production.
My question is for the Minister for International Trade. Can
the minister state in this House that the government does not
intend to cave in to American pressure on tariffs and that it will
not strike any kind of bargain with the various agricultural
sectors in order to facilitate negotiations with the U.S. on
exports of durum wheat and barley?
[English]
Hon. Roy MacLaren (Minister for International Trade):
Mr. Speaker, we are not linking products in our discussions with
the United States. We are not linking questions pertaining to the
tariffication of dairy and poultry quotas with those of grain. We
are not linking the rights of Canadian grain farmers to other
issues. We are dealing with both issues quite separately.
[Translation]
Mr. Stéphane Bergeron (Verchères): Mr. Speaker, can the
minister tell this House which provisions will prevail in trade
disputes between Canada and the U.S., that is whether or not
3957
GATT will take precedence over NAFTA, and could he table in
this House the legal opinions on which his answers are based?
[English]
Hon. Roy MacLaren (Minister for International Trade):
Mr. Speaker, I can assure the hon. member that Canada's
position has been clearly conveyed to the United States on
numerous occasions. That is that our belief, our conviction and
our best legal advice without question is that the GATT rules
take precedence over the NAFTA.
* * *
Mr. Charlie Penson (Peace River): Mr. Speaker, my
question today is for the Minister of National Defence.
On two previous occasions, January 26 and February 15, I
have asked the minister about the excessively high rates his
department pays for the household moves of military personnel.
I have never received a satisfactory answer.
I am well aware that the minister has managed to get a 10 per
cent reduction in the last tender due to adverse publicity, but this
has only scratched the surface of waste and mismanagement.
I ask the minister again today, what is he doing to bring more
open and fair competition to defence department household
moves?
(1455)
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, I
think it depends on one's perspective. There are a number of
moving companies in Canada, a couple of hundred I think, that
are involved in the whole movement of household effects for
national defence. We have to move a lot of employees around the
country.
We are assured at the moment that we are getting the best deal
and we are always trying to seek improvements. I know there are
some members in the House, and the hon. member is one of
them, who believes that we are not getting the best deal, but I
have yet to see the proof. If he has the proof, I will certainly
study it.
Mr. Charlie Penson (Peace River): Mr. Speaker, that seems
to be a little bit more smoke and mirrors. The Prime Minister has
stood in this House and repeatedly asked for ways to save
money. It has been suggested that in this department there could
be a $25 million saving.
The Ottawa Citizen and the member for Waterloo have both
called for an inquiry into the wasteful way in which household
moves are conducted. Will the minister come clean with
taxpayers and order such an inquiry?
Hon. David Michael Collenette (Minister of National
Defence and Minister of Veterans Affairs): Mr. Speaker, we
are not going to order an inquiry. We are looking into every
aspect of spending in the department, as my colleagues are in
their departments. If we think we can get a better deal for the
taxpayers, we are not wedded to one particular solution.
* * *
[
Translation]
Mr. Claude Bachand (Saint-Jean): Mr. Speaker, my
question is for the minister responsible for federal-provincial
relations.
Next week, the Quebec Minister of Education will meet with
the minister responsible for federal-provincial relations in an
effort to convince Ottawa to preserve the military vocation of
the Collège militaire royal de Saint-Jean.
Can the minister tell us how the federal government intends to
respond to the Quebec government's request to preserve the
military vocation of the college in Saint-Jean, an essential
condition for maintaining university level courses at this
campus?
Hon. Marcel Massé (President of the Queen's Privy
Council for Canada, Minister of Intergovernmental Affairs
and Minister responsible for Public Service Renewal): Mr.
Speaker, I have already had the opportunity this week to discuss
the future of the Collège militaire royal de Saint-Jean with
Minister Chagnon. Obviously we are going to proceed with the
measures announced in the budget and reduce the number of
military colleges to one. However, negotiations are continuing
and I think they could prove to be productive and satisfactory to
both parties.
* * *
[
English]
Mr. Myron Thompson (Wild Rose): Mr. Speaker, my
question is for the justice minister.
Today, if Scott Farion from Edmonton were alive, he would be
celebrating his 18th birthday. Instead, his life was cut short
when he became Edmonton's first murder victim of 1994. So
today his parents are grieving their loss rather than enjoying his
birthday.
The tragedy of this case is that Scott's murder could have been
prevented. Scott's alleged killer is a 16-year old repeat offender
who was out on probation for another crime at the time of the
murder.
What can the minister tell Scott's parents today to assure them
that this government plans to get tough with young offenders?
Hon. Allan Rock (Minister of Justice and Attorney
General of Canada): Mr. Speaker, I believe that case may still
be before the courts. Therefore I do not want to comment on the
facts of the case apart from expressing my sorrow at the
description of the tragedy that has been given by the hon.
member.
3958
The hon. member knows, and I have told the House, that I
will be bringing forward legislation in June to change the Young
Offenders Act to reflect longer maximum sentences for serious
violent crimes among other things. I have made that clear.
Let me go on to say that in the face of such tragedies, it is
important in my respectful view to bear in mind that the simple
change of a statute or enacting another law is not going to
change much unless at the same time we come to grips with the
conditions that lead to this kind of offence.
This government is committed not only to the kind of
effective legislation we need, and the member will see it soon,
but also to an attack on the underlying causes of crime. That is
what we intend to do.
* * *
Mrs. Brenda Chamberlain (Guelph-Wellington): Mr.
Speaker, my question is for the Parliamentary Secretary to the
Minister of Public Works and Government Services.
It is widely accepted that a sound electronic infrastructure
will greatly improve the efficiency of government. How is
public works and government services taking advantage of
tomorrow's technology to increase efficiency, improve services
and reduce costs for the Canadian taxpayer today?
(1500)
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services): Mr.
Speaker, this department, government services and public
works, now provides 70 per cent of the telecommunications
services for the government.
It is profiting from the new electronic infrastructure programs
that are available. Let me give examples very quickly. We have a
program, the Electronic Mail Network, which connects 120,000
public servants across the country. It saves Canadians $55
million per year. We have introduced an automated public
service compensation system that saves Canadian taxpayers $44
million a year.
* * *
Mr. Simon de Jong (Regina-Qu'Appelle): Mr. Speaker,
my question is directed to the Minister of Industry.
There is a growing concern that the information highway will
be controlled by a few monopoly companies. I would like to ask
the minister has the government defined what is in the public
interest as it concerns the information highway? How should
that public interest be implemented, protected and enforced?
Hon. John Manley (Minister of Industry): Mr. Speaker, the
question is a very good one.
I am sure the member is aware that the advisory council on the
information highway has its first meeting today. In the booklet
we produced on Canada's information highway with the
announcement of the advisory council, we set out our
objectives, including competition, jobs, accessibility and
affordability for all Canadians.
Those fundamental principles and objectives are the ones that
we are seeking to define. The means by which we achieve them
over the course of the deliberations of the council during the
next few weeks and months will define our view of the policies
that should be pursued. We will be seeking the input of members
of the House as well as the broader Canadian community about
the impact of the regulatory environment in which we are going
to operate.
It is a very important file, one on which the government will
act with great care and with great interest in what the hon.
member has to say to us about it.
[Translation]
The Speaker: Order! The hon. member for Laurentides has
the floor on a point of order and I believe, also has the
unanimous consent of the House.
* * *
Mrs. Monique Guay (Laurentides): Mr. Speaker, I believe
you will find that there is unanimous consent to move the
following motion:
That motion M-280, in the name of Mrs. Guay (Laurentides) in the Order of
Precedence of Private Members' Business, be withdrawn and replaced by
Motion M-294 in the name of Mrs. Guay (Laurentides), which is listed in
today's Notice Paper.
The Speaker: Is there unanimous consent?
Some hon. members: Agreed.
(Motion withdrawn.)
* * *
Mr. Michel Gauthier (Roberval): Mr. Speaker, could the
Government House Leader please tell us what is on the agenda
for the next few days?
Hon. Herb Gray (Leader of the Government in the House
of Commons and Solicitor General of Canada): Mr. Speaker, I
would be happy to make my statement, which is quite
straightforward. I think the Deputy Prime Minister will agree
with me on this.
3959
Ms. Copps: Yes. Absolutely.
[English]
Mr. Gray: Anyway, tomorrow the House will resume
consideration of Bill C-22 respecting Pearson airport. If this is
completed at second reading, we will turn to Bill C-25 to amend
the Canada Petroleum Resources Act. If there is time, we will
have Bill C-26 regarding the National Library.
Monday the House will resume business where it left off on
Friday. When this is completed, we will proceed to Bill C-27,
the income tax technical bill. On Tuesday, the House will
consider the motion in the name of the Minister of Agriculture
and Agri-Food in order to debate matters of importance to
Canadian farmers.
I understand that discussions are going on aimed at having the
House sit into the evening to accommodate all those who wish to
participate in this important debate.
In any event, the House will resume business from where it
left off on Monday and Thursday will be an allotted day.
_____________________________________________
3959
GOVERNMENT ORDERS
(1505)
[English]
The House resumed consideration of the motion.
Mrs. Georgette Sheridan (Saskatoon-Humboldt):
Madam Speaker, one key objective of the government in
introducing these programs is to maintain knowledge in
intensive industries and the high technology employment which
is part of it. This, of course, is also an objective of our efforts to
assist in the conversion of the Quebec defence industry.
While many of the approaches which I have just outlined
would be applicable to the Quebec defence industry, I believe it
would be a mistake to try to impose, for example, a U.S. style
solution to the Quebec situation.
[Translation]
A number of quite marked differences exist in terms of
defence industry conversion between Quebec and the United
States and even other parts of the world, like Europe.
Basically, the Quebec defence industry conversion is unique
and different from any other. A fair number of defence
industries in Quebec would be more appropriately referred to as
aerospace and defence industries. I say this because, unlike
many of its international competitors, the Quebec defence
industry has already diversified its production considerably. It
is producing a wide range of commercial and defence products.
[English]
Quebec's industry is unique in another important respect, one
in which we should all take pride. Quebec's aerospace and
defence sector sells a large proportion of its products and
services in world markets. To do this successfully it must, and in
fact do, produce world class products at competitive prices.
Like the rest of the Canadian aerospace and defence industry,
Quebec firms focus on high technology market niches. They
export subsystems and components sold primarily to aerospace
and defence prime contractors in countries around the world.
This is a remarkable achievement. A country as small as
Canada ranks sixth in the world in total aerospace and defence
sales, with between 70 and 80 per cent of all production exported
to other countries.
We should be proud of these companies and of the workers in
these dynamic industries who make this significant contribution
to the economies of Quebec and Canada.
As my comments indicate, Quebec's aerospace and defence
industries are in many ways different from their counterparts in
other areas of the world. I realize that many aerospace and
defence firms face uncertain prospects in the years that lie
ahead. But I am also confident that based on their past track
record Quebec's aerospace and defence industries can and will
rise to this challenge.
[Translation]
I hope I have demonstrated today the importance of
recognizing how unique the Quebec aerospace and defence
industries are. By building on their relative strength in relation
with the majority of industries in the rest of the world, Quebec
industries are well on the way to diversifying their production
and converting their technologies.
As mentioned recently in the budget, the federal government
intends to change the Defence Industry Productivity Program
(DIPP) in support of changes in the Quebec aerospace and
defence industry. I have good hope that all the support provided
by both the federal and the provincial governments to the
Quebec aerospace and defence industry will foster conditions
favourable to the pursuit of changes.
As I said earlier, given the unique circumstances of Quebec, it
may not be appropriate to consider applying in that case
3960
solutions used in the United States or in Europe. We all
recognize that product diversification in the defence industry
presents multiple difficulties. As indicated earlier today, this is
no small task and there is no quick fix.
But this does not mean that problems cannot be resolved.
They can and will continue to be resolved. Major efforts are
already being made by the private sector, efforts which are
proving successful in the Quebec aerospace and defence
industry.
(1510)
[English]
The government will continue to be a full partner in these
efforts to ensure that this industry continues to deal successfully
with the challenges and the opportunities which will come to
Quebec in the future.
Ms. Jean Augustine (Parliamentary Secretary to Prime
Minister): Madam Speaker, we have had much discussion on
the commitment of the government to defence conversion.
Indeed we have indicated in both the Liberal plan for Canada
``Creating Opportunity'' and the budget the important role that
the defence industry productivity program will play in this
commitment.
I would like to mention some of the principal aspects of the
role which the defence industry productivity program, or DIPP,
can play in defence conversion. We believe that the effective use
of this tool can contribute to the continuing reduction of the
industry's dependence on defence sales.
DIPP, created in 1959 under the auspices of the
Canada-U.S.A. defence production sharing agreement, supports
the federal policy of participating in international co-operative
production sharing agreements. It also plays a major role in
supporting Canadian high technology defence related industries
like aerospace.
Today Canada's defence industries are characterized by the
international scope, high risk and intense competition both in
Canada and abroad from subsidized foreign firms.
Under the current program DIPP makes repayable
investments to qualified firms for research and development,
source establishment, buying against production machinery and
for conducting market feasibility studies. The program is
market driven and industry led.
The government considered these as essential and desirable
features which will continue in any new conversion program.
These features can ensure that Canada remains internationally
competitive.
The defence industry productivity program has been
instrumental in the success in building high technology
industries and generating substantive exports and creating jobs
across Canada. Since its inception 35 years ago the program has
brought extraordinary benefits to Canada. I would like to
mention a few.
Seventeen hundred projects have been completed. The
Government of Canada has contributed $3.4 billion to those
projects. The program has leveraged $280 million from other
governments, primarily the U.S.A.
Canadian industry itself has invested $6.8 billion. These
projects have generated sales for Canada of between $25 to $40
per DIPP dollar invested primarily to the export markets.
In total around 60,000 person years of employment, most of it
high tech, have been maintained in Canada's aerospace and
defence industry sectors.
The program has been reviewed by the industry and considers
it extremely successful as well as essential for their future
growth and development.
The introduction of a viable defence conversion
diversification component under DIPP must take into account
the global context within which the program is situated: the
substantial reductions of defence expenditures by major
industrialized countries; the worldwide restructuring of the
aerospace and defence sectors; Canada's obligations toward the
GATT and other agreements; Canada's fiscal constraints in
industrial infrastructure.
The challenge therefore is to introduce a defence conversion
and diversification component that will best help firms wishing
to diversify while at the same time ensuring that the projects
being supported will have a reasonable chance of success.
(1515)
Although the program was not specifically designed for
defence conversion, it has nevertheless reinforced the
conversion of Canada's defence industry through its flexibility
and responsiveness to market conditions.
For example, sales of the aerospace and defence sector are
now 70 per cent commercial versus 30 per cent military. This is
the reverse of the mix that we had in the 1960s. However, in view
of the new global realities, we must intensify and focus our
conversion efforts so that we can attain the new objectives.
Consultations so far have raised a number of important issues
that we will have to resolve before we finalize the new
component. We will have to recognize that some firms in
successful niche markets may not wish to convert and that some
may be inconvertible. We may have to modify standard existing
DIPP performance criteria to accommodate defence
conversions. Repayment options are also to be considered.
From the analysis to date the government is considering the
following five activities as candidates eligible for support:
defence conversion market feasibility studies, research and
development assistance for new technologies, limited capital
assistance for tooling and retooling on an exceptions basis, a
3961
training component through Human Resources Canada, and
change of corporate culture perhaps for such activities as total
quality management.
At the moment low on the list of potentially eligible activities
are such items as software development, joint ventures,
acquisitions, strategic partnerships, and shutdown of a
production line or facility.
Although the new components of contribution programs such
as DIPP will continue to assist companies in identifying new
opportunities and in developing dual use technologies and
commercial products to meet new opportunities, we will have to
be careful. As members on all sides of the House are very much
aware, Canadians want governments to spend carefully and look
for high value for money spent to ensure maximum benefits at
least cost. They also want us to put our best efforts into long
term job creation.
The defence industry productivity program has indeed been
one of the most productive programs which the government
provided to benefit companies, employees and communities
across the country.
As we heard earlier in the debate, since DIPP came on stream
35 years ago the success stories have been many, varied and
extraordinary. The program can be a most effective tool for
reducing the dependence of our industries on defence sales and
for expediting the conversion of companies from defence
production into commercial success in the new global
marketplace. We can look forward to the defence industry
productivity program serving as a catalyst to help ensure our
economic future.
In Etobicoke-Lakeshore we look forward to those programs
in our midst. As Canadians we will share in the challenge,
fulfilment and prosperity which await those who respond to the
needs of our training partners around the world in the 21st
century.
[Translation]
Mr. Claude Bachand (Saint-Jean): Madam Speaker, I
listened carefully to the hon. member's speech. Now, in this
debate on conversion, I could not help making a little aside on
Oerlikon, of course, which is a major company in my riding, and
I will have a question for the hon. member.
Oerlikon is a pathetic situation. I admit, I also have a
confession to make. At the time, I was in the peace movement
and when Oerlikon came to Saint-Jean, even if it provided 700
jobs, what we foresaw as a long-term scenario is happening.
(1520)
When a company stops making military equipment, very
often it just closes down and moves elsewhere. Even if attempts
at diversification have been made, and I will come back to that,
the apocalyptic scenario which we feared is taking place in
Saint-Jean. Perhaps parts will continue to be made for another
year, to be stored in warehouses for future supply needs, but
once that is over, I think that Oerlikon is likely to close.
At one time, it maintained a certain level of employment. In
the riding, 735 jobs depended on Oerlikon, and now it is down to
325. When the contract ends, none will be left.
I remind you that Oerlikon produces low-altitude air defence
systems, that is guns which can hit planes invading a territory.
With the changed international situation, of course, these
contracts are worthless. Although Oerlikon has made a big effort
to sell a lot elsewhere in the world, I think that this equipment is
no longer needed today. Only $90 million is left for the final
year of operation of a $1-billion contract. Then nothing will be
left.
I want to point out that unfortunately the federal government
did not do its share when Oerlikon wanted to diversify. I thought
that there was an attractive opening at the time. They wanted to
diversify 25 per cent of their production to laser treatment for
environmental protection. That was an interesting approach to
diversification. Unfortunately, the federal government did not
support it.
I agree with my hon. colleague on DIPP, but would the
solution not be an industrial conversion fund instead? Would the
hon. member promise to defend within her party the idea of a
military industrial conversion fund? That industry has
tremendous brain power and human resources and also money
invested in infrastructure, so there is surely a way to capitalize
on this immense human potential and on that infrastructure.
Can she at least tell us if she can make her caucus realize that
the way to diversify is really to have a military industrial
conversion fund?
[English]
Ms. Augustine: Madam Speaker, I say to the member that
maybe he has given us a bit of history and maybe that history
predates the present government.
The company is currently pursuing export markets. There is
support from the present minister to ensure that Oerlikon can
diversify and look at all the options before it.
The government is providing full support for all marketing
efforts. It will review all the proposals. It is working with
everyone in terms of coming forward with as many proposals as
possible to work toward diversification.
[Translation]
Mr. Antoine Dubé (Lévis): Madam Speaker, as the member
for Lévis, I am pleased to participate in this special debate,
which results from an Official Opposition motion, on the
conversion of defence industries to civilian production.
3962
In my riding, there is an extremely important company which
is in jeopardy because of the existing situation. I am referring
to the MIL Davie shipyard. In fact, until just a few years ago,
this company was the largest shipyard in Canada.
The conversion of defence industries is undoubtedly an
important issue for Quebec. As you know, military equipment
industries have been experiencing difficulties since the end of
the Cold War. It is estimated that, since 1987, the demand on the
international market has dropped by close to ten per cent.
According to international experts, this drop may very soon
reach 25 per cent. In Quebec, since that same year, 11,000 of the
57,000 jobs in that sector have already disappeared.
(1525)
If there is a company which illustrates the urgent need to
convert military industries, it is the MIL Davie shipyard. One
year ago, the company developed a business plan to switch from
military to civilian production. This plan is not only designed to
give back to MIL Davie its status of best shipyard in Canada, but
also to make it a leader at the international level. The plan
includes two transitional contracts. One concerns the
construction of a ferry for the Magdalen Islands, for which there
is a demonstrated need, while the other provides for the
construction of a multi-purpose strategic ship for peacekeeping
missions and environmental interventions, called ``smart ship''.
Unfortunately, the shipyard and the thousands of related jobs
are in jeopardy because of this government's apathy. MIL Davie
urgently needs to convert to civilian production, since this
shipyard is among those Quebec industries which rely the most
on military contracts.
Let me give you some interesting data compiled by the
Groupe de recherche de l'industrie militaire et de reconversion,
which is affiliated to the Université du Québec à Montréal. Until
now, 91 per cent of MIL Davie's production has been related to
military equipment contracts. MIL Davie is also in fourth place
among the 16 companies identified by the UQAM group, after
Oerlikon, which has so far been dependent on the military
market for 100 per cent of its production, as well as Paramax and
SNC Technologies, which depend on that market for 95 per cent
of their production. Yet, the Liberal government only offers
lame excuses to justify the delaying of its decision on the
transitional contracts for the Magdalen Islands ferry and the
``smart ship''.
The latest of these excuses is the one provided by the Minister
of Transport who, in early March, demanded a copy of MIL
Davie's business plan before making a decision concerning the
two contracts. But, as I said earlier, this business plan has been
available for a year already.
Obviously, before making such a decision, the government
must ensure that there is a real need for these ships. However,
that need has been demonstrated in both cases.
Let us first look at the Magdalen Islands ferry. The useful life
of the ferry which has been in use for over 28 years, the Lucy
Maud Montgomery, will end in less than two years. After that,
the ship will not be safe enough to get its certificate of
seaworthiness, which is required by the federal government.
The Magdalen Islanders also consider that the Lucy Maud
Montgomery is bad for business in their area, because the ship
no longer meets the needs of the people. For example, the
tweendeck is not high enough to accommodate some types of
trailers and trucks.
On February 11, the mayors of the Magdalen Islands
communities toured MIL Davie main dockyard, the only
world-class dockyard in Quebec for now. All of them
unanimously recognized the need to replace the Lucy Maud
Montgomery. On February 22, these same mayors and
representatives of the Coopérative de transport maritime et
aérien, the company operating the ferry service, reached a
consensus and all agreed that a new ferry was needed.
I am going over all of this because there seems to be some
confusion created by the hon. member for Bonaventure, among
others, about the possibility of replacing the ferry by a used
ship. In January, and more specifically on January 18, the day
after the opening of this session, the minister of Transport
stated, in answer to questions put by our colleague, the hon.
member for Beauport-Montmorency-Orléans and myself,
that, where the Magdalen Islands ferry was concerned, an
announcement would be made soon. Following pressures made
by stakeholders, we were told that when the minister said soon,
he really meant a couple of months. That was on January 18.
(1530)
The only other time I heard the hon. member for
Bonaventure-Îles-de-la-Madeleine comment on this very
important issue for his constituents was in an article run by the
local newspaper, Le Radar. The hon. member had nothing else to
say but complain that the whole issue of the ferry service was his
responsibility, not the responsibility of the Bloc Quebecois.
To tell the truth, he must have been outraged by one of the
headlines in a previous issue of Le Radar, where it was said that
never before had the Magdalen Islands been talked about so
much since the arrival of the Bloc Quebecois in Ottawa. If I had
been the hon. member for Bonaventure-Îles-de-la-Madeleine
I would have felt piqued as well.
Nevertheless, March and April have come and gone. We are
still waiting for an answer while the workers are being laid off
by the hundreds and while Magdalen Islanders are wondering
what their member and their government are doing.
3963
If a decision is made shortly, the new ferry could be delivered
in time, that is when the Lucy Maud Montgomery has to be
replaced. I will take 9 to 10 months to prepare the final
drawings. Then, construction will take 12 months and sea trials
another month. The Liberal government has dragged its feet
long enough, it must act now.
Let us now talk about the smart ship, a multi-purpose supply
and general transport ship. The Canadian Armed Forces and the
Department of Environment need that type of ship, the former
for peacekeeping or humanitarian aid operations, the latter to
intervene in case of a major spill. This project is by far the most
important for the future of MIL Davie, because it would allow
the development of a new organizational culture and new modes
of production.
The concept was developed by the MIL Davie shipyards of
Lévis. Plans, modelling and prototype development are done
under the direction of an associated company, MIL Engineering
System.
The construction of this type of ship would fit into the review
of the Canadian defence policy, a review made necessary by the
end of the cold war and the increase in the number of
peacekeeping or humanitarian operations because of local
conflicts.
The new international environment, a result of the end of the
cold war, might very well increase the risk of such conflicts and
Canadian Armed Forces have developed a sought after
know-how in the area of peacekeeping. As matter of fact, the
Canada 21 Council gave another boost to the smart ship project
on March 16. This private council has been commissioned to
review the Canadian defence policy in the new context of
international relations. Its membership includes former
politicians of various affiliations, some fairly well known like
Donald MacDonald and Gérard Pelletier, both former Liberal
ministers; former military officers like Admiral Robert H. Falls;
and business people and economists of renown.
The Canada 21 Council recommends that the Canadian
government cancel the planned purchase of three submarines
and acquire instead three multi-purpose supply ships, or smart
ships, to provide operational support to peacekeeping missions.
These three ships proposed by the council would replace the
AOR combat support ships, such as the Protecteur, which are
nearing the end of their operational lives, and which are not
multi-purpose and cannot transport vehicles nor launch small
landing crafts or amphibious vehicles in great numbers. As a
matter of fact, they are only used to supply navy ships at sea.
Moreover, the smart ship can be used for a whole range of
logistic operations. It can be used as an aircraft-carrier and hold
up to 24 transport helicopters and 600 troops for airborne
operations. Such a capacity could be a real asset if, for example,
Canadians or citizens of allied countries had to be evacuated on
a moment's notice, as in Rwanda, for example.
(1535)
At the present time, to transport the equipment of Canadian
troops, we have to charter private ships, mainly foreign. And
then it takes several weeks before our soldiers receive their
heavy equipment and their combat vehicles. One smart ship
could transport one battalion group with its equipment,
armoured vehicles, tanks and artillery. It would have been very
useful for our mission in the former Yugoslavia.
In the event of a natural disaster, the smart ship can be quickly
transformed to carry a whole range of vehicles such as trucks
and ambulances, building materials and equipment, water tanks,
fuel tanks and bridgelayers.
Close to 200 containers holding food, clothing, tents and
other supplies can be stored on the main deck. This feature
would have been appreciated especially in Somalia and in
Florida, after hurricane Andrew.
Moreover this ship can carry chemical dispersants, and
devices to contain and absorb spills. It can accommodate a
clean-up team of 600 and be used as a command, control and
communications ship.
Recently, a director of MIL Davie told me that the Department
of National Defence has enough information available to it this
spring to convey its decision right away to government officials.
A favourable decision would allow MIL Engineering System to
proceed to build a model of the ship at a cost of only $6.5
million.
Time is of the essence here. It is highly probable that most of
MIL Davie's competitors are now familiar with the smart ship
concept. Rumours are swirling that other shipyards have taken
up the idea and intend to have their own engineers take a look at
the concept.
If we delay too long, someone will steal our idea, possibly
foreign competitors who already possess the necessary
technology to apply the concept developed by MIL Davie.
The smart ship project is the most important transitional
contract, one which would allow MIL Davie to proceed with
conversion. By building the smart ship, MIL Davie hopes to
develop new production modes and to change the way shipyards
in Canada operate.
The challenge ahead is a formidable one. The company hopes
to be able to build this ship in 390,000 hours, instead of the
normal 800,000 hours. The Danes have accomplished this feat
and if a strategic agreement can be reached with them, MIL
Davie could rely on help from a shipyard in Denmark, which
currently ranks third in the world in this field.
3964
MIL Davie would need new, more powerful cranes and its
staff would have to be trained in computer-assisted design and
production techniques and in the use of new procedures such
as plasma welding.
The Quebec Minister of Industry and Trade has expressed his
concern about the federal government's commitment to defence
industry conversion and with good reason. However, the Quebec
government is not alone in supporting conversion. The Conseil
du patronat du Québec, not known as an advocate of
sovereignty, also supports this process.
I would like to call to mind the resolution passed by
Rendez-vous économique 1993, an economic summit meeting
organized by the Conseil du patronat in Montreal. This
resolution called on the federal government to extend adequate
financial support for conversion to all industries that depend on
military contracts. This financial support would continue for
however long it took to complete the adaptation, conversion and
diversification process.
In recommendation 1B, the Conseil du patronat du Québec
also called on the federal government to award a $6.5 million
design contract and three-year $200 million construction
contract for the smart ship prototype. This would also be the
prototype for a series of similar ships for the international
market, a highly promising and expanding market.
(1540)
With the expertise acquired in building the smart ship, MIL
Davie wants to enter the international market for commercial
ships between 40,000 and 70,000 tons. It is estimated that half
the current fleet of oil tankers and bulk carriers should be
scrapped and replaced in the next few years. Moreover, the rise
in global demand due to the increase in international trade is
estimated at 2.5 per cent until 2005.
Under these conditions, average demand should grow by 30
per cent from an average of 780 ships per year in the last ten
years to an annual average of 1,025 ships until 2005, with peaks
of 1,500 ships weighing over 2,000 tons. Since the average ship
lasts 23 years and almost half the fleet is 15 years old or more,
large orders are to be expected.
When they were in opposition, some influential members of
this government's Cabinet, like the current Minister of Human
Resources Development who was the critic on External Affairs,
clearly stated that the Defence Industry Productivity Program
had to be redesigned for the conversion of defence industries.
In a March 26, 1993 press release from the Office of the
Leader of the Opposition, the current Minister of Human
Resources Development noted: ``Canada has a golden
opportunity to stake out new market niches for the Canadian
defence industry in peacekeeping and environmental
technologies''. We can only conclude that the Liberal
government is suffering from amnesia today.
On April 19, I asked the Parliamentary Secretary to Minister
of Defence whether the contract for building the smart ship
would soon be awarded to MIL Davie. He told me it would not
happen before 1995. This answer shows this government's lack
of concern for the tens of thousands of defence workers whose
jobs are threatened. At MIL Davie alone, excluding companies
like CAE, Canadian Marconi, Oerlikon, Paramax and many
others, nearly 2,800 jobs would be lost. The shipyard would
probably have to close for an indeterminate period of time or
even permanently. Another 8,000 indirect jobs would vanish in
the Quebec City region. So it is very important.
While I have a few minutes left, so you will not feel that MIL
Davie and Quebec complain or demand too much, I will quote
some figures concerning contracts awarded since 1986 to
various shipyards in Canada. The ferry Smallwood, $130 million
to MIL Davie; destroyer modernization, $286 million to MIL
Davie but $1.2 billion to Toronto-based Linton; frigate
construction, $400 million to MIL Davie but $6.2 billion to
Saint John Shipbuilding; defence contract adjustments, only
$263 million to MIL Davie; the Pictou ferry, $50 million to the
Pictou shipyard; minesweepers, $450 million to Fenco Halifax.
In conclusion, I would like to come back to the press release
of March 26. Just before, I would like to say that I did not
complete the list, but in all, $13 billion was invested in the
marine sector, of which the MIL Davie shipyard got only $1.094
billion, or about one thirteenth.
I come back to the press release in which the Leader of the
Opposition, who is now the Prime Minister, said this:
``Canadians deserve a government that can lead the way, a
government that brings new ideas and new strategies, a
government that helps them adjust to change. Our defence
conversion policy is an example of how a Liberal government
would meet the needs of Canadians in years to come''.
I have only this to say to this government in conclusion:
``Prove to the workers of MIL Davie and the employees of the
649 other defence companies in Quebec that what you said, Mr.
Prime Minister, when you were in opposition was not just empty
words''.
(1545)
Mr. Francis G. LeBlanc (Cape Breton Highlands-Canso):
Madam Speaker, I would like to address a brief comment to my
colleague from Lévis. I know that he is familiar with the
employer, MIL Davie, which is located in his riding. As the
Minister of Industry and the Minister of Transport have already
indicated in this House, the government is perfectly aware of the
important role this company plays in the economy of the Quebec
City region. The government has also received MIL Davie's
3965
business plan, which has first to be approved by the government
of Quebec as principal stockholder.
Why does his party insist on raising this issue today, when the
hon. member and his colleagues know the government has the
matter well in hand, is working on it, advancing it? The hon.
member and his colleagues know full well that we are looking
into the problem of industrial technology transfer for the benefit
of employers in Quebec and elsewhere in Canada.
Mr. Dubé: Mr. Speaker, I thank the hon. member, whom I
know well given that he chairs the parliamentary committee on
Human Resources, of which I am a member myself, for his
question. What is the cause of my concern? Simply the facts. We
heard that a business plan was tabled recently. I was not only
concerned, I was also disappointed to hear the Minister of
Transport mention just recently that he was waiting for a
business plan. He even said so in a letter to the City of Lévis, the
City Council of Lévis.
Last August, a few weeks before the election was called, MIL
Davie officials presented this famous business plan to the
present chief of staff of the present Prime Minister, who was a
candidate in Quebec City, and to all the Liberal candidates in the
Quebec City region. Considering that the Prime Minister's chief
of staff already knew about this business plan then, one cannot
come and claim eight or ten months later never having heard of
this plan.
Like many other people of Lévis who took part in the election
campaign and all the workers, I can remember the Prime
Minister visiting Lévis days before the election and saying he
agreed with the business plan. The fact of the matter is that this
plan he had been shown minutes earlier provided for two
transition contracts, that is to say the Magdalen Islands ferry and
the smart ship, as well as for some infrastructure assistance. All
this has been known since last August.
Now, the government was elected a few months ago. It is
understandable that it would take until January to settle in, but I
will remind the hon. member that, when I rose in my place on
January 18 to inquired about the ferry to the minister, his answer
was: ``Soon''. Later we learned that for him, ``soon'' means two
months. If I am not mistaken, two months from January 18, that
would bring us to March 18. We are now in May. Two months
may not seem like a very long time, but for workers loosing their
jobs a hundred at a time every week-there were 3,000 of them
this time last year, but at this rate there may soon be only 400 or
500 of them remaining; that is 2,500 jobs lost, and it will be
2,800 by the time December comes around-to hear the
government answer it is looking into the matter is becoming
unacceptable. Hundreds of workers are waiting for an answer.
(1550)
That kind of situation worries me. That is the reason why I
wanted, as the member for Lévis, to take part in this debate on
the conversion of military industries to civilian production. I
rise not only for my own riding, but also because for the whole
Quebec City region the MIL Davie shipyard accounts for a total
payroll of $150 million. If you count all indirect jobs created by
sub-contracting, it represents for the 10 ridings of the Quebec
City region an economic activity of $600 million.
As you know, that type of venture yields secondary benefits.
Therefore it is extremely important. Besides, that issue has been
recognized by the Conseil du patronat and by all economic
organizations of Quebec as a top priority. The present Liberal
government knew that when they were in opposition and during
the election campaign. And they still know it today. We are now
in the month of May 1994 and no answer has come yet.
Meanwhile, the rumour has it that the contract might be given
by tender and that there would be other shipyards, in the region
of the hon. member by the way. And there is the smart ship-a
concept that belongs to and was developed by the MIL Davie. At
the beginning, that original idea was presented in a business
plan in private but today it is becoming more and more public.
But as months go by nothing happens.
I am not the only one to be worried. The Minister of Industry
and Commerce of Quebec, Mr. Tremblay-I guess I can call him
by his title since he is not here-is also getting impatient. A few
weeks ago, a coalition of all federal and provincial political
parties, including the Quebec City members of the federal
Liberal Party, supported the position of the MIL Davie. Despite
that, there was no answer. This situation is indecent.
I am once more urging the government-and it may be the last
time-to respond at last and to stop penalizing the region of
Quebec City because it has not voted for the Liberal Party. If that
is the reason, it is dangerous. I have warned the government that
there will soon be, in a few weeks, in a few months, a provincial
election that could have major consequences for the future of
this country.
[English]
Mr. Barry Campbell (St. Paul's): Madam Speaker, I am
pleased to participate in this debate. Let me reinforce the
comments made earlier today by the Minister of Industry with
reference to defence conversion.
The plan recognized that the time had come to help defence
industries make the transition from high tech military
production to high tech civilian production.
3966
[Translation]
We are determined to reach that objective and we have already
accomplished significant progress towards the development of
an effective strategy.
[English]
Our defence conversion program has three major
components: First, defining Canada's defence policy; second,
rationalizing the military infrastructure; third, rationalizing the
defence industrial base.
Later today in this debate my colleagues will describe the
government's policy and program for expediting the first two
components of our overall strategy. We will also discuss the
nature and direction for defence conversion of the industrial
base.
Conversion of defence production can be described as
industrial adjustment with an added element of national
security. To understand the scale and scope of the challenge
which Canada faces one must appreciate the evolution of
Canada's aerospace and defence industry.
We have followed a path quite different from that of almost
every other nation in the western world. We have long
maintained a relatively small domestic military procurement
budget. In order to sustain themselves and indeed to grow
Canadian defence firms pursue two avenues. The first has been
to focus on export markets. The second has been diversification.
As I said the Canadian aerospace and defence industry
pursued export markets as suppliers of components for the
manufacturers of major military systems such as radar systems
to detect low flying aircraft and military flight simulators. Their
clients were generally not governments but defence companies
world wide. Canadian manufacturers have designed, developed
and sold world-class high tech products aimed at buyers of
sophisticated, specialized equipment and our industries have
produced these special components at competitive prices.
(1555)
By contrast most of the western world's defence firms have
relied on large domestic military sales. They have produced
entire systems for a closed and essentially less competitive
market. They have had little export focus and have sold almost
exclusively to their national governments.
In many countries domestic military budgets were cut back
severely at the end of the cold war. The shifts in geopolitical
power required nations to re-evaluate their defence role.
Suppliers in other countries which focused on a domestic
market for major weapon systems found themselves suddenly
without a traditional market. Add to this equation the fiscal and
budgetary problems facing all western governments and the
result has been what might be described as a double whammy of
radically different requirements and a rapidly shrinking market.
The inevitable results: Significant downsizing,
rationalization and large layoffs, what we all too readily identify
with defence conversion.
[Translation]
But here in Canada, defence industries are faced with a very
different reality. Most have concentrated on export sales. The
size of world markets, as well as the number of world suppliers,
are diminishing.
The reduction of military spending at the international level
could put out of business some competitors of Canadian
companies and thereby create new market opportunities.
[English]
Canadian industry reliance on Canadian government
procurement is already small by world standards and it is
declining. In aerospace for example, 30 years ago defence
products comprised 65 per cent of total sales. Today defence
sales are less than 30 per cent of sales and projections indicate
that by 1997 the percentage will fall to 25 per cent.
These figures indicate that in Canada defence conversion has
been going on as a gradual process for almost 30 years.
The sudden and precipitous changes taking place in the
United States and Europe in the defence industries will not occur
in Canada to the same degree. For example, between 1991 and
1993 in the United States the aerospace and defence sectors lost
almost 300,000 jobs. That is 10 per cent of their workforce. In
Europe the experience has been similar. Over the same period,
150,000 people have lost their jobs in defence and in aerospace.
In Canada, in marked contrast, we have lost 5,000 jobs in this
sector and forecasts indicate they will be regained by 1998.
Our successful Canadian manufacturers aim at small niche
markets around the world. The export focus of Canadian
manufacturers of subsystems and components has cushioned our
industry from the worst of the fallout occurring in the United
States and in Europe.
As I stated earlier, the other major factor in our success in
avoiding severe contractions has been diversification.
[Translation]
A large number of defence industries have developed
technology which can be sold for both military and commercial
purposes. These companies have gained the necessary skills to
successfully manage operations producing both military and
commercial products.
3967
The Canadian defence industry is in a good position to make
the necessary transition from a high tech military production
to a high tech civilian production, as illustrated by the changes
which have occurred in recent years.
[English]
Canada's defence industry comprises more than 500 firms.
The majority of them have already begun the diversification
process both in commercial and military production and in
domestic and export sales. On average 60 per cent of sales by
Canadian defence firms are for the commercial market and only
40 per cent for the defence market. Many of these firms also
have strong export sales. More than 80 per cent of all
commercial sales are to export markets and 35 per cent of
defence sales are abroad.
(1600)
The only notable exceptions are the large shipbuilders in the
Atlantic provinces and in Quebec and the munitions
manufacturers in Quebec. In recent years they have depended
almost entirely on defence production.
In United States, defence conversion has been quite different.
The U.S. defence industry has been a domestic market nearly 40
times that of Canada. It produces large scale, fully integrated
systems. These include, for example, military aircraft,
submarines and sophisticated weapons systems.
[Translation]
Until now, a large number of American defence industries
have been almost totally dependent on domestic military sales.
These industries do not follow the Canadian tradition of either
diversifying, being geared to operations, or relying on an
important volume of commercial sales.
An American solution to a typically Canadian situation is a
highly unlikely solution.
[English]
As I mentioned earlier, Canada's solution is threefold: first, a
defence policy review which will of necessity take time to
complete; second, the rationalization of bases and defence
infrastructure, both of which elements will be addressed by the
minister of defence; third, the rationalization of Canada's
defence industry base, a complex question but one on which
progress is being made.
In the Liberal plan for Canada ``Creating Opportunity'' the
government made a commitment to expand the mandate of the
defence industry productivity program to assist in the
conversion and diversification of the industry.
I am pleased to say that earlier this year the government
followed through with a provision in the budget to redesign,
DIPP for 1996-97. This will help industry convert from defence
to high technology civilian production. This is the first step in
redirecting existing government programs and initiatives. We
are also proceeding on other fronts and will be announcing
further initiatives soon.
Some elements of the government's support program,
however, must await the report of the defence policy review and
therefore will not be fully developed for some time.
[Translation]
This type of measured response will be problematic if the
Canadian context for the conversion of military industries is
similar to that of Europe or the United States. As I pointed out,
the situation is very different in Canada. Generally speaking,
Canadian companies are in the unique position of being much
less vulnerable to military world market slowdowns than their
foreign competitors.
[English]
This is not to say that Canada does not face challenges in
expediting a smooth transition. Rather the defence industry and
therefore some Canadian workers face a unique situation.
Canadian companies are generally well positioned in
international markets. They have strong order books. They have
good employment prospects. They have solid, diversified
international export markets for both their commercial and
defence product lines.
There are some exception to the quite strong positions
enjoyed by many companies in Canada. These exceptions
include munitions and shipbuilding where a number of specific
problems generally beyond the scope of a defence conversion
program continue to cause concern. We will address these
problems through a combination of defence conversion
programs and other programs that can help provide solutions.
I have outlined the unique challenge facing us in the matter of
conversion of defence industries. In some, while the defence
conversion problem in Canada is similar in scope to that in other
parts of the western world, it is not by any means of the same
scale.
Sales and employment prospects vary by company: some
positive, some neutral, sadly some negative. Specific problems
affecting a particular firm require specific solutions. We do not
need to embark on sweeping programs offering sweeping and
expensive solutions. Programs that are carefully targeted
require careful preparation.
Targeted programs take time to develop but in my view are the
most effective in the medium term. It would be naive to assume
that the defence conversion problem in Canada can be solved
overnight.
3968
[Translation]
The solution which the government is in the process of
developing will be responsive to market forces, fiscally
responsible, properly directed and effective.
(1605)
[English]
As specific elements of the program take shape in the near
future, the government will be providing information on the
scope of its provisions.
The member who brought forth the motion also brought to the
attention of the House a most important question. As I pointed
out, companies in the Canadian defence industry have long
diversified their products and their markets. They have been
carrying out, some of them for as long as 30 years, what the
defence industry in other countries is just beginning to try, that
is to produce other products and to market in other markets.
[Translation]
The government is determined to continue on the path to
success with policies and programs which meet the needs of all
the Canadians who are part of the industry.
[English]
Those companies in sectors where the challenges have been
more demanding and more difficult are to receive the attention
and assistance of this government which understands the
problems and intends to contribute to the solutions.
Mr. Darrel Stinson (Okanagan-Shuswap): Madam
Speaker, I rise today to oppose the motion put forward by the
Bloc. However I want to say at the start that I am personally
concerned for the jobs of some 137,915 persons who the 1986
census showed were employed by the defence services sector.
Their employment is threatened by the Liberal strategy of
slashing defence spending before it has completed a full study of
Canada's defence needs.
The Reform Party caucus believes that announced cuts of $7
billion to the Department of National Defence over the next five
years prejudged and pre-empted the outcome of the defence
review and should not have been made until Parliament,
together with the Canadian people, had determined the mission
of the Canadian Armed Forces for the 21st century.
Once the mission is determined we can make careful and well
planned decisions on the military's main functions and
organizational structure and on Canada's long term needs for
hardware, bases and personnel.
The cuts announced by the government are already having
impact on the defence industry. As I have said I strongly object
to the government's action of cutting defence first and asking
questions later.
I strongly oppose any suggestion that the government should
fund the changeover of defence companies to civilian
production. I oppose using Canadian tax dollars for this purpose
for several reasons, not least of which is that half these firms are
foreign owned.
I would also oppose using Canadian tax dollars for this
purpose because as a Reformer I do not think on general
principle we achieve anything good by providing grants to
private industry. On the contrary, it goes against the grain that
taxpayers should on the one hand be trying to operate their own
companies while on the other hand competing with a company
their own tax dollars may be propping up.
For instance, over recent years it has been a tactic of the old
line political parties to spend some $160 million per year
through the defence industry productivity program, which is
almost like a regional development program, to dole out tax
dollars to the military industry concentrated mainly in southern
Ontario and southern Quebec. Such grants should be quickly
phased out.
To understand this particular motion we must first define what
we are talking about when we discuss Canada's defence
industry. I note that figures being quoted in the House today
have varied greatly so it is hard to know whose figures are
correct.
Despite the discrepancy in figures we need to try to get to a
general understanding of what the defence industry produces
and how it compares on the world scale. In analysing
world-wide arms production, nations are generally divided into
three tiers or levels of production. The first includes nations like
the U.S., which basically produces and sells anything it or its
allies need. The first tier accounts for some 60 per cent of the
arms transferred in the past decade.
Canada is in tier two with such countries as France, Italy and
Spain, which together account for some 25 per cent of annual
global arms exports. These countries do not have a big enough
home market to benefit from economies of scale and must
depend on exports to be competitive. Canada exports in large
measure to the United States with which we jointly produce
many weapons.
(1610)
There is a third tier of wild card arms producers like China,
India and Israel that can produce large amounts of less
sophisticated, functional but cheap weapons on short notice.
Among global arms producers Canada ranks about eighth,
producing some $3 billion worth of military goods per year or
about one per cent of the world total. Regarding more
conventional weapons, according to the Stockholm
International Peace Research Institute and for the period 1986 to
1990, Canada was the 14th largest exporter of major
conventional weapons in the world.
3969
Concentrated in southern Ontario and Quebec, the Canadian
defence industry involves about 1,000 companies with special
experience in what is called the new knowledge based industry,
specifically aerospace electronics and communications.
Robert Gillespie, former assistant deputy minister in the
Department of National Defence, gave the following description
of the defence industry:
Our industry is composed of only a few large companies with sales in excess of
$100 million per year. The vast majority of firms are in fact quite small and very
few of those produce purely military products. The industry is over 50 per cent
foreign owned with U.S. companies dominating the group and is very heavily
dependent on the export market.
There has been great fluctuation in Canadian military exports
over the period 1959 to 1991. For example, 1974 and 1975 were
low years, each at $280 million. In 1985 the industry hit its
recent peak at $1.9 billion in exports, with a similar amount in
1991 during the gulf war build-up and actual combat.
Research was based on three factors: first, public domain
listings of unclassified prime military contracts awarded by the
Department of National Defence; second, military export
contracts arranged by the Canadian Commercial Corporation on
behalf of foreign governments, primarily the United States;
third, Pentagon contracts placed directly with Canadian
companies, together totalling about 80 per cent of all Canadian
military production.
According to research covering those three factors the top six
Canadian military prime contractors are: SNC Industrial
Technologies Incorporated and Bombardier, both of Montreal;
Computing Devices Company of Ottawa; Standard Aero
Limited of Winnipeg; Allied Signal Aerospace of Rexdale,
Ontario; and Bristol Aerospace of Winnipeg. All six companies
had total value reported prime contracts during fiscal year
1990-91 in excess of $100 million. For three of the six, their
estimated or reported military sales were less than half of total
sales.
Of the top 20 Canadian military prime contractors,
accounting for some 60 per cent of reported military prime
contracts in Canada, according to the same three factors which I
listed earlier, 11 companies of the top 20 had estimated or
reported military sales of less than half of total sales.
Incidentally eight of those top 20 companies are located in
Quebec. I believe we can see the source of the Bloc's concern
with this issue.
What kinds of things do these companies produce? Although
Canada does rank 14th in world-wide production of
conventional weapons, the Library of Parliament has provided
me with a list of some 180 companies engaged in producing
defence electronics and avionics. These folks produce a whole
lot of things that most people cannot even pronounce, let alone
manufacture. Many of them are part of the new knowledge
based economy, their employers being well educated, not to say
out and out brilliant.
Because of the brilliance of these people and the highly
specialized nature of what they produce, I seriously doubt that a
notoriously inefficient federal government could do anything
really helpful for these industries and would only end up
throwing tax dollars at them, an approach which I strongly
oppose.
(1615)
Moreover, as I have shown, a large number of defence
industry companies have less than 50 per cent of their
production going into military purposes. Hopefully they can
convert a greater percentage of their operations to non-military
purposes. Because of the talents of the employees of these
particular high tech companies, it would be a great loss to
Canada if the employers were to shut down and the employees
moved to the United States. Remember, we are talking about an
industry that is already half foreign owned.
However, I am certain the sales and marketing offices of the
bigger companies and probably the presidents of the smaller
companies have long since smelled the coffee in so far as the end
of the cold war is concerned. Certainly they have been hard at
work tracing and developing new markets which could increase
their non-military sales.
Even the average man or woman on the street is well aware of
the remarkable growth in the knowledge based industry for such
things as fax machines, personal computers and the
transportation industry. Given the great land mass of Canada, we
truly have become a world leader in communications, a
technology needed all over the world for everything from
moving information, people and goods to distributing TV
signals or predicting the weather. I have great faith that
Canada's technological leadership in this sector of the world
economy cannot only be maintained but will grow steadily.
In conclusion it is high time for the government to smarten up
its own overall defence planning. I also believe one of the worst
things any of us could do to a given industry would be to
encourage the government to increase its involvement and
further upset the functioning of a free market economy.
Mr. Francis G. LeBlanc (Cape Breton Highlands-Canso):
Madam Speaker, I listened with some interest to the remarks on
this motion by the hon. member for Okanagan-Shuswap.
I found it somewhat strange that he would mention a concern
on behalf of his party for the defence cuts which the government
introduced in the budget. At the same time as saying that these
cuts were premature he argued that we should not support the
conversion of our defence industry to civilian purposes and to
help in the redirection of that technology into areas of greater
demand.
3970
Perhaps the member could elaborate on what seems to be a
paradoxical position from his party's perspective. Why is he
opposing cuts? Is that not what is party has been calling for?
Why is he opposing economies which have been made with
great difficulty and after much soul searching by this
government? What other cuts is he proposing in order to keep
the defence budget higher than this government has
recommended?
Mr. Stinson: Madam Speaker, we have always stated that
there have to be cuts in military spending, but we have also
stated that the studies should be done before and not after the
cuts. It is rather foolish to make the cuts and then say they have
to put them back in place again. The studies should be done
before the cuts are made. That is what we are saying on that
level.
As far as subsidizing an industry that was subsidized coming
in is concerned, remember this industry was subsidized coming
in and now government wants to subsidize it going out.
If the government is looking at subsidization levels what
becomes more important here? Private enterprise tries to
compete. It pays taxes but those tax dollars are being used in
many cases to form a company that it has to compete against. It
is pretty tough when a company is not being subsidized to
compete against a subsidized company. They do not have the
same worries, many times not even the same responsibilities.
(1620)
I would like to raise another fact when talking about
subsidization. We have to have priorities. Can anyone in this
House answer this question: Why are we subsidizing companies
in direct competition with companies in private enterprise when
we are shutting down hospitals? This absolutely makes no sense
to me, nor to anybody else in the House, but I am willing to
listen.
Mr. John Harvard (Winnipeg St. James): Madam Speaker,
I am very pleased to take part in this debate because major
aerospace firms and Canadian Forces Base Winnipeg are located
in my riding of Winnipeg St. James.
In the red book this government identified the world-wide
restructuring of the defence industry as a major issue for
maintaining high technology jobs in Canada.
In speaking to the government's commitment to defence
conversion, I must first be clear that it is not a passing fancy or
for that matter a platform for simplistic grandstanding. The
global market for the defence industry is already in the process
of restructuring. This government will encourage a sound and
structured response that will hold up for the long run, that will
meet the needs of industry and the highly skilled workers in that
industry.
The need to change is being driven by global markets for
Canada's defence industry is particularly vulnerable to change.
This cannot be otherwise when 50 per cent of the Canadian
defence industry is foreign owned, mostly by U.S. companies.
That has already been pointed out in this debate. The majority of
Canadian defence firms supply subsystems and components and
carry out subcontracted manufacturing for prime U.S.
contractors. Indeed, most Canadian exports go to the United
States.
The global giants, the American prime contractors, have been
rationalizing their organizations and just as important for
Canadian suppliers, their manufacturing processes. They are
starting to drive this process down their supply chain, down to
the suppliers of subsystems and components where Canada has
developed its edge.
Furthermore the giants are diversifying into commercially
advanced technology markets, squeezing our smaller and more
diversified companies. The aerospace and advanced electronics
industries in Canada could be vulnerable and they must be ready
to adapt. This government is preparing to assist positively and in
concert with industry.
I can assure members of this House and in particular the
member for Nanaimo-Cowichan who suggested this morning
that the government should talk to the industry leaders in the
west that this government has been doing just that.
On March 3 of this year the hon. Minister of Western
Economic Diversification, the parliamentary secretary for
finance and I all met with the chief executive officers of 10
leading western aerospace and defence companies. We
discussed the sector's views on defence conversion in the
context of science and technology policy and the new long term
space plan.
This broad focus is part of the western economic
diversification's new direction to work with industry and the
provinces through strategic initiatives, that is to deal with
structural economic issues at their root and on a co-operative
basis rather than treating the symptoms as they appear in
individual companies.
The March meeting was the first of what will be a series of
meetings on the subject and which will include an expanded list
of companies right across the west. The next meeting will be
later this spring at which time the private sector will present a
broad strategy along with recommendations for specific
activities required to facilitate defence conversion in western
Canada.
We are listening to the leaders of industry and working closely
with them as part of a broad concern for the health of the
aerospace and electronics industries in the west. For instance we
are fully sensitive to the immediate impact that can be felt from
the defence cuts. We have worked closely with industry to
ensure a smooth transition to new requirements.
3971
(1625)
This has been done with specific companies such as Bristol
Aerospace which is located in my riding. We have also worked
with Bristol and other companies in the west to help as they
pursue opportunities in international markets.
All of this is part of the national issue of restructuring the
Canadian defence industry. It is done to safeguard the positive
contributions the industry has made and continues to make to
Canada's economic well-being, while building something
viable and sustainable for the long term future without
side-swiping in the process the advanced technology companies
that have already diversified and have already taken action for
the future.
The blueprint for defence conversion contained in the red
book sets out a program to pursue strategic and fiscally sound
alternatives for high tech job creation. The program is to focus
on alternative military requirements, dual use products and
sustaining research and development.
Two major objectives were set, namely conversion of military
bases to alternative uses, and economic conversion and
diversification of the defence industry toward alternative
military and civilian goods, including the development of
peacekeeping technologies.
This government has already started down the defence
conversion road. Those base closures that were long overdue
have been announced as part of the recent budget. An example of
the concrete conversion action being taken as a result of the base
closures is the activity surrounding Defence Research
Establishment Pacific in Victoria, sometimes referred to as
DREP.
Defence Research Establishment Pacific is to close on March
31, 1995 as part of the reduction of defence infrastructure.
However, there is tremendous potential here to build upon the
critical mass of ocean industry and science which is resident in
Victoria and centred at DREP.
For example, there are many companies both large, such as
MacDonald Dettwiler and Associates, and small, such as
Barrodale Computing with just 10 employees, which have
transformed the science contracts they have undertaken with
DREP in the past into major commercial opportunities.
To maintain this flow from research into a commercial
business, western economic diversification in the next few days
will commission a study of the opportunities open to the ocean
industry based upon the critical mass existing in both the private
and public sectors in Victoria. Science does exist at Defence
Research Establishment Pacific. Highly competitive, high
technology companies, world-class firms are already in place.
The Department of National Defence wishes to see the
technology transferred to industry and the academic
community, such as the University of Victoria, and is anxious to
build further momentum. What better ingredients could be
found for converting a defence establishment into a sound
commercial enterprise than this one which is focused upon a
growing, vital ocean industry?
Our defence conversion blueprint also set out the objective of
diversification toward alternative military and civilian goods.
This too is already getting under way with a number of alternate
use concepts being actively examined by industry itself and
government. This goes beyond program and policy responses on
a broad sectoral front to the specific activities of individual
companies which are right now pursuing the opportunities that
are presenting themselves.
An example of government support to a winning defence
conversion strategy is EDO Canada Ltd. of Calgary. This
company has been manufacturing fuel tanks for the CF-18
fighter jets using composite materials.
In January of this year it won its first major commercial
contract by which it will supply lightweight natural gas fuel
tanks for General Motors 1994 Chevrolet Caprice and Corsica
models. This contract will be worth $2.5 million to $5 million
annually. To quote company president Doug Moore from a
Calgary Herald article of January 12, 1994: ``The contract is the
result of the commercialization of our aerospace technology''. It
is also the result of this government's application of the
industrial and regional benefits policy to defence conversion.
(1630)
General Motors as part of its contractual commitment to the
federal government for the sale of light armoured vehicles has
agreed to undertake millions of dollars of industrial benefits in
Canada.
The agreement of the government to allow IRB credit for GM
or to GM for the EDO sale helped to cement for EDO a strategic
alliance that it had been working on for some time. This is part
of an ongoing government program with continuing discussions
which could lead to a similar kind of contract for another
growing western high technology manufacturer. Again IRB
credits from the light armoured vehicle purchase could be an
incentive to solidify the deal.
I want to conclude by saying that this government knows what
defence conversion does not mean. It is not moving defence
companies into mature commercial markets. It is not intended to
be done in isolation from other economic activity and it cannot
happen instantly. It most certainly cannot mean wiping out the
existing defence industrial base.
3972
I have described what defence conversion is or is not. This
government has an equally clear understanding of what it
should be and can be with a carefully planned program. Defence
conversion can help defence dependent companies reduce their
dependency on limited products and customers. It can be a
co-operative effort between industry, labour and government
to foster strategic alliances for pursuing international markets.
It can be an opportunity to work with our counterparts in the
U.S. especially in fostering the development of dual use
technologies. I assure members that it will broaden the
industrial base for overall economic growth.
[Translation]
Mr. Eugène Bellemare (Carleton-Gloucester): Madam
Speaker, the Bloc Quebecois has introduced a motion saying:
That this House condemn the government for its unacceptable delays in
developing and implementing a genuine strategy for the conversion of defence
industries to civilian production, which would save and create new jobs in
high-technology sectors.
I congratulate the hon. members from the Bloc Quebecois for
thinking about jobs. I hope they will raise, in Canada and in
Quebec, concern for Canadian jobs. When I refer to Canada and
Canadians, I mean all provinces, including Quebec. Their
objective of separation is certainly not the ideal recipe for job
creation. We need to belong to a strong community, a strong
family, large and co-operative enough to develop its own
industries.
We were informed today of the policies and programs which
would guarantee the success of the conversion of defence
equipment manufacturers into companies active on
international markets. However, it is not simply a question of
policies and programs. The main factors are the entrepreneurial
spirit, the measures taken and the results achieved.
There are many examples of success. One of them is
Securiplex Technologies of Montreal. This is the story of a
successful conversion by a company which was well-known for
its defence equipment. Recently, they had the good fortune of
getting a $26 million contract from Bombardier BN, in Bruges,
Belgium, for the production of a control system.
This system will electronically detect and extinguish fires in
the 254 shuttle-cars that will be used in the Chunnel.
It is based on the system designed by Securiplex for damage
control on warships and presently installed on 12 new Canadian
frigates and ships of the British Royal Navy.
This system uses microprocessors to monitor and control the
sensors and fire-extinction devices, as well as other security
systems. It was developed under a procurement contract
negotiated with the Government of Canada through the Defence
Industry Productivity Program.
(1635)
Since the completion of this project, and with the help of
Industry Canada, Securiplex marketing has been targeting
commercial companies. This firm is actively pursuing the
industrial security market, especially in North America, Europe
and the Middle East.
Among its achievements are the contracts it won to supply
sophisticated fire detection and extinction systems for the
headquarters of the European Economic Community in
Brussels, the Alba power plant in Bahrain, in the Middle East,
and the Hibernia drilling platform off Newfoundland.
ATS is a rather impressing example. It was created on the
Montreal South shore in 1979. Originally, it was a small
company specialised in ammunition testing. Aware of the
limitations of this activity, it sought to put its considerable
expertise to good use by creating software for new markets.
Today, this company has nearly entirely changed its field of
activity. Its future lies now in completely new opportunities it
created, namely air control tower and room simulators. Training
air controllers is of the utmost importance, and yet nothing has
been done to update training methods.
Presently, ATS is executing major contracts awarded by
international customers. DIPP played a crucial role in the
development of this firm's technological capacity. ATS was
awarded its last contract in January 1992, and since then it has
not asked for another loan.
The common denominator to these success stories is the fact
that these manufacturers of defence equipment were able to
adapt to the new reality and meet the demand of a new market. It
is also our government's commitment to help these industries
diversify. The pessimistic outlook of some concerning the
future of our aerospace and defence industries does not reflect
reality. As a whole, the news regarding defence industries is
rather good.
For example, many members know that one of the leading
Canadian aerospace and defence electronics firms is CAE
Electronics Limited of Montreal. This company is a world-class
operation in every respect. It is the main supplier of commercial
aircraft flight simulators and records important sales to similar
defence markets.
CAE Electronics employs more than 3,000 people, with
scientists, engineers and technicians accounting for half of the
workforce. Annual sales of nearly $350 million are made by the
Montreal offices and the figure is expected to increase next year.
The company has been experiencing tremendous growth and
expansion for the past three decades. Annual sales now in excess
of one billion derive primarily from exports.
3973
The company is now busy expanding its facilities in order
to welcome clients from around the world who will attend
courses focusing on some of the most advanced technologies
in the world, from aircrafts to ships. Several years ago, CAE
Electronics acquired a major U.S. competitor called Link. This
company is now truly world class with a diverse client base.
Nevertheless, it continues to manage the electronics side of the
business from its offices in Montreal.
However, CAE Electronics still needs the support of the
government. This is especially true in the case of the project
which it is carrying out with the American National Aerospace
Administration and which involves exploring the application of
virtual reality in the cockpit. Without the support of the Defence
Industry Productivity Program, projects like this which are
vitally important to the future of CAE Electronics would be
impossible to carry out.
(1640)
That is why the federal government has indicated in the red
book it was determined to maintain this important program.
CAE also takes an active part in other defence conversion
projects, some of which in sectors far removed from traditional
defence activities. It is currently involved in a marketing project
for an artificial heart designed at the Heart Institute in Ottawa.
However, CAE still considers defence as an important part of
the corporate strategy in its business plans. Defence contracts do
account for the best part of its commercial activity and offer
unique opportunities to explore the limits of technology applied
to training and simulation.
The federal government plans on continuing its partnership
with CAE as well as with a number of other innovative, creative
and flourishing companies. The Canadian taxpayers'
investments in companies such as this one have never been more
important. CAE and the Montreal area can expect to prosper
thanks to these investments. CAE has undertaken to design,
develop and market new products and new services to meet the
needs of the population in the 21st century.
There are many more success stories in the defence industry,
stories of companies that have expanded their lines of activity
and prospered by identifying a need and meeting it
commercially.
Defence conversion is nothing new for many Canadian
companies, and their success is envied by their competitors.
[English]
The Acting Speaker (Mrs. Maheu): 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 Manicouagan, Labour Relations; the hon.
member for Rosedale, Rwanda; the hon. member for
Laurentides, Anti-flu Vaccines; the hon. member for Lévis, the
Olympic Games of 2002.
[Translation]
Mr. Jean H. Leroux (Shefford): Madam Speaker, it is always
for me an honour, a pleasure and a privilege to speak in this
House on behalf of the people of Shefford who elected me.
As you know, Madam Speaker, my region of Granby has been
hit hard by the unemployment problem plaguing the country. In
this speech, I want to express my support for the defence
industry conversion program. I strongly support the motion of
my colleague from Hochelaga-Maisonneuve, which condemns
the government for its inaction in this vital sector with the
potential to create high-tech jobs.
How can the government sit on its hands on such an important
issue after making firm commitments in this regard in the last
election campaign? As you know and since they talk about it all
the time, these commitments can be found in the Liberal Party's
red book and in a March 26, 1993 press release.
What is now left of these moral commitments? To impress
upon the government the meaning of the words ``active'',
``alert'' and ``enterprising'', I will quote the motion of my
colleague from Hochelaga-Maisonneuve:
That this House condemn the government for its unacceptable delays in
developing and implementing a genuine strategy for the conversion of defence
industries to civilian production, which would save and create new jobs in
high-technology sectors.
(1645)
I think this motion clearly expresses the goal we want to
achieve, namely to convert defence industries to civilian
production and create high-tech jobs. In the light of this
information, I remind the government that it must honour its
commitments and quickly develop a genuine strategy for the
conversion of defence industries.
The main reason underlying my position is that, with the
collapse of the Soviet Union and the end of the cold war,
spending on defence industries is no longer based on the initial
strategic foundation. Thus, as a member of the Joint Committee
on Defence, I still maintain that the amount spent on military
defence is quite high and we need a moratorium to stop the waste
of public funds. However, in making cuts in military spending,
we must act fairly to the provinces and the various components
of the defence industry.
Although the EH-101 helicopter project promised economic
benefits for Quebec, we in the Bloc Quebecois were opposed to
this program, but we insisted on the need to ensure economic
and industrial benefits for Quebec through a project like the
high-speed train, and these benefits are not yet forthcoming.
3974
In fact, the government is dragging its feet on several issues
that are important for economic recovery. They often quote the
red book but they do very, very little. Nevertheless, the
companies that were penalized when this helicopter contract
was cancelled urgently need government support to convert
their defence activities. Since the new world order began,
military industries have had a rough time, as everyone here will
agree.
The arms production market, estimated at over $450 billion
worldwide, has dropped significantly since 1987, by almost 10
per cent. International experts say that it could drop another 25
per cent in the next few years. The main exporting countries,
including Canada, are thus directly affected by this problem.
As you probably know, Canada exports about 70 per cent of its
production to international markets, of which 80 per cent goes to
the United States. Under Canada-U.S. agreements, we are thus
tied to this market. Since the late 1980s, the U.S. defence budget
has steadily declined. What will the impact be on our local
industries?
In this specific sector, the most conservative estimates are
that more than 1.6 million jobs will be lost throughout the world
by the year 2000. That is a lot. This prognosis is hardly
promising for Canada's military industry. In Quebec alone,
more than 650 companies of all sizes work directly or indirectly
in military production.
In Quebec, the most dynamic sectors are communication
electronics, aerospace, shipbuilding and munitions. More than
11,000 jobs in Quebec's military industry have been lost since
1987. The impact is considerable.
(1650)
Here are some specific examples of layoffs between 1990 and
1994 in Quebec companies that produced weapons or
components: Marconi, 1,480 layoffs; MIL Davie, 2,740 layoffs
since 1990; Oerlikon, 410 layoffs; Paramax, 1,000 layoffs; Pratt
& Whitney, 200 layoffs; Triplex, 200 layoffs; Vickers, 350
layoffs; and there are others. This is scary! It is unbelievable!
Just compiling these figures is an exacting process. Between
1990 and 1994, no less than 7,391 jobs have disappeared in those
Quebec companies which are formally identified as producing
systems or subsystems for military use.
These figures, which merely represent the tip of the iceberg,
confirm the dramatic drop in military production for Quebec
alone. You can imagine what the figures are for all of Canada.
This illustrates why the need to convert military industries is
so urgent and vital for the survival of our manufacturing and
high tech industries.
We must act quickly to ensure the conversion of defence
industries to civilian production. The elected government has a
fundamental role to play in this sector of the economy. So far,
federal government support to our defence industry has
essentially taken the form of procurement contracts and direct
assistance to industries.
This support is mainly given through the Defence Industry
Productivity Program, or DIPP. It seems that it is through this
program that support for the conversion of defence industries
will come.
The program aims at helping military industries remain
competitive on international and Canadian markets.
Considering the collapse of world and domestic markets for
military equipment, a thorough review of the program is a
logical and necessary step.
The most appropriate solution to help our defence industries
is undoubtedly the implementation of a conversion program
funded with DIPP's budget.
In fact, the House of Commons Sub-committee on Arms
Export asked, in its recommendation 18, that the DIPP be
extended so as to include assistance for conversion and
diversification. The Liberal members who sat on that
sub-committee signed the report, thus confirming their party's
position when they formed the opposition. Is it possible that
such a change could occur when you change sides in this House?
This is incredible! It is unacceptable!
Considering that stand from the Liberals, and given the need
to implement a conversion program to help defence industries, it
is important that the DIPP plays an accessory role in this
transition from military to civilian production.
While ideas seemed to have been developing for some time,
and while consultations seemed to support a quick
transformation of this program into a conversion program, it
now seems that the Liberal Party is hesitant to launch such a
support program. The Liberals are now undecided. What
happened to them since they took office? It is hard to tell. What
happened to those nice promises made on every platform by the
Liberals during the election campaign?
Even the leader of the Liberal Party, the current Prime
Minister, tried to outmatch everyone else in a press release dated
March 26, 1993, where he said: ``Canadians deserve a
government which can show them the way, come up with new
ideas and new strategies, and help them to adapt to change. Our
defence conversion policy is a good example of how a Liberal
government'', as he put it, ``would meet the needs of Canadians
during the 1990s.''
(1655)
Unfortunately, I must say that all these promises went
unheeded, so much so that, in his budget, the Minister of
Finance kept quiet about all the new programs the Liberals had
promised.
If the government does not develop a defence conversion
policy for the years to come, Quebec and the rest of Canada
stand to lose tens of thousands of jobs in technological indus-
3975
tries. Our capacity to create jobs will keep eroding, and the
government is very much aware of the situation.
Recently, when questioned by my colleague, the hon. member
for Hochelaga-Maisonneuve, the Minister of Industry was
rather smug and cynical. He said that the federal government
already has all the tools needed to promote conversion and that
the existing programs were enough to help them fill their
mandate. Is this the new tactic the Liberals are going to use?
The Minister of Industry probably confused the support
provided to military production within the DIPP program with a
conversion program that the government has yet to develop.
The Minister of Industry should, as soon as possible, review
the existing programs. He would notice a difference between
what he thinks is out there and the conversion program we are
proposing.
By the way, I urge my colleagues opposite to read the
statement released, on March 26, 1993, by the office of the then
leader of the opposition, now the Prime Minister of Canada.
With the help of the current Minister of Human Resources
Development and others, they came up with these proposals,
while they were sitting in the opposition. People say life is
easier when you are in the opposition, but still, if you are
serious, when you are in office you try to do what you said you
would do. At the time, the government promised Canadians jobs
and now all it is talking about is the deficit. It was the
Conservatives who talked about the deficit during the election
campaign, not the Liberals. The Liberals promised us jobs.
What happened?
The Liberal government has fallen into the trap. Caught
without any conversion policy, the government must, once
again, trust the market forces. Can you imagine? They keep
telling us: ``Wait and see. Wait and see.'' That is exactly what we
are doing. We are waiting.
For its part, the Bloc Quebecois firmly believes that the
government must take initiatives that can provide jobs for our
fellow citizens.
A plan to encourage manufacturers of military equipment to
move away from this type of production and export and onto
other fields. A well-defined strategy is the key to success for the
conversion of high-technology defence industries to civilian
production.
Defence industries are a pillar of the high-technology,
research and development sector, and our competitiveness and
our future depend in part on high technology. That is very
important.
A strong industrial fabric is essential to economic prosperity
and job creation. High technology offers high-paying jobs and,
furthermore, it uses our natural resources as well as products
and services from our enterprises.
I want to enunciate the three main recommendations of the
strategy we advocate. First, the government should create a
conversion fund as part of its comprehensive industrial
conversion strategy.
(1700)
The main mission of this fund would be to improve and add to
the assistance provided within existing programs, with the
objective of ensuring defence facilities and businesses an
adequate and long-term support in their conversion and
diversification undertakings.
Second, the government will have to create conversion
advisory committees at local and regional levels. Finally, the
government will have to form an independent committee to
examine the different existing programs that could be used.
Needless to say that this strategy must be aimed first and
foremost at completely reforming the DIPP.
The federal government must assume a part of the
responsibilities. When you are elected, you must assume
responsibility for these businesses' dependency towards arms
production.
My intervention today indicates well that we will continue our
representations, and I hope that the federal government will
respond as soon as possible to the legitimate expectations of
businesses from Quebec and Canada.
Mrs. Eleni Bakopanos (Saint-Denis): Madam Speaker, I am
very pleased to know that the member opposite has read our red
book and is now aware of this government's priority which is job
creation.
It is what we have been trying to achieve over the last six
months, since we came to power. I think we have been quite
successful.
Not to mention all the programs we have created, the
infrastructure program has been implemented to help the small
and medium-sized businesses that need our support.
I also want to stress that the Minister of National Defence has
stated that the whole defence policy is now under review,
including the industries that need to diversify their activities
and produce other goods than nuclear equipment. We all agree
that Canadians do not want any more production in that area.
The member mentioned that between 1990 and 1994 there has
been a great number of layoffs. Why have we been elected?
Because the previous government did not have a job creation
program. Nor dit it have a Canadian vision for this country.
There has been a problem in the area of job creation. We have
been elected on that platform. Job creation is in the red book.
3976
As far as Quebec is concerned, as a member coming from
that province I can say that on this side of the House we are
not concerned only with Quebec but with all of Canada and the
unity of this country. If members opposite want to help job
creation, they have to help us first with the programs aimed at
creating jobs all over Canada and stop talking only about the
Constitution or splitting up this country.
We have not changed our minds even if we are not sitting on
the same side of the House. We are true federalists. Job creation
has always been one of our priorities.
Could the member tell me why the current program does not
meet the needs of businesses in Quebec or elsewhere in Canada?
Mr. Jean H. Leroux (Shefford): Madam Speaker, I would
like to thank my colleague for her statement which seems very
honest.
Let me deal first with the infrastructure program. It is true that
program was implemented by the new government and it is an
excellent program. You all know that what we need now in
Canada is job creation.
That program will create jobs, but there are conditions.
(1705)
First, there are small municipalities, in my riding and
elsewhere, which cannot respect all of the program's
requirements and have problems obtaining a program because of
that.
Second, the infrastructure program will not develop high
technology for the future of Canada and Quebec; let me say I am
happy to mention the two together because the Bloc Quebecois
is a sovereignist party, yes it does want sovereignty, but not a
brutal and independent one. We wish to maintain relations with
the rest of Canada. Since you are also from Quebec, my
province, Madam Speaker, you know there will always be close
relationships between Quebec and the rest of Canada.
However, Quebec is different. Everybody knows it. We hear it
all the time. Just listen to the people sitting next to us, that is
what they say. We are different. The day it will be accepted as a
fact, everything will be easier. There is one important thing for
the government, for the party in office. The Liberals are in office
now, so they are able to consult the most intelligent and most
competent persons in Canada and in Quebec and ask them what
to do. If the government does not know what to do, it holds the
necessary authority to at least do that.
I think the problem with our government is that it consulted a
lot without presenting us with a legislative agenda equal to our
expectations. As for the DIPP, all I can say is that we are
experiencing delays. It is not functioning. Funds are frozen. We
have the funds; now we should invest them the right way.
I think if the government is serious, it must consider the
motion of the Bloc Quebecois and act upon it.
Mr. Eugène Bellemare (Carleton-Gloucester): Madam
Speaker, I find it amusing to see the hon. member for Shefford
panic and think that things are going from bad to worse in
Quebec. That would be true if the sovereigntist government
were to go off to sulk in a corner and to do as it pleased. The hon.
member did not do his homework. When he did his research, he
forgot to read the budget. If he had done so, he would know that
the Liberal government will broaden the DIPP criteria to include
more industries.
I would like to remind him what Paul D. Manson, a former
Canadian Forces Chief of Staff and now the president of
Paramax, said about his company: ``Nearly two years ago, we
created a task force to explore business opportunities in the
civilian sector. We identified four or five very promising areas.
Our parent company also extended its support and increased our
budget for research and development. We answered some calls
for tenders and, before the end of the year, we should have good
contracts.''
The hon. member, who is a sovereigntist and a separatist,
should be trying to create a Canadian industrial family, instead
of sulking and trying to leave us. He should be doing something
constructive and positive, such as creating interactive jobs
throughout Canada.
Mr. Leroux (Shefford): Madam Speaker, I listened to the
remarks of my colleague and I found them quite cynical. I think
both sides of the House will agree that this hon. member's
attitude was rather carefree in the past. Contrary to the hon.
member, I think that the best that can happen is for Quebec to
finally opt for self-determination.
(1710)
On the other hand, you can quote all the letters from all the
company presidents in the world, this will not change the fact
that 11,000 jobs were lost in Quebec. Each and every person who
was laid off did not necessarily write a letter, but the fact
remains that 11,000 jobs were lost. What we want is for the
government which was elected to create jobs to roll up its
sleeves and finally get things going for the benefit of our
country.
Mr. Francis G. LeBlanc (Cape Breton Highlands-Canso):
Madam Speaker, I am pleased to take part in this debate today,
for a few minutes, and particularly so as a member of the
government party.
Since the election, last October, the Liberal government has
taken to heart the commitments in our red book, the
commitments that had been presented to Canadians after much
reflection and debate within our political party.
3977
For this government, jobs are the priority. Since its very first
day in office, the new government began to keep its promises
and implement policy initiatives designed to create jobs, to
revive the economy, to spur economic growth, all things that
Canadians had been deprived of during the last years of the
Conservative government.
The February 24 budget we presented to the Canadian public
was a continuation of the initiatives the government had begun
to put implement. There was the infrastructure program that will
create jobs directly, renew the infrastructure across Canada and
kick-start the much needed economic growth. In the last budget,
the government put the emphasis on small and medium-sized
businesses as the engine of the economy, with several initiatives
designed to sustain them across Canada, so that they can create
jobs.
We also put the emphasis on the electronic and high tech
sectors, which in our opinion are other engines of the Canadian
economy. We have started to examine several areas of
government policy and activity through in-depth reviews of
foreign policy, defence and social security, a field I am involved
in as chairman of a House committee.
We have taken measures to build up the confidence of
Canadians in political and governmental institutions. Canadians
have responded, as can be seen in the polls and in the decreased
contempt they feel for politicians and the government. These
measures have been taken under the guidance of a Prime
Minister who is a man of experience, who feels a strong and
sincere passion for Canada and the future of Canada, and who
sees how this country can become one of the guiding lights of
the 21st century.
(1715)
Quebecers have benefitted from federal programs and
initiatives. The recent budget included measures to promote job
creation in Quebec. That province was largely spared when
severe cuts were made in Atlantic Canada, for whom defence
spending is very important. It is not easy for those provinces.
The federal government took part in many joint programs
with the Quebec government and Quebec firms to create jobs,
particularly in the defence and high technology industries in
Montreal, Quebec City and elsewhere.
It seems strange that the official opposition, which wants to
take Quebec out of Canada, should always be saying, through
this motion and its remarks today, that the federal government
does not give enough money to Quebec and does not give enough
contracts to Quebec firms. This is ironic and even inconsistent
for a party dedicated to Quebec separation.
When the official opposition talks that way, it should think
about the benefits for Quebecers of the presence of Quebec in
the Canadian federation, and it should try to co-operate with the
government in order to create jobs that will keep the economy
going. It should strive to build a better Canada instead of
breaking up this great country.
Mr. Antoine Dubé (Lévis): Madam Speaker, the member for
Cape Breton Highlands-Canso, whom I know well since he is
chairman of the human resources committee, of which I am a
member, today criticizes the role of the Official Opposition and
links it to sovereignty. Before doing that, however, he talked
about a few things, and I would like to refresh his memory on
certain facts. He said that Quebec was spared by the Budget in
terms of cuts.
I would like to ask him, after the many demonstrations made
not only by the Official Opposition, but the Government of
Quebec as well, if he really believes that the federal government
spared Quebec when it closed the Collège militaire royal in
Saint-Jean, the only francophone military college.
I will not restart the debate held earlier, but I am still
anxiously waiting for the government to take action in the MIL
Davie case. There was no response, as we said a little earlier. I
do not want to restart the debate, but we had no answer whatever
on this subject.
As for the helicopters, the government speedily cancelled the
contracts that the Conservatives had made. However, unlike Bill
C-22 on Toronto's Pearson Airport, which we are now
discussing, there was no compensation.
Formerly, when the federal government withdrew from
certain projects, it created a regional development fund, as in
the case of Laprade. But in this case, there was nothing of the
sort. Yet, the jobs on the line were very high-tech ones.
In this respect, you know, the member should share his
concerns with us because his region is having problems with
unemployment and fishing. He should himself be worried about
the situation. I understand that this afternoon, he is on the other
side, he is a member of the government, he does not dare to
express his concerns. According to what I heard, I do not think a
lot of progress was made in his province, Nova Scotia, since the
Liberal Party's election, because unemployment is still very
high. Quebecers are preoccupied because they lost 11,000
hich-tech jobs. It is up to the government to respond.
(1720)
We, in the opposition, proposed this debate today because we
feel that the conversion from military to civilian use is
extremely important. Maybe it is not the most important issue,
but it is one of the most important. Therefore, instead of
accusing us of debating on the Constitution, the member should
stick to today's issue, which is the problem of defence industry
conversion.
3978
Mr. LeBlanc (Cap-Breton Highlands-Canso): Madam
Speaker, first of all, I wish to thank the hon. member opposite
for his question and also for his participation in the Human
Resources Development Committee, where he made a very
useful contribution on behalf of his party. But in responding
to some points that he has raised, I said that Quebec had been
considerably spared by the defence cuts in the budget. I say this
because it is true and because other parts of Canada have
suffered much deeper cuts in terms of funds, dollars and jobs.
If we had followed his party's guidelines, the cuts would have
been much deeper in Quebec and elsewhere. But I think that
what the hon. member must remember is that, for example, on
the MIL Davie issue, I am not an expert on that, but from what I
understand, it is under discussion by both levels of government.
There is a plan and both governments are discussing it, and that
is what they have to do in a country such as ours. And that is
what we need in order to find solutions to our problems. With
that, I think the hon. member should, as he has been doing on the
committee, and his party also should participate constructively
in solutions that we must all bring to the problems, not only in
Quebec, but in other areas of this country as well.
[English]
Ms. Margaret Bridgman (Surrey North): Madam Speaker, I
would like to ask the hon. member this. The motion relates to the
unacceptable delays in converting the national defence industry
to civilian production, but minimum reference was made to that
actual approach in his presentation.
I would like him to expand on that theme a little bit, if indeed
there is a program along this line and if there is some delay in
this that could possibly be speeded up.
Mr. LeBlanc (Cape Breton Highlands-Canso): Madam
Speaker, I thank the hon. member for her question. To my
knowledge the process of defence conversion is well under way,
as has been mentioned by previous speakers. The government is
assisting this process.
I did not feel the need to go into a great deal of detail since
those points have already been made by those closer to the issue
than myself.
(1725)
We are well aware that parallel to a restructuring in the
defence sector, which is proceeding and which will be informed
by the debate and by the review on defence policy now taking
place, as well as other initiatives which the government is taking
to promote the high technology and information sectors of our
economy, that we will assist and support the conversion of
industries currently developed to focus mainly on military
production, into other activities.
It is not something that takes place overnight. It is a process in
which the government is assisting. We are not following the
Reform Party's approach which would have been, as I
understood it, not to cut defence and not to support conversion,
which I find rather contradictory certainly in the light of the
changes that are taking place not only in Canada but around the
world in this very important sector of our economy.
The Acting Speaker (Mrs. Maheu): Seeing no further
members rising-
[Translation]
Since the debate is over, under Section 81(19) of the Standing
Orders, the proceedings on the motion before the House are
terminated.
[
English]
The Acting Speaker (Mrs. Maheu): We will suspend
temporarily to the call of the Chair when we will take the
proceedings on the adjournment motion.
(The sitting of the House was suspended at 5.25 p.m.)
_______________
The House resumed at 5.32 p.m.
3978
ADJOURNMENT PROCEEDINGS
[
Translation]
A motion to adjourn the House under Standing Order 38
deemed to have been moved.
Mr. Bernard St-Laurent (Manicouagan): Madam Speaker,
my question would probably be for the Parliamentary Secretary
to the Development of Human resources.
Since February 20, 400 employees of the QNS & L of
Sept-Îles in my riding of Manicouagan are locked out. Federal
law does not forbid the employer, the IOC mining company, to
hire scabs, which naturally makes the situation extremely tense
and even ready to explode.
Since nothing hinders its activities, the company refuses to
negotiate with its employees even if they want to work.
(1735)
I would like to ask the Liberal government if they agree that
the absence of a federal anti-scab law is the reason for the
deterioration of negotiations between QNS & L and local 9344
of the steel workers' union. I would also ask the government if
they intend to intervene in that labour dispute and thus help the
workers?
[English]
Mr. Jesse Flis (Parliamentary Secretary to Minister of
Foreign Affairs): Madam Speaker, I am pleased to respond on
behalf of the government to the hon. member's question and I
3979
thank him for taking such an interest in the workers in his
constituency.
The question of restricting the use of replacement workers
during legal work stoppages raises a number of complex issues,
including the need to ensure that necessary services are
provided to the Canadian public. Protecting the public interest is
of particular relevance in the federal jurisdiction as the Canada
Labour Code governs many industries which provide necessary
services.
While the code does not prohibit the use of replacement
workers, it does provide protection for workers engaged in legal
work stoppages. The code prohibits an employer from
disciplining an employee for engaging in a legal work stoppage.
As well, an employer cannot discipline an employee for refusing
to perform the duties of another employee who is involved in a
legal work stoppage.
Once a work stoppage is terminated, employees are entitled to
return to their employment in preference to any persons hired to
replace them.
Despite the complex nature of labour relations within federal
jurisdiction, the existing system generally works as intended.
Most collective bargaining negotiations are settled by the
parties in direct negotiations. Of those that do require
conciliation officer assistance, more than 90 per cent-many
people do not realize this, Madam Speaker-are settled without
a work stoppage.
Part I of the Canada Labour Code has been designed to
balance the rights and responsibilities of labour and
management. This careful balance ensures that the collective
bargaining system functions effectively in the vast majority of
cases. For this reason it is important to consider the issue of
restricting the use of replacement workers during work
stoppages only in the context of a comprehensive review of the
code.
At a future date in the context of the full review, extensive
consultations will be held and full consideration will be given to
all representations on this subject.
I hope this answers the hon. member's concerns.
[Translation]
Mr. Bill Graham (Rosedale): Madam Speaker, it is a bit
reluctantly and a bit, if I may say, obscenely, that I would ask the
following question to the Parliamentary Secretary to Minister of
Foreign Affairs, because of the horror and the deep sadness of
the intolerable events that are occurring in Rwanda. It is really
hard for us, here, in this House, to imagine the situation out
there. Let us just think about the 1,500 Rwanda nationals who
live here, in Canada, and fear for the life of their families and
friends.
[English]
I know the Canadian government is taking action in this very
difficult situation. I asked the minister the other day if it was not
possible to conceive of a surgical strike, a surgical operation
whereby someone could go into Kigali and at least allow the
innocent civilians who are trapped there in this incredible
situation an escape route.
I asked the minister to use his best efforts to see whether
through the United Nations this could be done. We have heard on
the news that the United Nations is talking about this. Well, the
talking is going on and the killing is going on.
We know that this situation requires a regional solution. We
know that the Organization for African Unity is there. The
Organization of African Unity needs some political will behind
it. The Canadian government has earned a great deal of respect
and goodwill in Africa. It can provide a political impetus to the
process. It can also provide logistical support to the process.
(1740)
What is being done at this time to try to resolve this situation?
I have spoken of a surgical operation and providing the
logistical and political motivation to the Organization of
African Unity so it is able to step forward. We can give it the
strength, give it the ability to carry out an operation which only
it can achieve.
[Translation]
I would like to end my question, Madam Speaker, the way I
started it. Africa is far away, but I believe that what we will do in
this situation will determine how that Canada will respond in
similar situations that are likely to occur in this more and more
unstable and troubled world.
[English]
Mr. Jesse Flis (Parliamentary Secretary to Minister of
Foreign Affairs): Madam Speaker, unfortunately the civil war
continues to claim numerous lives in Rwanda. We are in contact
with the UN, the Organization of African Unity, friendly
countries and other NGOs in order to determine how best to
come to the aid of the Rwandan people.
Next week the Prime Minister will be meeting with the
president of the international committee of the Red Cross to
exchange views on the provision of humanitarian assistance.
CIDA has already provided $3 million in emergency aid since
April's outbreak of violence. General Dallaire I must point out
again continues to play a key role in leading the United Nations
assistance mission to Rwanda. As an intermediary between the
warring factions and as a participant in the humanitarian
operations he has done his utmost to attempt to obtain a
ceasefire with the assistance of the other seven Canadian
soldiers.
3980
Before deciding what action to take, the Security Council is
awaiting a reply from the African countries to the
Secretary-General's request for assistance. Canada's eventual
contribution will be considered in light of the Security
Council's decision.
The Security Council is apparently leaning toward a regional
solution with OAU participation funded by the United Nations.
The RPF and representatives of the government have travelled
to Tanzania to negotiate a ceasefire but are not talking to one
another. However, they talk separately to the Tanzanian
facilitator.
The Department of Foreign Affairs received the Rwandan
ambassador earlier this week to encourage his government to
negotiate in good faith and end the killing once and for all. A
similar message has been transmitted to the RPF via his
representative in New York. Politicians of both sides were told
that Canada will have a long memory toward those who exert
responsibilities and do not use their power to put an end to these
massacres.
The Canadian Forces Hercules operating out of Nairobi into
Kigali was shot at this morning after landing in Kigali. There
were no injuries and damage was superficial. Flying has
temporarily ceased until the situation at the airport has
stabilized.
I thank the hon. member for Rosedale for bringing this crisis
to the attention of Canada's Parliament. I also want to
congratulate him on the excellent work he is doing in the whole
area of foreign affairs.
[Translation]
Mrs. Monique Guay (Laurentides): Madam Speaker, last
April 26, I questioned the Minister of Public Works and
Government Services about the purchase of flu vaccine. His
answer reflected his decision on that issue. However, everything
was not said about the purchase of that vaccine. There are still
some questions left concerning the role of the minister as buy
broker for 4 million units of vaccine for the benefit of the
provinces and territories. I would like to state a few disturbing
and somewhat troubling facts about the process which led to the
federal government's decision on that issue.
In 1993, the contract for the supply of the flu vaccine was
awarded entirely to Bio Vac. The call for tenders for 1994 was
issued on December 8, 1993. The tender closing date was
January 7, 1994 at 2 p.m.
Two bids were received; Bio Vac from Laval was offering the
vaccine at $1.70 per unit and Connaught from Toronto was
offering a made in the U.S.A. vaccine at $1.46 per unit.
(1745)
Connaught's bid being lower, the federal minister who bought
the vaccine seemed to prefer its American vaccine. That is when
dumping allegations were made to the effect that Connaught was
selling this very vaccine for close to $3 in the United States, but
charging us $1.46 for it. Faced with this dumping issue the
minister extended the bidding period from January 7 to 18. At
that time, we were well aware the government was hesitant and
delaying its decision. We knew the situation was rather tricky
considering that jobs were at stake, as well as a large investment
in biotechnology, proposed by Bio Vac in Laval.
Another extension was announced, from January 18 to
February 3. All this time, the Minister was under pressure to
rapidly award the contract to BioVac. In a letter dated January
27, the Quebec Minister of Industry, Commerce and Technology
asked Minister Dingwall to decide quickly in favour of BioVac.
On March 25, the minister told the House that he was looking
for a Canadian solution to a serious Canadian problem. On April
20, the minister announced that he had decided to split the
difference and that his Canadian solution was to buy two million
American vaccines. The minister, as a Canadian broker, was
responsible for the lay-off of 26 employees with his Canadian
solution, jeopardising at the same time a $32 million investment
in biotechnology in Laval.
This unacceptable decision raises some questions. What
explanation can the minister give for the fact that his
negotiations increased the average cost of the vaccine from
$1.58 to $1.77, causing an additional expense of more than
$750,000 to taxpayers?
Second, given that the minister will now pay $1.77 per dose,
why did he refuse, on January 7, 1994, at the close of the first
call for tenders, to award the full contract to BioVac at $1.70 per
dose?
Third, can the minister tell us why, as a Canadian broker, he
buys American vaccines at a cost of $1.69 per dose while
BioVac's initial bid was $1.70? How can he explain such a
cheeseparing saving of 1 cent on two million doses of vaccine,
or $20,000, compared to 26 jobs lost? Has the minister analyzed
the economic cost of these 26 job losses? Finally, why is he
buying vaccines made in the U.S.A. when they could be entirely
produced in Canada? The minister's Canadian solution is a bad
joke.
To add a final touch to this already gloomy picture, rumour
has it that the minister asked BioVac to sign a letter stating its
satisfaction with the deal. What unmitigated nerve on the part of
the minister!
The federal broker-minister is not transparent in this case. He
acted in such a way that he penalized a Canadian firm and
disregarded the taxpayers' interests. His decision is senseless
and thoughtless. We ask the minister to disclose all the facts and
to table, if he has the courage to, all documents pertaining to this
case.
3981
The Acting Speaker (Mrs. Maheu): Before recognizing the
hon. parliamentary secretary, I just want to remind the hon.
member for Laurentides that she should not use the name of
a minister but his or her title instead.
Mr. Ronald J. Duhamel (Parliamentary Secretary to
Minister of Public Works and Government Services):
Madam Speaker, I am very pleased to be able to respond to the
hon. member and clarify yet again the federal government's role
in this important matter.
All members will surely agree that the availability of
influenza vaccine for school children and the elderly across
Canada is an issue which should be far removed from partisan
political considerations. The health and safety of Canada's
children and the elderly is this government's first priority. I
hope the same is true for my friend across the floor.
I am proud of the role that the department of the minister to
whom I am parliamentary secretary and the federal government
have played for the past twenty-one years on behalf of the
provinces and territories.
With Public Works and Government Services acting as the
purchasing agent of the vaccine on behalf of a joint
federal-provincial-territorial committee, we have been able to
achieve the economies of scale which bulk purchases represent.
The price per dose for one large national order is lower than if a
number of smaller purchases are made by the different
jurisdictions.
The result is a sterling demonstration of joint
federal-provincial-territorial cooperation and efficient use of
taxpayers' dollars.
(1750)
Members should note that the value of these purchases is now
approximately $7 million per year, of which 99 per cent is paid
for by the provinces and territories. The federal government
uses and pays for less than 1 per cent of the vaccine.
As has been announced in this House on several occasions,
and following a competitive process, an agreement in principle
was concluded on April 13, 1994, between the
federal-provincial-territorial committee and two Canadian
drug manufacturers. The contracts will be split 50/50 between
IAF BioVac in Laval, Quebec, and Connaught Laboratories in
Willowdale, Ontario. These contracts are scheduled to be signed
later this month. I should point out to the House that the hon.
member mentioned that there was a significant reduction in one
particular year, but if we look at the average for the last three
years, the proportion has gone from 38 per cent then to 50 per
cent now. That is 12 per cent more.
Prices are lower than in past years, and they are going down.
This year's price of $1.77 per dose is lower than the 1992 and
1993 prices.
To reiterate, both companies, the provinces and territories
have agreed to this arrangement. In questioning the government
on this issue, the member and her party have made a number of
factual errors. If one did not know better, one might conclude
that there is a deliberate attempt to mislead members of this
House and the Canadians we represent.
I sincerely hope that this is not the case.
Mr. Antoine Dubé (Lévis): Madam Speaker, on April 22, I
asked the Deputy Prime Minister a question about the federal
contribution to Quebec 2002. That was a two-part question.
First, I asked her when her government would appoint a
negotiator to determine with Quebec 2002 the amount of
funding needed.
``Soon'', answered the Deputy Prime minister. On this issue, I
am quite satisfied, since the daily newspaper Le Soleil reported,
on April 30, that the federal government had appointed, a day or
two before, Mr. Laurent Tremblay, executive director of the
Quebec office of the Department of Canadian Heritage, to act as
spokesperson for the federal government. One week is not that
bad a delay and we are satisfied with this part of the answer.
But we fail to see why it took six months and a question in the
House for the federal government to reply to an organization's
request. Six months is a long time. Will we need to press the
government in the House on all issues so that they finally reply
to organizations' requests?
We were satisfied with the answer we got this time. A
negotiator was appointed within a week. Unfortunately,
negotiations have not started yet and the deadline for Quebec
2002 has not been changed. Indeed, the final bids must be in by
August 18. They would like a definite answer from the federal
government within the next month, by the middle of June.
That was the second part of my question. I asked the Deputy
Prime Minister if she was prepared to give a mandate to a
negotiator modelled on what was done for Calgary in terms of
federal assistance when it bid on the 1988 Winter Games. I have
not received an answer to my question, either from the
government or from the negotiator.
I would like to remind this government that although
governments do come and go, it does have some responsibility
since in 1992, the former prime minister did make a verbal
commitment. However, since a new government is in office, this
commitment needs to be reaffirmed and confirmed, since we are
dealing with relatively tight deadlines.
Calgary received $240 million in financing guarantees. I
cannot understand why the federal government is so reluctant to
commit to a similar amount when a study has shown that this
project would generate in the neighbourhood of $200 million in
terms of direct and indirect jobs, the GST and so on. Why is the
government taking so long to decide when it could earn these
3982
kinds of revenues? Quebec is asking for equal consideration for
the 2002 Games, that is $240 million in financing guarantees,
without any indexation.
This financial guarantee is extremely important to the
residents of the Quebec City region in terms of helping them
prepare and present their bid for the Olympic Games. They need
some assurance that federal assistance will be forthcoming. A
great many concerns are being expressed at the local level.
Without assurances of the usual government assistance, people
are getting worried.
I hope that I will receive a clearer answer today than I did last
time.
Ms. Albina Guarnieri (Parliamentary Secretary to
Minister of Canadian Heritage): Madam Speaker, on several
occasions in the past few months, the government of Canada has
expressed support for the group of Quebec residents promoting
Quebec City's bid to host the 2002 Olympic Games. This is a
very important issue which must be considered carefully to
ensure the success of the entire operation.
[English]
The federal government has already committed $2.8 million
toward supporting Quebec's international bid efforts before the
International Olympic Committee. The Minister of Canadian
Heritage led a Canadian delegation in February to Lillehammer
while promoting Quebec's bid for the winter games.
[Translation]
The federal government's financial commitment could add up
to several hundred million dollars. You will agree this is a
substantial amount. That is why this commitment has to be
considered carefully beforehand. Not only has the Minister of
National Heritage asked his officials to work diligently on this,
but before a final answer can be given to the organizing
committee, he will have to consult with his Cabinet colleagues
whose departments will be involved.
Hosting the Olympic Games in Quebec City in 2002 requires
major financial support from the various levels of government,
but this project must also receive unequivocal support from the
local people; without this support, holding a sports event of that
magnitude would be unthinkable.
[English]
IOC will make its final decision in Budapest in June 1995,
after making a preselection in January 1995 when it will invite
four finalists to pursue their bids.
The member can rest assured that the minister is taking the
August 18, 1994 deadline for the preselection applications into
account. An answer will be announced as soon as possible.
The Acting Speaker (Mrs. Maheu): It being 5.59 p.m. this
House stands adjourned until tomorrow at 10 a.m. pursuant to
Standing Order 24(1).
(The House adjourned at 5.59 p.m.)